E!!

From the CNN op-ed page (emphasis mine):

Commentary: Bankruptcy, not bailout, is the right answer

Well, we now have proof positive that hanging out at the New York Times will muddle up anyone’s brain.  David Brooks, once a semi reliable conservative thinker, has penned a lamentation (“Revolt of the Nihilists”) so full of hand-wringing angst that, as Laura Ingraham quipped this morning, “it makes my hair hurt.”

Brooks says the failure of the “rescue package” (that’s an Obama-ism, BTW, and does nothing to endear me to the concept since I abhor victim mentalities of all kinds) means our political leaders have ”failed utterly and catastrophically to project any sense of authority, to give the world any reason to believe that this country is being governed.”

Apparently for Brooks, defeat of this bill equals de facto anarchy in America.

Brooks then makes a few apt remarks (ok, so he has not completely lost it), but quickly disappoints again:

And let us recognize above all the 228 who voted no — the authors of this revolt of the nihilists. They showed the world how much they detest their own leaders and the collected expertise of the Treasury and Fed. They did the momentarily popular thing, and if the country slides into a deep recession, they will have the time and leisure to watch public opinion shift against them.

No:  they showed the world that they were willing to listen to the people who elected them, the constituents in their own districts, who bombarded their offices with variations of “vote no” via email and telephone because they (we) don’t trust the “leaders,” and the “experts” at the Treasury and the Fed.  And why the heck should we, after a colossal failure of social engineering the likes of which this nation has never seen…?!

House Republicans led the way and will get most of the blame. It has been interesting to watch them on their single-minded mission to destroy the Republican Party. Not long ago, they led an anti-immigration crusade that drove away Hispanic support. Then, too, they listened to the loudest and angriest voices in their party, oblivious to the complicated anxieties that lurk in most American minds.

Good freaking grief, Mr. Brooks!  These House Republicans (and the 95 Democrats who voted with them) are the ONLY people standing up for proper conservative principles, including taking a careful, pragmatic approach to complex problems rather than giving people like Paulson a blank check. 

And nobody on the right led an “anti-immigration crusade”:  they just asked the U.S. government to enforce its own laws (what nerve, ay?!)  As for your take on the ”complicated anxieties that lurk in most American minds,” stick with the op-eds because a gifted psychoanalyst you’re not.  The only anxiety we’re having is over whether this bill will really fix what’s wrong, and whether anyone in D.C. is willing to do the hard work of making sure it does.

Now they have once again confused talk radio with reality. If this economy slides, they will go down in history as the Smoot-Hawleys of the 21st century.

So now we’re all just mindless sheep who totter zombie-like after Rush and Laura who are themselves out of touch with real life?  Do you have any idea how elitist and left wing that sounds?  Perhaps you’d like to come out in favor of the Fairness Doctrine also so we can get a dose of “reality” and not be hypnotized by the likes of the evil Limbaugh?

I can’t quote the rest of your op-ed, because frankly, my hair hurts.  My advice to you is stop wringing your pretty little hands and give it some time.  A bill will be passed; the markets will not collapse; and all will be well, if a little dicey for a time. 

And please stop calling it a “rescue” because that’s one of the words that is turning us off out here in Sheepville.

The LVRJ is reporting that Bob Loux has finally resigned.  (Go here for a refresher on Loux.)

Loux, age 59, apologized to the commission (and the public) for giving himself and other agency staffers unauthorized pay increases.

Gov. Gibbons has ordered that the salaries in question be corrected to the approved amounts and has asked that the Department of Personnel obtain repayment of the excess.

“This action will ensure that the general fund is reimbursed…and will also ensure that any retirement benefits to employees of the Agency for Nuclear Projects are based on the correct salary levels,” the LVRU reports Gibbons to have said.

Loux’s salary has been rolled back to the 2006 budgeted amount of $104,497 and his retirement will be based on a percentage of his three highest pay years, excluding the unauthorized ones.

Still a pretty good deal for a guy who, according to Stuart Waymire, holds a bachelor’s degree in education from the University of Nevada, Reno, did not have credentials for the job, and has done more than anyone to get in the way of a civil, intelligent discussion about Yucca Mountain.  (I’ve got excerpts from a book Waymire wrote here.)

Anyway, Loux is out. 

As the flight attendants cheerfully say at the end of long, tedious flights, “Buh-Bye now.”

I’m borrowing my post header from P.J. O’Rourke.  (VERY funny book if you have never enjoyed it.)

I do wish names would be Named, no matter the party affiliation:  who started and voted for all of the federal legislation, who harassed the lenders to conform, which lenders not only conformed but went above and beyond the call, and who made big bucks.

It won’t happen, of course, because they are all in bed together to some degree.

As Anne of Idaho quipped, “Someone needs to go to Washington and Wall Street and close down the whorehouses.”

If no bailout bill is passed and no other/better solution can be agreed upon, I am just fine with having us (and the rest of the world) go into a recession where everyone becomes more financially conservative and/or moderate. 

If I personally have to lose a little in the short term, so be it.  It’s what is best and wisest in the big picture that matters.  “Principle over pain.”

(Note to Chris Matthews on his statement that Dems “overwhelmingly” voted for the bailout bill:  sixty percent is not overwhelming.  In fact, I’d say it’s rather underwhelming.)

Roll Call is reporting that the House “voted 228-205 to reject the financial sector bailout bill crafted over the weekend by a bipartisan group of House and Senate negotiators. Speaker Nancy Pelosi (D-Calif.), Majority Leader Steny Hoyer (D-Md.) and Minority Leader John Boehner (R-Ohio) all had urged Members to support the bill. But House Republicans rejected it by a 2-1 margin, and more than 90 Democrats voted no.”

(excerpted by E!!)

AN ACADEMY CLASSIC

On the folly of rewarding A, while hoping for B

Editor

Whether dealing with monkeys, rats, or human beings, it is hardly controversial to state that most organisms seek information concerning what activities are rewarded, and then seek to do (or at least pretend to do) those things, often to the virtual exclusion of activities not rewarded. The extent to which this occurs of course will depend on the perceived attractiveness of the rewards offered, but neither operant nor expectancy theorists would quarrel with the essence of this notion.

Nevertheless, numerous examples exist of reward systems that are fouled up in that the types of behavior rewarded are those that the rewarded is trying to discourage, while the behavior desired is not being rewarded at all.

Fouled Up Systems

The American citizenry supposedly wants its candidates for public office to set forth operative goals, making their proposed programs clear, and specifying sources and uses of funds. However, since operative goals are lower in acceptance, and since aspirants to public office need acceptance (from at least 50.1 percent of the people), most politicians prefer to speak only of official goals, at least until after the election. They of course would agree to speak at the operative level if “punished” for not doing so. The electorate could do this by refusing to support candidates who do not speak at the operative level. Instead, however, the American voter typically punishes (withholds support from) candidates who frankly discuss where the money will come from, rewards politicians who speak only of official goals, but hopes that candidates (despite the reward system) will discuss the issues operatively.

(Hat Tip:  Joe Carter @ Culture11)

Two days ago Headmistress Sondrak had a “name the dog” contest for this photo (the official E!! winners are listed below):

Whitey

Well, Michelle calls Barack “Stinky” so that name is out.

Smug Communist Bastard (Oh wait, the dog?)

Biden’s Follicle Donor

Arugula

ACORN

Don’t be silly – why would he name a rental?

Karl (Marx)

TypicalWhiteDog

Bar’k Obama

(See the comments for the original post for all entries, and the kings of name-ology.)

In re: to my Dodd comments and in the interest of fairness to the Ds and Rs (and with a hat tip to Jim Treacher who posted this a short while ago):

You simply must read this NYT times piece by Stephen Holmes from September 20, 1999.  A few excerpts to whet your whistle:

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets — including the New York metropolitan region — will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans.

and

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.

and

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.”

(Hat Tip:  Nicky Cheese)

I’m reading accounts that Senator Chris Dodd’s weighty remarks and swelling ego nearly crushed a few innocent bystanders this morning as he bemoaned the Wall Street greed that got us into this mess.

The Chairman of the Senate Banking Committee uttered not one peep, though, re: his acceptance of $165K in contributions from failing Fannie and Freddie (presumably as payback for his opposition to properly overseeing and regulating them).

No mention either, that he benefitted from VIP insider discounted loans from the (now defunct) Countrywide Financial.

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An online news story reports the successful launch of China’s long-awaited space mission.  The account includes a riveting account of the take off as well as detailed account of the snappy inter-astronaut dialogue.

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Even more thrilling is the fact that the story was posted online by China’s official news agency Xinhua many hours before the rocket left the ground.

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In a bold move that has stunned the entire planet, the Chinese, in addition to building a spaceworthy vehicle, have mastered the art of time travel and are now able to report their achievements from the future.

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The Shenzhou 7 mission, which will feature China’s first-ever spacewalk, was set to launch yesterday between 9:07 a.m. EDT and 10:27 p.m. EDT.

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The Xinhua story was dated September 27, two days later.

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Electrifying as this is, with the rising super power now able to send operatives forward in time, hard questions must be asked about potential temporal rifts and disturbances, causality paradoxes, and the stability of the space-time continuum.

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The UN should immediately call a special meeting of the Assembly to discuss the appropriate response and prevent a cataclysm that could wipe out most of the solar system. 

Another gaffe Obama recently made is saying there will be a change of President in 40 days (counting to the election rather than the inauguration).

I’m sure he’s eagerly crossing off the days on his calendar and already planning what he’ll wear on the first day of School…

K-Lo just posted this, from Jim DeMint’s office:

We’ve just been alerted that despite House Democrats relenting on extending bans on offshore drilling and oil shale in the continuing resolution (CR) appropriations bill, Democrat Senate Leader Harry Reid has decided to sneak an extension of the oil shale ban through as Congress fights over the financial bailout. Oil shale in America’s West is estimated to hold be between 800 billion and 2 trillion barrels of oil — that is more than three times the proven oil reserves in Saudi Arabia alone.

Here is the text of Reid’s proposed new ban on oil shale, that he is trying to add as an amendment to the CR or move seperately as a “stimulus” package, or we should say an anti-stimulus package if this is included.

Sec 1602 continues ban on oil shale. The language follows:

SEC. 1602. Notwithstanding any other provision of law, including section 152 of division A of H.R. 2638 (110th Congress), the Consolidated Security, Disaster Assistance, and Continuing Appropriations Act, 2009, the terms and conditions contained in section 433 of division F of Public Law 110–161 shall remain in effect for the 19 fiscal year ending September 30, 2009.

It would be an insult to all Americans if Senate Democrats worked to bailout Wall Street while damaging our future prosperity by banning development of vast energy reserves in oil shale.

 I keep reading commentary, even in respected conservative forums, that Paulson’s gigantic bailout plan is bad, and admittedly un-conservative, but that we must do “something” and the alternative is too dreadful to contemplate.

 As Colonel Potter used to say, “Horse-hockey!”  

  Protecting the long-term value of the American dollar is more important than a quick fix.  So is teaching our bankers, traders and lawmakers that the government is not going to bail them out of future messes.  If there’s a pot of government gold at the end of every financial rainbow, what’s to stop everyone from chasing the green leprechaun again?

  Federal action is warranted, but the focus should be less on debt and more on protecting present and future capital.  If we go about this rationally and take this opportunity to promote pro-growth policies and tax reform, investors will respond to the prospect of higher future returns.  It’s that simple.

  Conservatives:  we cannot abandon our principles in times of crisis. We must remain steady at the wheel.

Great IBD op-ed on Obama’s under-the-radar socialism and how he came by these methods and beliefs.  If you have any doubts about Obama’s formative ideology, please do yourself (and all of us) a favor and read it.

Moonbattery also reminds us of the intro to Saul Alinsky’s Rules for Radicals.  If that doesn’t chill your spine, I don’t know what would.

After supporting a huge sales tax hike in Cali and quashing the last vestiges of conservative hope for him, Governator Schwarzenegger has slightly redeemed himself.

Prior to signing the new budget into law, Arnold used his line-item veto to totally eliminate the U of California Institute for Labor and Employment. Conservatives in the state say the institute was being used to push pro-union, anti-worker propaganda using taxpayer dollars.

All gone!

(H/T:  Friends of ATR blog)

The following letter was sent yesterday to Treasury Secretary Henry Paulson:

September 24, 2008

The Honorable Henry Paulson
Department of the Treasury
1500 Pennsylvania Ave., NW
Washington, DC 20220

Dear Secretary Paulson:

As you continue to craft a financial stabilization plan with Congressional policymakers, I wanted to once again urge you to consider a move that could be executed unilaterally by the Treasury Department: indexing the basis of capital assets to inflation for purposes of calculating gain or loss.

There is a body of legal opinion which holds that the Treasury Department has the power to define “cost basis” when taxpayers calculate capital gain or loss. To date, Treasury secretaries of both parties have chosen to define “cost” as nominal purchase price.

This creates a situation whereby an asset held for many years and later sold may generate a capital gains tax liability when much or all of that gain is purely from inflation. For example, a stock purchased in 1990 for $1000 and sold today for $1676 would face a capital gains tax liability on the $676 “profit.” But in reality, 100% of that “gain” is attributable to inflation.

If the Treasury Department were to re-define “basis” to discount the effects of inflation, it would have a timely and pertinent effect on the current financial challenges. Households and businesses would be able to sell assets, unlock liquidity, and pay a much lower level of taxes. This liquidity is badly needed by capital markets. Best of all, this can be done by you unilaterally, substituting Congressional permission in favor of mere consultation.

Sincerely,
Grover Norquist

– E!! says:  This is better than nothing, but I’d like it much more if we eliminated the capital gains tax altogether.  (Yes, I realize that is probably a pipe dream.  That being the case, Grover’s suggestion is excellent.)

Here’s a shot of Duane Lester and me at a New Media training/presentation at the Conservative Leadership Conference here in fabulous Las Vegas this past weekend. 

Duane (one of the many geniuses over at All American Blogger) called me “major league cool” on their blog today so we are now BFFs.

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K. emails from Michigan that a TARP – ref: Paulson’s Troubled Asset Relief Program - is (literally) a COVERING used to protect something that has been EXPOSED.  (She adds “Duh” for emphasis.)

Along these same lines, BS is (literally) a bunch of crap that comes out of the orifice of a creature at the end of all its gluttonous gorging.

I think we’re on to something here…

Days after the cessation of the Conservative Leadership Conference 2008, remembrances float up…

…Seton Motley’s talk on Media Bias and the unFairness Doctrine (sponsored by the Media Research Center)…clip after clip of such biased “reporting” (commentary and emoting) that one is heartily laughing and throughly appalled all at once…

…Chris Matthews (MSNBC), Keith Olbermann (ditto), Brian Williams (NBC), Ann Curry (ditto), John Roberts (CNN), Campbell Brown (ditto), Charlie Gibson (ABC), Terry Moran (ditto) and more…

…the observation that some so-called journalists and major media outlets are now eschewing ratings and “sacrificing the bottom line to ideology”…sacrificing viewers (do they say “good riddance”?) in order to push their increasingly obvious agenda…

…the concept of Bias by Omission (what is not reported that should be)…

…the three upcoming vacancies on the FCC (February) and who will seat them (McCain or Obama) and do the vetting…

…the new “code words” for the Fairness Doctrine that are springing up in activist organizations posing as non-partisan groups:  “localism,” “media democracy,” “media reform,” “universal access”…which you can see in action here…

…the effect the Fairness Doctrine (and other limits on media) would likely have:  the mass migration of conservative talk radio personalities to satellite radio, increased internet podcasting, vlogging (blogging via video clips), and other New Media forums/outlets…

…a comment by a young mother in attendance that Nickolodeon attempts political indoctrination of children via their “kid reporters” (who covered the DNC, but not the RNC)…

Adapted by Elizabeth Crum - E!! - from “A kingdom for a stage” by William Shakespeare [from Henry V]

O for a Muse of moderation, that would ascend
The brightest netwave of invention,
A kingdom for a Sage, senators to act
And bloggers to behold the swelling scene!

Then should the warlike pol, like Reagan,
Assume the port of Mars; and at his heels,
Leash’d in like hounds, should dollar and dividend
Crouch for employment. And pardon not, O Blogivists,
The doltish congressmen who dare

On their unworthy stage to recommend forth
Their idiotic plans:  can that intellectual vacuum hold
The vasty notions of fiscal responsibility?  Or will we cram
Within this week the very blunders
That did affright the kings of Wall Street?

O, pardon! since a crooked politician may
Protest while pocketing a million;
So let us, Bloggers in this great sphere,
Type, click and upload on screens galore.

 Today within the corridors of Congress
We see confined two indistinguishible parties,
Whose egos are exceeded only by their greed
And perilous corruption splits all asunder:
Piece out their imperfections with your posts;
Into a thousand parts divide their rhetoric,
And make it clear to all who rules this realm:

The Blogosphere, in all its glory rides

Printing our apt remarks i’ the receiving Web;
For ’tis our thoughts that now shall thump our kings,
Chase them here and there; Twittering and
Turning the empty accomplishment of many years
Into pithy posts:  for the further supply of which
Welcome us Bloggers to this great Webstory;
We pundit-like your online reading pray,

Bookmark our blogs, and kindly judge our daily Play.

-

Here’s some more corruption reporting at the Las Vegas Sun.

Clark County is holding back federal funds from the Urban League because a recent review of the non-profit’s books found double billing, problems with receipts, and lack of evidence that the group was actually helping people (a stipulation of the $67,000 grant that was supposed to help people who couldn’t pay rent and/or utilities).

The county found that the Urban League paid only part of what clients owed on their bills and then asked those folks to pay back 60 percent – and billed the county for the same cases.

If the money is cut off, it will be the third time in the past four months that a local government entity has taken back federal dollars from the Urban League (see the Sun piece for more details).

A county rep said the problems with the program are serious, adding there are “concerns about whether the organization can manage the money.”

Ya’ think?

On the subject of lining one’s own pockets under the pretense of helping needy kids:

The Las Vegas Sun reports that Willa Chaney, a candidate for the State Board of Education, owes the Nevada Education Department more than half a million bucks for funds she misused while running a program to provide aid to needy students.

The NV Education Dept. sued Willia Chaney’s company and in August a District Court judge ordered Chaney to pay back the money.  The Sun reports:

“From 1993 to 1999 Chaney operated a federally funded program to provide meals to poor children during summer vacations and other school breaks. The state shut down the Smart Start Summer Food Service Program in 1999 after the inspector general identified $1.01 million in questionable expenses.”

Apparently investigators found that Smart Start was serving far fewer children than it claimed in its reports of meals delivered to 13 apartment buildings in Las Vegas and North Las Vegas.  Also among the investigator’s audit findings (quoted from the Sun):

• More than $250,000 in salaries was paid to 15 Smart Start employees, “even though they apparently did little or no work” and no time cards were maintained. Chaney’s husband, James, served as the program’s director and her son and daughter were on the payroll.

• Federal money was used to purchase five vehicles. The titles were in the Chaneys’ names rather than in the name of the Smart Start program.

• The program’s costs included $2,000 a month paid to Chaney’s day-care center, Smart Start Daycare, for use of its kitchen and parking spaces. Investigators determined the food program’s facility had ample parking, and the child-care center was paying $1 a year to lease its entire location.

Chaney is running for the District 3 seat on the State Board of Education, which sets policy for the Nevada Education Department and the state’s school districts.  She denies any wrongdoing.

I like Jim Henley’s one-liner: “Wouldn’t it save administrative costs if I just started giving my money to random rich people?”

(H/T:  Outside the Beltway)

I had the honor of meeting and assisting Pat Toomey last week at the Conservative Leadership Conference here in Las Vegas.  This morning, Club for Growth says/releases the following (excerpted):

Eighteen months into the credit crunch, many largely capitalized financial services firms are experiencing serious difficulties but the overall economy continues to grow.  GDP growth over the past 12 months was 2.25 percent and 3.5 percent when excluding the drag imposed by the housing sector.  Even within the financial sector, many banks are doing well.  Regional bank indices had risen significantly since the lows of last July—prior to the bailout announcement—and thousands of community banks are thriving.  It is extraordinary that a massive government intervention in the economy is considered inevitable when the economy is not even in a recession.

Indeed it is.  On what is the panic of Wall Street types based?  Could it be fear that lack of liquidity and credit in the market will affect their own bank accounts?

At the same time, socializing economic risks come at a great cost to the American economy by misallocating capital, inviting political manipulation, and putting taxpayers on the hook for possibly a trillion dollars.  Such a large takeover by the government will surely be accompanied by adverse, unintended consequences.  Already, other companies and industries are lining up at government’s door asking for their own bailout.  And if the government incurs $700 billion in debt to finance the purchase of bad bank assets, the danger that it will eventually monetize that debt and trigger dramatic inflation is very worrisome.

“Unintended consequences.”  This concept is one of the great underlying tenets of conservative thought.  The idea is that when one makes broad, sweeping changes there are always unplanned effects, and they are often worse than the problem with which you began.

Our Do Nothing Congress should, in this case, do nothing (other than what Newt said yesterday).  We ought to free things up where we can, allow the market to self-correct, and let those who must (and should) take their proverbial Lumps. 

Access to unlimited cash and credit is not a “human right,” and we should stop behaving as if it is.

Well, as a writer/journalist/blogger, there is nothing like reading something you strongly disagree with to wake you up and get your day started right.  Such is the case with Treasury Secretary Paulson’s statement before the Senate Banking Committee.

Since hearing word of widespread support (Paulson, Congress and the President) for the latest, greatest Bailout I’ve been feeling increasingly dejected.  And concerned.  And angry.

Treasury Secretary Henry Paulson has a “plan” which will “shift” $700 billion in obligations from private companies to the American taxpayer.  Apparently he sees this as the only Way and has 9,000 wizards on stand-by to make it so.  (The same Wall Street wizards that got us into this mess, no doubt?)

And evidently most members of Congress are spellbound and preparing to waft more money New York’s way.

One can only imagine what Banking Committee Chairman Chris Dodd (the largest beneficiary of political funds from Fannie & Freddie) will dream up as he joins hands and sings Tra La La La La with Reid and Pelosi.  I’m not sure how it ends, but I’m pretty sure the working title is Nightmare on Wall Street and that we are barely ten minutes in.

Setting the typically wrong-headed Paulson aside for a moment, how is it that Bush and Congress care so little about protecting the American taxpayer?

And why all the insistence on a quick solution?  This mess was not created in a week, yet Paulson and our illustrious Congressional geniuses think they can solve it by this Thursday?  Does it not occur to anyone that we need to take a deep breath, wade in, and calmly and pragmatically work our way through our many economic and financial problems in a careful and measured manner?

As Newt blogged today (thank God for Mr. Gingrich), between the crisis of liquidity on Wall Street, the crisis of bad energy policy that transfers $700 billion a year to foreign nations, the crisis of Sarbanes-Oxley that cripples entrepreneurs/start ups and drives banks and businesses from New York to London, and the crisis of a high corporate tax rate…we are in some very deep Doo Doo.

Newt proposes a ”non-bureaucratic solution that would stop the liquidity crisis almost overnight and do it using private capital rather than taxpayer money.”  He suggests four reforms that would do the trick without the bureaucracy and additional tax burden.  I suggest you read his blog post as it is well worth the time, but in summation they are:

#1  Stop the mark-to-market rule which is forcing companies into unnecessary bankruptcy. If short selling can be suspended on 799 stocks, the mark-to-market rule can be suspended for six months and then replaced with a more accurate three year rolling average mark-to-market. 

#2  Repeal Sarbanes-Oxley. It failed with Freddy, Fannie, Bear Stearns, Lehman Brothers, and AIG. It is crippling our entrepreneurial economy. One San Jose firm told Newt they would bring more than 20 companies public in the next year if the law was repealed. It’s Sarbanes-Oxley’s $3 million per startup annual accounting fee that is keeping these companies private.

#3  Go to a zero capital gains tax like China and Singapore.  Private capital will flood into Wall Street (at no cost to Joe Taxpayer) and lead to an increase in federal revenue through a larger, more prosperous economy.

#4  Pass an “all of the above” energy plan designed to bring home $500 billion of the $700 billion a year we are sending overseas. With that much energy income, our economy would boom.

E!! endorses these proposals (a fact I’m sure Newt is happy to hear) and strongly advises against implementation of the Paulson plan which by all reasoned accounts is going to be a total Mess.

In closing, I’ll be waiting to see what McCain says and does about all this.  If he doesn’t reject the Paulson/Bush/Congressional plan and closely align himself with much of what Newt said here, I may not be able to vote for him after all.

(Note:  To those who have heard me joke that I am going to “get drunk and vote for McCain,” consider this my semi-official back-peddle…pending the outcome of this mess and McCain’s stand on things.  Let’s see how Maverick-y the self-proclaimed maverick is when it really counts.) 

With the takeover of AIG, the federal government has wangled its fourth major bailout and taken control of its very first insurance company.  

Both McCain and Obama have called the bailouts of AIG, Fannie Mae, Freddie Mac, and Bear Stearns “necessary measures.” McCain blames greedy Wall Street tycoons while Obama blames failed GOP policies.
 
Most sensible folks agree that the government’s implicit guarantee to Fannie Mae and Freddie Mac were a license to lenders to run rampant.  Fannie and Freddie were able to buy bundles of home mortgages and/or mortgage-backed securities in massive quantities without contemplation of the financial risks.

  
Some economists blame the regulators/regulations.  I disagree.  The financial industry is heavily regulated.  It was the government’s guarantee of Fannie and Freddie that emboldened lenders to put together dicey loans and encouraged undisciplined financial endeavors.

Government policy laid the foundation of the mortgage crisis more than three decades ago when Congress passed the Community Reinvestment Act of 1977. The law forced banks to loan money to low-income borrowers in order to meet the “needs” of the local community.

No worries, though.  The banks knew they could sell off those loans to Fannie or Freddie, and F & F knew they could buy those loans with little regard for the risk.

I’m reminded of the past weekend here in Las Vegas when a few enthusiastic friends (first time visitors) went out and hit the blackjack tables. 

A young man playing two hands was dealt four sevens.  A friend advised him to split and play four hands.  Pondering the risks, he hesitated – but the helpful friend offered to cover his losses and let him keep all the chips if he won. 

What do you suppose that young man did?

He behaved as anyone would:  he played all four sevens.  And, unfortunately, lost on all.

So it goes on the tables of Sin City.  So too, in Congressional corridors and bank board rooms. 

These bumper stickers are kind of fun.  Pick one up for just $2.99 plus mailing costs.