THIS WEEK'S COVER TOPIC: Capitalism, by Tony Blankley
Yet freedom: Making the case for free markets
here is nothing new under the sun. The United States has endured major financial panics in 1837, 1873, 1893, 1907, 1929, 1933 and now in 2008. Most of these economic events had ideological and political consequences — as well as the inevitable economic play-outs. And if history is any guide, contrary to the hope of some and the fear of others, this is not the end of capitalism as we have known it. But it is true that usually, major economic events have had political as well as economic consequences. For instance, the panic of 1893, which in some ways is similar to the current panic, was caused by overbuilding and sloppy financing of the railroads. The 1880s enjoyed dramatic economic expansion, which led to dangerous speculation. Once the railroad bubble burst, there was a run on the banks, a contraction of credit, and European investors demanded gold for payments, which forced the reduction in the value of the dollar. UNEMPLOYMENT went from three percent in 1892 to 18 percent in 1894 — not returning to single digits (6.5 percent) until 1899. Many out-of-work middle-class citizens failed to meet their mortgage obligations, abandoned their homes, and moved west. That was the end of the Gilded Age. After years of close presidential elections, McKinley’s decisive victory in 1896 — fought out over economic issues — brought on political realignment and the beginning of the Progressive era. With the exception of President Woodrow Wilson from 1913-1921 (who won in 1912 only because Teddy Roosevelt split the Republican vote), Republicans controlled the White House from 1897-1933. If economic events affect politics, it is also true that political events often have economic consequences. For example, the fall of the Soviet Union two decades ago deeply compromised the credibility and appeal of government-managed economies. As a result, throughout the world — and particularly in the United States — the past two decades have seen deregulation and a respect for market forces flourish. Not only Marxists but also conventional biggovernment democratic liberals in the West consistently lost the policy arguments to those of us who argued for a more vigorous, deregulated and freewheeling capitalism. Those abiding and ever-true principles of economics will be tainted for a while by recent economic events. Now waiting in the grass to leap up and champion the cause of anti-free markets are the left two-thirds of the Democrats here in America, our mainstream media, the socialists and regulators in Europe, and the Mussolini-style corporatists in Russia, China and perhaps in America, too.
WE HAD a taste of this urge for fierce regulatory recrudescence Sunday evening with the words of Democratic Rep. Rahm Emanuel, who warned, in calculated tones of inflamed class resentment, that once the Democrats save the day, they will ensure the end of deregulated markets (although after leaving Clinton’s White House staff, he took a position at the investment bank Dresdner Kleinwort Wasserstein in Chicago, where he worked from 1999 to 2002 and reportedly earned $18 million).
Blankley Last December, in somber rather than triumphant tones, leading conservative economic commentator Martin Wolf, of the British Financial Times warned, “What is happening in credit markets today is a huge blow to the credibility of the Anglo-Saxon model of transactions-oriented financial capitalism.” As Wolf’s further words have been characterized, when the crisis hits (as it now has), “That will certainly mean the end of the neoliberal consensus that has dominated politics for almost a generation.” Or, as Newsweek’s Howard Fineman wrote recently in more informal words, “The
era of cowboy capitalism has died, largely of self-inflicted wounds.” I don’t take those words as prophecy, but they are certainly shrewd warnings of the political things that may come. And it is true that it is harder this week than it was last week to argue persuasively for pure free-market principles if one has endorsed the $700 billion bailout and partial nationalization of the credit industry. (And I do emphatically endorse the bailout as the only available and preferable alternative to the calamitous economic status quo.) SO IN THE months and years to come, it falls to those of us who advocate for free markets to persist in making our case. It is true that momentary events likely will cloud the public’s judgment and provide nefarious opportunity for statists and other political hustlers. But it is also the truth, which is vouchsafed by any fair reading of history, that excessive regulation and taxation — which means political management of private property and previously free markets — are inherently corrupt and inefficient. Prosperity and the dignity of human freedom are two sides of the same coin. It is an old lesson that now must be retaught and relearned. And it shall be. October 1, 2008 __________________________________________ TONY BLANKLEY (c) 2008, Creators Syndicate __________________________________________
October 8, 2008
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October 8, 2008
BAILOUT: September 28, 2008
Hastening the ultimate government bailout
ometimes bipartisanship is grounds for celebration, but more often it is cause for tears. Last week, congressional leaders from both parties went into a room to hammer out a plan that would put taxpayers on the hook for $700 billion. But they assert that the investment is essential to the health of the economy. And they insist that if we make this investment, we’ll get all or most of it back. This promise would be more believable if the federal government had a long record of using tax dollars responsibly. In fact, it’s the equivalent of the guy who raids his kid’s piggy bank to feed the slots. The most notable impulse of our leaders is spending money the Treasury doesn’t have, piling up bills that future Americans will have to cover.
long. Today the federal government wants to bail out an industry that can’t meet its obligations. But it increases the chance that the next time, it will be the federal government that teeters on the brink of financial doom. The $700 billion comes on top of $85 billion it is lending to save the insurance company AIG. It’s in addition to the $200 billion it put up for mortgage giants Fannie Mae and Freddie Mac. There may be more on the way. Add it all up and you find that our government has suddenly run up a trillion dollars in new liabilities. That sounds like a lot — unless you compare it with Washington’s other outstanding commitments. Currently, the national debt stands at roughly $10 trillion, which is about three-quarters as large as our entire annual gross domestic product. But the Concord Coalition, a Washington-based fiscal watchdog group, says explicit and implicit obligations amount to $53 trillion — “almost as much as today’s net worth of all household assets.” Hear that? Everything you own is already spoken for. With each year, government spending rises, and the budget deficit gets bigger. As the baby boom generation retires, the gap will grow. Given current trends, federal outlays stand to
HOW DO our leaders intend to pay for this massive new outlay? Not by raising taxes. Not by cutting spending in other parts of the budget. No, they will borrow the funds. The Chinese and other foreign investors will lend us money so we can keep the economy humming, which will allow us to make the payments on the money we already owe them. Unfortunately, this deceptively pleasant process can go on only so
double between now and 2050, while revenues remain roughly stable. BY THEN, two programs — Medicare and Medicaid — will cost as much as the entire federal budget does today. Which means that, essentially, we’ll be financing two federal governments. If you dislike carrying a defensive end on your back, wait till his twin climbs aboard. Even the government admits this can’t go on forever. A report from the Treasury Department says that without big increases in revenue, “Medicare, Medicaid and Social Security spending and the related deficit financing costs will far exceed the government’s ability to pay.” When you spend more than you bring in, you have to borrow to cover the difference. In the next three decades, the government’s official debt is on track to triple. But at some point, the Treasury predicts, “the world’s financial markets would likely cease lending to the United States.” Then what? David Henderson, a research fellow at Stanford’s Hoover Institution and editor of The Concise Encyclopedia of Economics, ticks off the options: We could close the budget gap by drastically cutting spending or raising taxes. The Federal Reserve could print a lot of money, reducing the real value of the debt and making it easier to pay off. Or the government could default — in short, declare bank-
ruptcy. It may sound absurd to think the United States government would ever walk away from its debts. But if we are not willing to make painful sacrifices now, why would we be willing to make excruciating ones then? Inflation, says Henderson, is also unappealing because it would cause such pain here at home. Default would be more attractive to some Americans because we not only would escape our debt but also “would be screwing foreigners.” ONCE THEY have rescued the financial sector, maybe Henry Paulson and Ben Bernanke can answer the question that will eventually follow from this and other commitments: Who will rescue the federal government? __________________________________________ STEPHEN CHAPMAN (c) 2008, Creators Syndicate __________________________________________
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October 8, 2008
BAILOUT: September 29, 2008
If we must have a bailout, follow these principles
s of this writing, it is unclear what shape the credit bailout bill will take, or even if there will be a bill at all. But as this vital debate takes place, here are some principles that I feel must be hewed to in crafting a solution. And if they are not, then it would be better to pass nothing at all. If we are to fork over some $700 billion, this situation cannot repeat itself. It’s bad enough to be made to pay for other people’s irresponsible excesses. Causing them to not learn their lesson by papering over the consequences would be adding criminality on top of stupidity. Government – primarily Rep. Barney Frank and Sen. Chris Dodd – told Wall Street it had to lend to risky borrowers, those borrowers unsurprisingly defaulted, and naturally Wall Street went back to Washington and demanded to be made whole again, and donated big time to those in a position to make it happen. (Senator and presidential candidate Barack Obama was the second-biggest recipient, not that his media worshippers will report it.) Simply allowing these same scummy politicians to shovel our hard-earned money at this and walk away free to perpetrate it again would be unconscionable.
those lenders of a mindset to refuse to follow Congress’ silly marching orders (and admittedly, some weren’t) won’t be unfairly prosecuted for it. It’s not “discrimination against the poor” to refuse a huge loan to someone who can’t possibly pay it back – it’s common sense! And if they attempt to grease the skids, then both parties ought to be prosecuted to the full under federal bribery statutes. Putting a few big names, such as Dodd and Frank and their credit-sector solicitors, under striped sunlight would likely bring the rest into line in fairly short order. And from there, the market provides all the protection needed. Borrowers looking for bigger mortgages than they can handle won’t be able to get them. “Predatory lending,” such as there is, is already prosecutable under existing fraud laws. The incestuous relationship between lending bigwigs and the congressmen who purportedly oversee and regulate them would be broken. Economic hardship is no justification for trashing the Constitution and allowing a government takeover of the entire credit industry. One need not be a genius to see where having everyone going to government to obtain capital to invest would lead, because we’re seeing it right now on a smaller (relatively speaking) scale. Fannie Mae and Fred-
THERE MUST be protection so that
die Mac were used as barely disguised vessels for leftist income redistribution schemes, and it was unsustainable to the tune of $700 billion in very little time. Having government seize the credit industry would be like rewarding someone for recklessly opening a sluice gate by letting them blow up the entire dam. Government is already some $70 trillion in the hole in upcoming years, given entitlement obligations and existing debt. There isn’t enough money in the universe to fund all of this, and a very harsh day of reckoning lies ahead in the very near future. Adding the entire credit industry on top of this would be the definition of insanity. How many trillion more can we let Congress throw away? How bad does that inevitable crash have to be? Must we make it worse still? FURTHERMORE, only those items meeting with government’s approval would receive funding. Socialist credit would quickly result in decisions based on what was being invested in, and used as a social engineering tool for what
those in power like, just as the tax code already is. Redistributing income is as much about altering and controlling behavior as anything economic, and in that regard this would further open a door that’s already been opened much too far. I would rather be poor, hungry and free than fed, housed and under despotic socialist rule. We’ve already made the error of allowing Franklin Roosevelt to use the Great Depression as an excuse for expanding government well beyond its constitutional limits. (And it didn’t even solve the problem. World War II did that.) In some ways, we’re still paying for it some 70 years later. Let us not put financial well-being ahead of freedom. Even the most comfortable confinement is still imprisonment. We cannot have those who followed the rules punished and those who broke the rules rewarded by seizing from the former to lavish upon the latter. It’s not only morally obscene, it also creates a perverse incentive for even more irresponsible behavior. And it will eviscerate what the bailout is supposed to accomplish, providing a motive for doing it again. Just as one does not indulge an already spoiled child, so too must those who got us into this mess be the ones who suffer the lion’s share of the consequences. Perhaps, given that government, and liberal congressmen in particular (Rep. Barney Frank and Sen. Chris Dodd) are the main cause of this, it would be fitting to see the $700 billion come from their budget rather than all of ours. Congress spends $3 trillion of ours every year; I would think they could live with a paltry $2.3 trillion once. Perhaps a few firms should be allowed to go under, just to send a message to the rest that this will be their fate if there is a “next time around.” And perhaps some of those too stupid to know what mortgage they can’t afford need to rent a damn apartment from now on. BUT ALL of those Americans who worked hard and played smart and handled their own responsibilities should not be the ones to be punished with a $700 billion fine. __________________________________________ DAVID KARKI (c) 2008, North Star Writers Group __________________________________________
October 8, 2008
FINANCIAL CRISIS: September 30, 2008
The proper function of government His name was George F. Babbitt. He was 46 years old now, in April 1920, and he made nothing in particular, neither butter nor shoes nor poetry, but he was nimble in the calling of selling houses for more than people could afford to pay. — Babbitt by Sinclair Lewis (1922) We are waist deep in evasions because one cannot talk sense about the cultural roots of the financial crisis without transgressing this cardinal principle of politics: Never shall be heard a discouraging word about the public. CONCERNING which, a timeless political trope is: Government should budget the way households supposedly do, conforming outlays to income. But the crisis came partly because so many households decided that it would be jolly fun to budget the way government does, hitching outlays to appetites. Beneath Americans’ perfunctory disapproval of government deficits lurks an inconvenient truth: They enjoy deficits, by which they are charged less than a dollar for a dollar’s worth of government. Conservatives participate in this, even though deficits fuel government’s growth by obscuring its cost. The people can emulate the government because credit has been democratized. Democratization of everything is supposedly an unquestionable good, but a blizzard of
credit cards (1.5 billion of them, nine per cardholder), subsidized loans and cheap money has separated the pleasure of purchasing from the pain of paying. Furthermore, the entitlement mentality fostered by the welfare state includes a felt entitlement to a standard of living untethered from savings. Populism flatters the people, contrasting their virtue with the alleged vices of some minority — in other times, Jews or railroad owners or hard money advocates; today, the villain is “Wall Street greed,” which is contrasted with the supposed sobriety of “Main Street.” When people on Main Street misbehave by, say, buying houses for more than they can afford to pay, they blame the wily knaves who made them do it, such as the “nimble” Babbitt. Knowing that heat breeds haste, errors and unintended consequences, George Washington praised the Senate as the saucer into which legislation is poured to cool. In this crisis, however, the House of Representatives has performed that function. Republicans, especially, slowed a Gadarene rush to ratify the deeply flawed original bailout legislation.
VOTING against the bill — against putting taxpayers’ money at risk in order to clean up a mess that some people got rich by making — was easy, but not necessarily wrong. The $700 billion figure exaggerated the plan’s probable cost, but ac-
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curately measured something worse — the enormous enlargement of government’s power. So the joint declaration by John McCain and Barack Obama that Congress should “rise above politics” was mere gas. The legislation touched elemental questions — the meaning of justice, the parameters of freedom and the proper functions of government. Democrats charge that the crisis is market failure arising from an insufficiency of government, in the form of regulation. Well. Suppose that in 1979 the government had not engineered the first bailout of Chrysler (it, Ford and GM are about to get $25 billion in subsidized loans). Might
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there have been a more sober approach to risk throughout corporate America? Suppose there had never been implicit government backing of Fannie Mae and Freddie Mac. Better yet, suppose those two had never existed — there was homeownership before them, just not at a level that the government thought proper. Absent Fannie and Freddie — absent government manipulation of the housing market — would there have developed the excessive diversion of capital into the housing stock? The rising generation of thoughtful Republicans was represented on both sides of Monday’s vote. Virginia’s Eric Cantor, 45, and Wisconsin’s Paul Ryan, 38, supported the legislation because they had helped to achieve substantial improvements in it, such as requiring financial institutions to help finance their bailout, giving the Treasury potentially valuable equity in firms revived by public funds, and eliminating a slush fund for Democratic activists. Texas’ Jeb Hensarling, 51, and Indiana’s Mike Pence, 49, voted against what they considered a rescue model fundamentally flawed because (in Hensarling’s words) it “could permanently and fundamentally change the role of government.” IT IS potentially catastrophic that this crisis comes in the context of a closely contested election and a collapse of presidential authority. Congress should disconnect from a public that cannot be blamed for being more furious about than comprehending of this opaque debacle. The public wanted catharsis, and respect for its center-right principles, and got both with Monday’s House vote. It still needs protection against obliteration of the financial system. __________________________________________ GEORGE WILL (c) 2008, Washington Post Writers Group __________________________________________
October 8, 2008
BAILOUT: October 1, 2008
Who needs to pay mortgage and who doesn’t?
ill the U.S. Treasury Department help pay your mortgage or force you to help pay someone else’s? In the Great Bailout of 2008, on which side of the line do you, your home and your life savings sit? Are they in the land of individual responsibility, financial prudence and private property? Or in the land of government dependency, financial recklessness and expanding government control of the real-estate market? Americans have been lectured ad nauseam over the past week by television news anchors, Wall Street analysts, the president, the secretary of the treasury, the presidential candidates and the leaders of both parties in the U.S. Congress that we have no choice but to bail out the financial industry by having the Treasury directly purchase up to $700 billion in mortgage-backed securities.
American taxpayers — and conservative Republican congressional backbenchers — who lack the sophisticated understanding of the financial system so manifest among Wall Street bankers and leaders of the bipartisan elite in Washington, D.C. The Wall StreetWashington establishment is sending taxpayers this message: Stop harping about our failed past policies and unbridled greed. We have put a gun to the head of the U.S. economy. If you don’t give us what we want now, we will blow the economy away. We will kill all your hopes and dreams. We will wipe out the fruits of all your past work and sacrifice. Give us $700 billion now — or else. Unfortunately, there is some credibility in this threat. If credit runs dry, the economy will, too. But do we really need to let the government borrow an additional $700 billion (it is already running a deficit) so it can hand the money over to Wall Street bankers in return for vast numbers of mortgages both good and bad? Consider what the bailout bill that failed Monday envisioned the secretary of the treasury, and other federal agencies that ended up controlling these mortgages, doing with the bad ones. “(T)he Secretary shall implement plans that seek to maximize assistance
IF WE DO not do this, we are told, the flow of credit will freeze. Businesses will not be able to borrow money. Payrolls will not be met. Bankruptcies will follow. The stock market will crash further than it already has. The life savings of Americans who actually save money will evaporate. A new Depression will be upon us. And it will all be the fault of ignorant
for homeowners ... including term extensions, rate reductions (and) principal write downs,” the bill said. “(T)he Federal property manager shall implement a plan that seeks to maximize assistance for homeowners,” it said. “In the case of a residential mortgage loan, modifications made under paragraph (1) may include — (A) reduction in interest rates; (B) reduction in loan principal; and (C) similar modifications.” IN OTHER words, if your neighbor took out a $300,000 mortgage even though he could only afford a $200,000 mortgage, the federal government —
which would now own your neighbor’s mortgage — could simply reduce what your neighbor owes from $300,000 to $200,000. And it could reduce his interest rate from 6.5 percent to 5.5 percent. And it could extend the time he has to pay from 30 years to 40 years. What would this say to the people in the neighborhood who did not overextend themselves and who faithfully pay their mortgage every month? It would say: You’re a fool. Your profligate neighbor took the wiser course. And it would also say: Please keep paying your taxes on time because we may need your money to cover the $100,000 we just cut from your neighbor’s mortgage. So what is the alternative? The Republican Study Committee, a group of about 100 conservatives in the U.S. House led by Rep. Jeb Hensarling of Texas, has proposed that the government insure all mortgage-backed securities instead of buying up the riskiest ones. Under this scenario, institutions that hold mortgage-backed securities would need to buy federal insurance that guarantees them the principal and interest payments on any underlying mortgages that default. The insurance premiums would be risked-based, so securities that had more defaults would pay higher premiums. With this federal insurance behind them, the securities would be marketable again. The private organizations holding the mortgages would need to cut their own deals with those who don’t pay their bills. THIS WOULD still be a bailout. This would still be big government. But it is better than turning the U.S. Treasury into the world’s largest mortgage broker. __________________________________________ TERENCE JEFFREY (c) 2008, Creators Syndicate __________________________________________
October 8, 2008
FINANCIAL CRISIS: September 26, 2008
Day of reckoning — downsizing of America
ow did the United States of America, the richest nation on earth, whose economy represents 30 percent of the Global Economy, arrive at the precipice of a financial panic and collapse? The answer lies in the abject failure of both America’s financial elite and the political elite of both parties — the same elites now working together to determine how much of our wealth will be needed to bail the nation out of the crisis of their own creation. Big Government is riding to the rescue — saddlebags full of our tax dollars — to save us from the consequences of the stupidity and folly of Big Government. New York and Washington, the twin cities responsible for the crisis, are now being hailed by the media as the 7th Cavalry, coming to rescue a beleaguered nation. HAD THERE not been a steady and constant infusion of easy money and credit into the U.S. economy by the Fed, for years on end, a housing bubble of the magnitude of the one that has just exploded could never have been created. Had the politicians of both parties not coerced and pressured banks, S&Ls, Fannie Mae and Freddie Mac to make all those sub-prime mortgages, then to tie this rotten paper to good paper, convert it into securities and sell to banks all over the world, there would have been no global financial crisis. Had they seen this coming and acted sooner, the Federal Reserve and U.S. Treasury would not today, like Henny Penny, be crying, “The sky is falling!” and the end times are at hand, unless we give them five percent of our gross domestic product to buy up suspect securities backed by sub-prime mortgages. Consider what the “Paulson Plan” of Treasury Secretary Hank Paulson, against which Sen. Richard Shelby and the House Republicans rebelled, entails. Since Americans save nothing and have to borrow from abroad to finance our trade and budget deficits, wars and foreign aid, what the secretary proposes is this: that Congress authorize the Treasury to spend $700 billion to buy up the toxic paper on the books not only of U.S. banks, but of foreign banks operating in the United States. According to the Washington Times, the Treasury would also be authorized to buy up securities backed by rotten auto loans, student loans and credit card debts. Thus America would be borrowing from China, Japan and the Middle East to tidy up the balance sheets of the
banks of China, Japan and the Middle East. And all the rotten paper will be offloaded onto U.S. taxpayers, who hopefully will be able to recoup some of their losses, because some of the paper will be good. WHY SHOULD we do this? Because otherwise there will be a financial panic, followed by a market collapse, wiping out pensions, 401Ks, portfolios and defined benefit plans of Middle America, forcing millions into bankruptcy and millions more to put off retirement and continue working until they drop. In a democracy, it is said, you get the kind of government you deserve. But what did the American people do to deserve this? What did they do to deserve the quality of financial, corporate and political leadership that marched them into this mess — and that today postures as their rescuers?
Consider what this mess has already cost taxpayers: $29 billion to buy the rotten paper of Bear Stearns so J.P. Morgan would buy the investment bank; $85 billion for 80 percent of AIG to nationalize it; $150 billion in a stimulus package to flood the nation with cash; perhaps $300 billion to bail out Fannie Mae and Freddie Mac; and now $700 billion to begin taking the toxic paper off the hands of America’s big banks. And even if this is passed, say Paulson and Fed Chairman Ben Bernanke, there is no guarantee this will resolve the crisis. If the $700 billion is not provided and the toxic paper is not pulled off the books of the world’s banks by U.S. taxpayers, however, we face an almost certain collapse, surging bankruptcies, rising unemployment, a shrinkage of GDP and a recession, if not worse. Yet, the fellows who tell us we face a financial mushroom cloud over every
American city if we do not act at once to provide the $700 billion did not see this coming and can make no guarantee that this will succeed and end the crisis. Nevertheless, it must be done, and done now, as collapse is imminent. Looking at all the money being ladled out by the U.S. government to prevent a collapse, and the diminished revenue coming in, it is hard to see how America avoids future deficits that reach $1 trillion a year. These will imperil both the dollar itself and the ability of the United States, which saves nothing, to borrow from the rest of the world. The downsizing of America is at hand. YES, INDEED, we have arrived at the Day of Reckoning for Uncle Sam.
__________________________________________ PAT BUCHANAN (c) 2008, Creators Syndicate __________________________________________
BAILOUT: September 29, 2008
Problems remain with ‘deal’
efore the cheers go up for a so-called “Deal reached for Wall Street Bailout” as reported by several sources, here are some sobering reminders. — The housing market is overbuilt. — A lot of bad loans were made. — Consumers have too much debt. — The United States has too much debt. — Some banks are operating on the edge. — Some businesses may not be able to make payroll. — Some more people will lose their jobs. — The public deserves a lot of answers.
they are able to borrow money for short-term cash flow needs, and their business is picking up when consumers can afford to spend again, and people are buying houses again, then maybe we can take a deep breath. We do know that there will be some economic pain at all levels while the entire free market system tries to recalibrate itself. But in order for the
THE RIPPLE effect of the success of the “deal” will not be known for years. Just as the 1989 government bailout of the savings-and-loan industry took about five years to help stabilize the markets. In contrast to the potentially disastrous ripple effect down from Wall Street to Main Street if nothing had been done, the success of the “deal” will depend on the ripple effect up from Main Street back to Wall Street. When businesses are able to make payroll without any more layoffs, and
economic recovery to last, consumers and the federal government have got to stop spending beyond their means. Raising taxes and then offering some watered down stimulus checks to people will not help sustain the recovery process. In fact, it would make things worse. Let people keep their money in the first place, and they will decide when and how to spend it.
THE BIGGEST issue that must be addressed is failed accountability by Congress, some CEOs and some boards
of directors. I am less concerned about CEO compensation than I am about CEO performance and board accountability to its shareholders. And now with the “deal”, those companies and their boards who choose to participate are also accountable to the taxpayers. An even bigger concern is Congress’s failed accountability with the oversight tools they already have. Before we rush to give them another sledge hammer on businesses, we need to know why they allowed Fannie Mae and Freddie Mac to implode before the administration had to step in. After all, Fannie Mae and Freddie Mac is where the ripple effect started to unravel. Buying pre-packaged bad loans with “lipstick” was not just greed. It was also dishonest on the part of the sellers and the buyers. THE PUBLIC deserves a lot of answers before we can celebrate.
__________________________________________ HERMAN CAIN (c) 2008, North Star Writers Group __________________________________________
October 8, 2008
SUBPRIME MORTGAGES: September 25, 2008
Your mortgage given to a less qualified minority
n MSNBC this week, Newsweek’s Jonathan Alter tried to connect John McCain to the current financial disaster, saying: “If you remember the Keating Five scandal that (McCain) was a part of. ... He’s really getting a free ride on the fact that he was in the middle of the last great financial scandal in our country.” McCain was “in the middle of” the Keating Five case in the sense that he was “exonerated.” The lawyer for the Senate Ethics Committee wanted McCain removed from the investigation altogether, but, as the New York Times reported: “Sen. McCain was the only Republican embroiled in the affair, and Democrats on the panel would not release him.” So John McCain has been held hostage by both the Viet Cong and the Democrats.
most famous for defending a certain horny hick president a few years ago. In February this year, on Fox News’ Hannity and Colmes, Bennett said, for the eight billionth time: “First, I should tell your listeners I’m a registered Democrat, so I’m not on (McCain’s) side of a lot of issues. But I investigated John McCain for a year and a half, at least, when I was special counsel to the Senate Ethics Committee in the Keating Five. ... And if there is one thing I am absolutely confident of, it is John McCain is an honest man. I recommended to the Senate Ethics Committee that he be cut out of the case, that there was no evidence against him.” It’s bad enough for Alter to be constantly ripping off Kausfiles. Now he’s so devoid of his own ideas, he’s ripping off the idle musings of Kausfiles’ mother. Even if McCain had been implicated in the Keating Five scandal — and he wasn’t — that would still have absolutely nothing to do with the subprime mortgage crisis currently roiling the financial markets. This crisis was caused by political correctness being forced on the mortgage lending industry in the Clinton era. Before the Democrats’ affirmative action lending policies became an embarrassment, the Los Angeles Times reported that, starting in 1992, a majority-Democratic Congress “mandated that Fannie and Fred-
ALTER COULDN’T be expected to know that: As usual, he was lifting material directly from Kausfiles. What is unusual was that he was stealing a random thought sent in by Kausfiles’ mother, who, the day before, had e-mailed: “It’s time to bring up the Keating Five. Let McCain explain that scandal away.” The Senate Ethics Committee lawyer who investigated McCain already had explained that scandal away — repeatedly. It was celebrated lawyer Robert Bennett,
die increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains.” UNDER CLINTON, the entire federal government put massive pressure on banks to grant more mortgages to the poor and minorities. Clinton’s secretary of Housing and Urban Development, Andrew Cuomo, investigated Fannie Mae for racial discrimination and proposed that 50 percent of Fannie Mae’s and Freddie Mac’s portfolio be made up of loans to low- to moderate-income borrowers by the year 2001. Instead of looking at “outdated criteria,” such as the mortgage applicant’s credit history and ability to make a down payment, banks were encouraged to consider nontraditional measures of credit-worthiness, such as having a good jump shot or having a missing child named “Caylee.” Threatening lawsuits, Clinton’s Federal Reserve demanded that banks treat welfare payments and unemployment benefits as
valid income sources to qualify for a mortgage. That isn’t a joke — it’s a fact. When Democrats controlled both the executive and legislative branches, political correctness was given a veto over sound business practices. In 1999, liberals were bragging about extending affirmative action to the financial sector. Los Angeles Times reporter Ron Brownstein hailed the Clinton administration’s affirmative action lending policies as one of the “hidden success stories” of the Clinton administration, saying that “black and Latino homeownership has surged to the highest level ever recorded.” Meanwhile, economists were screaming from the rooftops that the Democrats were forcing mortgage lenders to issue loans that would fail the moment the housing market slowed and deadbeat borrowers couldn’t get out of their loans by selling their houses. A decade later, the housing bubble burst and, as predicted, food-stamp-backed mortgages collapsed. Democrats set an affirmative action time-bomb and now it’s gone off. In Bush’s first year in office, the White House chief economist, N. Gregory Mankiw, warned that the government’s “implicit subsidy” of Fannie Mae and Freddie Mac, combined with loans to unqualified borrowers, was creating a huge risk for the entire financial system. Rep. Barney Frank denounced Mankiw, saying he had no “concern about housing.” How dare you oppose suicidal loans to people who can’t repay them! The New York Times reported that Fannie Mae and Freddie Mac were “under heavy assault by the Republicans,” but these entities still had “important political allies” in the Democrats. Now, at a cost of hundreds of billions of dollars, middle-class taxpayers are going to be forced to bail out the Democrats’ two most important constituent groups: rich Wall Street bankers and welfare recipients. POLITICAL correctness had already ruined education, sports, science and entertainment. But it took a Democratic president with a Democratic congress for political correctness to wreck the financial industry. __________________________________________ ANN COULTER (c) 2008, Ann Coulter __________________________________________
October 8, 2008
BARACK OBAMA: September 26, 2008
Hiding the ball, especially about associations
hy does Barack Obama play hide the ball with his personal resumé, concealing his extreme leftist ideology and denying his damning associations? Question kind of answers itself, wouldn’t you say? Be concerned, very concerned. Obama hides his liberalism for the same reason every other liberal presidential candidate has: The electorate tilts center-right. This isn’t just my gut speaking or some self-serving theory I’m propounding. The Battleground poll — a well-respected bipartisan affair conducted by the Terrance Group, a Republican polling organization — and Lake Research Partners, a Democratic organization, tells us 60 percent of Americans identify themselves as conservatives.
Obama will only come clean about his liberalism when he thinks he is in safe territory, as he did at the San Francisco fundraiser where he trashed small-town Americans, thinking his words wouldn’t reach those he was belittling. Nor is Obama upfront about the liberal nature of his policy proposals, choosing instead to mask their liberalism and even disguise them as conservative. How else do you explain his whopper that he is recommending a tax cut for 95 percent of Americans when we know that the bottom 50 percent of income earners pay very little income tax at all? His plan calls for giving many of these people tax credits, even though they are paying no tax or are paying a small enough amount that the credit would result in them netting money from the government. As others have pointed out, this is welfare, not a tax cut. “Tax cut” resonates well among center-right voters; “welfare” does not. On foreign policy, suffice it to say that Obama would never want the center-right electorate to know the extent of his appeasement and retreat-and-defeat orientation, his support for the bankrupting and sovereignty-forfeiting Global Poverty Act or his goal of eliminating U.S. nuclear weapons, as reported by the New York Times.
BUT THE SPECIFICS are even more telling. Twenty percent consider themselves very conservative, 40 percent somewhat conservative, two percent moderate, 27 percent liberal, 9 percent very liberal, and three percent don’t know or didn’t answer. So John Kerry in 2004 and Barack Obama in 2008 didn’t deny they were the most liberal senators because liberalism has become a dirty word through a clever conservative propaganda campaign. They denied it because liberalism is a minority position in reality, albeit an extraordinarily effective vocal minority.
BUT WHERE Obama is really playing hide the ball is in his past and present associations. His campaign operatives and
the mainstream media have done their best to divert any attention from these relationships by saying it’s dirty campaigning to smear him through the acts of others. Well, folks, that’s not how ordinary people think. In sizing up someone’s character, we often consider with whom they associate. Sue us if you wish — even start a class action — but it won’t change human nature, which leads us, rationally, to consider this factor. Endless reports and many books have been written documenting Barack Obama’s discipleship in the thug tactics of Saul Alinsky’s Rules for Radicals. For Obama, community organizing was not an innocuous vehicle for assisting the needy. It was and is a cynically dangerous vehicle for the politics of extortion and intimidation
and the usurpation of power by socialists, whose ideology and methods more closely resemble those of Josef Stalin than those of Mother Teresa. These sources also prove beyond any reasonable doubt Obama’s close — not remote, not casual — relationship with the nihilistic, America-hating, Pentagonbombing radical William Ayers. Obama glibly dismisses the very idea that he should be blamed for a passing acquaintanceship with a guy who was bombing the Pentagon “when (Obama) was eight years old.” Enough with the insults to our intelligence, Mr. Obama. You were not eight when you launched your state Senate campaign in Ayers’ home. You were not eight when you served in the Chicago Annenberg Challenge, which Ayers was instrumental in establishing. You are not eight today, though you are still Ayers’ close friend, while he remains an America-hating radical, wholly unrepentant about his terrorist activities, other than to say he didn’t do enough. The fact that Obama would be seen in the same room with this guy should disqualify him from presidential aspirations. But he’s not just in the same room. In many ways, he’s on the same page, as evidenced by his default instinct to apologize for America and to blame America first. But Obama will continue striving to hide the ball on this association and many others, including those with the Rev. Jeremiah Wright and Tony Rezko. BUT BEWARE; if anyone dares to expose those relationships and their sordid details, he will open himself up to malicious and fraudulent charges of racism and other Saul Alinsky thug tactics that make Bill Clinton’s politics of personal destruction look like child’s play. __________________________________________ DAVID LIMBAUGH (c) 2008, Creators Syndicate __________________________________________
October 8, 2008
BARACK OBAMA: October 1, 2008
Obama, not Bush, the quasi-fascist on free speech
arack Obama poses as a champion of true American values. He sees himself as “a symbol of the possibility of America returning to our best traditions.” In reality, though, Barack Obama is just another in a long line of Chicago-style, free speech-squelching political thugs springing from the festering pit of Democratic machine politics. His rhetoric quashes debate. For all his talk about Americans uniting, he’s not afraid to attribute opposition to his candidacy to xenophobia — people who think he has a “funny name” or that he “doesn’t look like all those other presidents on those dollar bills.” HIS SUPPORTERS run roughshod over legitimate criticisms of Obama. “I want you to argue with them and get in their
face,” Obama tells his backers. They listen. In August, Obama encouraged his followers to shut down the WGN Chicago radio appearance of National Review reporter Stanley Kurtz. Obama’s supporters were issued talking points and told to call into the station in order to plug the lines. They dutifully did so. Obama’s minions duplicated the feat with David Freddoso, author of The Case Against Barack Obama. Spurred to action by a mass e-mail from the Obama campaign — an e-mail labeling Freddoso a “vicious” slanderer specializing in “hate-mongering” — the Obama supporters jammed the WGN phone lines, forcing the show to a standstill. Most importantly, though, his legal team
threatens anyone who doesn’t support the One with lawsuits and prosecution. This week, two state prosecutors in Missouri proclaimed that they were joining an Obama “truth squad.” Jennifer Joyce and Bob McCulloch, the top prosecutors in St. Louis, city and county, respectively, announced that they would “respond immediately to any misleading advertisements and statements that might violate Missouri ethics law.” The Obama camp claimed that Joyce and McCulloch were not threatening prosecution — but the invocation of Missouri ethics law says otherwise. Use of such law to prosecute political opponents would be blatantly unconstitutional.
BARACK OBAMA: September 26, 2008
Blind ambition to become president
he nation’s economy is on the precipice, but Barack Obama has more important things to attend to. He’s a man in a hurry to be president, and a little thing like the collapse of the U.S. credit markets won’t deter him. In fact, he sees it as an opportunity. By Obama’s calculation — and that of many of his supporters — the worse mess the economy is in, the better his chances are to win the Oval Office. But John McCain has other ideas. He actually believes it’s his duty to deal with the crisis at hand, which is why he temporarily suspended his presidential campaign Wednesday to return to Washington. Before he asks voters to elect him to a new office, McCain will fulfill what the citizens of Arizona have six times elected him to do — legislate; this time on an issue that has momentous consequences for all Americans, rescuing the credit markets on which much of the U.S. economy depends. McCain is willing to put partisan differences and his presidential ambitions aside for the moment and do what’s right for the country. OBAMA THINKS what’s right for the country is to elect him, period. This is, after all, the man who declared that his selection as the Democratic presidential nominee will be remembered as “the moment when the rise of the oceans began to slow and our planet began to heal” and who assured his devotees: “We are the ones we’ve been waiting for. We are the change that we seek.” Barack Obama has what can only be described as a Messianic vision of his own powers. It is beyond hubris; it verges on
delusional. Before securing the Democratic nomination, Obama’s single biggest achievement was to win his Senate seat by beating a perennially losing candidate and carpetbagger from Maryland. Since his election to the Senate, Obama has produced scant legislative accomplishments. He’s lent his name to largely non-controversial bills — like the LugarObama initiative to destroy stockpiles of
Chavez heavy conventional weapons that might end up in the hands of terrorists and promote nonproliferation of weapons of mass destruction — but he hasn’t engaged in the nitty-gritty of forging difficult legislation with bipartisan support. McCain, on the other hand, is consistently rated by his fellow senators and outside groups as one of the Senate’s most effective members. He’s tackled thorny issues from campaign finance and immigration reform to overcoming gridlock on judicial nominations — all with bipartisan support. And, unlike Obama, McCain doesn’t just put his name on an effort and show up for photo ops, he involves himself in the actual drafting of proposals and participates in negotiations that achieve real results. MCCAIN IS a risk-taker. When he supported sending additional troops to Iraq
for the so-called surge, public support for the war was at its lowest point and the military situation in the country looked dire. But, he said that he would rather lose an election than lose a war. Obama thinks the election is the only war that counts, and he aims to win it. As for risk-taking, he’ll do nothing that he thinks might stop his juggernaut from capturing the White House, which is why he insisted that Friday’s first presidential debate go on as scheduled, financial crisis be damned. If Obama had agreed to McCain’s proposal to hold 10 town hall meetings, then Friday’s debate could easily have been postponed while both men stayed where they belonged, in Washington. Instead, Obama made it clear that he would be in Oxford, Miss., and McCain had no choice but to return to the campaign trail. These two candidates have been campaigning for months, but the American people have never had a clearer look into what drives them than they had this week. One man’s ambition is to become president. The other man’s ambition is to get things done. IN THE VAGARIES of a presidential election, it is never possible to predict how voters will react to events. But character often trumps party affiliation or even specific policy concerns when it comes to determining which candidate will prevail. And when it comes to character, John McCain once again proved this week that he has the edge. __________________________________________ LINDA CHAVEZ (c) 2008, Creators Syndicate __________________________________________
This is hardly the first time the Obama campaign has attempted to trample the First Amendment by unleashing the subpoena squad. In August, the American Issues Project released an ad tying Obama to American terrorist Bill Ayers. Obama’s team responded by calling on the Justice Department to begin “an investigation of the American Issues Project; its officers and directors; and its anonymous donors, whoever they may be.” The next day, Obama’s legal advisors sent another letter to the Justice Department, this time demanding that Harold Simmons, the chief funder of the AIP, be prosecuted for “knowing and willful violation of the individual aggregate contribution limits.” IN SEPTEMBER, the National Rifle Association aired an ad targeting Obama for his opposition to the Second Amendment. Obama’s legal team sent letters to stations airing the ad, stating, “For the sake of both FCC licensing requirements and the public interest, your station should refuse to continue to air this advertisement.” Obama says he opposes the so-called Fairness Doctrine, which would force radio stations to air both liberal and conservative viewpoints, essentially shutting down talk radio, or turning it into NPR. But should the American public believe he won’t reverse himself on the Fairness Doctrine to shut down his political critics? Obama has been known to “reconsider” positions in his time: offshore drilling, Israel’s undivided capital in Jerusalem, public financing, meeting dictators without preconditions, branding Iran’s Revolutionary Guard a terrorist organization, illegal immigration, decriminalization of marijuana, running for president in 2008, NAFTA, clean coal and Jeremiah Wright, to name just a few. In fact, it is difficult to name a single position Obama has not parsed. Except for one position, that is: Barack Obama fervently believes that Barack Obama must never be attacked for any reason. All criticism is illegitimate. Furthermore, it should be illegal. Liberals have told us for eight years that President Bush is a Hitlerian tyrant intent on stopping political debate. For eight long, unceasingly acrimonious years, liberals have called Bush a murderer and a traitor. They have that right — and the fact that Bush has not sought to undermine that right demonstrates his commitment to the First Amendment. OBAMA’S commitment to the First Amendment, by contrast, extends only to those who agree with him. He’ll use any means at his disposal to stop his opponents. If Barack Obama has his way, all criticism of his presidency will end on January 20, 2009. The Messiah must not be questioned. __________________________________________ BEN SHAPIRO (c) 2008, Creators Syndicate __________________________________________
October 8, 2008
SARAH PALIN: September 26, 2008
The Palin problem: Is she out of her league?
f at one time women were considered heretical for swimming upstream against feminist orthodoxy, they now face condemnation for swimming downstream — away from Sarah Palin. To express reservations about her qualifications to be vice president — and possibly president — is to risk being labeled anti-woman. Or, as I am guilty of charging her early critics, supporting only a certain kind of woman. Some of the passionately feminist critics of Palin who attacked her personally deserved some of the backlash they received. But circumstances have changed since Palin was introduced as just a hockey mom with lipstick — what a difference a financial crisis makes — and a more complicated picture has emerged. AS WE’VE seen and heard more from John McCain’s running mate, it is increasingly clear that Palin is a problem. Quick study or not, she doesn’t know enough about economics and foreign policy to make Americans comfortable with a President Palin should conditions warrant her promotion. Yes, she recently met and turned several heads of state as the United Nations General Assembly convened in New York. She was gracious, charming and disarming. Men swooned. Pakistan’s president wanted to hug her. (Perhaps Osama bin Laden is dying to meet her?) And, yes, she has common sense, something we value. And she’s had executive experience as a mayor and a governor, though of relatively small constituencies (about 6,000 and 680,000, respectively). Finally, Palin’s narrative is fun, inspiring and all-American in that frontier way we seem to admire. When Palin first emerged as John McCain’s running mate, I confess I was delighted. She was the antithesis and nemesis of the hirsute, Birkenstock-wearing sisterhood — a refreshing feminist of a different order who personified the modern successful working mother. Palin didn’t make a mess cracking the glass ceiling. She simply glided through it. It was fun while it lasted. Palin’s recent interviews with Charles Gibson, Sean Hannity and now Katie Couric have all revealed an attractive, earnest, confident candidate. Who Is Clearly Out Of Her League. No one hates saying that more than I do. Like so many women, I’ve been pulling for Palin, wishing her the best, hoping she will perform brilliantly. I’ve also noticed that I watch her interviews with the held breath of an anxious parent, my finger poised over the mute button in case it gets too painful. Unfortunately, it often
does. My cringe reflex is exhausted. Palin filibusters. She repeats words, filling space with deadwood. Cut the verbiage and there’s not much content there. Here’s but one example of many from her interview with Hannity: “Well, there is a danger in allowing some obsessive partisanship to get into the issue that we’re talking about today. And that’s something that John McCain, too, his track record, proving that he can work both sides of the aisle, he can surpass the partisanship that must be surpassed to deal with an issue like this.” When Couric pointed to polls showing that the financial crisis had boosted
Obama’s numbers, Palin blustered wordily: “I’m not looking at poll numbers. What I think Americans at the end of the day are going to be able to go back and look at track records and see who’s more apt to be talking about solutions and wishing for and hoping for solutions for some opportunity to change, and who’s actually done it?” If BS were currency, Palin could bail out Wall Street herself. If Palin were a man, we’d all be guffawing, just as we do every time Joe Biden tickles the back of his throat with his toes. But because she’s a woman — and the first ever on a Republican presidential
ticket — we are reluctant to say what is painfully true. What to do? McCain can’t repudiate his choice for running mate. He not only risks the wrath of the GOP’s unforgiving base, but he invites others to second-guess his executive decision-making ability. Barack Obama faces the same problem with Biden. Only Palin can save McCain, her party and the country she loves. She can bow out for personal reasons, perhaps because she wants to spend more time with her newborn. No one would criticize a mother who puts her family first. DO IT for your country.
__________________________________________ KATHLEEN PARKER (c) 2008, Washington Post Writers Group __________________________________________
POLITICIANS: September 30, 2008
Washington’s Personality Disorder
e have a financial crisis that threatens our economy — that’s clear. But what’s preoccupying me and a lot of Americans today is that the events of the past few days also have revealed a political crisis of confidence we face that may be even more dire and longerlasting. On Monday we lost wealth equivalent to the entire economy of India — in one day. A nearly 10 percent drop in the S&P 500’s value. Our real economic problem is not in the stock market, which is functioning. It’s on the credit side, where the problem is not that the credit market is in danger of falling (it’s gotta do that) but of ceasing to exist for a sustained period. PEOPLE WHO can’t sell bonds and other credit instruments don’t know what they are worth. Things that you can’t sell have an immediate real value of “zero,” even if their actual value — in a sane market that’s working — would be considerably higher. Amid all this mounting uncertainty, one thing has become crystal clear: Our political class stinks. We face a crisis of almost unprecedented magnitude — a potential Great Depression that threatens the wellbeing of millions of Americans. And what do our politicians do? Well, they display all the traits of Narcissistic Personality Disorder, a serious psychiatric condition that is characterized by (a) a need for attention and adulation and a grandiose sense of one’s own importance that results
in (b) manipulative and exploitative behavior toward others including (c) a tendency to demean and criticize anyone who disagrees with them and (d) a marked tendency to shift blame and responsibility for one’s own behavior onto others. Nancy Pelosi has got to be one of the weakest and most passive-aggressive House speakers in history. How else to explain that on a must-win issue for the nation, almost 40 percent of
Gallagher Pelosi’s own Democrats voted against the “bailout” bill? Why did Speaker Pelosi use her minute on Monday during this national crisis to make it clear she intended to use the crisis to kill as many Republicans as possible: “Seven hundred billion dollars — a staggering number but only a part of the cost of the failed Bush economic policies to our country.” A FEW days of rising above politics to get the deal done in the nation’s interest — is that too much to ask a speaker of the House? But John McCain’s behavior was, in my humble opinion, even worse — insulting to the intelligence of the American people. For example, in a Sept. 26 press release McCain said: “Both parties in both houses of Con-
gress and the administration needed to come together to find a solution that would deserve the trust of the American people. ... “The difference between Barack Obama and John McCain was apparent during the White House meeting yesterday where Barack Obama’s priority was political posturing in his opening monologue defending the package as it stands. John McCain listened to all sides so he could help focus the debate on finding a bipartisan resolution that is in the interest of taxpayers and homeowners.” On Sept. 29 McCain repeated: “Our leaders are expected to leave partisanship at the door and come to the table to solve our problems. Senator Obama and his allies in Congress infused unnecessary partisanship into the process. Now is not the time to fix the blame. It’s time to fix the problem.” This is insane. Worse, it’s disgusting. Does John McCain (or his handlers) think we have no ears? That we won’t notice his nasty partisan jabbing while posing as a leader above the fray? HERE’S WHAT our dysfunctional political system now encourages: The last man jabbing and jabbering thinks he’s going to win.
__________________________________________ MAGGIE GALLAGHER (c) 2008, Universal Press Syndicate __________________________________________
October 8, 2008
POLITICS IN CHURCH: September 30, 2008
Pulpit bullies: Where should churches’ focus be?
here is no telling how many churches actually participated in “Pulpit Freedom Sunday,” an event designed to challenge the government’s restriction on political pronouncements from the pulpit. The Alliance Defense Fund, a conservative legal alliance of Christian attorneys, headed by President Alan E. Sears, whose activist roots go back to the 1980s, cooked up the idea. A press release from the organization promised that on Sept. 28 pastors in 20 states “will reclaim their constitutional right (and) from the pulpit, they will advise their congregation what scripture says about today’s issues, apply(ing) those issues to the candidates standing for election just like their forefathers did 150 years ago.” THE RELEASE might have added,
“and just as many in some AfricanAmerican churches do today, but without the pressure by the IRS, which many white conservative churches and institutions feel.” Clearly a double standard exists as to how the law is applied (see the political pronouncements of Reverends Jeremiah Wright, Al Sharpton and Jesse Jackson, as three of many examples). The law restricting political language from the pulpit is of rather recent vintage. Until 1954, election sermons could be heard on the first Sunday in November, or virtually any other time, without invoking the wrath of government. That changed when then-senator Lyndon Baines Johnson of-
fered an amendment to restrict nonprofit organizations, including churches, from endorsing or opposing political candidates. The amendment passed and has been part of the IRS code ever since. If one takes the position that the political life of the country is a fit subject for sermonizing — whether the subject is poverty, abortion, or low behavior in high office — then the First Amendment should certainly prevail over efforts to categorize and, thus, restrict free speech. The early colonial sermons were filled with righteous indignation and some indignation that was anything but righteous, but people were free to make up their own
LIBERALS: September 25, 2008
Road paved with liberal intentions
n a recent appearance on the Today Show, former President Bill Clinton so much as admitted that during his administration he and his fellow Democrats pressured lending institutions to make sub-prime loans to the poor and minorities in an effort to increase the percentage of American home ownership. Matt Lauer referred to a September 1999 New York Times article that pointed out the Clinton Administration “pressured Fannie Mae to increase the number of lower and middle income families and individuals who could get a mortgage and thus own a home.” To accomplish that, Lauer read from the article, “Fannie Mae lowered its standards for credit, (creating) the sub-prime mortgages.” Lauer pointed out that the article said that although it was “well intentioned, it was also dangerous.” PRESIDENT Clinton told Matt Lauer that “... it looks like that was true,” but that he had to take in consideration what was happening at the time this was done. He cited a balanced budget, a budget surplus, a rapidly growing economy and too much money going back to Fannie Mae shareholders and executives as reasons to justify this affirmative action policy. Just because there are fewer cars on the road at 3 a.m. doesn’t justify driving a car blindfolded. You have to consider the probable ramifications if you drive blindfolded. And, you have to consider the probable ramifications to the economy if you give loans to people who cannot or will not pay them back. The pressure by the Clinton White House and Democratic-controlled Congress on banks to grant “sub-prime” loans
to the poor and middle-class minorities set off alarm bells with economists who warned of a financial disaster looming if the housing bubble burst. They knew that these mortgage borrowers wouldn’t have enough equity to pay off their loans by selling their homes. Couple that with “creative financing” from lending institutions that allowed no down payment, no employment verification, super low teaser starter rates that adjusted upwards in a
few years, and allowing consideration of welfare payments as credible sources of income for credit worthiness, created the recipe for the disaster that we have now. The Democrats’ definition of “affordable housing” is lending money to people who have no chance of paying it back. Lenders made money with each loan origination, and then they would repackage loans to larger institutions to keep the loans afloat. Credit has tightened up considerably from the days when merely having a pulse qualified you for a Fannie Mae or Freddie Mac loan. NOW the pendulum has swung the other way. A realtor friend of mine said she was having a hard time qualifying a buyer for a high-end home because he had only been at his new job for 11 months. The fact he had impeccable credit and
held a long-time job prior to changing employers less than a year ago didn’t matter to the lender. The Democrats are desperately looking for a Republican scapegoat. Fingers are being pointed at John McCain, SEC Chairman Chris Cox, President Bush and even Ronald Reagan for promoting deregulation when he said, and correctly so, that government isn’t the solution to a problem, it is the problem. There is no better example of the government being the problem than this current crisis. This is what happens when you elect “well-intentioned” liberals to the presidency and Congress instead of leaders who are practical problem solvers. Barack Obama epitomizes a liberal with good intentions. Who doesn’t want affordable housing, alternative forms of energy, great schools, better infrastructure, affordable health care for all and a clean environment? But achieving these things requires sensible plans that will not destroy the economy and place our national security at risk. IF AMERICANS ever needed to wake up to which political party offers the adult leadership required to get us out of this mess, achieve energy independence and secure victory over terrorism, this is the time. Feel-good, well-intended, politically correct liberal politicians must not be allowed to do further damage. They need to be rounded up and held in captivity until they breed themselves out of existence. __________________________________________ GREGORY D. LEE (c) 2008, North Star Writers Group __________________________________________
minds as to whether their pastor was speaking for God, or if he had more temporal concerns. Before this type of “Berlin Wall” between church and state is torn down, however (and Johnson had his own political motives for erecting it), those who favor freeing pastors from political purgatory have some higher obstacles to overcome. The first obstacle is what Scripture teaches about a Christian’s relationship to the state. In one of the best-known passages, Paul the Apostle writes, “Everyone must submit himself to the governing authorities, for there is no authority except that which God has established.” (Romans 13:1) Is defying the law, no matter what political motivations were behind it, submitting to such authority, or opposing it? OBSTACLE number two has to do with the reason people attend worship services. It is not, or should not be, in order to pledge allegiance to a party, candidate or earthly agenda. One can spend inordinate amounts of time on that subject simply by watching cable TV, or listening to talk radio, or reading the newspapers. No matter how hard they try to protect the gospel from corruption, ministers who focus on politics and politicians as a means of redemption must minimize their ultimate calling and message. The road to redemption does not run through Washington, D.C. Politicians can’t redeem themselves from the temptations of Washington. What makes anyone think they can redeem the rest of us? This pulpit rebellion also presumes that congregants lack a worldview or knowledge about candidates and politics that only a pastor can address. In my church, we have many highly educated people, Republicans and Democrats, who would not take kindly to the pastor discoursing on politics anymore than they would accept legal or medical advice from their auto mechanic. The law has done churches a favor, however inadvertent, by protecting most of them from the downside of electioneering, but a strong constitutional challenge would most likely overturn it. The flip side would be whether the politicians would then allow churches to maintain their tax-exempt status. WHETHER the law is repealed, or not, churches and ministers would do better to keep their attention focused on the things above, rather than the things below, because politics can be the ultimate temptation and pollute a far superior and life-changing message. __________________________________________ CAL THOMAS (c) 2008, Tribune Media Services __________________________________________
October 8, 2008
JOHN MCCAIN: September 25, 2008
Candidate John McPerot, refusing to give up
ll year, John McCain has been like the proverbial cartoon character over the edge of the cliff, in midair, desperately flapping his arms and somehow maintaining altitude. On top of an already toxic environment for Republicans, two weeks ago came the financial mess, Hurricane Lehman blowing away the tie McCain had, through grit and improvisation, managed to forge in the presidential race. The McCain campaign thought it was falling into the abyss immediately after the crisis broke and McCain made his notorious “fundamentals of the economy are strong” statement. He buoyed himself by blasting away at Barack Obama’s ties to the failed subprime merchants Fannie Mae and Freddie Mac, and giving a mad-as-hell populist speech in Wisconsin blasting the corruption and incompetence of Washington and Wall Street.
trailing Obama by two points, and the Gallup tracking poll has them tied. McCain’s challenge at every juncture has been to shake up the campaign. He’s like a Democrat trying to win the White House in the middle of the Civil War after Sherman took Atlanta. Or like a Republican running in the Great Depression. That means making moves that mark him as different, but can be seen as risky or gimmicky, whether choosing Sarah Palin as his vice-presidential nominee or canceling the first day of the Republican Convention during Hurricane Gustav. And never looking back, in a three-yardsand-a-cloud-of-dust mentality. Does Palin know enough to be a national candidate right now? No, but she can be mostly walled off from the press. Will attacking Obama on Fannie and Freddie open McCain to attack because one of his top aides lobbied for the organizations? Yes, but he can bulldog through it. Is going to Washington going to help much of anything? Probably not, but the symbolism matters. All the unconventional moves risk eroding McCain’s reputation as a steady hand, but the alternative is simply being overwhelmed by the gravitational pull of the public’s desire for change.
THEN, HE made the conversation-changing move of “suspending” his campaign and calling for a delay of the first presidential debate so he could rush back to Washington, supposedly to help seal the financial bailout deal. McCain, incredibly enough, hasn’t crashed to earth. The Wall Street Journal/NBC News poll has McCain only
OBAMA, on the other hand, owns change, but has to seem reliable and trustworthy. So he displays cool equanimity to McCain’s heated turbulence. He has ice in his veins to McCain’s Tabasco. McCain says stop everything to deal with the financial crisis; Obama says the campaign can go on even as a bailout bill is written in Washington. McCain wants to rip up the debate process as long established by the sainted bipartisan debate commission; Obama wants to stick to established procedure. Obama’s demeanor the past two
weeks has been excellent by typical standards. He has often been talking calmly and deliberately before American flags in reassuring events with a presidential feel. In the Wall Street Journal/NBC poll, a majority says Obama would be able to handle a military crisis as president. But McCain’s anger, usually a worrisome quality in a presidential candidate, has resonance given a public mood somewhere between Watergate and the stock-market crash of 1929. According to the Wall Street Journal/NBC poll, McCain leads among independents by 13 points. For many voters, McCain probably isn’t hot enough. He hasn’t yet called for public hangings, after all. If the financial crisis and the bailout that is generating angry calls to all congressional offices had hit several months ago, a Ross Perot-style candidate would undoubtedly have emerged. Who knows? Lou Dobbs might have been pulling a third of the presidential vote by now. IT’S TOO late for a Perot figure, so McCain is doing his best impression of one. It’s the latest move that has kept him suspended over thin air, believing — and hoping in November the electorate makes it so — that he can fly.
__________________________________________ RICH LOWRY (c) 2008, King Features Syndicate __________________________________________
October 8, 2008
ECONOMY: September 26, 2008
Good people with good intentions, bad results
reasury Secretary Henry Paulson went to Capitol Hill seeking $700 billion. He got an earful. Now, $700 billion is a serious sum, and Congress has the fiduciary responsibility to make sure the money it appropriates goes for a good cause. But from the indignant congressional demands for a laundry list of quid pro quos, you would have thought Paulson wanted it for his personal use. In fact, Paulson is a lame duck. In four months, he is gone. Paulson is asking for the money not for self-aggrandizement but for the same reason Fed Chairman Ben Bernanke and the markets are asking for it: to prevent the American economy from going over a cliff. SOME DISDAIN that assessment as hypothetical. Paulson and Bernanke, who actually peered into the abyss on Black Thursday (Sept. 18), think oth-
erwise. They’re not infallible, but prudence dictates not risking the economy on the opposite bet. The stock market dive and the seizing up of the credit markets convinced them that their ad hoc Bear-yes, Lehman-no rescue of investment firms had not only reached a dead end, but was actually making things worse. It had added uncertainty to a situation in which pre-existing uncertainty was already causing panic. Hence the need to go below the institutional superstructure to the underlying toxic assets, which Paulson proposes to take off the private sector’s books by having the government buy them for, yes, $700 billion. Congress has every duty to be careful with taxpayers’ money and to sug-
gest improvements in the administration plan. But part of Congress’ reaction has nothing to do with improving the proposal and everything to do with assuaging the rage of constituents — even if it jeopardizes the package’s chances of success, either by weakening it or by larding it up with useless complicating provisions designed solely to give the appearance of sticking it to the rich. Window dressing such as capping pay packages, which the Bush administration has already caved in to. I’ve got nothing against withholding golden parachutes from failed executives. But artificially capping the pay of people brought in to lead these wobbly companies back to health is a fine way to tell talented executives to look elsewhere
JOHN MCCAIN: October 1, 2008
There is still time, John McCain
railing six points in Rasmussen’s poll, having fallen four points since he suspended his campaign last week, the question for John McCain is: Haven’t you learned anything? His failure to do much of anything in Washington, after teasing the whole country and riveting their attention on him by suspending his campaign, has let the voters down — and they are turning away from McCain. But there is still time for him to make his move. The House Republicans bought McCain another shot by turning down the $750 billion bailout package on Monday. With no House vote scheduled until Thursday, McCain still has time to do the right thing. HE SHOULD publicly announce his support for the House Republican alternative package of insurance, loans and tax changes to deal with the financial crisis. He should attack Barack Obama and the Democrats for supporting the use of tax money for a massive bailout when the same purpose can be accomplished by other, cheaper means. McCain should draw a line in the sand and take a firm position. The Democrats are not prepared to pass their bailout proposal by themselves. If they were, they would have done so on Monday. Instead, they withheld the votes of their most vulnerable congressmen and let the package fail. If the Republican Party poses a unit-
ed front in the House, with McCain’s leadership, the Democrats will have to fall in line. They cannot do nothing. By taking a firm line, McCain can turn the whole process around to his — and his country’s — advantage. Who would have imagined that John McCain would lose the election because he had a failure of courage at the last minute? Who would have
Morris guessed that he would choose not to stand on principle for fear of being criticized and fail as a result? If John McCain is to lose this election, let it at least be fighting for principle, as he has done throughout his storied career. By backing an alternative, McCain forces Obama to defend the Democratic-Bush package. He can tie Obama to President Bush and to the Washington insider-Wall Street crowd. He can give his populism a programmatic reality and a topical relevance. Obama would have to spend the rest of the election defending the $750 billion turkey the length and breadth of the country. AMERICA detests the bailout package. Polls show better than two-
to-one opposition. Were McCain and the Republicans able to project that there is another alternative that works, the opposition would swell to even greater proportions. Obama and the Democrats could cite the views of Treasury Secretary Paulson, Fed Chairman Bernake and Wall Street executives that the Republican relief package would be too little too late. But voters can be pardoned for skepticism. Paulson, a few years removed from Wall Street, and Democrats in hock to the street for campaign contributions are naturally eager to get their hands on $750 billion. If Obama lends himself to that cause, it could cost him the election. McCain needs to have the courage to free himself from the web of Washington deals and take a principled stand for the right side and stay there. Then the inevitable dynamics of the process will bring the country around to him. Otherwise, his campaign will have missed the opportunity to draw the kind of clear issue that would have gotten him elected president. IT IS admirable to see a candidate of principle and conviction lose an election by standing on his beliefs. It is sickening to see one lose by abandoning them. __________________________________________ DICK MORRIS (c) 2008, Creators Syndicate __________________________________________
for a job. In the demagogic parlance of this election year, it is a prescription for outsourcing our best financial minds to London and Dubai. THE MOB is agitated, but hardly blameless. While the punch bowl — Alan Greenspan’s extremely low post9/11 interest rates — was being held out, few complained about cheap loans and doubling home values. Now all of the sudden everything is the fault of Wall Street malfeasance. I have little doubt that some, if not many, cases of malfeasance will emerge. But what we conveniently neglect is the fact that much of this crisis was brought upon us by the good intentions of good people. For decades, starting with Jimmy Carter’s Community Reinvestment Act of 1977, there has been bipartisan agreement to use government power to expand homeownership to people who had been shut out for economic reasons or, sometimes, because of racial and ethnic discrimination. What could be a more worthy cause? But it led to tremendous pressure on Fannie Mae and Freddie Mac — who in turn pressured banks and other lenders — to extend mortgages to people who were borrowing over their heads. That’s called subprime lending. It lies at the root of our current calamity. Were there some predatory lenders? Of course. But only a fool or a demagogue — i.e., a presidential candidate — would suggest that this is a major part of the problem. Was there misbehavior on Wall Street? The wheels of justice will grind. But why wait for justice? If a really good catharsis will allow a return of rationality to Capitol Hill — yielding a clean rescue package that will actually save the economy — go for it. Capping executive pay is piffle. What we need are a few exemplary hangings. Public hangings. On television. Pick a few failed investment firms, lead their CEOs in chains through the canyons of Manhattan and give the mob satisfaction. Better still, precede the auto-da-fe — fire is highly telegenic — with 24hour reality-TV coverage of their recantations, lamentations and final visits with the soon-to-be widowed. The ratings would dwarf American Idol, and the ad revenue alone would make the perfect down payment on the $700 billion. WHATEVER IT takes to clear our heads. __________________________________________ CHARLES KRAUTHAMMER (c) 2008, Washington Post Writers Group __________________________________________
October 8, 2008
GOVERNMENT: September 28, 2008
Are we at an inflection point? Look at history
ou can sum up much of 20th century history by saying that in the 1930s Americans decided that markets didn’t work and government did, and that in the 1970s Americans decided that government didn’t work and markets did. The protracted and painful experiences of those decades changed basic public attitudes on the balance between government and markets, between regulation and enterprise, between government aid programs and self-reliance. The breadlines and depression of the 1930s moved Americans in one direction; the gas lines and stagflation of the 1970s moved them in the other. WHICH RAISES the question of whether the financial ructions of 200708 (09?) will move them back again. One reason to believe this is possible is the passage of time. Americans in the 1980s and 1990s were ready to accept deregulation and tax cuts and welfare reform because so few of them had personal memories of the 1930s. In 1992, Bill Clinton ran as a different kind of Democrat because so many voters then had personal memories of the 1970s. Today, fewer do. Half the voters did not reach adulthood until the 1980s. They never sat behind the steering wheel in a gas line or paid monthly bills as inflation was skyrocketing. It’s plausible that they may be more open to big government programs than their elders. Barack Obama and other Democrats have used the financial crisis to spin a narrative. The problem, they say, is deregulation and greed. This is not, strictly speaking, accurate. Obama and the Democrats opposed tighter regulation of the mortgage giants Fannie Mae and Freddie Mac, and John McCain supported it. Unregulated firms like hedge funds have done well, while heavily regulated banks have had troubles. But the narrative will be advanced by the Obama-loving media ... and by the passage of a giant financial bailout — er, rescue package. The likelihood, as this is written, is that Obama will be elected president and the Democrats will expand their congressional majorities. Possibly even to the 60 votes they need to effectively control the Senate. In that case, Democrats might be able to move toward nationalized health care finance. Their card-check bill will promote unionization and do to much of the private sector what union contracts have done to the Detroit Three automakers.
Higher taxes and overregulation could reduce economic vitality and creativity. Comparable worth laws could have bureaucrats setting private sector salaries. America could move some distance to becoming another France. THOSE SEEKING that outcome would do well to study some history. Some New Deal-Great Society programs have mostly worked well over the long term: bank deposit insurance, securities market regulation. Some worked well for many years but are on the road to something like financial collapse: Social Security, Medicare. But some had adverse economic effects and proved unpopular: high taxes on high earners, industrial unionization. The economy in the 1930s suffered from what Amity Shlaes in The Forgotten Man calls a “capital strike,” with unemployment stuck over 10 percent. Take a look at the polls in the 1940 election. If voters had decided on domestic issues, the Democrats probably would have lost. Franklin Roosevelt won because Adolf Hitler, with his then-ally Joseph Stalin, had conquered most of Europe and was threatening Britain and the United States. Roosevelt’s experience and his steady hand on foreign policy won him his third term. The war that followed produced huge economic growth and sharp increases in income equality — the biggest such movement in American history. But the war policies — government taking up
nearly half of gross domestic product, the mobilization of the equivalent of 37 million in the military — are not replicable under any circumstances foreseeable today. Postwar America continued to grow, with help from the John Kennedy tax cuts, declining unionization and (I would argue) the civil rights acts. But eventually, in the 1970s, regulation designed to freeze a static economy in place and macroeconomic policies complacent about the danger of inflation (the big problem in the 1930s was deflation) produced the gas lines and stagflation voters rebelled against. Policies inspired by the inflection point of the 1930s led to a different inflection point in the 1970s.
ARE WE looking at another inflection point today? Maybe so. Reviewing the long course of history, I think it’s obvious that market capitalism, together with the rule of law, hard currency and regulations that ensure transparency and accountability, has produced bounteous growth and the resources to address problems that require government action, like defending the nation and protecting the environment. But voters tend to consider only the history they know. They might do well to look back a little further. __________________________________________ MICHAEL BARONE (c) 2008, North Star Writers Group __________________________________________
ANSWER MAN: October 12, 2008
The Answer Man SOME OF THE NATION’S AREAS 1. Which is the largest ocean in the world in area? 2. On the dry side, name the world’s largest desert. 3. How many of the five Great Lakes can you name? 4. Only one of the Great Lakes is wholly within the United States. Name it. 5. Which of the U.S. metropolitan areas grew in population by more than 83 percent from 1990 to 2000? 6. What country was formerly named Zaire?
7. What is the popular name for the National Academy of Recording Arts and Sciences Awards? 8. Name the United Kingdom’s official national anthem. 9. What is the official national anthem of our northern neighbor Canada? 10. The first president of the Continental Congress, a Virginia delegate, was elected in Philadelphia in 1774. Name him.
Seamans continued on page 19
October 8, 2008
PAULSON PLAN: September 29, 2008
A Paulson-Cantor plan is a win-win
he single-biggest mistake in the Paulson bank-rescue-plan marketing effort has been the failure to explain clearly how taxpayers are going to recoup $700 billion used to buy toxic assets at auction in order to unfreeze the banking system. In other words, folks don’t understand how taxpayers will be paid back, and may actually make profits, which will enable the new government debt to be erased after the Treasury bank rescue is completed. Here’s the key point: Any loan package bought by the Treasury will be 100 percent taxpayer owned. Period. LET’S WALK through this hypothetical for a moment. Through a market-driven auction, the Treasury will purchase some dollar amount — say $100 billion — of loans that banks will sell. The Treasury will then buy those loans at the prices that fill the auction, starting
with the lowest prices and working up. Now, the Treasury will hold those bonds either to maturity or for a sale in the open market if rising prices in the market make that sale attractive. In other words, suppose the Treasury buys a bond package at 20 cents on the dollar. They hold it for a while, and if market conditions improve, they sell it for 50 cents on the dollar to some buyer (e.g., an investment fund, a private-equity fund, a hedgie). The Treasury will make the sale at the higher price in order to gain a profit for taxpayers. In the meantime, as the Treasury holds the loans, the government will get monthly cash flows coming in on the mortgages, or on any other loans that it owns. So it is win-win for taxpayers.
First, taxpayers get the cash flow generated by the assets (something like a 10 percent interest rate.) Second, if the loan is sold for profit, the taxpayers will own that profit. And the new law must of course stipulate that all the cash flows and/or profits go for debt-reduction to protect taxpayers. I don’t think a lot of folks understand this win-win scenario. Let me repeat: The taxpayers own the bonds the Treasury buys; the taxpayers own the cash flows generated by the bonds; the taxpayers own the profits when the bonds are sold; and the taxpayers benefit when the profits and cash flows are used to pay down government debt. Actually, for taxpayers, it’s a winwin-win-win.
BAILOUT: September 26, 2008
‘The Ant and the Grasshopper’
ith what looks like imminent passage of the Mother of All Bailouts (following on the heels of a year’s worth of government-funded rescues of private homeowners, lenders, insurers and automakers), Washington has turned Aesop’s famous fable about prudence and hard work on its head. The time is ripe for a revised 2008 edition of “The Ant and the Grasshopper:” In a meadow on a hot summer’s day, a Grasshopper was chirping and carousing his time away. He watched scornfully as an Ant nearby struggled to store up large kernels of food and build a secure nest. The Ant pulled overtime shifts to pay off his loans and accumulate retirement funds for the future. “GIVE IT a rest,” the Grasshopper said. “Why bother saving and slaving and toiling and moiling? Let’s party!” The Ant demurred: “I am planning ahead for winter, and you should do the same.” The Grasshopper blew off the Ant, squandered his supplies the rest of the season and abandoned his home while on vacation (paid for by tapping every last cent of his home equity gain) instead of holding down a job. When winter came, the Grasshopper’s pantry was empty, and his shelter ruined from neglect. The Ant, weary from planting, harvesting, and stocking up for months, was dining comfortably in his nest.
Cold, hungry, jobless, facing foreclosure and up to his two pairs of eyeballs in debt, the Grasshopper limped to the Association of Community Winged Insects for Rescue Now and demanded recourse. The office was swamped with thousands just like him. ACWIRN immediately put the Grasshopper to work registering dead ants as new voters.
Funded with tax dollars from the rest of the meadow’s residents, ACWIRN organized mass protests at the Bank of Antamerica, ambushed its top officials at their private homes, harassed their children and demanded that the meadow’s politicians halt all foreclosures (“We must keep Grasshoppers in their houses!”) and outlaw discriminatory lending practices against starving, homeless Grasshoppers (“Well-stocked shelters are basic insect rights!”) THE BANKING industry capitulated; the Orthoptera Lobby secured hundreds of millions of dollars in housing earmarks, grants and counseling subsidies to support the Grasshoppers with the shadiest credit and employment histories. Antie Mae, the mead-
ow’s government-backed home lending giant, fueled the push for increased insect homeownership in the name of biodiversity. Its executives cooked the books and headed for the hills. Katie Cricket and the Mainstream Meadow Media joined the grievance-for-profit circus, profiling Grasshopper sob stories and drumming up ratings as bewildered Ants wondered who was looking out for them. The banks drowned in toxic debt. More Grasshoppers fell behind on their mortgage payments. Bailout mania and panic gripped the meadow. Our little Ant, minding his own business, heard a knock on his door one late winter night a year later. It was his old, sneering Grasshopper neighbor. With ACWIRN’s presidential candidate, Barack Cicada, now in office, the Grasshopper had been hired by the meadow as a tax collector. “I’m here to take your provisions,” the Grasshopper cackled. BUT IT was the Ant who had the last laugh. “I’ve learned my lesson,” he told his shiftless friend. “Why bother saving and slaving and toiling and moiling? I’ve spent all my savings. I’m walking away from my mortgage. Thrift is for suckers,” the Ant said as he headed out the door, leaving the Grasshopper empty-handed. __________________________________________ MICHELLE MALKIN (c) 2008, Creators Syndicate __________________________________________
THINK ABOUT this. The troubled assets purchased by the Treasury right now are likely to be very under-priced because of the chaotic and frozen market conditions. But over time, through monthly cash-flow payments or through loan sales, taxpayers will get all their money back and in great likelihood make a handsome profit. I have been in conversation with leading House Republicans, and they understand these key points. Unfortunately, this understanding did not materialize in their original meeting with Paulson a few days ago. But now the actual reality is sinking in. Another point: Republican leader Eric Cantor has an excellent idea for a federal bond insurance guarantee for straight mortgage-backed paper, financed by private-sector insurance premiums. That will improve investor confidence in mortgage bonds and will make those bonds highly marketable. Importantly, senior Treasury officials have told me that Paulson will accept the insurance idea as an option in the final bill, alongside the ability of the Treasury to purchase distressed assets. Sources also tell me that other conditions will be necessary to bring the House GOP along. First, the ACORN slush fund must be removed. Second, the so-called union proxy to run a slate of corporate directors is a big problem. Third, all profits from the Treasury rescue mission must be used to reduce the national debt — 100 percent. Fourth, Republican members are opposed to bankruptcy judges setting mortgage terms and interest rates (Sen. Obama also is opposed). Fifth, the so-called government equity ownership of banks is distasteful because it effectively creates a corporate tax increase on banks at a time when they are struggling. And last, the treasury secretary’s request for $700 billion is regarded as way too high. ESSENTIALLY, House Republican leaders want a slimmer, cleaner Paulson plan supplemented by Cantor’s mortgage-bond insurance program. I think it’s a good package that would be great news for stock and bond markets that are now ailing badly. It would set the stage for a gradual return to normalcy on the part of bank lenders, including loans to small businesses, consumers and homeowners. It would be a pro-growth package at a time when the economy desperately needs a prosperity tonic.
__________________________________________ LARRY KUDLOW (c) 2008, Creators Syndicate __________________________________________
16 October 8, 2008
CONSERVATIVE FOCUS: Presidential Debate
Scrawled notes on a debate that was a wash
s I sit here after Friday night’s presidential debate, my memory of it is as disjointed as the debate was. All I have to go by is a notepad full of hasty, incautious impressions. They’re about as useful as a hangover from last night’s binge. Unrecorded in my notes, but permeating every page, is a feeling of resentment at having to watch an exercise that had so little to do with the pressing news of the moment: the financial crisis that both candidates had left behind in Washington in order to trade pleasantries, and a few unpleasantries, on national television. THE FULCRUM of the country’s financial and political seesaw was in Washington, D.C., where an historic deal to keep credit flowing and therefore businesses operating, was being worked out, or rather not worked out. A deal had to be cut before the markets opened Monday. And in the midst of all this the nation’s eyes were being directed toward ...Oxford, Miss.? A lovely town, Oxford, which has retained some of its Faulknerian ambiance even in these denatured times. I love the place. But no one would confuse it with the center ring of the American economic and political circus maximus in A.D. 2008. Even when two presidential candidates were in town. But to what end? We live, as the historian Daniel Boorstin once noted, in the age of the non-event. Both candidates sounded as if they were just exchanging canned comments they’d test-marketed for months out on the campaign trial. They did little in this two-man road show but reprise their familiar roles: John McCain remains the man of action, having flown in from Washington at the last minute. He would head back as soon as the show was over. For he’s still the Navy pilot veering off into every firefight. To what end isn’t always clear. But where the action is, that’s where he’d be as president. His critics call this recklessness, his admirers leadership. Senator McCain does have a record of service he can be proud of in war and peace. Especially when it comes to (a) criticizing the administration’s conduct of the war in Iraq early and often, and (b) helping it reverse course and adopt a new, successful strategy (the Surge) once he and a general named Petraeus finally got the commander-in-chief’s attention. BARACK OBAMA makes the perfect contrast with his opponent in this race. If John McCain is a doer, Barack Obama is a thinker. Or at least a talker. His time line on Iraq doesn’t go beyond 2006, when American fortunes were at low ebb. To listen to him talk about Iraq, it’s still 2006 and always will be. He’s got a lot riding in this campaign on proving that American forces were defeated in a war that should never have been fought,
and, if elected president, he might prove himself a prophet. For there is still time to snatch defeat from the jaws of victory. Iraq doesn’t matter, to hear Senator Obama tell it, because Afghanistan is really the central front in this war on terror, and that’s where another three or four American brigades should do the trick. All of which reduces John McCain, a not very articulate man at his best, to a prolonged sputter. He tries to explain that the Surge wasn’t just a matter of sending more troops to Iraq but how they were deployed in the midst of the population rather sequestered far from the action, and in close cooperation with Iraqi troops and tribes-
men. The Surge wasn’t just a new tactic but a new strategy. A professor of law, Barack Obama is used to picking apart arguments, not deploying troops. Like most citizens in a post-draft America, he seems wholly innocent of even the rudiments of military culture. He speaks of military affairs with the assurance of someone who never had anything to do with them. For the first time in many years, I was reminded of an ROTC instructor of mine who was astounded beyond words that someone of our (apparent) intelligence just didn’t get it. IN THE END, the debate was a wash
between the old warrior and young critic, though it did give the country some idea of what having a president who’s really a critic-in-chief would be like. An Obama administration could prove one of the most introspective and least effective in American history. A McCain administration would be headed by a cantankerous chief, but one whose naturally impetuous temperament has been seasoned by experience. Which raises the possibility that he might actually get some things done. As for Senator Obama’s experience, I get the impression it lies mainly ahead. September 25, 2008 __________________________________________ PAUL GREENBERG (c) 2008, Tribune Media Services __________________________________________
The sheriff and the professor debate
efore getting to Friday night’s debate, let us look at what happened before the debate. Yes, John McCain’s suspension of his campaign earlier in the week and call for a delay of Friday’s debate were campaign stunts. But his decision to go to Washington to prod political leaders to pass a sensible bailout measure, while political, showed America a candidate who will risk his electoral fortune to deliver the right policy. McCain was in a corner. He clearly feared that if Congress did not approve a bailout measure, the economy would tank. Then, his bid for the White House would be doomed. AND WHILE Senate Majority Leader Harry Reid derided McCain’s appearance Friday, on Wednesday Reid declared a need for “the Republicans to start producing some votes for us. We need the Republican nominee for president to let us know where he stands and what we should do.” The alleged deal that had been cut before McCain landed in Washington Thursday did not exist. House Republicans had not signed on. Without them, Democrats would not sign on. On Friday, Reid falsely claimed there was a deal “and then guess who came into town.” And: “The insertion of presidential politics has not been helpful. It’s been harmful.” No lie, but it’s Reid and company who appeared ready to scuttle any settlement lest McCain get the credit. The campaign suspension did serve to add drama to a campaign season that has been provided a rush of roller-coaster moments — making Friday’s debate all that much more a high-stakes affair. The consequences of this election are dire, but for pure theatre, this has been the most fun election to cover in my career. I pity young journalists covering this race
because they’ll have started with the best. They’ll be talking about 2008 until they’re as old as, well, John McCain. Or if they’re lucky, McCain’s 96-year-old mother, Roberta. Who needs Desperate Housewives? Every week, this campaign has a cliffhanger. On the day of the debate, Obama spokesman Bill Burton sent an e-mail to
Saunders reporters that announced “debates are not a good format for Obama,” who was expected to come across as too professorial. Campaigns do that sort of thing as they play to the chattering classes who are impressed not by the candidate who makes the better arguments, as much as the candidate who defies their often mistaken expectations. In fact, for the most part, both candidates delivered strong performances with a presidential demeanor. Of course, I think McCain won. WHAT OBAMA did right: Obama was right to note that the $700 billion bailout will delay some of his spending proposals. He scores points with voters when he mentions the $10 billion-per-month price tag for the Iraq war when the Iraqi government enjoys a $79 billion surplus. Obama showed class when he commended McCain’s opposition to the use of torture in the war on terror. What Obama did wrong: George W. Bush is not running for re-election. The gratuitous Bush-bashing has gotten old — and it makes Obama sound like a college
student at a political rally. Maybe it works with the moveon.org crowd, but most voters are looking for a leader for the next four to eight years. And it takes no leadership to kick someone with an approval rate higher only than that of Congress. Also, Afghanistan is not the “central front” in the war on terror. As McCain countered, “If we fail in Iraq, it encourages al-Qaida.” What McCain did right: McCain understands that “maybe to Sen. Obama” $18 billion in annual earmark spending is “not a lot of money,” but earmarks are corrupting. McCain noted his opposition to earmarks had earned him the nickname of “the Sheriff.” Most important, McCain did not come across as bellicose, especially when he recalled his opposition to Ronald Reagan’s push to keep U.S. troops in Lebanon in 1983. When McCain warned Obama about not brandishing a gun unless he is willing to pull the trigger — in reference to getting too tough with Pakistan — McCain showed himself to be the adult in the room. What McCain did wrong: Jim Lehrer was practically begging McCain to look at Obama when he criticized Obama. “Say it directly to him,” Lehrer chided him. But McCain would not, or could not, do so. WHAT THEY both did wrong: Neither candidate would articulate which of their pet proposals might have to be postponed if the $700 billion bailout passes. Then again, neither intended to be so blunt. September 28, 2008
__________________________________________ DEBRA J. SAUNDERS (c) 2008, Creators Syndicate __________________________________________
CONSERVATIVE FOCUS: Presidential Debate
October 8, 2008 17
Obama strikes out in first presidential debate
he liberals have been marketing Barack Obama as the greatest orator of our times, but the public saw a different picture in the first presidential debate. Angry, perplexed, and devoid of substance was the real Obama whom the media could no longer hide. By contrast, John McCain provided refreshing sincerity to Obama’s incoherent subterfuges. McCain explained in simple language that only Republicans will limit the increase in government spending, defend national security, and ensure that families rather than the federal government will control health care. McCain reminded voters that Obama is the most liberal member of the U.S. Senate. In one of several witty comments, McCain said, “It’s hard to reach across the aisle from that far left.”
lost in the proposed bailout, McCain proposed a spending freeze with a few specific exceptions. “How about a spending freeze on everything but defense, veterans affairs and entitlement programs?” McCain offered. Obama refused to accept this obvious solution to out-of-control federal spending. His response illustrated why Democratic presidential candidates have been criticized as tax-andspend politicians. “There are some programs that are very important that are under-funded. I want to increase early childhood education, and the notion that we should freeze that when there may be, for example, this Medicare subsidy doesn’t make sense.” The only thing clear about Obama’s incoherent statement is that he will continue to tax-and-spend exactly as the Democratic leadership has been doing for decades. McCain’s position against more fiscal recklessness scored many points with the voters, who are tired and broke because of politicians wasting their money. Given the weak state of the economy, all Obama had to do was to offer some reasonable plan and he would have come out ahead. But he couldn’t muster even that. Obama declared, “The only point I want to make is this, that in order to make the tough decisions we have to know what our values are and who we’re fighting for
THE DEBATE was held under very disadvantageous circumstances for McCain, and the left had every reason to expect a home run for its candidate. The markets were melting with a Republican in the White House, and McCain was being bullied by the media. While there was nothing particularly brilliant about McCain’s responses to Jim Lehrer, McCain came across as genuinely sincere and straightforward. That was more than Obama could do. When asked how each candidate would specifically make up for money
and our priorities and if ... we are leaving out health care which is crushing on people all across the country, then I think we have made a bad decision and I want to make sure we’re not shortchanging our long-term priorities.” “Leaving out health care?” It sounds like Obama wants to make another try for federal control over all family health care decisions. McCain made it clear that he opposes any such government interference. “I want to make sure we’re not handing the health care system over to the federal government, which is basically what would ultimately happen with Senator Obama’s health care plan. I want the families to make decisions between themselves and their doctors; not the federal government,” McCain explained.
MORE government control is not the kind of “change” that Americans want, particularly after politicians have so badly mishandled our financial condition. Can you imagine the hardship if hospitals were about to collapse like financial institutions? The last time the Democrats tried to give the federal government greater control over families’ medical decisions was in 1993 and 1994, and then Americans surprised them by voting many of them out of office. McCain showed that he knows that Americans still want to assure a system that families, not government, will make medical decisions. American voters are not as easily fooled as Obama and his supporters seem to think. The more that voters hear what Obama has in mind for them, the more they will likely say “no thanks” to his repackaged proposals for more government control. Only McCain was honest enough to remind the American people that we “owe China $500 billion.” Only McCain said that he has “plans to reduce and eliminate unnecessary and wasteful spending and, if there’s anybody here who thinks there aren’t agencies of government where spending can be cut and their budgets slashed, they have not spent a lot of time in Washington.” Obama’s evasion of specifics and his use of repetitious platitudes made it painfully clear that he does not intend to reduce government control or cut government spending at all. “We have to fix our health care system,” he declared, but his “fix” is just more government control and spending. OBAMA’S performance confirmed that he is full of bitter gripes about something. American voters are left scratching their heads and wondering about Obama’s own candidacy: “Where’s the beef?” September 30, 2008 __________________________________________ PHYLLIS SCHLAFLY (c) 2008, Creators Syndicate __________________________________________
October 8, 2008
GWEN IFILL: October 1, 2008
A debate ‘moderator’ in the tank for Obama
y dictionary defines “moderator” as “the nonpartisan presiding officer of a town meeting.” On Thursday, PBS anchor Gwen Ifill will serve as moderator for the first and only vice presidential debate. The stakes are high. The Commission on Presidential Debates, with the assent of the two campaigns, decided not to impose any guidelines on her duties or questions. But there is nothing “moderate” about where Ifill stands on Barack Obama. She’s so far in the tank for the Democratic presidential candidate, her oxygen delivery line is running out. In an imaginary world where liberal journalists are held to the same standards as everyone else, Ifill would be required to make a full disclosure at the start of the debate. She would be required to turn to the cameras and tell the national audience that she has a book coming out on Jan. 20, 2009 — a date that just happens to coincide with the inauguration of the next president of the United States. THE TITLE of Ifill’s book? The Breakthrough: Politics and Race in the Age of Obama. Nonpartisan my foot. Random House, her publisher, is already busy hyping the book with YouTube clips of Ifill heaping praise on her subjects, including Obama and Obamaendorsing Mass. Gov. Deval Patrick. The official promo for the book gushes: “In The Breakthrough, veteran journalist Gwen Ifill surveys the American political landscape, shedding new light on the impact of Barack Obama’s stunning presidential campaign and introducing the emerging young African American politicians forging a bold new path to political power. ... Drawing on interviews with power brokers like Sen. Obama, former Secretary of State Colin Powell, Vernon Jordan, the Rev. Jesse Jackson and many others, as well as her own razor-sharp observations and analysis of such issues as generational conflict and the ‘black enough’ conundrum, Ifill shows why this is a pivotal moment in American history.” Ifill and her publisher are banking on an Obama/Biden win to buoy her book sales. The moderator expected to treat both sides fairly has grandiosely declared this the “Age of Obama.” Can you imagine a right-leaning journalist writing a book about the “stunning” McCain campaign and its “bold” path to reform timed for release on Inauguration Day — and then expecting a slot as a moderator for the nation’s sole vice presidential debate? Yeah, I just registered 6.4 on the Snicker Richter Scale, too. DESPITE THE protestations of her colleagues that she will be fair, Ifill has appeared on numerous radio and TV talk shows over the past several months to cash
in on her access to the Obama campaign. She recently penned a fawning cover story on the Obamas for Essence magazine that earned much buzz. The title? “The Obamas: Portrait of an American Family.” A sample of Ifill’s hard-hitting investigative journalism, illustrated with Kennedy-esque photos of the Obamas and children posing at home on the back porch and by the piano: “Barack Obama is sitting in the back of his rented luxury campaign bus with its granite counters and two flat-screen TVs. The Illinois senator’s arms are wrapped around his wife, Michelle, whom he doesn’t get to see much these days. At this very moment he is, of all things, singing.” During the Democratic National Convention, Ifill offered her neutral analysis
on NBC News before Michelle Obama’s speech: “A lot of people have never seen anything that looks like a Michelle Obama before. She’s educated, she’s beautiful, she’s tall, she tells you what she thinks and they hope that she can tell a story about Barack Obama and about herself.” During the Republican National Convention, the PBS ombudsman fielded numerous complaints about Ifill’s coverage of Sarah Palin’s speech. Wrote Brian Meyers of Granby, Ct.: “I was appalled by Gwen Ifill’s commentary directly following Gov. Sarah Palin’s speech. Her attitude was dismissive and the look on her face was one of disgust. Clearly, she was agitated by what most critics view as a well-delivered speech. It is quite obvious that Ms. Ifill
supports Obama as she struggled to say anything redemptive about Gov. Palin’s performance. I am disappointed in Ms. Ifill’s complete disregard for journalistic objectivity.” Like Obama, Ifill, who is black, is quick to play the race card at the first sign of criticism. In an interview with the Washington Post a few weeks ago, she carped: “[N]o one’s ever assumed a white reporter can’t cover a white candidate.” IT’S NOT the color of your skin, sweetie. It’s the color of your politics. Perhaps Ifill will be able to conceal it this week. But if the “stunning” Breakthrough she’s rooting for comes to pass on Jan. 20, 2009, nobody will be fooled.
__________________________________________ MICHELLE MALKIN (c) 2008, Creators Syndicate __________________________________________
PRESIDENTIAL DEBATE: September 29, 2008
The first debate comes out evenly
he first televised debate between John McCain and Barack Obama probably came out evenly enough to enable both sides to claim victory — which is, of course, exactly what they did. Certainly, neither man was obviously and overwhelmingly the winner. Both were in command of their material and ably defended their views. Several people to whom I spoke after the debate mentioned that McCain had not looked directly at Obama, whereas Obama did speak directly to McCain. Personally, I hadn’t noticed this, but I am sure the observation is correct. Whether it matters is another question. McCain was no doubt mindful of the huge audience of millions of television viewers who were listening and was anxious to engage them directly. But, of course, the direct object of his remarks was Obama. ONE OF Obama’s early comments on the subject of the economy sounded critical of “the market” and implicitly favorable to “regulation,” which is the usual liberal mantra on that subject. McCain followed with a sharp attack on excessive government “spending,” which is the conventional conservative complaint on that issue. Thus far, both debaters were hewing faithfully to positions with which their supporters are familiar and feel comfortable. McCain, following up his attack on the evils of spending, then called for a
“spending freeze,” and Obama neatly changed the subject by suggesting that we “save on Iraq” — i.e., cut expenditures by eliminating the heavy cost of the Iraq war. That brought up the whole issue of Iraq, to which the debate now inevitably shifted.
Rusher McCain declared confidently that we will win in Iraq. Obama replied that he had opposed the attack on Iraq from the start, and he believes we should cut back our efforts there and concentrate on finishing our military operation in Afghanistan. McCain countered that Obama had opposed President Bush’s decision to launch a “surge” in Iraq, contending that it wouldn’t work, when in fact it has worked remarkably well. AND SO the evening went, with each debater seemingly well prepared for the other’s thrusts. There is no space, in this column, to list all of the attacks made and all of the rebuttals offered, but I can’t honestly say that, when it was over, I felt that either debater was massively ahead on points. There are two other debates ahead,
and it may well be that one debater or the other will clearly stand out as the winner of one or both. At the moment, however, after the first debate, it seems to me that the protagonists are still pretty close to even. Of course, it is fair to ask just how much these debates matter. If the voters clearly prefer one candidate over the other, that preference may simply overwhelm any benefits his adversary may gain by doing better in the debates. But the polls seem to show the race as extremely close so far, with the candidates almost exactly tied. In that situation, a good showing in the debates is going to be important and, quite possibly, decisive. SO THE REMAINING debates are going to be worth watching. One may wonder whether it is entirely fair for so much to depend on which candidate has the smoother delivery. There are, after all, other attributes at least as important in a president. But this is, for better or worse, a democracy, and how well a candidate can put his case is a pretty fair test of the man.
__________________________________________ WILLIAM RUSHER (c) 2008, United Media Services __________________________________________
October 8, 2008
ACORN: September 30, 2008
ACORN, Obama, and the mortgage mess
he financial markets were teetering on the edge of an abyss last week. The secretary of the Treasury was literally on his knees begging the speaker of the House not to sabotage the bailout bill. The crash of falling banks made the earth tremble. The Republican presidential candidate suspended his campaign to deal with the crisis. And amid all this, the Democrats in Congress managed to find time to slip language into the bailout legislation that would provide a dandy little slush fund for ACORN. ACORN stands for the Association of Community Organizations for Reform Now, a busy hive of left-wing agitation and “direct action” that claims chapters in 50 cities and 100,000 duespaying members. ACORN is where Sixties leftovers who couldn’t get tenure at universities wound up. That the bill-writing Democrats remembered their pet clients during such an emergency speaks volumes. This attempted gift to ACORN (stripped out of the bill after outraged howls from Republicans) demonstrates how little Democrats understand about what caused the mess we’re in.
ing.” They agitate for higher minimum wages, attempt to thwart school reform, try to unionize welfare workers (that is, those welfare recipients who are obliged to work in exchange for benefits) and organize voter registration efforts (always for Democrats, of course). Because they are on the side of righteousness and justice, they aren’t especially fastidious about their methods. In 2006, for example, ACORN registered 1,800 new voters in Washington. The only trouble was, with the exception of six, all of the names submitted were fake. The secretary of state called it the “worst case of election fraud in our state’s history.” As Fox News reported: “The ACORN workers told state investigators that they went to the Seattle public library, sat at a table and filled out the voter registration forms. They made up names, addresses, and Social Security numbers and in some cases plucked names from the phone book. One worker said it was a lot of hard work making up all those names and another said he would sit at home, smoke marijuana and fill out the forms.” ACORN explained that this was an “isolated” incident, yet similar stories have been reported in Missouri, Michigan, Ohio, and Colorado — all swing states, by the way. ACORN members
ACORN does many things under the umbrella of “community organiz-
have been prosecuted for voter fraud in a number of states. (See www.rottenacorn.com.) Their philosophy seems to be that everyone deserves the right to vote, whether legal or illegal, living or dead. ACORN recognized very early the opportunity presented by the Community Reinvestment Act (CRA) of 1977. As Stanley Kurtz has reported, ACORN proudly touted “affirmative action” lending and pressured banks to make subprime loans. Madeline Talbott, a Chicago ACORN leader, boasted of “dragging banks kicking and screaming” into dubious loans. And, as Sol Stern reported in City Journal, ACORN also found a remunerative niche as an “advisor” to banks seeking regulatory approval. “Thus we have J.P. Morgan & Co., the legatee of the man who once symbolized for many all that was supposedly evil about American capitalism, suddenly donating hundreds of thousands of dollars to ACORN.” Is this a great country or what? As conservative community activist Robert Woodson put it, “The same corporations that pay ransom to Jesse Jackson and Al Sharpton pay ransom to ACORN.” ACORN attracted Barack Obama in his youthful community organizing days. Madeline Talbott hired him to train her staff — the very people who would later descend on Chicago’s banks as CRA shakedown artists. The Democratic nominee later funneled money
to the group through the Woods Fund, on whose board he sat, and through the Chicago Annenberg Challenge, ditto. Obama was not just sympathetic — he was an ACORN fellow traveler. NOW YOU could make the case that before 2008, well-intentioned people were simply unaware of what their agitation on behalf of non-credit-worthy borrowers could lead to. But now? With the whole financial world and possibly the world economy trembling and cracking like a cement building in an earthquake, Democrats continue to try to fund their friends at ACORN? And, unashamed, they then trot out to the TV cameras to declare “the party is over” for Wall Street (Nancy Pelosi)? The party should be over for the Democrats who brought us to this pass. If Obama wins, it means hiring an arsonist to fight a fire. __________________________________________ MONA CHAREN (c) 2008, Creators Syndicate __________________________________________
seamans Seamans from page 14
ANSWERS 1. The Pacific Ocean is the largest. 2. The Sahara Desert is the world’s largest desert. 3. The Great Lakes are named Erie, Huron, Michigan, Ontario and Superior. 4. Lake Michigan is completely inside the United States. All others are shared between the United States and Canada. 5. Las Vegas had a massive increase in population during that decade. 6. Zaire is now the Republic of the Congo. 7. These are the Grammys. 8. The British national anthem is “God Save the Queen/King.” 9. Canada’s national anthem is “O Canada.” 10. The first colonial president elected at the Continental Congress was Peyton Randolph. Colonial Williamsburg, Va., Answer Man-er Sophie Hart sent us this question. Take “The Answer Man” to work or to school. Challenge your friends for “Bragging Rights.” Send your questions and answers to: The Answer Man, Andy Seamans, Horizon House #603, 1300 Army Navy Dr., Arlington, VA 22202. __________________________________________ ANDY SEAMANS (c) 2008, Creators Syndicate __________________________________________
October 8, 2008
POLITICAL DISCOURSE: October 1, 2008
Speak correctly — or build a big bunker
llow me to introduce myself. I am a traitor and an idiot. Also, my mother should have aborted me and left me in a dumpster, but since she didn’t, I should “off” myself. Those are just a few nuggets randomly selected from thousands of e-mails written in response to my column suggesting that Sarah Palin is out of her league and should step down. Who says public discourse hasn’t deteriorated? The fierce reaction to my column has been both bracing and enlightening. After 20 years of column writing, I’m familiar with angry mail. But the past few days have produced responses of a different order. Not just angry, but vicious and threatening.
The emotional pitch of many comments suggests an overinvestment in Palin as “one of us.” Palin’s fans say they like her specifically because she’s an outsider, not part of the Washington club. When she flubs during interviews, they identify with that, too. “You see the lack of polish, we applaud it,” one reader wrote. Of course, there’s a difference between a lack of polish and a lack of coherence. Some of Palin’s interview responses can’t even be critiqued on their merits because they’re so nonsensical. But even that is someone else’s fault, say Palin supporters. The media make her uncomfortable. Or, it’s the fault of those slick politicos who are overmanaging her. “Let Sarah be Sarah” has become the latest rallying cry among my colleagues on the right. She’ll be fine if we just leave her alone, they say. Between prayers, I might add. Not all my mail has been mean-spirited. A fair number expressed polite disappointment; others relief and gratitude. Still others offered reasonable arguments aimed at changing my mind. I may yet. In the meantime, this assault and my decision to write about it aren’t really about me — or even Sarah Palin. The mailbag is about us, our country, and what we really believe.
SOME OF my usual readers feel betrayed because I previously have written favorably of Palin. By changing my mind and saying so, I am viewed as a traitor to the Republican Party — not a “true” conservative. Obviously, I’m not employed by the GOP. If I were, they’re seriously in arrears. But what is a true conservative? One who doesn’t think or question and who marches in lockstep with The Party?
That we have become a partisan nation is no secret. This week has provided a vivid example of where rabid partisanship leads with the failure of Congress to pass a bailout bill vitally needed to keep our economy from unraveling. HOUSE SPEAKER Nancy Pelosi gave a partisan speech, blaming the credit crisis on the Bush administration (omitting the Clinton administration’s role in launching the subprime lending debacle). Republicans responded by voting against the bill. Everyone’s to blame, by the way.
Such extreme partisanship has a crippling effect on government, which may be desirable at times, but not now. More important in the long term is the less tangible effect of stifling free speech. My mail paints an ugly picture and a bleak future if we do not soon correct ourselves. The picture is this: Anyone who dares express an opinion that runs counter to the party line will be silenced. That doesn’t sound American to me, but Stalin would approve. Readers have every right to reject my opinion. But when we decide that a person is a traitor and should die for having an opinion different than one’s own, then we cross into territory that puts all freedoms at risk. (I hear you, Dixie Chicks.) I’m sure it is coincidence that, upon the Palin column’s publication, a conservative organization suddenly canceled a speech I was scheduled to deliver in a few days. If I were as paranoid as the conspiracy theorists are, I might wonder whether I was being punished for speaking incorrectly. Unfortunately, that’s the way one begins to think when party loyalty is given a higher value than loyalty to bedrock principles. Our day of reckoning, indeed, may be upon us. Between war and economic collapse, we have enormous challenges. It will take the best of everyone to solve them. That process begins minimally with a commitment to engage in civil discourse and a cease-fire in the war against unwelcome ideas. IN THAT spirit, may Sarah Palin be fearless in Thursday’s debate and speak her true mind. __________________________________________ KATHLEEN PARKER (c) 2008, Washington Post Writers Group __________________________________________
October 8, 2008
ROOSEVELT VS. WILSON: October 4, 2008
Roosevelt vs. Wilson and McCain vs. Obama
arack Obama claims that he is a new breeze, but he is actually a throwback to Woodrow Wilson both in his policies on many issues and in his manner of thinking and speaking. John McCain implies that he is a throwback to Theodore Roosevelt, “my great hero and role model,” and both his policies and his style show that he is self-aware. Wilson was born in 1856 and Roosevelt on Oct. 27, 1858, making this month the 150th anniversary of his birth. A few hardy souls still visit T.R.’s birthplace on 20th St. in Manhattan, a brownstone that was his home until age 14. Guides there talk about the esteem Roosevelt had for his father, whom he called “the best man I ever knew.” MCCAIN’S autobiography, Faith of My
Fathers, shows his veneration for his father and grandfather, both of whom were Navy admirals. But Obama, who grew up without a dad’s presence, emphasizes newness rather than tradition: “We are the change we have been waiting for. ... I am confident that we can create a Kingdom right here on Earth.” Wilson, who grew up in a traditional Southern Presbyterian setting but abandoned those beliefs to embrace theological modernism, spoke the same way, referring to himself as the “ambassador of salvation” and “the personal instrument of God.” He predicted that Americans “will turn to him almost as they would turn for salvation,”
and that he was the one who could “exert upon men that influence which will turn their eyes from themselves.” If Obama gets to the White House, his inaugural address will probably be as exultant as Wilson’s first one: “The feelings with which we face this new age of right and opportunity sweep across our heartstrings like some air out of God’s own presence.” Wilson said his administration would work “to purify and humanize every aspect of our common life ... to lift everything that concerns our life as a Nation to the light that shines from the hearthfire of every man’s conscience and vision of the right.”
BAILOUT: September 25, 2008
The case against the bailout
he late comedian Jack Benny made a career of claiming to be a cheapskate. In one joke, a robber accosted him and said: “Your money or your life.” Getting no response, the thug repeated his demand. Benny replied, “I’m thinking about it!” That’s the sort of dilemma posed by Henry Paulson and Ben Bernanke in their proposed rescue of financial institutions. They predict dire consequences if they don’t get their way. But the consequences of letting them have their way are so awful that the alternative doesn’t look so bad. What they prescribe is for the federal government to buy $700 billion worth of lousy assets from banks and other lenders, exposing taxpayers to a potentially crushing liability. This plan would nationalize the money-losing part of the financial sector, to the benefit of capitalists who have made spectacularly bad decisions — fostering more bad decisions in the future. IT WOULD add to the liabilities of a government that is already living way beyond its means. It would give unprecedented power to a couple of officials who have proved highly fallible in trying to avert this alleged crisis. And it poses the risk of abuse and corruption because the government has no way to gauge the value of what it will buy. Nor is there any guarantee the plan would work. The cover of the latest issue of Fortune magazine hails the “steelyeyed Treasury chief” under the headline “Paulson to the Rescue.” The story appears brilliantly timed — until you realize it is about the earlier rescue of mortgage giants Fannie Mae and Freddie Mac. That was just one of several steps taken by the
feds that were supposed to halt the downward spiral. None of them has. The latest action was justified by the threat that the entire credit system would cease to function. “Last week, our credit markets froze,” Paulson told the Senate Banking Committee. “If that situation were to persist, it would threaten all parts of our economy.”
Chapman George Kaufman, a finance professor at Loyola University Chicago, is skeptical. “The last refuge of a scoundrel regulator,” he says, “is to shout ‘systemic risk.’” Usually, the alarm is false. He notes that aside from inter-bank lending, the credit markets were functioning tolerably well at the height of the crisis. Rates on 30-year mortgages actually dropped last week. If banks really need to get rid of this junk paper, they could have unloaded it before now. Merrill Lynch did itself a lot of good by facing reality and taking 22 cents on the dollar. But other companies now have the far more enticing option of selling to the government at a premium. THE POINT of the plan, after all, is to shore up struggling firms by awarding them more for those assets than they could get anywhere else. As an analysis in the Washington Post put it, “the more effective the plan, the more expensive it will be.” Not only that, the more effective it is,
the more damage it will do to the free market system. Saving companies from their bad gambles turns business into a game of “profits for me, losses for you,” corroding the incentives that make capitalism so innovative and efficient. And for what? Bernanke warns of a recession. But economic downturns are not to be avoided at all costs. And one good thing about recessions is that they end, usually in a matter of months. An intervention of this nature, by contrast, would have malignant consequences for decades to come. A group of 122 economists, including at least two Nobel laureates, signed a letter this week summarizing the danger: “If the plan is enacted, its effects will be with us for a generation. For all their recent troubles, America’s dynamic and innovative private capital markets have brought the nation unparalleled prosperity. Fundamentally weakening those markets in order to calm short-run disruptions is desperately short-sighted.” Not to mention the risk of giving the executive branch powers that a Russian czar would envy. If this bailout goes through, the term “limited government” will have to be permanently retired. PAULSON AND Bernanke say, and probably believe, that their program is for the good of us all. But remember what Thoreau thought of their 19th-century counterparts. “If I knew for a certainty that a man was coming to my house with the conscious design of doing me good,” he wrote, “I should run for my life.” __________________________________________ STEPHEN CHAPMAN (c) 2008, Creators Syndicate __________________________________________
Wilson at times claimed direct divine inspiration; for example, his League of Nations proposal arose “by no plan of our conceiving but by the hand of God who had led us into this way.” (Unlike God, however, Wilson was so far short of omniscient that he did not even know the geography and demographics of one “country” he abstractly stitched together, Czechoslovakia.) EUROPEAN crowds this summer showed Obama love as they did for Wilson in 1919, but experienced European leaders back then guffawed. British Prime Minister Lloyd George scorned Wilson’s statement that “Jesus Christ so far [has] not succeeded in inducing the world to follow His teaching because He taught the ideal without devising any practical scheme to carry out His aims.” Wilson often talked around subjects with torrents of words, as Obama and his running mate Joe Biden do now. Once in office Wilson raised taxes, pioneered a regulatory regime by pushing through the Federal Reserve System and the Federal Trade Commission, and campaigned in 1916 on a “He kept us out of war” slogan, only to propel the United States into war early the following year. As Americans learned then and British appeasers belatedly realized two decades later, war is more likely to come when great powers give ambiguous signals than when they are forthright. McCain is forthright and direct in answering questions. Like Roosevelt, he is assertive on foreign policy and opposed to what T.R. called “mere sentimentality” in helping the needy. Guides at Roosevelt’s boyhood home emphasize the training in compassion he garnered from his philanthropically fervent father: He insisted that “voluntary action by individuals in the form of associations” was most likely to produce “that most important of all forms of betterment, moral betterment—the moral betterment which usually brings material betterment in its train.” McCain’s views are similar. THE DECADE in which Wilson and Roosevelt were born, the 1850s, was next to the 1960s the weirdest one in American history. The stacks of the Library of Congress contain hundreds of books from the 1850s that purport to be messages spoken during séances by George Washington, Benjamin Franklin, and other long-dead notables purportedly channeled by “spiritualists.” But this year’s campaigning sounds like Roosevelt and Wilson going at it. Reprinted with permission of WORLD Magazine. To get more news and views from a Christian perspective, call 800-9516397 or visit www.worldmag.com. __________________________________________ MARVIN OLASKY (c) 2008, God’s World Publications __________________________________________
October 8, 2008
TARANTO PRINCIPLE: September 25, 2008
How the left wing media undermines itself
ears from now in journalism schools, they will call it the “Taranto Principle.” At least, that is what they will call it if they still have journalism schools years from now. In the future, the great republic may only have blog schools, those being schools where students are taught to sit in their underwear in front of their luminescent laptops and pound out semiliterate diktats to an — for the most part — unobservant world. Today the amalgamation of all this indignation is called the “blogosphere.” Its competing rants are treated occasionally as significant in the media, though lunatics howling on street corners are not. Very curious.
the left, Taranto believes that it has a harmful effect on left-wing politics, often causing left-wing candidates to lose at the polls. According to the Taranto Principle, the media’s failure to hold left-wingers accountable for bad behavior merely encourages the left’s bad behavior to the point that its candidates are repellent to ordinary Americans. According to Taranto, in 2004 the media quietly went along with Sen. Jean-Francois Kerry’s exaggerated claims to heroism and military prowess, thus encouraging his braggadocio and leaving him utterly unprepared when his fellow vets stepped forward and demonstrated that he had been a dreadful showoff in Vietnam. Officers who had fought alongside him served up evidence that his exploits were embellished and sometimes completely made up. They cast doubt on his medals and most damningly reminded us that in testimony on Capitol Hill, Kerry accused his fellow soldiers of war crimes. The vets reproduced the video, video that any journalist could have lain hands on.
WHAT IS the Taranto Principle? It is a principle laid down by the Wall Street Journal’s perceptive editorialist James Taranto. Taranto — in his column, “Best of the Web Today” — surveys the media and reports daily on their output with special emphasis on their contradictions, hypocrisies and — most deliciously — imbecilities. Like all other thoughtful observers of American media, Taranto recognizes that they are biased heavily toward the Democratic Party and the left in general. Yet while many who hold that this advances the Democratic Party and
THE VETS’ assault on Kerry is called “Swiftboating” now by leftwingers and journalists alike, who insist the vets’ charges were “lies,”
though four years later, it is apparent that the so-called lies comprised an accurate rendering of blowhard Kerry’s war record. Had the media treated his initial boasts with some skepticism, he might have been better prepared for the vets’ response. The left-leaning media spoiled Kerry and brought out the worst in him to the revulsion of enough voters to lose him the election. Now the Taranto Principle can be seen in the reporting on Gov. Sarah Palin. As a former mayor and sitting governor, she has about as much experience as former President Jimmy Carter had in 1976. Moreover, she obviously has more executive experience than the Democratic presiden-
tial candidate. Yet the media have let her experience become a vexed issue. Worse, at the highest level of media, she has been subjected to unwarranted scurrilities that are without precedent in a presidential election. Just the other night, an idiot comedy show portrayed her daughter and husband in an incestuous affair. The consequence of this is that Gov. Palin is running away with the women’s vote and doubtless picking up sympathetic men, also. According to this variation of the Taranto Principle, the media circulate infamies that encourage leftists to confect greater infamies, thus causing the defamed candidate to cop the sympathy vote. That vote will have consequences in this increasingly bizarre election. MEANWHILE, the press continues to treat the inexperienced and gaffe-prone Sen. Barack Obama as though he is the next JFK. Among the howlers is the presumption that he is an orator of great gifts as JFK was an orator of great gifts. In truth, the Prophet Obama suffers one of the strangest oratorical disabilities I ever have seen in a presidential candidate: a dependence on the teleprompter. We know of politicians who depend on the teleprompter for fluency. Sen. Obama, however, relies on a teleprompter so that he will not be heard talking down to the electorate. If he is not lecturing with his nose in the air, he is all uhhs and ahhs. Perhaps if he had served as mayor in a small town, he would have gotten over this revealing disorder.
__________________________________________ R. EMMETT TYRRELL (c) 2008, Creators Syndicate __________________________________________
October 8, 2008
PERVERTED TV: September 26, 2008
Castration: The next television frontier
he temperature has cooled, the leaves are turning colors, and the new fall television season has begun. Enter the mudslide. The Shock and Awe manipulators have been unleashed to air evermore graphic sex and grotesque violence — and, predictably, a combination of the two. The first “winner” in this race to the bottom was the FX cable channel, another sure bet. On Sept.17, viewers of the appropriately named new series Sons of Anarchy were “treated” to a graphic castration scene, complete with hacked-off genitals shown lying in a pool of blood. Completely tasteless programming is in, and FX bathes in it. The mastermind of all that Rupert Murdoch-backed villainy is an executive named John Landgraf, who pronounces his philosophical approach thusly: “One of our writers used to say, ‘Bad men do what good men can only dream about.’ There is a sense that what
these characters are doing is allowing us to explore, in a safe context, our id and subconscious, what we might do if there were no restraints of society or conscience on us.’’ DEFENDERS of graphic violence in television or films insist that the power of these images do not corrupt. A person can view these programs without dreaming those dreams or acting upon them. But it’s pathetic to argue that Hollywood is somehow performing a public service, taking the violence out of society, so as to “allow us to explore in a safe context” how much we’d like to castrate someone. No one should attempt to argue that “exploring our id” is a socially construc-
tive crusade instead of a cynical attempt to shock your way to some extra ratings points, at least not without a laugh track attached. It might be amusing to watch a Hollywood executive try to argue before a minister that allowing someone to fantasize about unleashing his violent subconscious is a path to holiness. Most ministers would reply that someone who constantly dreams about committing violent acts, but never actually does it in real life is not a “good” person. They would see a flaming sinner with a socially helpful amount of cowardice. Landgraf’s brazen attempts to play a moralist suggest a different maxim, one that fits a Hollywood executive: Bad men corrupt good men by bombarding them
BAILOUT: September 29, 2008
A bailout to save capitalism
pponents of the Henry Paulson bailout plan are prepared to try an economic experiment: Is it possible to have capitalism without capital? The massive government intervention in the financial system represented by the embattled $700 billion plan has brought fiery denunciations of creeping socialism from the right and fierce attacks on welfare for Wall Street at the expense of the middle class from the left. All of this windy posturing might have a point if capitalism could operate effectively in the absence of a functioning financial system (it can’t) and if it weren’t proverbial Main Street that will ultimately suffer the direst consequences from severe financial dysfunction (it will). THE PHRASE the “real” economy has become a hallmark of the debate over the bailout. The “real” economy is implicitly contrasted with the “fake” economy of the financial world and identified with all things wholesome and solid. John McCain talks of the honest laboring man as the strength of America. No doubt he is, but presumably he wants to buy a house (which requires a mortgage), not pay for everything with cash (which requires credit cards), have a job (which requires a business that is very likely dependent on loans) and buy big-ticket consumer items he can’t pay for upfront (which requires car loans, etc.). Freeze up all those sources of credit, and economic life as we know it ends. Already, the financial panic has sent inves-
tors to the safety of Treasury bills, leaving less capital for consumers and businesses. No one seems to realize how much businesses rely on short-term loans for routine operations like meeting payroll, and how that most characteristic American entrepreneurial figure — the guy with a bright idea he works out in his garage — depends on investment and loans. Conservatives who make so much of their knowledge of the markets would ordinarily be the ones to point this out, but
Lowry they have a blind spot for the failures of the market. The financial system is subject to periodic panics that, if left to work their course, will wreak economic havoc out of all proportion to reason. They take down good institutions along with the bad. If it works, the Paulson plan’s most worthy accomplishment will be saving innocent bystanders from the wildly swinging tail of the blind and panicked financial beast. IF CONSERVATIVE purists opposing the Paulson plan were to be consistent in their market fundamentalism, they’d work Ron Paul-style to eliminate the Federal Reserve and just accept depressions as the cost of doing business in a capitalist system, as we once did in the 19th century.
We weathered the depression of 1893 — fueled by the bursting of a railway bubble that devastated the banks — so why can’t we grin-and-bear-it through another one? House Republicans will get the blame if the Paulson plan isn’t saved. When the bill was brought to the House floor on Monday, 133 Republicans and 95 Democrats voted “no.” That’s a lot in both caucuses, but Democrats delivered a majority of their members in favor. Yes, House Speaker Nancy Pelosi was harshly partisan throughout the process. But that’s not a good excuse. Too many Republicans followed the siren song of ideological fixity. The financial crisis is so disturbing exactly because finance is so centrally important. Our sophisticated financial system — inherited from the British — has been one of the glories of Anglo-American capitalism. “The bankers, accountants, investors, traders, and corporate officers whose joint efforts brought this system forth have changed the world far more profoundly than virtually any of their contemporaries,” writes Walter Russell Mead in his book God and Gold: Britain, America, and the Making of the Modern World. WITHOUT THIS system, Britain and America wouldn’t have risen to global pre-eminence, and consumer capitalism as we know it — dependent on credit — wouldn’t exist. We may be about to find out what happens when it is rocked to its foundations. __________________________________________ RICH LOWRY (c) 2008, King Features Syndicate __________________________________________
with entertainment that shocks them so aggressively and consistently that they’re programmed to seek out an ever edgier, more graphic “entertainment” experience. FX’s Sons of Anarchy is another series about antiheroes, in this case a northern California motorcycle gang and criminal enterprise. Unsurprisingly, the show erupts from a man named Kurt Sutter, a longtime scriptwriter of the gruesome FX crooked-cop series The Shield. Sutter admitted — boasted, really — to the Miami Herald that he’s trouble: “My sensibility is really twisted and dark ... Every story pitch that ever got me thrown out of a meeting, I put in The Shield.” Sutter was the source of two of the most notorious scenes in that show, the melting of a drug dealer’s face into an electric grill burner, and a police captain being forced to commit an act of oral sex on a gang member at gunpoint, with all its revolting head-bobbing. SUTTER TOLD the Herald’s Glenn Garvin that FX executives patiently ask him to consider that not yet everyone shares his “vision,” and so he has to move a little slower. “The notes weren’t saying, ‘don’t do it,’ but ‘we want to honor your vision; now how are we going to photograph it?’” he recounted. “I lose perspective of people’s capacity for watching violence. I just do. ... I really need somebody to say, ‘You can’t do that. You don’t want to turn people off.’” In a nutshell, what we’re hearing is FX executives who have a lot more sensitivity to the “vision” of a seriously twisted human being than they do to the prospect of a 10-year-old boy finding a terrifying castration scene as he’s flipping channels in his home. As usual, the TV critics are almost as sick as the alleged visionaries of Tinseltown. Associated Press critic Frazier Moore oozed about Sons that “FX is adding to its roster of outstanding dramas that showcase fascinating anti-heroes who buck the system, doing some good but leaving plenty of collateral damage. They are shrewd go-getters who, more than anything, keep creating problems for themselves.” Moore doesn’t mention the castration scene, but he seems to suggest that it’s just another example of “shrewd go-getters” bucking the system. ONCE AGAIN, the gruesome unfolding of a pervert’s mind onto a national television screen underlines the need for the cable industry to provide a system of consumer choice, where parents have some ability to pick and pay for the cable networks they want, and not subsidize the twisted Wizards of Id at networks like FX. __________________________________________ BRENT BOZELL (c) 2008, Creators Syndicate __________________________________________
October 8, 2008
CAPITALISM: September 25, 2008
Is capitalism on the ropes? Let’s try it first
n indictment of greed! A case for more government intervention! Worst financial crisis since the Great Depression! Failure of capitalism! This list includes the “lessons” of the recent turmoil in the financial markets. Nonsense. Down with greed! Someone please produce the gun held to the temples of borrowers who put little or no money down, took out “teaser” rates, and then pleaded ignorance or victimhood when the lender — as stipulated in the contract — jacked up the rate. Lenders and borrowers expected government/taxpayers to somehow, someway, step in and shield them from the consequences of their decisions. This creates “moral hazard” — behavior based upon the knowledge of protection from the bad consequences of reckless or irresponsible behavior. Decisions entail risk, whether personal or financial ones.
and Fannie’s collapse and subsequent government takeover, OFHEO issued a report that saw only clean sailing. The Community Reinvestment Act, passed in 1977, mandated that lenders lend to highrisk borrowers — or else. The government actually held up prudent bank mergers if one or both sides did not sufficiently “lend” to borrowers who, under normal circumstances, failed to qualify. Why is the federal government in the housing business in the first place? We need less government, not more regulation. We are experiencing “the greatest financial crisis since the Great Depression!” Even if this were true, we aren’t even close to that catastrophic event. At the Great Depression’s nadir, 25 percent of adults were unemployed, including nearly 50 percent of urban black adults. Economist David Wheelock, of the Federal Reserve Bank of St. Louis, says that by the dawn of 1934, nearly half the urban homes with mortgages were in default, and 7.3 percent of housing structures had been foreclosed. Today 6.4 percent of mortgages are delinquent, 2.75 percent are in the foreclosure process, and 0.6 percent of all housing units are bank-owned. But what about since the Great Depression? Take the recession of 1980-81. In 1980, inflation averaged 13.58 percent, unemployment increased from 6.3 to 8.5
WE NEED more regulation! We have it — lots of it. Ever hear of the Office of Federal Housing Enterprise Oversight (OFHEO)? This agency, which employs 200 people, exists for one thing and one thing only — to “oversee” Freddie Mac and Fannie Mae, the “government-sponsored entities” that own or guarantee 40 percent of the nation’s residential mortgages. Mere months before Freddie
percent, and the prime loan rate reached an astonishing 21.5 percent. According to the Mortgage Bankers Association, today’s delinquency rate is only a little higher than in 1985. And in 1999, the foreclosure rate set records. ACCORDING TO the FDIC, in the almost two-year period of 2007 and 2008, 15 banks failed. Similarly, during Clinton’s last two years in office, 1999 and 2000, 15 banks also failed. In the recession-free years of 1988 and 1989, there were 1,004 bank failures. And since the Great Depression, the average number of yearly bank failures has been 94. This exposes the failure of capitalism! What do you say we actually try capi-
talism, where private actors reap rewards and assume the risk? “Capitalism,” says Kenneth Minogue, professor emeritus at the London School of Economics, “is what people do if you leave them alone.” People want “hands off” until, that is, they want “hands on.” People want homes, many preferring that option even when renting may be more prudent. Many want rent control to shield them from leasing at fair market rates. Democratic presidential candidate Barack Obama promises “world-class” education — with taxpayers paying for it. And the federal government, in dramatic contradiction with the limitedgovernment intention of the Constitution, involves itself in health care, guaranteeing private-sector retirement accounts, disaster relief, welfare, unemployment compensation benefits, retirement benefits, etc. The Federal Reserve Bank, in effect, prints money to pay for things that voters demand — but their taxes cannot cover. The proposed bailout of financial institutions enables the Fed to create hundreds of billions of dollars out of thin air. The cost is greater inflation — a stealth tax on us all. Government, meanwhile, grows and grows. In 1930, before Franklin Delano Roosevelt’s New Deal, taxpayers paid about 12 percent of their income to all three levels of government — state, local and federal. Today we pay approximately 40 percent — even more if you attach a value to unfunded mandates, such as those issued by agencies such as OSHA. SO, YES, our recent financial turmoil does suggest failure — a failure to truly practice capitalism and a failure to accept and believe in the value, appropriateness and morality of a limited government and maximum personal responsibility. __________________________________________ LARRY ELDER (c) 2008, Creators Syndicate __________________________________________
October 8, 2008
FANNIE & FREDDIE: September 25, 2008
Fannie & Freddie (sub)prime suspects of mess
here is no more insidious myth than the notion that the subprime-mortgage debacle began on Wall Street and that predatory capitalism was responsible for the whole blooming mess. Economist Milton Friedman used to say that just about every economic and social ill that confronts our country could be traced to misguided federal policies and their “unintended consequences.” And that is certainly true of the subprime crisis seeds that were planted by two federally created, government-assisted lending agencies: Fannie Mae and Freddie Mac.
sured, pushed and ordered the agencies to make housing loans to lower-income borrowers who could not meet credit standards elsewhere in the mortgage industry. As of last year, Fannie Mae alone owned or guaranteed more than $388 billion of these high-risk loans. “Their large presence created an environment within which even mortgage-backed securities assembled by others could find a ready home,” the American Enterprise Institute economist says. There were those who saw disaster early in the making, and that’s what happened from 2004 to 2005 when both agencies were caught in the undertow of an accounting scandal that swept Fannie Mae CEO Franklin Raines from office in disgrace. One of those who tried to rein in the two agencies was President Bush, who recommended in 2003 that an agency be created to regulate the housing-finance industry, including Fannie Mae and Freddie Mac. But Barney Frank, then the ranking Democrat on the Financial Services Committee and now its chairman and chief protector, stopped Bush’s regulatory initiative cold. “These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” Frank
TO BE SURE, there’s lots of blame to go around, but these two mortgage giants were at the root of this scandal. “Fannie and Freddie did this by becoming a key enabler of the mortgage crisis,” wrote economist Kevin Hassett in a revealing article for Bloomberg financial news. “They fueled Wall Street’s efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools. In addition, they held an enormous portfolio themselves.” To a large degree, Fannie and Freddie became the mortgage market, as Democratic leaders in Congress pres-
said then. “The more people exaggerate these problems, the more pressure there is on these companies and the less we will see in terms of affordable housing.” Frank’s Democratic ally, Rep. Melvin Watt, saw the Bush regulation as a sinister move to tighten control of the lending giants. “I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Watt said at the time. So the situation festered, despite repeated warnings that the two mortgage businesses were a catastrophe in the making. IN 2005, Federal Reserve Chairman Alan Greenspan told Congress that if Fannie and Freddie “continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest-rate
aversion, they potentially create evergrowing potential systemic risk down the road. “We are placing the total financial system of the future at substantial risk,” Greenspan testified. Around that time, a regulatory reform bill came out of the Senate Banking Committee that would have cracked down on the two agencies and forced them to jettison their riskiest investments. But that bill, opposed by Connecticut Sen. Chris Dodd and New York Sen. Hillary Clinton, among others, never became law, because Democrats rallied in lock step against it and prevented it from coming up for a floor vote. In layman’s terms, Hassett explains that, if Fannie and Freddie had been disbanded or at least had been forced to submit to needed oversight and regulation, “this whole mess could never have happened.” This is not to say that there weren’t other factors involved in a subprime scandal. “This is the result of a witches’ brew of bad government policies and programs — from the Community Reinvestment Act, which required banks to provide homeownership loans to people who couldn’t afford to repay them, to Fannie Mae and Freddie Mac, which started the financial contagion by encouraging ‘subprime’ loans, to the Fed’s easy monetary policies that helped produce the housing bubble,” said Cesar Conda, former chief domestic policy adviser to Vice President Dick Cheney. But Fannie and Freddie are at the core of this financial calamity. “There shouldn’t have been a Fannie and Freddie. They are the perfect example that power corrupts,” free-market economist Arthur B. Laffer told me last week. THEY ARE also another reason why government should not be running commercial enterprises and why Treasury Secretary Hank Paulson should dismantle and sell both businesses as soon as it is feasible to do so. __________________________________________ DONALD LAMBRO (c) 2008, United Media Services __________________________________________
October 8, 2008
HOLLYWOOD CONSERVATIVES: September 30, 2008
Clandestine conservatives in Hollywood
s I was being interviewed recently at my Texas ranch by Geraldo Rivera, I thought back over my four decades in acting and how the pool of conservative “tough guys” seems to be drying up in Hollywood. Or are liberal waters just getting too hot for conservatives? Then I recalled that the Washington Times recently reported, “A group of politically conservative and centrist Hollywood figures (up to 600 at once) organized by actor Gary Sinise and others has been meeting quietly in restaurants and private homes, forming a loose-knit network of entertainers who share common beliefs like supporting U.S. troops and traditional American values.” But the article also noted that the secret is out on these clandestine meetings, as conservatives progressively are becoming more and more emboldened.
the opposite positions on those measures, he is considered to be compassionate and a liberator. Or when a liberal candidate, such as Hillary Clinton, runs for president, her candidacy is considered a fulfillment of civil rights and women’s suffrage. But when a conservative candidate, such as Sarah Palin, runs for vice president, she’s considered a radical right-wing extremist who could usurp the Capitol by toting rifles at her side. This is America, and we should respect the fact that we will have strong, diverse opinions, and we must allow one another the freedom of speech to air such opines, not suppress them through peer pressure of any type like children. I have many acting friends and many friends in politics. I vehemently disagree with some of them, and that is my American right, as it is theirs. We must agree to disagree agreeably, without blogging about or denigrating someone’s life and character before the nation and rest of the world. We must do better at keeping the focus on the fact that we are Americans first; we are not just conservatives and liberals.
IN A SO-CALLED age of tolerance, it amazes me just how intolerant some people are of those who stand for traditional values. For example, if I stand against California’s memorializing of Harvey Milk Day or stand for California’s Proposition 8, which would create an amendment to the California Constitution to safeguard heterosexual purity in marriage (which I do support and encourage Gov. Schwarzenegger and all Californians to do the same), I’m considered by many to be intolerant and a bigot. But if another actor takes just
IF WE are going to move our country forward, if it is going to survive and flourish for the next generation, then we have to drop the partisan rancor and pick up a unified patriotism — not the patriotism of the past eight years or even the past 18 years, but the patriotism of unified spirit and pas-
sion shown by early Americans. What was important to them, what they fought for, was not the left or the right, but being American and being free. We’ve got to get back to that form of patriotism — one that is based upon the Constitution, not congressional corruption, and elects people for their character, not their charisma. These are the type of citizens and leaders who don’t go deeper into debt to bail out debt. These are the type of citizens and leaders who will say enough is enough. Like Ron Paul, who, after drawing similarities between the $700 billion bailout and the Great Depression, said, “The only thing we learn from history, I am afraid, is that we do not learn from history.” (Getting to the heart of America’s Found-
ers’ beliefs — their patriotism and answers to our problems — is also at the heart of why I wrote my latest New York Times bestseller, Black Belt Patriotism.) I admire those in the recent past who were able to represent a respectful conservatism in the liberal-leaning show business industry — men such as Charlton Heston, John Wayne, Jimmy Stewart and Ronald Reagan. And I’m grateful for others today who also have stood for conservative values — incredible actors such as Jim Caviezel, Mel Gibson, Jon Voight and others. These are the type of men who will go against the grain of the Hollywood status quo. These are the type of men who get the fact that entertainment isn’t about playing party politics. These are the type of men who demonstrate what my hero and stalwart conservative, John Wayne, once said: “Courage is being scared to death and saddling up anyway.” Despite Tinseltown’s liberal leanings, there is a lot of good that conservatives are doing in the film industry — not only for American entertainment but also for activism. That is why I recommend movies such as Sherwood Pictures’ Fireproof, David Zucker’s An American Carol and the millennial social cry to expose and stop the global and even American slave trade, Call + Response. UNDERGROUND or aboveground, we’re all “created equal ... endowed by (our) Creator with certain unalienable Rights, that among these are Life, Liberty, and the Pursuit of Happiness.” On Main Street or Wall Street, in the movie business or the political arena, maybe there’s much more overlap in life than we think; maybe we’ve got a lot more in common than we really know. We’re Americans. __________________________________________ CHUCK NORRIS (c) 2008, Creators Syndicate __________________________________________
October 8, 2008
INCUMBENTS: September 25, 2008
Judgment day, no more business as usual
t isn’t often that public outrage peaks so close to an election, but this is a rare moment in history when “we the people” can exact a price from the political leadership that has duped, scammed and lied to them, contributing mightily to the current financial mess. At the Senate Banking Committee hearings Tuesday, Democrats, led by Chairman Chris Dodd of Connecticut, seemed to think the mortgage crisis, aided and abetted by Fannie Mae and Freddie Mac, AIG, Bear Stearns, Lehman Brothers and other disasters, occurred on someone else’s watch. Dodd, joined by ranking Republican Richard Shelby of Alabama, criticized what he said was the ad hoc nature of the government’s response to the financial crisis and complained that the Bush administration’s proposals lack detail.
SOME HISTORY is important. It was pressure from the Carter and Clinton administrations that forced Fannie and Freddie to grant more high-risk loans to people who otherwise would never qualify. They mostly wanted to promote not only new home ownership numbers, but also more home ownership in the minority community. That was a noble goal, but the cost turned out to be too high. Democrats would love to blame the Bush administration for a disaster they mostly helped to create. But, according to the White House, as early as April 2001, the administration warned that the size of Fannie Mae and Freddie
Mac was “a potential problem,” because “financial trouble of a large (government-sponsored enterprise) could cause strong repercussions in financial markets, affecting federally insured entities and economic activity.” As recently as June of this year, President Bush asked Congress to take the necessary measures to address growing foreclosures. “We need to pass legislation to reform Fannie Mae and Freddie Mac,” he said. In July, Congress passed reform legislation, but it was too late. It is an affront to the nation that some of the people who brought on the crisis (and financially and politically benefited from the status quo) were asking
MAHMOUD AHMADINEJAD: September 25, 2008
In a New York state of mind
ranian “President” Mahmoud Ahmadinejad rejects American ideas — all of our ideas, that is, but nuclear fusion. When Ahmadinejad told a crowd at Columbia University in 2007 that the United States must investigate “who was truly involved” in 9/11, students may have confused the speech with ethnic studies class. There should be no confusion. It’s bad enough this birdbrained troglodyte was walking the streets of America’s greatest city again this week, a place teeming with women, Christians, Jews and gays. Ahmadinejad has something to offend all. Holocaust denier. Misogynist. Religious fanatic. Terrorist enabler. Homophobic inquisitor — though Ahmadinejad does claim, “In Iran, we don’t have homosexuals like in your country.” YES, Ahmadinejad delivered an anti-Semitic lecture at the United Nations that could have been used at a battalion reunion of the Schutzstaffel. But let’s not forget he also believes “a world without America ... is attainable.” So why isn’t everyone troubled? Why did CNN’s Larry King, who nabbed Ahmadinejad for an interview, shower the Iranian strongman with queries that wouldn’t have rattled Elizabeth Taylor? Why does the apologist fringe of the American left continue to assail U.S. policy rather than a belligerent Iran? Why aren’t high-minded left-winger politicos as insulted by Ahmadinejad as
they are by, I don’t know, Sarah Palin? Instead, Ahmadinejad felt welcome. He spent a couple of hours schmoozing at New York’s Grand Hyatt with representatives of the American “peace movement.” Jodie Evans, co-founder of the antiwar group CodePink, actually had a sit-down with Ahmadinejad. “It’s rare,” she explained, “for a head of state to take time during an official U.N. visit
Harsanyi to meet with the peace community, especially in a situation where the host government — represented by the Bush administration — is so hostile.” Human Rights Watch reports that Ahmadinejad, when he’s not torturing dissidents, “has shown no tolerance for peaceful protests and gatherings.” There is no CodePink in Tehran for Ahmadinejad to sit down with. Then again, CodePink’s mission is to shut down the free expression of those it disagrees with, so perhaps the two parties had a congenial discussion. BUT BACK to planet Earth ... Palin, in a speech she could not deliver in New York, accused Ahmadinejad of dreaming “of being an agent in a ‘Fi-
nal Solution’ — the elimination of the Jewish people.” True. Barack Obama condemned the speech in strong language and pointed out that the “threat from Iran’s nuclear program is grave.” True, as well. This is a stark reversal from Obama’s naive earlier assertion that he would meet with Ahmadinejad without any preconditions. As he well knows, no matter who wins in November, Iran can’t be ignored. The latest report from the International Atomic Energy Agency reports that Tehran’s nuclear activities present “a decidedly bleak picture.” Most observers believe Ahmadinejad is stonewalling inspectors while he works on a nuclear bomb and missile warheads. This report, incidentally, wasn’t issued by bellicose Rovian Bushites hellbent on waging war for amusement and oil, but a contingent of twinkle-toed worldly optimists. How exactly will a new administration stop Iran if Iran continues to ignore diplomacy and sanctions, as they have for the past six years? How will the world sanction Ahmadinejad when the U.N. Security Council includes Russia, a nation that has done its best to allow Iran’s nuclear program to continue? No candidate has clued us in yet. SO IT’S NO wonder Ahmadinejad feels so comfy in New York. __________________________________________ DAVID HARSANYI (c) 2008, Creators Syndicate __________________________________________
the questions at the Banking Committee hearing. They should have been in the witness chair. Dodd said the crisis was “entirely foreseeable and preventable.” Then why didn’t he try to prevent it? He should have been answering questions about the PAC contributions he received from Fannie Mae and Freddie Mac, (according to opensecrets.org, he’s the Senate’s no. 1 recipient of campaign contributions, $133,900, Barack Obama is no. 3, $105,849), his sweetheart Countrywide Financial mortgage rate and whether they influenced his inattentiveness to the growing mortgage crisis. IF THE PUBLIC wants real reform, it will penalize the people and the party that failed to provide it. Voters can do more than “throw the bums out.” They can throw these bums out and replace them with freshmen Republicans who will take office with a reformer’s zeal and rebuild the government’s financial house before the Potomac fever virus infects them. With John McCain and Sarah Palin already committed to reform (as opposed to Barack Obama’s nonspecific “change”), the combination of a new Republican administration and a Republican Congress that has been chastened by its defeat in the 2006 election and imbued with a new zeal to change the way Washington works, could produce a revolution that would have made our Founders proud. Polls show many congressional races are tightening. But while Democrats are bragging about increasing their numbers and producing a “veto-proof” majority, can the public trust that those who gave us the problem can provide the solution? McCain and Palin ought to do more than ask voters to elect them. They should call for a complete house cleaning in Washington and ask voters to give them the mop. Real reform won’t come with a Republican White House and a Democratic Congress. And it surely won’t come with an all-Democratic government. While Republicans could have done much more when they held a congressional majority under a Republican president, they now swear they have learned their lesson. With the public engaged as never before, even Republicans wouldn’t be able to get away with business as usual this time. LET THE REVOLUTION begin! Judgment Day should come on Nov. 4.
__________________________________________ CAL THOMAS (c) 2008, Tribune Media Services __________________________________________
October 8, 2008
FINANCIAL CRISIS: September 28, 2008
Whose mess is it, Congressman Frank? “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.’”
pline 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 leftwing 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
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 disci-
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. Affirmativeaction 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. __________________________________________ JEFF JACOBY (c) 2008, Boston Globe __________________________________________
October 8, 2008
CAMPAIGN 2008: September 30, 2008
McCain should pin the tail on the donkey
believe John McCain won the foreign policy debate hands down, but he was unimpressive on economic issues, which, in fairness, were not supposed to be the subject of the first debate. But he can redeem himself in the next debate. Thankfully, Obama is exceedingly vulnerable here, even more so than on foreign policy, which is a mouthful. McCain must attack Obama’s classwarfare assertion that every economic problem we face, including, preposterously, the financial crisis, is a result of the Bush tax cuts. If McCain’s going to be a supply-sider, he must begin talking like one. He must also steer far away from the silly populist line that the free market is somehow to blame for the crisis. Leave such blasphemy to the Obama Democrats.
richer when you consider that on this matter, despite his scant political record, Obama has very dirty hands. He cannot be allowed to pretend to have been a bystander when it’s incontrovertible that the policies leading to this crisis were vintage Obama. The people who caused it are Obama’s political allies and close friends. McCain cannot sit idly by as Obama attempts to shift blame onto corporate America, capitalism itself, Republicans and the Bush administration. He can’t allow the mindless mantra of moral equivalence (“each party shares equal responsibility”) to stand: — not that Obama would even consider that much of a concession. McCain must take the gloves off — as he did after Obama made the mistake of showing his nasty, haughty and condescending side in the first debate — and place the blame for this mess squarely at the Democrats’ and Obama’s door. As you’ve surely heard by now, much of the ammunition he needs is contained in a well-done YouTube video showing the congressional Republicans’ efforts in 2004 to rein in Freddie and Fannie and the Democrats’ thwarting of those efforts. The Office of Federal Housing Enterprise Oversight determined in 2004 that Fannie Mae’s management engaged in a pervasive misapplication of its accounting rules. In 1998, Fannie deferred $200
BUT MCCAIN’S first order of business must be to address the financial crisis head-on — instead of in generalities, as both he and Obama did in round one. McCain should not consider this a problem but a softball served up by recent history and the comparative behavior of the two political parties and the two presidential candidates that he must knock out of the park. If McCain is willing to hit Obama in the gut with the full truth about the genesis of the crisis, he could emerge from the next debate as the clear favorite. McCain’s opportunity here is even
million of estimated expenses to create the illusion of profit to justify enormous bonuses to management. The regulators cited Fannie’s management for smoothing out swings in its earnings, presumably to deceive investors into believing Fannie was a low-risk company. Regulators also condemned “a culture and environment that made these problems possible.” Fannie CEO Franklin Raines, a bosom buddy of Obama’s whose dirty hands were all over this scandal, was forced to return millions of dollars for his “alleged” responsibility for the improper accounting practices. BOTH Federal Reserve Chairman Alan Greenspan and Treasury Secretary John Snow called for tougher oversight of Fannie and Freddie as early as 2004
because the magnitude of Fannie’s operations coupled with their serious financial difficulties could put the nation’s financial system at risk. Republican members of Congress pushed for remedial action based on those warnings, but the very Democrats pointing their fingers today at President Bush, Republicans, and capitalism openly, vehemently, and nastily opposed their noble efforts. The always-sanctimonious Barney Frank said: “These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies the less we will see in terms of affordable housing.” Watch the YouTube video and see Frank, Maxine Waters, Gregory Meeks, Lacy Clay and Franklin Raines himself denying there was a problem and bludgeoning Republicans and regulators for trying to solve it. In exchange, the Democrats’ corrupt gravy train — political contributions in exchange for CEO bonuses — continued unabated. After highlighting all of this and pinning the financial-crisis tail squarely on the “donkey,” McCain must then proceed, unabashedly, to tie Obama to the Association of Community Organizations for Reform Now, Obama’s socialist community organization of choice. McCain must detail ACORN’s complicity in creating this crisis when it forced an epidemic of politically correct, but woefully un-creditworthy loans. And he must show how until the very end, unrepentant and unaccountable Democrats tried to funnel 20 percent of the originally proposed $700 billion of “bailout” money to ACORN and its cousins. TIME FOR some straight talk, senator. And please, don’t hold back. __________________________________________ DAVID LIMBAUGH (c) 2008, Creators Syndicate __________________________________________
October 8, 2008
IRAQ: October 1, 2008
Historians at war: The decision to disband
aul Bremer’s decision to disband the Iraqi Army in May 2003 is without doubt one of the most controversial military and political decisions made in Iraq and perhaps one of the most controversial made since 9-11. The circumstances surrounding Bremer’s CPA Order No. 2, issued May 23, 2003, remain a bit vague, though Douglas Feith’s War and Decision (Harper, 2008) provides some very useful documentation and footnotes. Feith writes, “... it would surely have been better if the decision to issue the order had been debated throughout the government. I have no reason to think that the other agencies would have opposed Bremer on the dissolution, but their participation might have improved the crafting or implementation of the policy.”
ner told me in October 2005, “Tommy Franks and I thought we would have 100,000 to 125,000 Iraqis” to help provide local security. “We (military men) know you don’t turn young (former) enemy soldiers loose. Give them a broom or a mop. And pay them.” Last month, I asked Gen. David Petraeus for his opinion on disbanding the Iraqi Army. Petraeus replied that he had been asked in confirmation hearings for reflections “on some of the areas in which there were mistakes made. And I think this is one of them.” Still, it was a complex issue, and Petraeus explored some of those complexities: “To be fair to those who made this decision, Iraq did not need that army ... it was a bloated top-heavy force under Saddam. It was really a jobs program for generals,” but “at the end of the day, (the Iraqi Army) was Iraq’s one national institution” and many of its Iran-Iraq war veterans should not have been left “unemployed, feeling disrespected and uncertain about their future.”
ONE problem in implementation was the failure to provide “stipends” — pay for Iraqi soldiers. Feith writes, with profound understatement, that “that would cause serious harm on the ground in Iraq.” Bremer might have asked the man he replaced, Lt. Gen. Jay Garner, for his thoughts on the Iraqi military. Gar-
PETRAEUS added: “... we went through a very tough, long, hot fiveweek period between the decision to disband the armies, that announcement and the announcement of the stipend
program that would at least provide some finances to those who used to serve in the army.” War correspondent Michael Yon says he thinks getting rid of the Iraqi Army was a mistake at the time but the new Iraqi Army, built from scratch, is largely free of the old organization’s terrible anti-Shia taint. Yon said in a pajamasmedia.com “Deep Background” audiocast that the new Iraqi army is more reliable, and its performance during the summer of 2008 bears out that
assessment. Yon said Iraqi officers told him they sometimes contact their former American compatriots and training advisers by phone — long distance to the United States — to discuss tactics and exchange ideas. StrategyPage.com editor James F. Dunnigan insists that the old Iraqi Army had to go. “The Saddam-era security forces were recruited mainly for loyalty to Saddam and the Sunni Arab minority. Unless you wanted an Iraqi security force led by Sunni Arabs, many of dubious loyalty to a democratic Iraq, you had to disband the security forces.” All true statements — but like Garner, I say don’t put unemployed young males with military experience on the streets. The United States should have fired the officers above the rank of captain and paid the enlisted soldiers — and then used these “service corps” units as building blocks for a new force. IN THE “IRAQ” chapter of the new edition of A Quick and Dirty Guide to War, Dunnigan and I had to negotiate this compromise: “Unemployed young men who know how to use weapons are a huge problem. Likewise, retaining 100,000 young Iraqis would have been a route for pumping money into the economy. The problem of determining who would command the “reconstruction corps,” however, still remained. ... The CPA concluded that the army and police force had to be rebuilt, and that became a fact on the ground.” __________________________________________ AUSTIN BAY (c) 2008, Creators Syndicate __________________________________________
October 8, 2008
SUPERNOTES: September 26, 2008
The secret war on the dollar uncovered
n Wednesday night, President Bush addressed the nation in an effort to persuade Congress to pass a bill to reduce the risk to major financial institutions and to safeguard American families and businesses. On Thursday, he met with Sens. John McCain and Barack Obama and other congressional leaders to build a consensus plan for bailing out our financial system. The potentates on the Potomac now are pondering the price tag for saving Wall Street. Unfortunately, corrupt officials in other nations’ capitals are also hard at work — undermining what’s left of the U.S. dollar by printing and distributing their own versions of American currency.
been circulating overseas. Called “supernotes” by our Treasury Department, Secret Service and FBI, they are printed on cotton-fiber paper with intaglio printing presses, the same type used by the U.S. Bureau of Printing and Engraving. The source of these nearly flawless notes is hardly a secret. On Jan. 26, 2006, in a White House news conference, President Bush asserted, “We are aggressively saying to the North Koreans ... don’t counterfeit our money.” A Congressional Research Service report two months later concluded, “At least $45 million in such supernotes of North Korean origin have been detected in circulation, and estimates are that the country earns from $15 to $25 million per year from counterfeiting.” Later that year, Hezbollah — a wholly owned subsidiary of the repressive regime in Tehran — began flooding Lebanon with supernotes. Thanks to Iran and North Korea, there may be billions in “phony Franklins” floating around the world. The bills also have turned up here at home. Just how some of them arrived on our shores was revealed a few days ago, when former undercover FBI agent Bob Hamer took the witness stand in the Las Vegas courtroom of U.S. District Court Judge James Mahan. While the so-called mainstream media were preoccupied with presidential politics, the Wall Street meltdown and the O.J. Simpson trial up the street
COUNTERFEITING another nation’s legal tender is not only a crime but also an act of aggression. During World War II, Adolf Hitler produced British bank notes to destabilize the U.K. Mao Zedong used phony money to undermine Chiang Kaishek’s Nationalist government through inflation. The Soviets created passable replicas of African and European monetary instruments to damage local economies. But no one ever has engaged in the kind of economic warfare against the United States as effectively or on such a scale as is being waged now by the regimes in Pyongyang, North Korea, and Tehran, Iran. For more than five years, remarkably accurate duplicates of U.S. $100 bills have
from Mahan’s court, Hamer — using audio and video recordings — revealed how two Chinese nationals and others plotted to smuggle anti-aircraft missiles, narcotics and counterfeit supernotes into the United States. On the tapes, the Chinese conspirators describe how the false bills are manufactured in North Korea and distributed through the Russian Embassy in Beijing to Chinese organized crime figures. One of them boasts of his ties to North Korea. DURING the course of a three-year undercover operation code-named Operation Smoking Dragon, Hamer purchased $2 million worth of supernotes. The sting also netted 36 indictments and shut down a scheme to deliver 200 Chinese-manufac-
tured QW-2 anti-aircraft missiles, capable of bringing down commercial airliners. It was, to put it mildly, a stunning success — and completely ignored by those who purport to deliver the “news.” Full disclosure here: Bob Hamer is a friend — not a word I use loosely. He is also a former U.S. Marine and a living legend within the FBI. During the time he was risking his life to stop the “importers” of counterfeit currency and of surface-toair missiles, he also was posing as a pedophile, targeting the North American Man/ Boy Love Association, an underground network of men seeking to justify their sexual attraction to young boys. His book, The Last Undercover: The True Story of an FBI Agent’s Dangerous Dance With Evil, was released the week before he took the stand in the Las Vegas counterfeiting trial. In the work, he chronicles his threeyear infiltration of NAMBLA and details a dozen other remarkable undercover assignments. His book is a riveting account of his years spent undercover for the FBI and of the kind of risks that are necessary in a world where criminals and our adversaries will go to any lengths to destroy us. The operation against those who were helping to undermine our economy was one of many intrigues in which Bob Hamer proved his mettle in an extraordinary career. LAST WEEK, the Chinese conspirator who brought the counterfeit bills into the U.S. was found guilty and now faces up to 25 years in federal prison. The case against O.J. still is pending in a courthouse two blocks away. Congress may yet figure out how to bail out Wall Street without impoverishing the rest of us. Meanwhile, if Mahmoud Ahmadinejad shows up in your restaurant for dinner, don’t let him pay in cash. __________________________________________ OLIVER NORTH (c) 2008, Creators Syndicate __________________________________________
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A look at past financial panics
Wednesday, October 8, 2008 • Volume 23, Number 41 • Hampton, Iowa
Conservative Chronicle Free Markets