Month: September 2008

Posted on Democrats, George W. Bush, Republicans

more on the “rescue plan”

One day after the House Republicans, with the help of a significant number of Democrats, stopped this disaster of a federal bailout, the world hasn’t collapsed.  The Dow rebounded a little today after its terrible day yesterday.  I still think those who voted against this bill did the right thing.  I am, however, unsympathetic to the Republicans complaining about Pelosi’s partisan speech, and making that a reason to oppose the bailout.  The bailout should be opposed on its lack of merit, and its expansion of government welfare to those who acted irresponsibly.  Republicans haven’t been making this case, and that’s why Democrats could still win the PR war.

Some of my fellow conservatives are trying to tell us the sky is falling and that we must pass Bush’s plan NOW.  Not so fast.  A federal takeover of this kind must be carefully studied and discussed, and alternatives must be presented.  Any acceptable plan must attempt to correct past errors as well as to hold those responsible for this mess accountable for their actions.  We aren’t there yet.

To the Democrats still willing to support their Speaker, I would ask them: Doesn’t it concern you that the Bush administration wants to expand the reach of the federal government to take over a large section of our economy?  I thought you all were against more power for the federal government under George Bush.  Why all of a sudden do you believe the Bush administration and Secretary Paulson when they insist that the only way to save the economy is through a federal takeover?  If this bill passes in its current form, then Democrats will share the blame with our President when it fails to achieve its objectives.  Hope you all are ok with that.  Looks like a no-win to me.

There are a few economists who are opposed to this bailout, and I would take their opinions over those of some of the know-nothings in Congress.

Here’s part of what one of them, Jeffrey Miron (day job- Harvard), had to say:

So what should the government do? Eliminate those policies that generated the current mess. This means, at a general level, abandoning the goal of home ownership independent of ability to pay. This means, in particular, getting rid of Fannie Mae and Freddie Mac, along with policies like the Community Reinvestment Act that pressure banks into subprime lending.

The right view of the financial mess is that an enormous fraction of subprime lending should never have occurred in the first place. Someone has to pay for that. That someone should not be, and does not need to be, the U.S. taxpayer.

Read the whole thing.

Posted on Conservatives, Democrats, George W. Bush, Republicans

more reservations

There’s now a possibility that our Congress may pass a slightly modified version of Bush’s socialist bailout.  I guess we should be grateful that the House Republicans were allowed some input in the current draft, because it could be much worse than it is.  However, it’s not clear that the House Republicans got enough of what they wanted in this bill.  Mike Pence is still opposed to it, which prompts serious doubt in my mind that this is the best compromise we can come up with to “save” the economy.  Minority Leader Boehner calls this plan a “crap sandwich” but still plans to vote for it.  What awesome leadership by our minority leader.   Really inspires confidence in the folks we put in charge of the Washington Republicans.

Freedom Works has also weighed in with their opposition to the current bailout legislation (h/t: Michelle Malkin).  Here’s what they had to say:

Ten Reasons to Oppose the Wall Street Bailout

1. NO REFORM: The plan attempts to mask, rather than reform, imbalances in credit markets and in U.S. economic public policy. The plan props up reckless and failed banks by buying “troubled assets” instead of focusing on real reforms that go after government sponsored culprits Fannie Mae and Freddie Mac, and sustainable policies that will increase the availability of private capital and expanded economic growth.

2. TREASURY POWER GRAB: The plan raises Constitutional concerns by dramatically expanding the power of the current and future Treasury Secretaries, giving the government agency power to directly purchase assets from for-profit financial and non-financial firms.

3. STUNNING PRICE TAG: The $700 billion bailout figure is as much money as the combined annual budgets of the Departments of Defense, Education and Health and Human Services. It amounts to $2,300 for every man, woman, and child in America.

4. INCREASES NATIONAL DEBT: Instead of cutting spending elsewhere, Congress will borrow all $700 billion on global capital markets, and the bill raises the national debt ceiling to a staggering $11.3 trillion.

5. GLOBAL BAILOUT: The plan includes taxpayer purchases of distressed assets from foreign banks.

6. HURTS RESPONSIBLE AMERICAN BANKS: The plan punishes responsible U.S. banks by keeping reckless, insolvent investment banks in business. As BB&T CEO John Allison wrote in a letter to Congress on Sept. 23rd, “….this is primarily a bailout of poorly run financial institutions…. Corrections are not all bad. The market correction process eliminates irrational competitors.”

7. FLAWED PROCESS: Members of Congress and the public will have less than 24 hours and no hearings to discuss and understand the impact of this sweeping plan. This rush to pass a wildly unpopular plan without benefit of significant public debate and input will also undermine its legitimacy and effectiveness.

8. BY WALL STREET, FOR WALL STREET: Treasury Secretary Paulson, the architect of the plan, was formerly the head of Goldman Sachs, one of the firms responsible for the mess and a direct beneficiary of the bailout. Further, the advisers managing the bailout auctions and assets will be Wall Street firms and will likely receive billions of tax dollars in fees.

9. OTHER OPTIONS NOT EXHAUSTED: The idea that taxpayers will make money on the bailout is not credible. There are ready buyers for these “troubled assets” — Merrill Lynch sold its entire portfolio of mortgage backed securities in July– provided the price is low enough. If a profit was possible, private speculators would readily buy these troubled assets.

10. MORALLY OFFENSIVE: The plan violates basic principles of American capitalism and honest governance by creating a system of “private profits, socialized losses” that transfers money from taxpayers directly to Wall Street investment banks. Free market capitalism only functions if individuals and firms are held accountable and are allowed to both succeed and profit, and also to sustain losses and even fail.

I echo these sentiments.  This current bailout bill (pdf here) isn’t good enough.  Go back to the drawing board and fix some of these flaws before the vote if we absolutely must have a government intervention of this type.  I’m not convinced that we need something this massive.  We can do better than this, and we must.   Like the Freedom Works quote says, “Free market capitalism only functions if individuals and firms are held accountable and are allowed to both succeed and profit, and also to sustain losses and fail.”   The solutions we are seeing from this Congress don’t solve the problem and could add trillions to the national debt.  There’s nothing fiscally conservative about that.

If we don’t come up with a more responsible solution to our economic problems, then President Bush becomes the new FDR.  Well-intentioned socialism is still socialism.  In the beginning, our president seemed to be supportive of free markets and capitalism, as well as those popular tax cuts, but we didn’t elect him because we thought he had a strong fiscally conservative record.  It was because of national security and judges.  That doesn’t keep me from being disappointed that he feels he needs to support something like this.  While I realize that many of the root causes of this current crisis lie with our friends on the other side of the aisle, a large chunk of the blame for the current mismanagement of it should be with Paulson and the Bush administration.

I’m not sure if there is anything we can do to stop the worst from happening if Minority Leader Boehner has already caved and is trying to convince others to go along with the Democrats on this bailout plan.  I just hope that when this process is over, there will have been enough Republicans with the guts to say —  if this is what we must do,  let’s get this right before voting on it.

2 Comments Posted on '08 Election, Democrats, Liberals, Republicans

draw

That’s what I thought about the McCain-Obama debate. McCain had a few good lines, but Obama did not do any obvious damage to himself when discussing foreign policy — at least not that any casual observer would notice. I don’t think either of them changed any minds tonight. I missed the part where they discussed the economy, but it probably wouldn’t have changed my opinion of this debate. McCain needed to knock out Obama, and he did not. This raises the stakes for the next two debates for John McCain, and this is a debate I believe McCain should have won because it’s an area of strength for him.

Minor point — there’s not much difference between preconditions and preparations, and Barack Obama’s explanation of this is just silly. But Barack did what he needed to do in this debate. Even though I absolutely disagree with about 95% of what Barack wants to do on foreign policy and the economy, I realize that the average American does not follow politics as closely as the bloggers and other assorted political junkies. So it’s possible that someone more detached from this than I am could see a clear winner between McCain and Obama. I didn’t.

Not surprisingly for those on the opposite side of the political debate — McCain is winning the FNC text poll 82 to 16. It was a lot closer than that.

Posted on Baseball

go cubs

As a Mets fan, I am ashamed, appalled and embarrassed by the shaky performance of my baseball team down the stretch, and I am tired of watching their bullpen and their lack of timely hits choke away our chances at postseason play.  So I’m done with them for this year.  They may still surprise us all and hold off Milwaukee, but there’s no way this team goes anywhere in the playoffs.  Think first-round exit.  Anybody still watching this team knows that any optimism left is misplaced.

Once the postseason begins, I will be cheering for the Cubs.  The Mets haven’t proved they deserve my support, and it would be great for baseball if the Cubs won the World Series.  That’s all I have to say on that.

More on the bailout when Congress finally gets something in writing.

Posted on '08 Election, Republicans

just say no

Senator DeMint gives the Paulson bailout plan a very emphatic thumbs down.

From his Senate website:

After reviewing the Administration’s proposed bailout plan, I believe it is completely unacceptable. This plan does nothing to address the misguided government policies that created this mess and it could make matters much worse by socializing an entire sector of the U.S. economy. This plan fails to oversee or regulate the government failures that led to this crisis. Instead it greatly increases the role for Secretary Paulson whose market predictions have been consistently wrong in the last year, and provides corporate welfare for investment firms on Wall Street that don’t want to disclose their assets and sell them to private investors for market rates. Most Americans are paying their bills on time and investing responsibly and should not be forced to pay for the reckless actions of some on Wall Street, especially when no one can guarantee this will solve our current problems.

This plan will not only cause our nation to fall off the debt cliff, it could send the value of the dollar into a free-fall as investors around the world question our ability to repay our debts. It’s also very likely that this plan will extend the cycle of bailouts, encouraging other companies to behave in reckless ways that create the need for even more bailouts, triggering an endless run on our treasury. This plan may make things look better for Wall Street in the next couple months, but the long-term consequences to our economy could be disastrous.

There are much better ways of dealing with this problem than forcing American taxpayers to pay for every asset some investor doesn’t want anymore. We should start by reforming government policies and programs that created this mess, including the Federal Reserve’s easy money policy, the congressional charters of Fannie Mae and Freddie Mac, and the Community Reinvestment Act. Then Congress should pass a number of permanent and proven pro-growth reforms to encourage capital formation and boost asset values. We need to make permanent reductions in the corporate tax and the capital gains tax rates. We have the second highest corporate tax rate in the world, which encourages companies to take jobs and investment overseas.

It’s a sad fact, but Americans can no longer trust the economic information they are getting from this Administration. The Administration said the bailout of Bear Stearns would stop the bleeding and solve the problem, but they were wrong. They said $150 billion in new government spending using rebate checks would solve the problem, but they were wrong again. They said new authority to bailout Fannie Mae and Freddie Mac would solve the problem without being used, but they were wrong again. Now they want us to trust them to spend nearly a trillion dollars on more government bailouts. It’s completely irresponsible and I cannot support it.

My Senator has the right idea here. This $700 billion bailout doesn’t provide any accountability or address any of the problems that got our economy where it is today.  It will, as others have said, give Secretary Paulson a virtual blank check without any promise of results.  It is irresponsible, and the Bush administration should go back to the drawing board, knowing that many Republicans will not support this.  If John McCain has any maverick tendencies left after he finishes ripping greedy people and Wall Street fat cats –neither of which have primary responsibility for the mortgage mess we find ourselves in– he should seriously consider showing up and voting against this bailout.  Republicans will follow McCain in opposing this, but he needs to take the lead in fighting for the taxpayers.

8 Comments Posted on Democrats, Liberals

re: remove all doubt

Interesting that my buddy Chris is willing to link to Fox News, since it’s such an unreliable source. 😉 I’m not sure why he wants to classify Fox News as part of the MSM, except that a lot more people watch FNC for their news than MSLSD or CNN.  But ok…Fox News is now part of the hypocritical double standard where the MSM doesn’t call Iraq and Afghanistan socialistic enterprises, but it criticizes Obama for wanting to spend US taxpayer dollars on solving global poverty.  One of these should be under the umbrella of necessary foreign policy, and one of them should not be.  We disagree on whether the US role in rebuilding Iraq is a good investment in a positive outcome for Iraq or whether it’s just government wasting our money on useless nation-building — and thus no more useful than Obama’s efforts to finance the end of world poverty.

I’m not missing any such point.  If the MSM sees a difference between our efforts in Iraq and Afghanistan and what Obama is proposing with the Global Poverty Act,  it’s probably because there is one.  If your intention is to shoot a specific messenger, you might want to get a more accurate gun.  If Barack is being misrepresented, that’s not my fault.  That’s not the fault of the MSM or Fox News.  That’s his campaign’s fault.  But I’m getting off of the subject here…

I called the bailouts socialism, while acknowledging my lack of expertise on the subject of the financial markets.  You can choose to see this as a cop-out, or as an excuse for me not to be too hard on President Bush.  That’s your opinion, and you are welcome to it.  You can spin all you want to, but even you do not know what Barack Obama will do once he’s President.  He could decide to keep troops in Iraq and Afghanistan.  Thus the war funding would continue.  

But let’s say you’re right — that we suddenly have all the Iraq and Afghanistan money to play with.

Continue reading →

Posted on '08 Election, Democrats, Liberals

re: forest for the trees

There is a difference between calling the bailouts a mistake and calling them one example of socialism.  I did both.  I started out by saying that I disagreed with all the bailouts, and also that I was opposed to government taking over private industry.  Not sure how I could be any more clear than I was with that.   I wasn’t excusing the Bush administration by saying that I didn’t completely understand why certain private industries got government assistance and others did not.   The bailouts are still what I said they were.   I’m just saying that it’s above my pay grade to figure out what the fallout would be from letting these businesses fail.  We have already discussed the failure of the Bush administration to limit government, and I think you know that we are in agreement that he has expanded government during his 8 years.

What are the objectives of foreign aid?  Is it to promote goodwill or to give a financial incentive to other nations to side with us in disputes at the UN?  If so, how’s that working for us?  The nations who hate us will still hate us even when we have done all we can to win their favor.  Private charities have always been able to provide financial assistance to countries who have suffered natural disasters like earthquakes and floods, and they are usually more effective in the distribution of aid  than the US government is. Maybe a freeze isn’t the way to attack this, but Obama’s going to need all the domestic funds he can get to finance all the spending he’s proposing.

Iraq and Afghanistan are necessary expenditures, and ending world poverty shouldn’t be quite as high on our priority list.   A destabilized Iraq would be a national security risk.   Leaving now could mean that at some point, we would have to go back in and fix the chaos.  We have a national security interest in Afghanistan.  Even some of your Democratic friends agree on that point.  Doesn’t Barack want to send more troops there?  So he doesn’t seem to have a problem spending money on that project.  He also appears to have some interest in delaying the withdrawal of troops from Iraq, if that New York Post story is accurate.  

Let’s review– Barack wants to spend money on some domestic programs, ending world poverty, AND continuing to leave troops in Iraq and Afghanistan.  Explain why his plans are so different from those of the Bush administration.  (Well…other than the raising taxes on “rich” people part of Barack’s agenda.)

We wouldn’t have to raise taxes if the federal government would use the money it has more effectively, but since this hasn’t happened during the Bush administration, it’s even less likely under an Obama administration.  We have forgotten the part of fiscal responsibility that includes cutting programs that don’t work and allocating resources where they are most needed.  If Obama or McCain have something like this in their economic plan, I haven’t seen it.  Raising taxes on anybody is not a desirable option, especially because it enables wasteful spending, and raising taxes on corporations affects everybody, not just the fat cat CEOs.

1 Comment Posted on '08 Election

stop the madness

I think it’s only fair to call a mistake a mistake, and yes, I would consider the AIG bailout a mistake.  I would also question the wisdom of bailing out Fannie and Freddie, but there would have been far deeper financial chaos had the Bush administration decided not to make that move.  These are steps in the wrong direction, because we cannot keep sticking the taxpayers with the bills for the corporate mismanagement of these companies.  It’s fair and reasonable to call this socialism — this would be the perfect example of such,  with the government taking over private industry like this.  That said, it would take someone much smarter than myself in the ways of the financial markets to completely understand the reasons behind handing out some government checks and not others.

The Bush administration is not, and has never been, a proponent of small government.  Compassionate conservatism and limited government have absolutely nothing in common. That’s not what got him elected.  Most conservatives have been consistent in calling out the President and Republicans for spending too much taxpayer money, and they are currently questioning these government bailouts as well  — so we do not need to apologize for our criticism of Obama’s spending proposals.

If Barack Obama is so worried about spending all that money in Iraq, then maybe he should consider taking that 0.7% of GDP he wants to spend on the Global Poverty Act and use that money for domestic programs.  Shouldn’t the Democrats, who are so concerned about the working man here in America, consider a freeze on foreign aid until all these domestic problems are solved?  One thing Democrats and Republicans should recognize is that throwing money at problems doesn’t guarantee positive results.  This goes double for any money ending up in the hands of UN bureaucrats.

Both Senator Obama and Senator McCain should be more frugal with their spending proposals, because it’s fiscally irresponsible to create new programs and finance new services when the feds are flat broke.  Maybe someone smarter than me can explain how it’s possible that Barack will cut taxes for 95% of the American people, and still give us all these new exciting government programs and services.  That doesn’t sound right to me.

Even if he only raises taxes on the “rich”,  those tax hikes would trickle down to the middle class.  Corporations pass on increased costs to the consumer by charging higher prices.   These higher tax rates would also mean they couldn’t hire as many people to produce their products, and it might even mean that some of the company’s workers would lose their jobs.  None of these things would increase productivity or have a positive impact on our struggling economy, so I would hope that Barack would consider the implications of any tax hike on the rich before he makes them a permanent part of his economic policy.  After all, he has been known to change his mind when presented with conflicting facts.

Posted on '08 Election, Conservatives, Democrats, Liberals

conservatives and the mccain/palin ticket

There are two main issues that Christian conservatives consider important enough to threaten withholding votes from any politician who doesn’t perfectly toe the line — abortion and same-sex marriage.   When evangelicals and others hold the line on principle and refuse to endorse a candidate who doesn’t agree with them on these issues, they are called single-issue voters and derided for standing on those principles.  These issues are important to me as well, but sometimes we don’t think about the consequences of withholding support from perfectly good and qualified candidates who might be a better bet to win an election. Every one of our divided conservative groups picked a different horse, and McCain got his independents and moderates — at least in the primary. That’s how we ended up with a candidate in McCain that we are still unhappy with, despite the Palin bounce.

I agree with those who say that we should stop trying to make the experience argument for Sarah Palin, even though it doesn’t seem to bother the Obama sheep that their man hasn’t closed the deal with the American people in that category.   Her appeal is a broad appeal that has very little to do with her knowledge of foreign policy or her deep conversations with world leaders.   It’s all about her personal story — moose hunting, fishing, the NRA membership, her Down’s Syndrome son.  She’s a very sympathetic figure, and she is a happy warrior, zinging Obama and the Democrats with a smile on her face. (She does need some more variations in her scripted lines, but other than that, I have no complaints.)

While she has requested and received some earmarks, it is evident that she has made some significant changes in the way Alaska does business.  She deserves credit for that.  With an sky-high approval rating in Alaska, she must have done something right in her short tenure there.  I still think that Palin can learn what she does not know,  but unless the Democrats know something we don’t know about McCain’s mortality– McCain will be President on day one, not his VP.  Why are the Democrats even worried about Palin’s readiness anyway?  All they have to do is make sure Barack overcomes his struggles and wins the election. Not that difficult, right? 🙂

Then the 80% wrong Joe Biden can run his foreign policy.  Yikes.  This can’t be what the Democrats really want.

4 Comments Posted on '08 Election, Conservatives, Democrats, Liberals, Republicans

some advice for the mccain campaign

Stop treating Sarah as a victim. Stop being so politically correct. Let this “pig” remark die a natural death. Guess it’s too late for that now.

Take every opportunity to compare Governor Palin’s fiscal record with that of Senator Biden. She has the advantage there. There may be some doubt as far as when she started to oppose the bridge to nowhere, but she did oppose it. Both Barack and Joe supported it from the beginning.

More later….