Too many reports to ignore that maybe Barack Obama's vaunted fundraising operation is steeped in fraud. Specifically, the allegation is that the donate-by-credit card option on the Obama website is intentionally disabled to allow fraudulent donations.
If you've bought anything online you've probably dealt with the AVS, or Address Verification Service, which is a check to be sure that your name matches the card number and your address and zip code match the account information as well. Many vendors also insist on the three-digit CVV code on the back to confirm you have the real card in your hand when you donate.
The Obama website has none of this, which is part of the reason that the Obama Campaign has accepted donations from such well-known figures of history and fiction as Good Will & Doodad Pro, Adolf Hitler, OJ Simpson, Nodda Realperson, John Galt, Henry Reardon (those last two for the Ayn Rand fans in the audience) and the best "asdf". In some cases these fictional donors have given tens of thousands of dollars in small increments.
The reason for small increments is that donations of less than $200 do not have to be reported to the Federal Election Commission with the same stringency as larger donations. You do not need to record a name, address and occupation of the donor. If you wanted to send millions of dollars to a candidate, the easiest way to do it would be to do so in $200 increments. You could pay someone $10 an hour, enter a payment a minute, and funnel $12,000 an hour into a campaign, limited only by the ability of your keyboardist to invent new names. Quite frankly, you could just automate the process with a large enough database of names and fictional addresses and do it 24/7/365. The personal limit to any individual campaign is $2300 in the primaries and $2300 in the general election.
The disabling of the fraud-protection system got me thinking, though. There are three ways this could work out for the Obama Campaign.
One, it allows foreign donors to contribute, and it's not as if the man is unpopular overseas. Nice that they have an opinion but taking their money is a federal crime, I believe. The fact that so many Obama donations during the primaries were odd-denomination donations (dollars and cents) makes one suspicious that the donated amounts were in Euros or other currency helpfully converted to dollars by the magic of Visa.
Two, it allows people to use lists of valid credit-card numbers to "donate" to Obama in a fraudulent fashion -- which has happened.
Three, if the Obama campaign was working in conjunction with a fraudulent front company to do its credit card processing, fraud becomes a feature and not a bug.
Usually, if your credit card is misused by someone else your bank will reimburse you for the loss, and attempt to ding the merchant for the difference. If there was an intermediary organization that could a) do the credit card billing for Obama and b) had access to foreign cash (or just cash in general over and above what could be legally donated), the front company could reimburse "fraudulent" charges to people whose cards were used wrongly...and never attempt to get the money back from the Obama Campaign.
Let's say Ima Republican shows up with a $2300 charge on her credit card to "Obama Campaign Services". She reports it as a fraudulent charge, and Obama Campaign Services refunds her the money. Well, if OCS is a front bank with its own source of money, then it doesn't have to go after the Obama Campaign itself to make good. It just accepts the loss and moves on. The Obama Campaign is never asked by Obama Campaign Services, its credit-card processor, to repay the money. Assuming OCS has sacks of cash available, the more fraud the better it is for the Obama Campaign, as long as it doesn't get caught too often. OCS is there to take the hits, pushing otherwise-illegal money to the Obama campaign no matter if it's fraudulent or not.
Sounds a little paranoid, I know. But when I hear about Democratic lawmakers circling my 401k like sharks, paranoia becomes a reasonable way to do business. I know next-to-nothing about credit card processing, this is entirely conjecture on my part. But the fraudulent activity is not conjecture. it's something to be concerned about, especially when it would be very easy to make your website fraud-resistant the way the Hillary Clinton and John McCain websites are.
But Sarah Palin has new clothes, so I guess all of this doesn't matter.
UPDATE: Apparently Chase Paymentech is the company that does the CC processing, and they are a reputable firm. Other people have pointed out that the Obama campaign may batch-process a days' worth of credit card payments and automatically drop obviously fraudulent or illegal contributions -- except "Good Will" has made actual donations.
All I can say is that when you're running for President and trying to raise money through credit cards it's occasionally good to have "The Senator from MBNA" for your wingman. Is Joe Biden worth it? If you're in good with the CC companies he's worth (literally) millions.
Barack+Obama 2008 Fraud
Thursday, October 23, 2008
Tuesday, October 21, 2008
On Deterrence and Perception
I know something about deterrence, both sides of it actually. Now that I am 6'5" and slightly over 250lbs, I represent one defintion of deterrence. My first CHL instructor, a former Green Beret and UN Peacekeeper in the Sinai, told me flat out, "Nobody is ever going to mess with you Darren, not even drunk. You're just too big." I find this to be true. I haven't had anyone in my adult life make anything approaching an aggresive physical move toward me. I know one side of deterrence in this way: I intimidate, without trying.
The other side of deterrence I know from my childhood. I was tall, but not particularly wide. I grew fast and was skinny, and I stood out among my peers. I had some kind of inborn block against beating the crap out of people who deserved it. I have thought a lot about this, and for me I believe it came down to a fear of losing control, of abandoning myself to fury and really trying to hurt someone else. I have subsequently gotten over this concern (it's amazing what having a wife and children will do), but growing up and being the new kid as often as I was, I had people getting aggressive with me all the time.
Now, you may wonder, why does this trip down memory lane have much relevance this political season? Well, Joe Biden made the discussion of deterrence and lack thereof relevant with some comments he made in Seattle, as reported by ABC News:
Amazingly, Joe Biden and I agree on something, though strangely enough when I proposed this a week ago to some committed Obamatons, they said I was absolutely insane. I said that the courage of John McCain was beyond question, but that when Obama talked tough he was unconvincing which meant that he was going to be challenged more than McCain would.
While some of you intuitively "get" this, there are no doubt some readers who will say, "No, now, the practice of international diplomacy is sophisticated! You can get degrees in it, it doesn't come down to something as silly as schoolyard bully calculations!" I agree with that to a certain point. Democracies are often complex, messy and shot through with divergent groups with divergent ends they wish to see met. Even as august a figure as the President of the United States may only be speaking for some portion of the population, and if the President gets ahead of the populace they may jerk his or her chain back into line.
Not so with totalitarian governments. Totalitarian states are built around the personalities of their leaders and inevitably end up taking on the personality of those who run the Cult of Personality. Positions that are complex and may arise from a confluence of different interests in a democracy become much simpler when you're a dictator. If you don't like cheese, you can outlaw cheese and the dairy lobby can't say boo. If there is a warship off the coast of your nation, you can personally weigh the benefits and risks to harassing it or leaving it be. Totalitarian states are the ones most likely to reflect the characteristics of their leaders and to act in a schoolyard fashion.
Should Obama become President, it's not the democracies who are likely to give him trouble. He could run for EU President in 2009 and win that, too, most likely. It is the totalitarian governments (Venezuela, Iran, Russia and to a lesser extent North Korea and China) that will be the most likely state actors to contrive a conflict with Obama, to measure the man and see what can be gotten away with in the next four years. And lest we forget, there are totalitarian non-state actors like Al Qaeda who will be only too happy to see George W. Bush disappear over the horizon, if for no other reason than he would respond to attack without hesitation, and would pursue an attack rather than making a show of aggression like Clinton. They, too, might choose a confrontation with Obama to see if their campaign has produced a more malleable US President.
What's interesting is that Senator Biden didn't stop at saying that we WILL get into a conflict in the first six months of Obama's term (if he's elected). That would be too easy for Joe, he continued, somewhat ominously:
Curiouser and curiouser. I added the emphasis, and that's the interesting part. The guarantee that our nation will be plunged into crisis is garden-variety and patented Joe Biden Stupid (TM), but the idea that the influence of left-wing idealogues who come to an Obama-Biden fundraiser will be needed to counteract what appears to be boneheaded moves by then-President Obama is interesting.
Does this imply that the nominally docile Obama will display a level of aggression in response to a threat that would be off-putting to the granola-crunchers that paid for his campaign? Or will the lefties be drafted to explain why doing nothing in the face of crisis (which seems to me to be more likely) is the "right" thing to do? Either is likely, but in any event Biden is basically saying that they won't get the first one right, at least in the eyes of the public, and they'll need political cover from Obama supporters after the election. Biden implies that there will either be an overreaction or an underreaction, but not that they'll handle the situation in what is clearly the right way.
Makes you wonder about Obama's judgment in choosing this clown as his running mate. Sarah Palin is regarded by many on the left as a stuffed skirt with no intelligence and a drag on the GOP ticket they're thankful for, but so far she's
energized the GOP base (check)
given the highest-rated acceptance speech in VP history (check)
given SNL the highest ratings in 14 years (check)
draws crowds that equal or exceed Obama's (check)
What has Joe Biden done? Besides prove himself unable to count to four?
Joe Biden will be 66 years old a couple of weeks after the election. Ask yourself this: If Joe Biden becomes demented and starts confabulating (making up things to cover the gaps in his memory), how long will it be before anyone notices?
I think Joe Biden would have to agree that the wisest choice would be to avoid the test, avoid the need for political cover from leftists, and just elect John McCain.
Update: When you get schooled by Sarah Palin, whom you disdain, what does that make you? Seriously, watch the video. It's worth a smile.
The other side of deterrence I know from my childhood. I was tall, but not particularly wide. I grew fast and was skinny, and I stood out among my peers. I had some kind of inborn block against beating the crap out of people who deserved it. I have thought a lot about this, and for me I believe it came down to a fear of losing control, of abandoning myself to fury and really trying to hurt someone else. I have subsequently gotten over this concern (it's amazing what having a wife and children will do), but growing up and being the new kid as often as I was, I had people getting aggressive with me all the time.
Now, you may wonder, why does this trip down memory lane have much relevance this political season? Well, Joe Biden made the discussion of deterrence and lack thereof relevant with some comments he made in Seattle, as reported by ABC News:
"Mark my words," the Democratic vice presidential nominee warned at the second of his two Seattle fundraisers Sunday. "It will not be six months before the world tests Barack Obama like they did John Kennedy. The world is looking. We're about to elect a brilliant 47-year-old senator president of the United States of America. Remember I said it standing here if you don't remember anything else I said. Watch, we're gonna have an international crisis, a generated crisis, to test the mettle of this guy."
Amazingly, Joe Biden and I agree on something, though strangely enough when I proposed this a week ago to some committed Obamatons, they said I was absolutely insane. I said that the courage of John McCain was beyond question, but that when Obama talked tough he was unconvincing which meant that he was going to be challenged more than McCain would.
While some of you intuitively "get" this, there are no doubt some readers who will say, "No, now, the practice of international diplomacy is sophisticated! You can get degrees in it, it doesn't come down to something as silly as schoolyard bully calculations!" I agree with that to a certain point. Democracies are often complex, messy and shot through with divergent groups with divergent ends they wish to see met. Even as august a figure as the President of the United States may only be speaking for some portion of the population, and if the President gets ahead of the populace they may jerk his or her chain back into line.
Not so with totalitarian governments. Totalitarian states are built around the personalities of their leaders and inevitably end up taking on the personality of those who run the Cult of Personality. Positions that are complex and may arise from a confluence of different interests in a democracy become much simpler when you're a dictator. If you don't like cheese, you can outlaw cheese and the dairy lobby can't say boo. If there is a warship off the coast of your nation, you can personally weigh the benefits and risks to harassing it or leaving it be. Totalitarian states are the ones most likely to reflect the characteristics of their leaders and to act in a schoolyard fashion.
Should Obama become President, it's not the democracies who are likely to give him trouble. He could run for EU President in 2009 and win that, too, most likely. It is the totalitarian governments (Venezuela, Iran, Russia and to a lesser extent North Korea and China) that will be the most likely state actors to contrive a conflict with Obama, to measure the man and see what can be gotten away with in the next four years. And lest we forget, there are totalitarian non-state actors like Al Qaeda who will be only too happy to see George W. Bush disappear over the horizon, if for no other reason than he would respond to attack without hesitation, and would pursue an attack rather than making a show of aggression like Clinton. They, too, might choose a confrontation with Obama to see if their campaign has produced a more malleable US President.
What's interesting is that Senator Biden didn't stop at saying that we WILL get into a conflict in the first six months of Obama's term (if he's elected). That would be too easy for Joe, he continued, somewhat ominously:
"I can give you at least four or five scenarios from where it might originate," Biden said to Emerald City supporters, mentioning the Middle East and Russia as possibilities. "And he's gonna need help. And the kind of help he's gonna need is, he's gonna need you - not financially to help him - we're gonna need you to use your influence, your influence within the community, to stand with him. Because it's not gonna be apparent initially, it's not gonna be apparent that we're right."
Curiouser and curiouser. I added the emphasis, and that's the interesting part. The guarantee that our nation will be plunged into crisis is garden-variety and patented Joe Biden Stupid (TM), but the idea that the influence of left-wing idealogues who come to an Obama-Biden fundraiser will be needed to counteract what appears to be boneheaded moves by then-President Obama is interesting.
Does this imply that the nominally docile Obama will display a level of aggression in response to a threat that would be off-putting to the granola-crunchers that paid for his campaign? Or will the lefties be drafted to explain why doing nothing in the face of crisis (which seems to me to be more likely) is the "right" thing to do? Either is likely, but in any event Biden is basically saying that they won't get the first one right, at least in the eyes of the public, and they'll need political cover from Obama supporters after the election. Biden implies that there will either be an overreaction or an underreaction, but not that they'll handle the situation in what is clearly the right way.
Makes you wonder about Obama's judgment in choosing this clown as his running mate. Sarah Palin is regarded by many on the left as a stuffed skirt with no intelligence and a drag on the GOP ticket they're thankful for, but so far she's
energized the GOP base (check)
given the highest-rated acceptance speech in VP history (check)
given SNL the highest ratings in 14 years (check)
draws crowds that equal or exceed Obama's (check)
What has Joe Biden done? Besides prove himself unable to count to four?
Joe Biden will be 66 years old a couple of weeks after the election. Ask yourself this: If Joe Biden becomes demented and starts confabulating (making up things to cover the gaps in his memory), how long will it be before anyone notices?
I think Joe Biden would have to agree that the wisest choice would be to avoid the test, avoid the need for political cover from leftists, and just elect John McCain.
Update: When you get schooled by Sarah Palin, whom you disdain, what does that make you? Seriously, watch the video. It's worth a smile.
Saturday, October 18, 2008
Music to CPR By
Saw this at the WSJ Health Blog and had to mention it.
Turns out that most people who do CPR don't compress the chest fast enough to help. The recommended rate is 100 beats per minute, but it seems too fast and wears you out.
The answer seems to be providiing appropriate theme music, which, ironically is Stayin' Alive by the Bee Gees.
At 103 beats per minute, if you can keep up with the Bee Gees you can do CPR at the proper rate. Kind of turns saving lives into Guitar Hero, but when 15 medical students were allowed to listen to music (namely, this song) they could do 109 BPM, and five weeks later, even without the music they were still at 113 BPM. All of this will be presented for the edification of us all at ACEP, the American College of Emergency Physicians meeting October 27-30 in Chicago, or as it is known for those three days, "The Best Town In Which To Have A Public Cardiac Arrest."
Turns out that most people who do CPR don't compress the chest fast enough to help. The recommended rate is 100 beats per minute, but it seems too fast and wears you out.
The answer seems to be providiing appropriate theme music, which, ironically is Stayin' Alive by the Bee Gees.
At 103 beats per minute, if you can keep up with the Bee Gees you can do CPR at the proper rate. Kind of turns saving lives into Guitar Hero, but when 15 medical students were allowed to listen to music (namely, this song) they could do 109 BPM, and five weeks later, even without the music they were still at 113 BPM. All of this will be presented for the edification of us all at ACEP, the American College of Emergency Physicians meeting October 27-30 in Chicago, or as it is known for those three days, "The Best Town In Which To Have A Public Cardiac Arrest."
Friday, October 17, 2008
Two Debates and one Plumber
Well, I didn't post anything about the second debate between John McCain & Barack Obama because it was so dull I was afraid I would lose the meager readership I have simply by mentioning it. Nothing happened, literally. People asked questions that the candidates didn't answer, and many talking points were repeated. About the only thing I can say is that I'm glad there weren't 9 more "Town Hall" formats scheduled, and Tom Brokaw has strangely become much more compelling in text than in real life.
Bob Schieffer moderated debate #3, which is the first one that John McCain really showed up for. He was animated and engaged, a little too wordy at some points (stepping on his own points on occasion), but much better than in previous debates. He took it to Obama on the over-the-top accusations of John Lewis, and the best line of the night was "I'm not George W. Bush. If you wanted to run against him you should have run four years ago."
As an aside, while I liked McCain getting on Obama about the falsehoods and distortions, McCain lacks the carpe jugulum (Latin - seize the neck) attitude that his running mate displays pretty well. He made his attacks but did not press them. He landed blows but refused to try to sit on Obama's rhetorical chest and continue pounding until Obama could not reply. It's just not in him, I guess. I have heard it is a generational thing, but either way McCain keeps letting things like Obama's "cut taxes for 95% of taxpayers" line float past unmolested.
The star of the third debate, who wasn't even present, was undoubtedly Joe the Plumber, better known as Joe Wurzelbacher, a Ohioan who Barack Obama had the misfortune to stumble upon and engage in conversation while being videotaped.
Joe the Plumber asked Obama if he was really going to raise taxes on him, Joe was considering purchasing the small plumbing business where he works but was worried that the increased taxes would make it unprofitable to work beyond the 10-12 hours a day he already put in.
Obama, foolishly, was honest. As quoted at Fox News:
Oops. In one comment, Barack Obama may have undone four months of careful tacking to the center on economic issues. We may have a problem or even a series of problems in the economy right now, but when one of the people that could be President starts speaking in language dripping with socialist overtones I believe Americans will start to listen a little more critically.
Sensing an unforced error, John McCain mentioned "Joe the Plumber" nine times in the third debate, with Obama forced to mention him twice. The election has a poster child, Ladies and Gentlemen.
Now what makes this infuriating to me is that immediately the left side of the blogging community and the media set to "vetting" Joe the Plumber as if he did anything other than ask a question of Barack Obama.
Within 48 hours we now know that Joe Wurzelbach's actual name is Samuel J. Wurzelbach, he is twice-divorced and does not have a plumber's license, though he does work for a plumber. His home address has been published, his tax lein (filed in 2007) publicized and his local plumber's union notified, lest he actually work as a plumber somewhere near where he lives. He has cameras all over him, and he doesn't have to worry about any of his secrets being revealed. If you can find it online, it's going to be revealed about him.
The real question I have is why Joe the Plumber is getting the third degree? And why is the Obama campaign so completely silent on the public strip-and-cavity search that its allies are performing to a "civilian", a voter? He's just a guy, or he was before he committed the unpardonable act of making Barack Obama flub a question in front of a camera.
I see this as tremendously not-helpful for Barack Obama, because it doesn't bode well for free speech or even criticism should he become President. Apparently the rule is that if you question Barack Obama or his policies, then you make yourself the subject of inquiry. The question to be answered is not, "What is Barack Obama's reply?" but rather, "What makes you think you have standing to ask The One a question?"
At this point, would you want Barack Obama to come up to you and say, "Hi, do you have any questions I can answer?" In essence, he would be asking you if you think it's worth your privacy in case he gets stumped. Joe didn't even set himself up to be a rival of Barack Obama, Barack came to his house and because Joe didn't kiss the ring and move along, he gets both barrels from the press and the left wing.
The vitriol directed toward Joe the Plumber is pretty similar to that directed toward Sarah Palin, in that neither of them were considered to have sufficient stature to question Barack Obama's policies or conclusions. There was a collective, "Who the hell are YOU?" response, as if Joe or Sarah sat down at the cool kids' table in junior high school unbidden. What I find so interesting is that it is the alleged egalitarians and Friends of The Common Man, the leftists, who are the most incensed when an unelite person skewers one of the anointed.
Well, I have a tiny little soapbox, but when the press comes calling I will stand up and say, "I am Joe the Plumber." Somebody has to stop this kind of thing. We need to get in the habit of making our questions and criticisms known, so that maybe an potential Obama government will worry about trying to stifle dissent.
Polls are tightening. If you're of a GOP or conservative bent, keep your powder dry and be sure you vote. This is far from over.
Bob Schieffer moderated debate #3, which is the first one that John McCain really showed up for. He was animated and engaged, a little too wordy at some points (stepping on his own points on occasion), but much better than in previous debates. He took it to Obama on the over-the-top accusations of John Lewis, and the best line of the night was "I'm not George W. Bush. If you wanted to run against him you should have run four years ago."
As an aside, while I liked McCain getting on Obama about the falsehoods and distortions, McCain lacks the carpe jugulum (Latin - seize the neck) attitude that his running mate displays pretty well. He made his attacks but did not press them. He landed blows but refused to try to sit on Obama's rhetorical chest and continue pounding until Obama could not reply. It's just not in him, I guess. I have heard it is a generational thing, but either way McCain keeps letting things like Obama's "cut taxes for 95% of taxpayers" line float past unmolested.
The star of the third debate, who wasn't even present, was undoubtedly Joe the Plumber, better known as Joe Wurzelbacher, a Ohioan who Barack Obama had the misfortune to stumble upon and engage in conversation while being videotaped.
Joe the Plumber asked Obama if he was really going to raise taxes on him, Joe was considering purchasing the small plumbing business where he works but was worried that the increased taxes would make it unprofitable to work beyond the 10-12 hours a day he already put in.
Obama, foolishly, was honest. As quoted at Fox News:
"It's not that I want to punish your success. I just want to make sure that everybody who is behind you, that they've got a chance for success too," Obama responded. "My attitude is that if the economy's good for folks from the bottom up, it's gonna be good for everybody ... I think when you spread the wealth around, it's good for everybody."
Oops. In one comment, Barack Obama may have undone four months of careful tacking to the center on economic issues. We may have a problem or even a series of problems in the economy right now, but when one of the people that could be President starts speaking in language dripping with socialist overtones I believe Americans will start to listen a little more critically.
Sensing an unforced error, John McCain mentioned "Joe the Plumber" nine times in the third debate, with Obama forced to mention him twice. The election has a poster child, Ladies and Gentlemen.
Now what makes this infuriating to me is that immediately the left side of the blogging community and the media set to "vetting" Joe the Plumber as if he did anything other than ask a question of Barack Obama.
Within 48 hours we now know that Joe Wurzelbach's actual name is Samuel J. Wurzelbach, he is twice-divorced and does not have a plumber's license, though he does work for a plumber. His home address has been published, his tax lein (filed in 2007) publicized and his local plumber's union notified, lest he actually work as a plumber somewhere near where he lives. He has cameras all over him, and he doesn't have to worry about any of his secrets being revealed. If you can find it online, it's going to be revealed about him.
The real question I have is why Joe the Plumber is getting the third degree? And why is the Obama campaign so completely silent on the public strip-and-cavity search that its allies are performing to a "civilian", a voter? He's just a guy, or he was before he committed the unpardonable act of making Barack Obama flub a question in front of a camera.
I see this as tremendously not-helpful for Barack Obama, because it doesn't bode well for free speech or even criticism should he become President. Apparently the rule is that if you question Barack Obama or his policies, then you make yourself the subject of inquiry. The question to be answered is not, "What is Barack Obama's reply?" but rather, "What makes you think you have standing to ask The One a question?"
At this point, would you want Barack Obama to come up to you and say, "Hi, do you have any questions I can answer?" In essence, he would be asking you if you think it's worth your privacy in case he gets stumped. Joe didn't even set himself up to be a rival of Barack Obama, Barack came to his house and because Joe didn't kiss the ring and move along, he gets both barrels from the press and the left wing.
The vitriol directed toward Joe the Plumber is pretty similar to that directed toward Sarah Palin, in that neither of them were considered to have sufficient stature to question Barack Obama's policies or conclusions. There was a collective, "Who the hell are YOU?" response, as if Joe or Sarah sat down at the cool kids' table in junior high school unbidden. What I find so interesting is that it is the alleged egalitarians and Friends of The Common Man, the leftists, who are the most incensed when an unelite person skewers one of the anointed.
Well, I have a tiny little soapbox, but when the press comes calling I will stand up and say, "I am Joe the Plumber." Somebody has to stop this kind of thing. We need to get in the habit of making our questions and criticisms known, so that maybe an potential Obama government will worry about trying to stifle dissent.
Polls are tightening. If you're of a GOP or conservative bent, keep your powder dry and be sure you vote. This is far from over.
Friday, October 03, 2008
My VP Debate Wrap-Up
After some consideration, this is my conclusion about the debate.
Joe Biden clearly and convincingly defeated George W. Bush in this debate, President Bush being absent. He also forcefully stated that as VP under Obama, in the face of economic crisis he would not pursue the tax policies of his opponent, John McCain, then went on to list the things he would not be in favor of cutting despite the fact that the bailout bill added another trillion or so to the national debt. He would "slow down" foreign aid commitments, which he later described as vital to winning in Afghanistan. As Bill Hobbs points out, this is "slowing down" a doubling of US foreign aid amounting to $25 billion a year -- against an annual deficit of hundreds of billions.
Palin dodged some questions, the wisest dodge was on the issue of the Unitary Executive and the role of the VP, which is an inside-baseball topic of interest primarily to Con Law professors and something she likely knows virtually nothing about. Joe Biden put on his Con Law professor hat and proceeded to quote the wrong part of the Constitution regarding the role of the VP as Executive Branch. "Everyone should know that," he said. I question whether "everyone should know" something that's patently wrong. Article I, Section 3 refers to the office of Vice-President, it is the part of the Constitution dealing with legislative structure and function. Article II has to do with the Executive.
Joe Biden was fully in command of the facts he made up out of whole cloth during the debate. He showed a far greater range of familiarity with his own fabrications than his opponent. In this regard, he was clearly the winner, as shown by focus group polling from Katie's Restaurant in Wilmington, DE, which has been closed since 1990. He showed boldness by contradicting the Obama website on sitting down President-to-President with Achmedinejad without preconditions. He also showed boldness by contradicting himself on the issue of coal plants. Speaking untruth to power has never had a bolder advocate. In my opinion, Joe Biden is never more convincing and genuine than when seamlessly weaving made-up facts into his statements, and I believe that is an important qualification when choosing a Democratic Vice-Presidential candidate.
But really, I think Palin came out ahead. She lied less, for one, and she's authentic in a way Joe hasn't been for a couple of decades. Considering that this is her first national debate and his third run for the Presidency (this time as VP), he didn't blow her out and she was able to score on him in her vicious-yet-nice way, which is a true political gift. She did not defend McCain as well as I would have liked, a more experienced politician might have seen more opportunities and I can't help but believe that she still could have done better. Nevertheless, she did exceptionally well. Like I said in the liveblog, they need to come up with another word for "maverick", my personal feeling is that the word has attracted as many people as it's going to attract. Drop it, or use it once and then use a synonym.
It didn't change much for the race, but it changed a lot for Sarah Palin. You can bet she'll subscribe to Foreign Affairs and, if she loses, spend the next four years getting the experience and knowledge to run on her own. She's a bit uneducated from a national and world affairs standpoint, which is what you expect from a remote state governor. Ask Biden about the status of salmon fisheries and he'll make something up, but she's probably right on top of that one. Get Biden to talk about anything other than John McCain's votes on alternative energy and he'll tell you a heartwarming story about Bill's Oil & Coal in Wilmington that never existed, or modify a Frank McCourt story about how his family had to make one piece of coal last all winter because President Willkie was such a bad Republican president back in the 1940s. Energy is Palin's issue, and she wasn't asked a single question about it.
She's a superb communicator, and couple that with more experience and she'll be deadly. She is probably about as physically attractive as a woman seeking political power can be without being off-putting to other women, what she lacks is a few more years in the governor's chair and easy familiarity with issues compelling to reporters and media folks. She needs to tone down the homespun a notch, but she's got the right instincts and she'll be a player for years.
She might even be Bobby Jindal.
Sarah+Palin Joe+Biden debate
Joe Biden clearly and convincingly defeated George W. Bush in this debate, President Bush being absent. He also forcefully stated that as VP under Obama, in the face of economic crisis he would not pursue the tax policies of his opponent, John McCain, then went on to list the things he would not be in favor of cutting despite the fact that the bailout bill added another trillion or so to the national debt. He would "slow down" foreign aid commitments, which he later described as vital to winning in Afghanistan. As Bill Hobbs points out, this is "slowing down" a doubling of US foreign aid amounting to $25 billion a year -- against an annual deficit of hundreds of billions.
Palin dodged some questions, the wisest dodge was on the issue of the Unitary Executive and the role of the VP, which is an inside-baseball topic of interest primarily to Con Law professors and something she likely knows virtually nothing about. Joe Biden put on his Con Law professor hat and proceeded to quote the wrong part of the Constitution regarding the role of the VP as Executive Branch. "Everyone should know that," he said. I question whether "everyone should know" something that's patently wrong. Article I, Section 3 refers to the office of Vice-President, it is the part of the Constitution dealing with legislative structure and function. Article II has to do with the Executive.
Joe Biden was fully in command of the facts he made up out of whole cloth during the debate. He showed a far greater range of familiarity with his own fabrications than his opponent. In this regard, he was clearly the winner, as shown by focus group polling from Katie's Restaurant in Wilmington, DE, which has been closed since 1990. He showed boldness by contradicting the Obama website on sitting down President-to-President with Achmedinejad without preconditions. He also showed boldness by contradicting himself on the issue of coal plants. Speaking untruth to power has never had a bolder advocate. In my opinion, Joe Biden is never more convincing and genuine than when seamlessly weaving made-up facts into his statements, and I believe that is an important qualification when choosing a Democratic Vice-Presidential candidate.
But really, I think Palin came out ahead. She lied less, for one, and she's authentic in a way Joe hasn't been for a couple of decades. Considering that this is her first national debate and his third run for the Presidency (this time as VP), he didn't blow her out and she was able to score on him in her vicious-yet-nice way, which is a true political gift. She did not defend McCain as well as I would have liked, a more experienced politician might have seen more opportunities and I can't help but believe that she still could have done better. Nevertheless, she did exceptionally well. Like I said in the liveblog, they need to come up with another word for "maverick", my personal feeling is that the word has attracted as many people as it's going to attract. Drop it, or use it once and then use a synonym.
It didn't change much for the race, but it changed a lot for Sarah Palin. You can bet she'll subscribe to Foreign Affairs and, if she loses, spend the next four years getting the experience and knowledge to run on her own. She's a bit uneducated from a national and world affairs standpoint, which is what you expect from a remote state governor. Ask Biden about the status of salmon fisheries and he'll make something up, but she's probably right on top of that one. Get Biden to talk about anything other than John McCain's votes on alternative energy and he'll tell you a heartwarming story about Bill's Oil & Coal in Wilmington that never existed, or modify a Frank McCourt story about how his family had to make one piece of coal last all winter because President Willkie was such a bad Republican president back in the 1940s. Energy is Palin's issue, and she wasn't asked a single question about it.
She's a superb communicator, and couple that with more experience and she'll be deadly. She is probably about as physically attractive as a woman seeking political power can be without being off-putting to other women, what she lacks is a few more years in the governor's chair and easy familiarity with issues compelling to reporters and media folks. She needs to tone down the homespun a notch, but she's got the right instincts and she'll be a player for years.
She might even be Bobby Jindal.
Sarah+Palin Joe+Biden debate
Thursday, October 02, 2008
Near-Liveblogging The Debate
Through the miracle of TiVo and a new HDTV aerial (new today) I can see every one of Joe Biden's hairplugs. Amazing. Anyway, I'm about 20 minutes behind, so refresh to see my take as it goes along.
Joe is muted and low-key
Sarah blew the answer about the financial issue. She blamed the 'Predatory lenders' without mentioning the effects of the CRA, without mentioning the actions of Freddie & Fannie.
She is bright and assertive but a little hyperkinetic. So far she's able to bring details without having to look like she's straining.
Joe is hammering deregulation, she's not responding and sticking on the tax issue. Needs to stop using the term 'heat up' the economy.
Next question: why is raising taxes not class warfare?
Joe "It's called fairness". Hmm. 30% of income tax filers don't pay any taxes. "Simple fairness" IS class warfare. $300 billion to corporate America.
Sarah "redistribution of wealth" good reframe. And she hits the small business issue. Needs to meniton S Corporations. Backwards way of growing the economy. Nice. Looked like she was going to duck the question on health care. Handled it well. "Unless you're pleased with the way the federal government has run much of anything..." Tap that anger, girl. She also snuck in the word 'Universal' -- that's a Frank Luntz word.
Joe is making a lot of hay out of the tax credit for healthcare. Spouts a lot of numbers but I doubt his specifics. I will have to look this up. $12K per insured, that's a lot of money. Maybe more than the entire private health insurance market.
Ifill reasks the "what promises will you not be able to keep?"
Joe Biden promises to slow down foreign aid, and not to keep John McCain's campaign promises regarding taxes. Will keep alternative energy, education, health care. Eliminate wasteful spending, mentions $100 billion tax dodge for offshore tax havens.
Doesn't tell one thing to one group & one to another. Energy bill 2005 -- "That's what gave those oil companies those big tax breaks" Biden used the $4 billion for XOM line twice, she turned it around and sank it in his eye socket. No, there's no promises we won't keep.
Biden responds that Barack Obama voted for it because it had alternative energy things, tried to strip it out. He calls her severance tax a "windfall profits tax", which it's not. If that is not proof of what I say then I don't know what is. Well, if you lie about it, then does it count as proof.
She's hammering the corruption and greed of Wall Street issue. John McCain to thank for failing to get his bill passed. "A toxic mess on Main Street that is affecting Wall Street." As Willy Wonka would say, "Strike that, reverse it."
Ifill asks about the bankruptcy bill -- it's complicated, Biden says. We should be allowing bankruptcy courts to adjust the principal you owe as well as your interest rate. That sounds fishy. Used to be that when you lost your stuff when you declared bankruptcy. The whole penalties thing?
8:29pm
Brief answer from Palin to deflect the bankruptcy issue and then back to energy. She's doing remarkably well so far, few flubs. She's kind of lecturing here, but hammering the ANWR issue. Energy independence is the key to this nation's future. Needs to stop using "heckuva".
Q: What is true and what is false regarding climate change? I don't want to argue about the causes of climate change, want to figure out how we can do that. All of the above plan. As we rely more and more on other countries.
Biden: It is man-made, it is clearly man-made. The cause is man-made. Gives the 3% of reserves/25% of consumption line, which minimizes our true reserves and ignores unproven offshore reserves as well as natural gas and the trillion barrels of oil shale we have. John McCain voted 20 times against alternative energy. Obama-biden wants to develop energy that needs subsidies to be competitive and try to sell that to the rest of the world. No-go in China or India, Joe. Coal is King there and will be for sure in China
Palin does support capping carbon emissions. Joe supports clean coal technology for 25 years, despite his rope-line comment. Maybe he's all for it if the go government doesn't have to pay for it.
Joe Biden supports gay marriage. First gaffe. Saran-does not support gay marriage. Now neither Joe Biden & Barack Obama do not support gay marriage. So much for the people who think Barack Obama is a closet gay marriage supporter.
Iraq: Palin sounds like she knows this. Compliments Biden on standing up to Obama regarding a political vote.
Biden: needs an exit strategy, needs a time table. Palin says we'll go when we're ready, when the Iraqis can govern themselves. She points out that Biden says he would have been proud to be VP candidate for McCain. skewers him effortlessly.
Biden says Pak nukes could hit Israel. Wrong, I believe. Between nuclear Iran and unstable Pakistan he chooses unstable Pakistan. Sarah says both are important but talks about how a nuclear Iran is dangerous. Gets into the "no preconditions" line. Talks about her meeting with Kissinger. Biden bald-faced lies about what Obama said at a Democratic debate HE WAS AT. Misrepresents what McCain said as well.
Palin is clear and articulate on need for a two-state solution. Sounds entirely reasonable. Biden is now running against George W. Bush. He is four years too late for that. Biden: haven't heard how the policy is different from Bush's.
8:55 When do we use nuclear weapons? Palin answers a line about not allowing nuclear proliferation. Makes point about using surge principle In Afghanistan. Biden says CG in Afghanistan says (today) that surge would not work. Mentions Obama-Lugar as if it's important - an update to a 1991 law makes a big difference how? Makes a statement about spending in 3 weeks in Iraq the same as in 7 years in Afghanistan. Ignores difference in geography, technology, etc.
Biden makes an impassioned speech about Darfur. Palin agrees, a little too smarmy, but then mentions divesting Alaska's investments in Sudan. Didn't know that.
9:05 pm: When do we go into another country? Biden if we can win, makes a statement about countries and when we can invade. Palin needles him again about his voting record and statements, she's hammered this enough that she had better have a couple of Aces in terms of backup documentation.
So what if your President dies? Neither one will change anything.
What a Vice-President does? Palin: working with the Senate, she would lead in areas of Energy, Senate, special-needs children. Biden: Senate, advising President, He will tell president if he disagrees. Ifill asks about Cheney's assertion regarding the split nature of VP as Executive vs. Legislative. Palin ducks the question, wisely. Biden gives a long answer that is probably too much inside baseball.
Conventional Wisdom: Palin is inexperienced, Biden undisciplined. Palin makes a good speech. Biden says he's changed things, tears up when talking about his kids. Pain responds, needs to stop using the term 'Maverick'. It's getting annoying. Find another way to say it. Biden: "Maverick he is not."
Final question: What policy position have you changed? Biden: position re: judicial confirmation. Palm; wasn't able to zero-balance budgets, no compromises on principle.
Now the real final question: How do you stop the partisanship as VP? Biden: Don't question others' motives. Palin: get the job done, don't worry about credit.
Final statements: Palin: I like Reagan. McCain fought for you. Biden: it's time for America to stand up together.
Especially people making $250K or more. It's easier to get at their wallets that way.
Debate over. Palin survived, not broken or dispirited. Biden only gaffed once, wasn't nasty. Both did a good job. Hard to pick a winner, Pain maybe wins by not losing, but not by much.
Joe is muted and low-key
Sarah blew the answer about the financial issue. She blamed the 'Predatory lenders' without mentioning the effects of the CRA, without mentioning the actions of Freddie & Fannie.
She is bright and assertive but a little hyperkinetic. So far she's able to bring details without having to look like she's straining.
Joe is hammering deregulation, she's not responding and sticking on the tax issue. Needs to stop using the term 'heat up' the economy.
Next question: why is raising taxes not class warfare?
Joe "It's called fairness". Hmm. 30% of income tax filers don't pay any taxes. "Simple fairness" IS class warfare. $300 billion to corporate America.
Sarah "redistribution of wealth" good reframe. And she hits the small business issue. Needs to meniton S Corporations. Backwards way of growing the economy. Nice. Looked like she was going to duck the question on health care. Handled it well. "Unless you're pleased with the way the federal government has run much of anything..." Tap that anger, girl. She also snuck in the word 'Universal' -- that's a Frank Luntz word.
Joe is making a lot of hay out of the tax credit for healthcare. Spouts a lot of numbers but I doubt his specifics. I will have to look this up. $12K per insured, that's a lot of money. Maybe more than the entire private health insurance market.
Ifill reasks the "what promises will you not be able to keep?"
Joe Biden promises to slow down foreign aid, and not to keep John McCain's campaign promises regarding taxes. Will keep alternative energy, education, health care. Eliminate wasteful spending, mentions $100 billion tax dodge for offshore tax havens.
Doesn't tell one thing to one group & one to another. Energy bill 2005 -- "That's what gave those oil companies those big tax breaks" Biden used the $4 billion for XOM line twice, she turned it around and sank it in his eye socket. No, there's no promises we won't keep.
Biden responds that Barack Obama voted for it because it had alternative energy things, tried to strip it out. He calls her severance tax a "windfall profits tax", which it's not. If that is not proof of what I say then I don't know what is. Well, if you lie about it, then does it count as proof.
She's hammering the corruption and greed of Wall Street issue. John McCain to thank for failing to get his bill passed. "A toxic mess on Main Street that is affecting Wall Street." As Willy Wonka would say, "Strike that, reverse it."
Ifill asks about the bankruptcy bill -- it's complicated, Biden says. We should be allowing bankruptcy courts to adjust the principal you owe as well as your interest rate. That sounds fishy. Used to be that when you lost your stuff when you declared bankruptcy. The whole penalties thing?
8:29pm
Brief answer from Palin to deflect the bankruptcy issue and then back to energy. She's doing remarkably well so far, few flubs. She's kind of lecturing here, but hammering the ANWR issue. Energy independence is the key to this nation's future. Needs to stop using "heckuva".
Q: What is true and what is false regarding climate change? I don't want to argue about the causes of climate change, want to figure out how we can do that. All of the above plan. As we rely more and more on other countries.
Biden: It is man-made, it is clearly man-made. The cause is man-made. Gives the 3% of reserves/25% of consumption line, which minimizes our true reserves and ignores unproven offshore reserves as well as natural gas and the trillion barrels of oil shale we have. John McCain voted 20 times against alternative energy. Obama-biden wants to develop energy that needs subsidies to be competitive and try to sell that to the rest of the world. No-go in China or India, Joe. Coal is King there and will be for sure in China
Palin does support capping carbon emissions. Joe supports clean coal technology for 25 years, despite his rope-line comment. Maybe he's all for it if the go government doesn't have to pay for it.
Joe Biden supports gay marriage. First gaffe. Saran-does not support gay marriage. Now neither Joe Biden & Barack Obama do not support gay marriage. So much for the people who think Barack Obama is a closet gay marriage supporter.
Iraq: Palin sounds like she knows this. Compliments Biden on standing up to Obama regarding a political vote.
Biden: needs an exit strategy, needs a time table. Palin says we'll go when we're ready, when the Iraqis can govern themselves. She points out that Biden says he would have been proud to be VP candidate for McCain. skewers him effortlessly.
Biden says Pak nukes could hit Israel. Wrong, I believe. Between nuclear Iran and unstable Pakistan he chooses unstable Pakistan. Sarah says both are important but talks about how a nuclear Iran is dangerous. Gets into the "no preconditions" line. Talks about her meeting with Kissinger. Biden bald-faced lies about what Obama said at a Democratic debate HE WAS AT. Misrepresents what McCain said as well.
Palin is clear and articulate on need for a two-state solution. Sounds entirely reasonable. Biden is now running against George W. Bush. He is four years too late for that. Biden: haven't heard how the policy is different from Bush's.
8:55 When do we use nuclear weapons? Palin answers a line about not allowing nuclear proliferation. Makes point about using surge principle In Afghanistan. Biden says CG in Afghanistan says (today) that surge would not work. Mentions Obama-Lugar as if it's important - an update to a 1991 law makes a big difference how? Makes a statement about spending in 3 weeks in Iraq the same as in 7 years in Afghanistan. Ignores difference in geography, technology, etc.
Biden makes an impassioned speech about Darfur. Palin agrees, a little too smarmy, but then mentions divesting Alaska's investments in Sudan. Didn't know that.
9:05 pm: When do we go into another country? Biden if we can win, makes a statement about countries and when we can invade. Palin needles him again about his voting record and statements, she's hammered this enough that she had better have a couple of Aces in terms of backup documentation.
So what if your President dies? Neither one will change anything.
What a Vice-President does? Palin: working with the Senate, she would lead in areas of Energy, Senate, special-needs children. Biden: Senate, advising President, He will tell president if he disagrees. Ifill asks about Cheney's assertion regarding the split nature of VP as Executive vs. Legislative. Palin ducks the question, wisely. Biden gives a long answer that is probably too much inside baseball.
Conventional Wisdom: Palin is inexperienced, Biden undisciplined. Palin makes a good speech. Biden says he's changed things, tears up when talking about his kids. Pain responds, needs to stop using the term 'Maverick'. It's getting annoying. Find another way to say it. Biden: "Maverick he is not."
Final question: What policy position have you changed? Biden: position re: judicial confirmation. Palm; wasn't able to zero-balance budgets, no compromises on principle.
Now the real final question: How do you stop the partisanship as VP? Biden: Don't question others' motives. Palin: get the job done, don't worry about credit.
Final statements: Palin: I like Reagan. McCain fought for you. Biden: it's time for America to stand up together.
Especially people making $250K or more. It's easier to get at their wallets that way.
Debate over. Palin survived, not broken or dispirited. Biden only gaffed once, wasn't nasty. Both did a good job. Hard to pick a winner, Pain maybe wins by not losing, but not by much.
Bwahaha! Maureen Dowd Kicked Off McCain Plane
Maureen Dowd, The New York Times' op-ed columnist, is no longer welcome on the McCain-Palin press plane.
She sent an email to the Pittsburgh Post-Gazette:
A couple of notes. First, when did the First Amendment extend to a seat on a plane? Goodness, if that's the case I've had my First Amendment rights violated my entire life. Ms. Dowd could certainly arrange her own travel and cover every news event as it happens -- she's just not actually a news reporter so that would be a little too pedestrian, I guess. It's no secret that in recent weeks the McCain campaign has called out the New York Times as a biased and unfair news operation.
What's more, Ms. Dowd has a column up today, and has had columns published on her regularly scheduled slots in the NYT without interruption since being booted off the plane August 30. I don't see any First Amendment violation here.
Second, Barack Obama's campaign did precisely the same thing to New Yorker writer Ryan Lizza, who lost his seat on the junket to Europe after the New Yorker got sideways with Team O over a sarcastic cover featuring a cartoon of Michelle Obama as Angela Davis and Barack in Somali garb in the Oval Office. Few cries of First Amendment violation there.
It gets even better if you read the comments on these stories at Huffington Post or Daily Kos. Schadenfreude is a term for quiet joy when seeing the pain of others, there needs to be a similar term for self-satisfaction at seeing the stupidity of others. I hope that if Obama wins the netroots people don't actually get to influence things. It's already been established (through a poll, asterisk asterisk) that a whopping 29% of self-identified Obama voters believe the Supreme Court should rule based on what's in the Constitution, so it is entirely possible that the First Amendment entitles Ms. Dowd to her seat on the Straight-Talk Express.
There does appear to be an upside to an Obama win: your seat on an airplane is no longer a contractual agreement between you and an airline, it's now a Constitutional Right!
She sent an email to the Pittsburgh Post-Gazette:
"I had had a great relationship with John McCain for 16 years, through columns he liked and didn't like. So at first I thought it was a mistake and doublechecked with the press office. They said I was banned from both planes for 'the foreseeable future.' Then [McCain spokeswoman] Nicole Wallace was gloating about it to reporters on the Palin plane," Dowd wrote in an email.
"It was disappointing because I didn't think John McCain would ever be as dismissive of the First Amendment as Dick Cheney."
A couple of notes. First, when did the First Amendment extend to a seat on a plane? Goodness, if that's the case I've had my First Amendment rights violated my entire life. Ms. Dowd could certainly arrange her own travel and cover every news event as it happens -- she's just not actually a news reporter so that would be a little too pedestrian, I guess. It's no secret that in recent weeks the McCain campaign has called out the New York Times as a biased and unfair news operation.
What's more, Ms. Dowd has a column up today, and has had columns published on her regularly scheduled slots in the NYT without interruption since being booted off the plane August 30. I don't see any First Amendment violation here.
Second, Barack Obama's campaign did precisely the same thing to New Yorker writer Ryan Lizza, who lost his seat on the junket to Europe after the New Yorker got sideways with Team O over a sarcastic cover featuring a cartoon of Michelle Obama as Angela Davis and Barack in Somali garb in the Oval Office. Few cries of First Amendment violation there.
It gets even better if you read the comments on these stories at Huffington Post or Daily Kos. Schadenfreude is a term for quiet joy when seeing the pain of others, there needs to be a similar term for self-satisfaction at seeing the stupidity of others. I hope that if Obama wins the netroots people don't actually get to influence things. It's already been established (through a poll, asterisk asterisk) that a whopping 29% of self-identified Obama voters believe the Supreme Court should rule based on what's in the Constitution, so it is entirely possible that the First Amendment entitles Ms. Dowd to her seat on the Straight-Talk Express.
There does appear to be an upside to an Obama win: your seat on an airplane is no longer a contractual agreement between you and an airline, it's now a Constitutional Right!
Wednesday, October 01, 2008
The 'Burning Down the House' Video
I can't embed it, but the video giving some of the history of the subprime meltdown along with the government's role in promoting it has been re-cut without the music that Time Warner Group objected to, which resulted in it being pulled from YouTube after 1.2 million views.
There is a bit at the beginning which notes that Google (who owns YouTube) and Time Warner have been major contributors to the Obama campaign. I think that's worth noting, and remembering when it's time to purchase magazine subscriptions or music.
The video is here. Please share this with anyone you talk to who seems particularly ignorant on this subject. If necessary, drag them to a computer and make them watch it. If you don't like the new music, turn off the sound.
Financial+Crisis video
There is a bit at the beginning which notes that Google (who owns YouTube) and Time Warner have been major contributors to the Obama campaign. I think that's worth noting, and remembering when it's time to purchase magazine subscriptions or music.
The video is here. Please share this with anyone you talk to who seems particularly ignorant on this subject. If necessary, drag them to a computer and make them watch it. If you don't like the new music, turn off the sound.
Financial+Crisis video
Tuesday, September 30, 2008
The Financial Crisis, Part II
Well, I should have written Part I before yesterday. Yesterday was occupied by other news, a 777-point drop in the Dow Jones Industrial Average. Today, the DJIA increased by 485 points. Volatility, anyone?
It is worth noting that the DJIA follows only 30 publicly-traded companies, and those are in the industrial sector, not the financial sector. Broader markets like the S&P 500, comprised of 500 stocks in various sectors of the economy, saw an 8% loss yesterday followed by a 5.3% gain today. Of the "$1.2 trillion" lost yesterday, we seem to have regained more than half, in a 24-hour period.
My real losses and gains for the past two days are easy to calculate: $0.00. Or in Yen, also 0. Same for Euros. In any currency you choose to measure, I lost precisely nothing because I traded precisely nothing. The DJIA is largely irrelevant to me because I don't actually own personally any of the DJIA stocks, and any losses are paper losses. I am, like many investors, a class that comprises 66% of US citizens, a buy-and-hold investor. I buy stocks in companies I like and believe they will appreciate in value. Same for my mutual funds.
Besides, I cashed out a lot in January.
The news item driving these wild gyrations is The Bailout, its failure to pass yesterday driving prices down and the promise of its passage later in the week driving prices up today.
If I knew exactly what the sentiments driving stock investors were, I would be writing this blog from my yacht. I am writing it from my office, I still have a day job, and plan to until I retire, so I don't write as one with supreme knowledge of market forces. To be honest, I'm guessing about as much as anyone. The press will tell you that the Bailout is the only thing driving markets, and that may be true, but there is also the fact that value investors love to see people dumping shares of companies for no good reason and driving the price down. One of the stocks I own, Diamond Offshore, is paying better dividends than a T-bill when you consider the price to which it fell yesterday. People bought today maybe out of expectation that their cookies were going to get hauled out of the fire, and maybe because the stocks they've been following hit buy points that met with their requirements.
The Bailout, as I understand it, is a program whereby the Treasury Department on behalf of the government will be granted an initial $250-350 billion dollars to be used to buy assets from banks and investment companies that are otherwise unsalable. Things like CDOs, and RMBS shares and the like. This sale will be conducted as a reverse auction: the companies will price their assets and the Treasury will buy assets it feels are "worth the investment". The assets will then be held by the Treasury and something done with them in the future. The banks who sell investments to the government will be required to accept restrictions on their activities, particularly in the realm of executive compensation, and will be subject to other no-doubt-onerous restrictions on future actions. There is even a "clawback" clause in the bill that will compensate the government for any truly stinky assets it overpays for.
If this initial process goes poorly, the Congress can veto the rest of the $700 billion next year to prevent us getting any further into a sinking process. While this will put $350 billion into the financial services sector within a few months, there are some other problems.
1. Nobody knows if this investment, even the whole $700 billion, will be enough. As quoted in Forbes regarding the $700 billion figure:
Well, I know that reassures me.
2. Financial companies are likely to dump their worst assets on the public at prices the market would not give them. Citigroup agreed to take on Wachoiva and its $312 billion in subprime mortgages only if the FDIC agreed to cover all but $42 billion of that debt, in return for $12 billion in Citibank preferred stock. At most, Citibank is out $54 billion and the government is on the hook for $260 billion. That's about 20 cents on the dollar for $312 billion in loans, assuming everything goes south. Why would anyone else ask for anything less? The intrusion of the government will only distort prices in unpredictable ways.
3. Mark-to-market accounting rules may spread the pain farther. "Mark-to-market" is an accounting rule adopted in November of 2007. Financial companies holding an asset (like CDO shares) have to value that asset at whatever the last transaction of that asset was. If one company reverse-auctions CDO shares to the government, they've just set the valuation for everyone holding those shares, no matter what the price is. The Treasury can overpay and inflate that value, or underpay and crush everyone else holding what may be a producing asset. There is no way to tell, one would hope companies would discard their worst assets that are near-zero in value in any event, but there is no certainty there. If the resultant underpricing makes other banks have to write down the value of their capital, then purchasing these assets may actually force companies to further limit their capital available to lend -- which is 180 degrees from the intended result.
4. Which sector is next at the public trough? This year it's financial services. Next year it may be homebuilding, or the auto industry (who already got $25 billion in loan guarantees), or some other area where the risk-reward ratio got badly out of whack.
The hazard of not doing a bailout is that the credit crisis will worsen and businesses will be unable to increase their investments. If you've just won a contract for your electrical business and need to finance $20,000 in raw materials to complete the job, you're out of luck. If you sell cars and your customers need finance, good luck with that. Even banks that normally lend to each other at 50 basis points (100 basis points equals 1%) over T-bill rates are now seeing short-term loans going out at 450 basis points over T-bill rates -- and that's to other banks, who are usually considered "preferred" customers.
Banks are getting so stingy with one another that the Federal Reserve has made $225 billion available in 84-day loans. Apparently, nobody else will make these loans. There is also another $330 billion available in loans to people making currency exchanges into dollars, which is probably some of the reason the dollar is increasing in value against the euro -- the Fed is paying people to denominate their money in dollars!
If there is a freeze in credit, the problems will extend much farther than to the Dow Jones Industrial 30, it will hit Main Street square in the face. Small businesses will find financing very difficult to find, and when they find it they will find it at much higher interest rates to reflect the risk that even small distributions of capital are to large financial institutions. Further restrictions on credit will likely make the mortgage default problem worse, and will further depress housing prices. There is no real 'soft landing'.
This is about as close to a nightmare as it gets.
But it's worse than that.
This article from Fortune/CNN Money should scare the daylights out of most of the people who read it, I know it scared me. The credit-default swap problem dwarfs the economy. I mean, the economy of the world. There are nowhere near enough assets to pay off the credit-default swaps that now exist, and apparently they're down $10 trillion from their peak last year. If you read no other article I've linked to, please read this one.
This is also the first example I have seen of government action making this worse. In 2000, according to the article, Phil Gramm authored legislation that passed with the support of Bill Clinton's Treasury Secretary Lawrence Summers, as well as Alan Greenspan, to forbid the government from regulating these contracts. In retrospect, this was a mistake. $250 billion in subprime loans is a big loss, no doubt. What makes this worse is that financial companies and hedge funds got into the business of writing contracts on the success or failure of deals they were not involved in. The article specifically lists John Paulson, a hedge fund investor, who pocketed $15 billion in CDS payouts when he took contracts against the failure of subprime loans. He didn't make these loans, he just bet other companies they'd fail -- and collected 15 billion dollars.
That's 3% of the money we're looking at spending to fix this mess, for one hedge fund. With that much money at stake, and with those kinds of side bets possible -- unregulated and unreported to stockholders -- you can imagine the reasons people would have to sabotage companies and even entire financial sectors of the country and the world. I am reasonably certain that billions of dollars have been "bet" through credit-default swaps on the failure of GM, Ford and Chrysler, probably more than the companies have in combined worth. If you're a GM or Ford or Chrysler employee, how does it make you feel to believe that wealthy people stand to gain even more wealth with the demise of your industry? What is it worth to them to see you fail?
Say what you will about Randolph & Mortimer Duke from Trading Places, at least all they bet was a dollar. With this kind of money to be made, the idea that what we have is Milton Friedman's free market is becoming laughable. At least the SEC banned short-selling in financials, but since CDS contracts are not limited to financial companies (or much of anything) there is no reason that short-sellers won't pick out another lagging bison from the herd and bring it down just because they can.
With all of this, I've yet to be convinced that The Bailout a) is necessary, b) will be effective, or c) addresses the elephant in the room that is credit-default swaps. The one thing the Bailout will do is to provide time to sort out the bad investments from the truly awful investments, as the Federal Government is able to wait to see which will be which, and might actually prosper from some of the deals. I still don't know if this justifies sinking so much taxpayer money into a potential hole that we don't even know the bottom of yet.
Something needs to be done. I would much prefer that the CRA be revoked, CDS contracts become regulated and CDS obligations be required to be reported on a company's website within 24 hours, "mark-to-market" rules be replaced for a period until the subprime issue has been sorted out, and the mortgage insurance program Eric Cantor and others proposed be tried before a direct cash injection from taxpayers becomes both law and precedent. Even if it costs an election, even if it costs a recession, there has to be something better than throwing money at a problem.
Enough money has been thrown for enough reasons. Let's try having a real fair market without social engineering distortions and without back-room side bets, let the weak institutions fail and the ones that showed more judgment and less greed prosper.
It is worth noting that the DJIA follows only 30 publicly-traded companies, and those are in the industrial sector, not the financial sector. Broader markets like the S&P 500, comprised of 500 stocks in various sectors of the economy, saw an 8% loss yesterday followed by a 5.3% gain today. Of the "$1.2 trillion" lost yesterday, we seem to have regained more than half, in a 24-hour period.
My real losses and gains for the past two days are easy to calculate: $0.00. Or in Yen, also 0. Same for Euros. In any currency you choose to measure, I lost precisely nothing because I traded precisely nothing. The DJIA is largely irrelevant to me because I don't actually own personally any of the DJIA stocks, and any losses are paper losses. I am, like many investors, a class that comprises 66% of US citizens, a buy-and-hold investor. I buy stocks in companies I like and believe they will appreciate in value. Same for my mutual funds.
Besides, I cashed out a lot in January.
The news item driving these wild gyrations is The Bailout, its failure to pass yesterday driving prices down and the promise of its passage later in the week driving prices up today.
If I knew exactly what the sentiments driving stock investors were, I would be writing this blog from my yacht. I am writing it from my office, I still have a day job, and plan to until I retire, so I don't write as one with supreme knowledge of market forces. To be honest, I'm guessing about as much as anyone. The press will tell you that the Bailout is the only thing driving markets, and that may be true, but there is also the fact that value investors love to see people dumping shares of companies for no good reason and driving the price down. One of the stocks I own, Diamond Offshore, is paying better dividends than a T-bill when you consider the price to which it fell yesterday. People bought today maybe out of expectation that their cookies were going to get hauled out of the fire, and maybe because the stocks they've been following hit buy points that met with their requirements.
The Bailout, as I understand it, is a program whereby the Treasury Department on behalf of the government will be granted an initial $250-350 billion dollars to be used to buy assets from banks and investment companies that are otherwise unsalable. Things like CDOs, and RMBS shares and the like. This sale will be conducted as a reverse auction: the companies will price their assets and the Treasury will buy assets it feels are "worth the investment". The assets will then be held by the Treasury and something done with them in the future. The banks who sell investments to the government will be required to accept restrictions on their activities, particularly in the realm of executive compensation, and will be subject to other no-doubt-onerous restrictions on future actions. There is even a "clawback" clause in the bill that will compensate the government for any truly stinky assets it overpays for.
If this initial process goes poorly, the Congress can veto the rest of the $700 billion next year to prevent us getting any further into a sinking process. While this will put $350 billion into the financial services sector within a few months, there are some other problems.
1. Nobody knows if this investment, even the whole $700 billion, will be enough. As quoted in Forbes regarding the $700 billion figure:
"It's not based on any particular data point," a Treasury spokeswoman told Forbes.com Tuesday. "We just wanted to choose a really large number."
Well, I know that reassures me.
2. Financial companies are likely to dump their worst assets on the public at prices the market would not give them. Citigroup agreed to take on Wachoiva and its $312 billion in subprime mortgages only if the FDIC agreed to cover all but $42 billion of that debt, in return for $12 billion in Citibank preferred stock. At most, Citibank is out $54 billion and the government is on the hook for $260 billion. That's about 20 cents on the dollar for $312 billion in loans, assuming everything goes south. Why would anyone else ask for anything less? The intrusion of the government will only distort prices in unpredictable ways.
3. Mark-to-market accounting rules may spread the pain farther. "Mark-to-market" is an accounting rule adopted in November of 2007. Financial companies holding an asset (like CDO shares) have to value that asset at whatever the last transaction of that asset was. If one company reverse-auctions CDO shares to the government, they've just set the valuation for everyone holding those shares, no matter what the price is. The Treasury can overpay and inflate that value, or underpay and crush everyone else holding what may be a producing asset. There is no way to tell, one would hope companies would discard their worst assets that are near-zero in value in any event, but there is no certainty there. If the resultant underpricing makes other banks have to write down the value of their capital, then purchasing these assets may actually force companies to further limit their capital available to lend -- which is 180 degrees from the intended result.
4. Which sector is next at the public trough? This year it's financial services. Next year it may be homebuilding, or the auto industry (who already got $25 billion in loan guarantees), or some other area where the risk-reward ratio got badly out of whack.
The hazard of not doing a bailout is that the credit crisis will worsen and businesses will be unable to increase their investments. If you've just won a contract for your electrical business and need to finance $20,000 in raw materials to complete the job, you're out of luck. If you sell cars and your customers need finance, good luck with that. Even banks that normally lend to each other at 50 basis points (100 basis points equals 1%) over T-bill rates are now seeing short-term loans going out at 450 basis points over T-bill rates -- and that's to other banks, who are usually considered "preferred" customers.
Banks are getting so stingy with one another that the Federal Reserve has made $225 billion available in 84-day loans. Apparently, nobody else will make these loans. There is also another $330 billion available in loans to people making currency exchanges into dollars, which is probably some of the reason the dollar is increasing in value against the euro -- the Fed is paying people to denominate their money in dollars!
If there is a freeze in credit, the problems will extend much farther than to the Dow Jones Industrial 30, it will hit Main Street square in the face. Small businesses will find financing very difficult to find, and when they find it they will find it at much higher interest rates to reflect the risk that even small distributions of capital are to large financial institutions. Further restrictions on credit will likely make the mortgage default problem worse, and will further depress housing prices. There is no real 'soft landing'.
This is about as close to a nightmare as it gets.
But it's worse than that.
This article from Fortune/CNN Money should scare the daylights out of most of the people who read it, I know it scared me. The credit-default swap problem dwarfs the economy. I mean, the economy of the world. There are nowhere near enough assets to pay off the credit-default swaps that now exist, and apparently they're down $10 trillion from their peak last year. If you read no other article I've linked to, please read this one.
This is also the first example I have seen of government action making this worse. In 2000, according to the article, Phil Gramm authored legislation that passed with the support of Bill Clinton's Treasury Secretary Lawrence Summers, as well as Alan Greenspan, to forbid the government from regulating these contracts. In retrospect, this was a mistake. $250 billion in subprime loans is a big loss, no doubt. What makes this worse is that financial companies and hedge funds got into the business of writing contracts on the success or failure of deals they were not involved in. The article specifically lists John Paulson, a hedge fund investor, who pocketed $15 billion in CDS payouts when he took contracts against the failure of subprime loans. He didn't make these loans, he just bet other companies they'd fail -- and collected 15 billion dollars.
That's 3% of the money we're looking at spending to fix this mess, for one hedge fund. With that much money at stake, and with those kinds of side bets possible -- unregulated and unreported to stockholders -- you can imagine the reasons people would have to sabotage companies and even entire financial sectors of the country and the world. I am reasonably certain that billions of dollars have been "bet" through credit-default swaps on the failure of GM, Ford and Chrysler, probably more than the companies have in combined worth. If you're a GM or Ford or Chrysler employee, how does it make you feel to believe that wealthy people stand to gain even more wealth with the demise of your industry? What is it worth to them to see you fail?
Say what you will about Randolph & Mortimer Duke from Trading Places, at least all they bet was a dollar. With this kind of money to be made, the idea that what we have is Milton Friedman's free market is becoming laughable. At least the SEC banned short-selling in financials, but since CDS contracts are not limited to financial companies (or much of anything) there is no reason that short-sellers won't pick out another lagging bison from the herd and bring it down just because they can.
With all of this, I've yet to be convinced that The Bailout a) is necessary, b) will be effective, or c) addresses the elephant in the room that is credit-default swaps. The one thing the Bailout will do is to provide time to sort out the bad investments from the truly awful investments, as the Federal Government is able to wait to see which will be which, and might actually prosper from some of the deals. I still don't know if this justifies sinking so much taxpayer money into a potential hole that we don't even know the bottom of yet.
Something needs to be done. I would much prefer that the CRA be revoked, CDS contracts become regulated and CDS obligations be required to be reported on a company's website within 24 hours, "mark-to-market" rules be replaced for a period until the subprime issue has been sorted out, and the mortgage insurance program Eric Cantor and others proposed be tried before a direct cash injection from taxpayers becomes both law and precedent. Even if it costs an election, even if it costs a recession, there has to be something better than throwing money at a problem.
Enough money has been thrown for enough reasons. Let's try having a real fair market without social engineering distortions and without back-room side bets, let the weak institutions fail and the ones that showed more judgment and less greed prosper.
Monday, September 29, 2008
The Financial Crisis, Part I
Hard to remember a bigger news story, and the stories about it tend to come in liberal and conservative flavors, and grow in the telling.
The liberal argument, as I understand it, is that this is a case of mass predatory lending and greed, with Wall Street sucking the life out of Main Street (and in particular, the poorer end of Main Street) for short-term gain. There is also talk of deregulation leading to this, though never any specifics about what deregulation was to blame. You'd think that after two weeks they could cite a bill or an Executive Order or some published relaxation of SEC or federal lending rules to justify this position, but I have yet to see a single citation.
The conservative position is pretty well laid-out in a video called "Burning Down the House: What Caused the Economic Crisis?", which was up on YouTube until Warner Brothers made a copyright claim against some of the music used in the video and YouTube took it down. That is fishy in and of itself (it's a pretty good bit of viral video), but I will summarize until I can find another copy of it.
In 1977, the Carter Administration and Congress passed the Community Reinvestment Act, a law designed to keep banks from only lending to people in certain neighborhoods and with certain credit scores. This process is called "red-lining", and the implication was than banks were only giving loans to white people in good neighborhoods.
In 1995, the Clinton Administration updated the CRA with teeth. Federal bank examiners would look at a spreadsheet of loans given by a bank, and if sufficient geographic and racial diversity was not present the bank examiners would penalize the bank. That the creditworthiness of borrowers was taken into account was not a significant factor, in essence the feds put a gun to the head of banks and told them to loan money to people that were credit risks. The other place where teeth were added, and those are the teeth that are the real issue this year and last, is that the government provided that these credit-risk loans, called 'subprime loans' (heard that term recently) could be purchased from the banks and resold by the two Government Sponsored Entities, Fannie Mae and Freddie Mac.
See, mortgages aren't just loans to you. Every loan to you is in effect a bond to someone else -- your loan is their purchase, the interest you pay is the interest they earn for their investment in your property. The collateral for the mortgage, and the bond is the value of your house. Something Fannie Mae and Freddie Mac did to make more money available for mortgage lending was to buy loans from banks, package them up into millions of dollars worth of loans, and then resell them to investors. Once the loan is sold, your bank gets its capital back and then it can loan money to someone else to buy another home. The whole thing depends on two factors: one, that a home is worth its sale price, and two, that the person with the mortgage can make the payments of interest and capital. Losing either of those things would be bad.
The Wall Street Journal has a great Flash presentation on how these Residential Mortgage-Backed Securities became the current bane of Wall Street: the Collateralized Debt Obligation. I strongly advise you to look at these pages and step through the way that mortgages were turned into assets, which are now less asset-y than they were, and which is the source of the problem. Some of the smartest people in finance in the world designed the bundling of RMBS to reduce risk, and then the CDOs to gather tranches from multiple RMBSs to further reduce risk, and then covered themselves with credit-default swaps (another financial derivative that hammered AIG into near-insolvency) to reduce risk. Do you believe they adequately assessed the risk? Me neither.
OK, back to the Conservative Case. Barack Obama, fresh out of law school at Harvard, took a job at a law firm in Chicago. One of the cases he won as a lawyer was Buycks-Roberson vs. Citibank, a 1994 case representing black plaintiffs who sued Citibank for "redlining" and not loaning enough to black applicants, in violation of the CRA. There was not only civil litigation against banks for violating the CRA, there was political pressure on Fannie Mae & Freddie Mac to take more subprime loans.
The goal of the CRA, and of the Congressional protectors of Fannie Mae & Freddie Mac, was noble. The goal was to increase home ownership among the poor, which I am completely in favor of assuming they can afford to buy and keep up their homes. By taking on and securitizing subprime loans, Fannie and Freddie were able to do this...until recently.
Fannie & Freddie had problems of their own in the 1990s, though. They had major accounting problems that were used to artificially inflate their stock price. They paid their executives tens of millions of dollars, just like Wall Street firms. They were badly undercapitalized, meaning they did not have cash on hand to back the loans they sold. Any normal company would have been bankrupt long before now, but as Government Sponsored Entities (GSEs) created for the purpose of making housing more affordable, they were able to pull off selling subprime mortgages with a wink and a nod at Uncle Sam, who they implied was good for it.
Fannie & Freddie did make a lot of money on fees by buying and reselling loans, and they spent that money on political action. The two people they spent the most on in the last 20 years were Senator Christopher Dodd (D-CT), the chairman of the Senate Banking Committee, and Rep. Barney Frank (D-MA), the chairman of the House Financial Services Committee. These were not idle investements, multiple times during the Bush Administration more oversight of Fannie & Freddie were proposed and then shot down in Congress. This included a bill John McCain cosponsored in 2005, which did not make it out of the Banking Committee.
The member of Congress who was #3 in donations from Fannie & Freddie was Sen. Barack Obama. What makes this all the more incredible is that Dodd & Frank's totals were obtained over 20 years. Obama's was obtained in just four years in the Senate. One of the leading banks to participate in making and selling subprime loans was the late and unlamented Countrywide, who not only made subprime loans to people not creditworthy, they made sweetheart loans to members of Congress under what was called the Friends of Angelo program, named after now-disgraced Countrywide CEO Angelo Mozilo.
Just so we're clear, the guy in charge of oversight of the Senate Banking Commitee a) got the most money from Fannie Mae & Freddie Mac, two of the companies he was overseeing, and b) got a great deal on a mortgage from one the companies that did the most business with Fannie and Freddie. And one candidate for President (Barack Obama) was #3 on the money list from Fannie & Freddie after less than one term in the Senate.
Earlier this summer, Fannie & Freddie were taken over by the federal government as insolvent.
The conservative case comes down to this: the free market was not free, it was used for social engineering purposes. The normal checks and balances on making loans to credit risks were overrun by regulation (not deregulation) and then exacerbated by Fannie Mae and Freddie Mac buying those loans and reselling them to others. The predatory lending was encouraged by the government, not prevented by it, over the space of 30 years.
My position is that the conservative case is close to reality, but not all of reality. Yes, the CRA contributed to hundreds of billions of dollars in bad loans being issued, but the fact of the matter is that many of the banks that failed have done so in part because rather than reselling their subprime loans, they kept them on the books. Why? Because subprime loans command greater interest due to greater risk. Why keep your 5% loans to creditworthy people and sell off the 8-9% loans? Hold on to some of those subprime loans and count on rising home values to make up the difference. This worked until the rising home prices stopped rising due to increased interest rates and oil prices bit into the family budgets. The banks that did this are already has-beens: Countrywide, Great Western, Indy Mac, Bear Stearns.
The banks that are suffering now are suffering in part because they have as assets things like CDO shares and RMBS pools that they have no idea how to value. If more and more mortgage-borrowers default, then the CDOs and RMBSs will decline in value. With home sales dropping and home prices falling, there isn't a really good way to value those things, so what liquid capital these financial institutions have they must hold onto to maintain capital limits.
Some of the now-extinct banks likely bought CDOs and RMBSs on margin -- they paid $10 million and borrowed $90 million to buy $100 million in CDO shares or RMBSs, and with those now declining in value and income the people who loaned the banks money now want their $90 million back. It doesn't take too many deals like that to destroy all of a financial institution's good capital.
It gets worse if the banks and trading houses were also participating in a credit-default swap with another institution. This is in essence an insurance policy for a CDO transaction or other transaction. Company A agrees to pay Company B if Company B's investment goes belly-up. The thinking up until recently was apparently that this was easy money as long as what was being purchased was residential mortgages, worst-case scenario in a market with rising home prices was that the home would be resold for more than the mortgage. When home prices fell and Company B's investment in CDOs went south, Company A was on the hook for the deal. This is how AIG ended up becoming a fiscal ward of the state. There is an estimated $45 trillion in credit-default swap obligations floating around right now. The US has a $13 trillion economy, if that tells you how big this derivative market got.
Yes, there was greed on Wall Street. There is always greed on Wall Street, and this time more than just the trading houses got in on it. The bond raters like Moody's and Standard & Poor's and Fitch vastly overrated the subprime mortgages. The mortgage companies found clients and got them together with banks to make deals that, in retrospect, look stupid. And there was definitely greed on Main Street -- buying houses for well more than 3x your annual income, the usual rule-of-thumb for mortgages. Shows on TV like "Flip this House", and there are still advertisements for programs to "Get rich in real estate!" People at every level were greedy, and now even us non-greedy people get to pay for it.
Ultimately, the whole system forgot the basic rule of economics: There Ain't No Such Thing As A Free Lunch, also known as TANSTAFFL. This law is as inviolate as the Second Law of Thermodynamics. I don't need to listen to the description of a perpetual motion machine, because they don't work. Just because a financial guru with a PhD in mathematics can show formulas that prove that a free lunch can make more food by gathering free lunches and reselling the components of the free lunch to investors in sandwiches and apples and cookies does not mean there is, in actuality, a free lunch to be had.
America has lived beyond its means as a nation for years. And I believe that time is coming to an end. The shape of things to come will be interesting, at the least.
Financial+Crisis
The liberal argument, as I understand it, is that this is a case of mass predatory lending and greed, with Wall Street sucking the life out of Main Street (and in particular, the poorer end of Main Street) for short-term gain. There is also talk of deregulation leading to this, though never any specifics about what deregulation was to blame. You'd think that after two weeks they could cite a bill or an Executive Order or some published relaxation of SEC or federal lending rules to justify this position, but I have yet to see a single citation.
The conservative position is pretty well laid-out in a video called "Burning Down the House: What Caused the Economic Crisis?", which was up on YouTube until Warner Brothers made a copyright claim against some of the music used in the video and YouTube took it down. That is fishy in and of itself (it's a pretty good bit of viral video), but I will summarize until I can find another copy of it.
In 1977, the Carter Administration and Congress passed the Community Reinvestment Act, a law designed to keep banks from only lending to people in certain neighborhoods and with certain credit scores. This process is called "red-lining", and the implication was than banks were only giving loans to white people in good neighborhoods.
In 1995, the Clinton Administration updated the CRA with teeth. Federal bank examiners would look at a spreadsheet of loans given by a bank, and if sufficient geographic and racial diversity was not present the bank examiners would penalize the bank. That the creditworthiness of borrowers was taken into account was not a significant factor, in essence the feds put a gun to the head of banks and told them to loan money to people that were credit risks. The other place where teeth were added, and those are the teeth that are the real issue this year and last, is that the government provided that these credit-risk loans, called 'subprime loans' (heard that term recently) could be purchased from the banks and resold by the two Government Sponsored Entities, Fannie Mae and Freddie Mac.
See, mortgages aren't just loans to you. Every loan to you is in effect a bond to someone else -- your loan is their purchase, the interest you pay is the interest they earn for their investment in your property. The collateral for the mortgage, and the bond is the value of your house. Something Fannie Mae and Freddie Mac did to make more money available for mortgage lending was to buy loans from banks, package them up into millions of dollars worth of loans, and then resell them to investors. Once the loan is sold, your bank gets its capital back and then it can loan money to someone else to buy another home. The whole thing depends on two factors: one, that a home is worth its sale price, and two, that the person with the mortgage can make the payments of interest and capital. Losing either of those things would be bad.
The Wall Street Journal has a great Flash presentation on how these Residential Mortgage-Backed Securities became the current bane of Wall Street: the Collateralized Debt Obligation. I strongly advise you to look at these pages and step through the way that mortgages were turned into assets, which are now less asset-y than they were, and which is the source of the problem. Some of the smartest people in finance in the world designed the bundling of RMBS to reduce risk, and then the CDOs to gather tranches from multiple RMBSs to further reduce risk, and then covered themselves with credit-default swaps (another financial derivative that hammered AIG into near-insolvency) to reduce risk. Do you believe they adequately assessed the risk? Me neither.
OK, back to the Conservative Case. Barack Obama, fresh out of law school at Harvard, took a job at a law firm in Chicago. One of the cases he won as a lawyer was Buycks-Roberson vs. Citibank, a 1994 case representing black plaintiffs who sued Citibank for "redlining" and not loaning enough to black applicants, in violation of the CRA. There was not only civil litigation against banks for violating the CRA, there was political pressure on Fannie Mae & Freddie Mac to take more subprime loans.
The goal of the CRA, and of the Congressional protectors of Fannie Mae & Freddie Mac, was noble. The goal was to increase home ownership among the poor, which I am completely in favor of assuming they can afford to buy and keep up their homes. By taking on and securitizing subprime loans, Fannie and Freddie were able to do this...until recently.
Fannie & Freddie had problems of their own in the 1990s, though. They had major accounting problems that were used to artificially inflate their stock price. They paid their executives tens of millions of dollars, just like Wall Street firms. They were badly undercapitalized, meaning they did not have cash on hand to back the loans they sold. Any normal company would have been bankrupt long before now, but as Government Sponsored Entities (GSEs) created for the purpose of making housing more affordable, they were able to pull off selling subprime mortgages with a wink and a nod at Uncle Sam, who they implied was good for it.
Fannie & Freddie did make a lot of money on fees by buying and reselling loans, and they spent that money on political action. The two people they spent the most on in the last 20 years were Senator Christopher Dodd (D-CT), the chairman of the Senate Banking Committee, and Rep. Barney Frank (D-MA), the chairman of the House Financial Services Committee. These were not idle investements, multiple times during the Bush Administration more oversight of Fannie & Freddie were proposed and then shot down in Congress. This included a bill John McCain cosponsored in 2005, which did not make it out of the Banking Committee.
The member of Congress who was #3 in donations from Fannie & Freddie was Sen. Barack Obama. What makes this all the more incredible is that Dodd & Frank's totals were obtained over 20 years. Obama's was obtained in just four years in the Senate. One of the leading banks to participate in making and selling subprime loans was the late and unlamented Countrywide, who not only made subprime loans to people not creditworthy, they made sweetheart loans to members of Congress under what was called the Friends of Angelo program, named after now-disgraced Countrywide CEO Angelo Mozilo.
Just so we're clear, the guy in charge of oversight of the Senate Banking Commitee a) got the most money from Fannie Mae & Freddie Mac, two of the companies he was overseeing, and b) got a great deal on a mortgage from one the companies that did the most business with Fannie and Freddie. And one candidate for President (Barack Obama) was #3 on the money list from Fannie & Freddie after less than one term in the Senate.
Earlier this summer, Fannie & Freddie were taken over by the federal government as insolvent.
The conservative case comes down to this: the free market was not free, it was used for social engineering purposes. The normal checks and balances on making loans to credit risks were overrun by regulation (not deregulation) and then exacerbated by Fannie Mae and Freddie Mac buying those loans and reselling them to others. The predatory lending was encouraged by the government, not prevented by it, over the space of 30 years.
My position is that the conservative case is close to reality, but not all of reality. Yes, the CRA contributed to hundreds of billions of dollars in bad loans being issued, but the fact of the matter is that many of the banks that failed have done so in part because rather than reselling their subprime loans, they kept them on the books. Why? Because subprime loans command greater interest due to greater risk. Why keep your 5% loans to creditworthy people and sell off the 8-9% loans? Hold on to some of those subprime loans and count on rising home values to make up the difference. This worked until the rising home prices stopped rising due to increased interest rates and oil prices bit into the family budgets. The banks that did this are already has-beens: Countrywide, Great Western, Indy Mac, Bear Stearns.
The banks that are suffering now are suffering in part because they have as assets things like CDO shares and RMBS pools that they have no idea how to value. If more and more mortgage-borrowers default, then the CDOs and RMBSs will decline in value. With home sales dropping and home prices falling, there isn't a really good way to value those things, so what liquid capital these financial institutions have they must hold onto to maintain capital limits.
Some of the now-extinct banks likely bought CDOs and RMBSs on margin -- they paid $10 million and borrowed $90 million to buy $100 million in CDO shares or RMBSs, and with those now declining in value and income the people who loaned the banks money now want their $90 million back. It doesn't take too many deals like that to destroy all of a financial institution's good capital.
It gets worse if the banks and trading houses were also participating in a credit-default swap with another institution. This is in essence an insurance policy for a CDO transaction or other transaction. Company A agrees to pay Company B if Company B's investment goes belly-up. The thinking up until recently was apparently that this was easy money as long as what was being purchased was residential mortgages, worst-case scenario in a market with rising home prices was that the home would be resold for more than the mortgage. When home prices fell and Company B's investment in CDOs went south, Company A was on the hook for the deal. This is how AIG ended up becoming a fiscal ward of the state. There is an estimated $45 trillion in credit-default swap obligations floating around right now. The US has a $13 trillion economy, if that tells you how big this derivative market got.
Yes, there was greed on Wall Street. There is always greed on Wall Street, and this time more than just the trading houses got in on it. The bond raters like Moody's and Standard & Poor's and Fitch vastly overrated the subprime mortgages. The mortgage companies found clients and got them together with banks to make deals that, in retrospect, look stupid. And there was definitely greed on Main Street -- buying houses for well more than 3x your annual income, the usual rule-of-thumb for mortgages. Shows on TV like "Flip this House", and there are still advertisements for programs to "Get rich in real estate!" People at every level were greedy, and now even us non-greedy people get to pay for it.
Ultimately, the whole system forgot the basic rule of economics: There Ain't No Such Thing As A Free Lunch, also known as TANSTAFFL. This law is as inviolate as the Second Law of Thermodynamics. I don't need to listen to the description of a perpetual motion machine, because they don't work. Just because a financial guru with a PhD in mathematics can show formulas that prove that a free lunch can make more food by gathering free lunches and reselling the components of the free lunch to investors in sandwiches and apples and cookies does not mean there is, in actuality, a free lunch to be had.
America has lived beyond its means as a nation for years. And I believe that time is coming to an end. The shape of things to come will be interesting, at the least.
Financial+Crisis
Sunday, September 14, 2008
Hurricane Ike Update
No injuries reported in the Longview area, but there are tens of thousands here without power including your humble correspondant. We lost power at about 4:30 p.m., and what makes it all the more annoying is that our neighbors 30 feet away have power. We are apparently on different transformers.
Lots of little limbs down, but we didn't lose any trees. The loss of power makes getting in and out of garage a bit of a booger, our doors are electrically operated. Just as an interesting exercise it's a little alarming to see how much of our stuff in the house is power-dependant, how our use of resources over past decade and the ways we normally fill our days disappear when the lights go out. Books still work by candlelight though, and my Amazon Kindle is still good for several days. I'm reading Amity Shlaes' retelling of the Great Depression, The Forgotten Man, the first part of which deals with rural electrification. Irony is, as I have always believed, an elemental force that has no electrical requirements.
Updates as power is available. This one is from my iPhone, which is a pretty handy tool.
Lots of little limbs down, but we didn't lose any trees. The loss of power makes getting in and out of garage a bit of a booger, our doors are electrically operated. Just as an interesting exercise it's a little alarming to see how much of our stuff in the house is power-dependant, how our use of resources over past decade and the ways we normally fill our days disappear when the lights go out. Books still work by candlelight though, and my Amazon Kindle is still good for several days. I'm reading Amity Shlaes' retelling of the Great Depression, The Forgotten Man, the first part of which deals with rural electrification. Irony is, as I have always believed, an elemental force that has no electrical requirements.
Updates as power is available. This one is from my iPhone, which is a pretty handy tool.
Thursday, September 11, 2008
First Interview
Sarah Palin's first interview with Charlie Gibson came out tonight on World News Tonight.
Overall, not bad. Not as good as the speech, but she didn't hemm and haw much. She did steer the 'What is your background national security issues' question back to her background in energy, which is a pretty typical dodge to familiar ground. In her defense, many of her critics would tell you we've been fighting the Iraq War for oil, so there is some bearing on the issue.
She did duck the Russia question. Being able to see Russia from shore in Alaska is not a recitation of the issues you've dealt with as governor -- fishing rights disputes, etc. Hey, she's a governor. I'm pretty sure the governor of Virginia doesn't have much national security experience either.
The 'not widely travelled' meme was brought up, which is to my mind a bit of a hollow criticism. How many people grow up without significant means and yet manage to do a full tour of the Louvre? She did manage to add Canada and Mexico to the countries she's been to -- which may be easily dismissed were it not for the fact that Canada is our largest trading partner and Mexico is not far behind. I somehow doubt she got beyond Cozumel, but hey.
She is no Miss Teen South Carolina. She was wise to question Charlie Gibson about what aspect of the Bush Doctrine he meant, there have been several breaks with tradition in the Bush Administration, and virtually none of them have been labelled 'The Bush Doctrine' by GWB himself. My first thought when he mentioned that term was supporting democracy and opposing totalitarianism.
I don't believe Charlie Gibson can be fairly accused of pitching softballs. His questions were tough but fair. There was a series of questions at the end that discussed her views on God and the Iraq War, she referred back to Abraham Lincoln though I would honestly say that her reference is a bit strained. She did manage to not come across like a total religious kook on the issue, she gets rather impassioned about extending freedoms to people, which is admirable though she comes across as trying to sell something Gibson's not buying in that segment.
UPDATE: Apparently Gibson's quote of what she said left out a couple of words. She said, "Pray that our national leaders are sending our troops on a task that is from God." Abraham Lincoln's quote fits better into the context of "Pray that our national leaders..."
This interview will not endear her to those that dislike her already. They will call her 'George W. Bush with lipstick', and will interpret extending NATO membership to Ukraine and Georgia as warmongering even though that is clearly a cooperative agreement. She pronounced 'Saakashvili' properly, still having issues with 'nuk-yu-ler', but I'm not going to quibble about that one. Jimmy Carter was a nuclear engineer and pronounces it worse, if possible. I am glad she was unequivocal about the Russian aggression in Georgia, I see it that way as well.
She needs a little more work on these questions, but maybe the domestic issues will be better for her. I hope she can put a stake in the "she lied about the Bridge To Nowhere" issue. There was a lot of editing, which can either help or hurt. She could have looked worse or better depending on what they cut out.
I think there is going to be a big sigh of relief at the Obama HQ tonight, particularly from the VP section. She may not be the Terminator in heels.
Overall, not bad. Not as good as the speech, but she didn't hemm and haw much. She did steer the 'What is your background national security issues' question back to her background in energy, which is a pretty typical dodge to familiar ground. In her defense, many of her critics would tell you we've been fighting the Iraq War for oil, so there is some bearing on the issue.
She did duck the Russia question. Being able to see Russia from shore in Alaska is not a recitation of the issues you've dealt with as governor -- fishing rights disputes, etc. Hey, she's a governor. I'm pretty sure the governor of Virginia doesn't have much national security experience either.
The 'not widely travelled' meme was brought up, which is to my mind a bit of a hollow criticism. How many people grow up without significant means and yet manage to do a full tour of the Louvre? She did manage to add Canada and Mexico to the countries she's been to -- which may be easily dismissed were it not for the fact that Canada is our largest trading partner and Mexico is not far behind. I somehow doubt she got beyond Cozumel, but hey.
She is no Miss Teen South Carolina. She was wise to question Charlie Gibson about what aspect of the Bush Doctrine he meant, there have been several breaks with tradition in the Bush Administration, and virtually none of them have been labelled 'The Bush Doctrine' by GWB himself. My first thought when he mentioned that term was supporting democracy and opposing totalitarianism.
I don't believe Charlie Gibson can be fairly accused of pitching softballs. His questions were tough but fair. There was a series of questions at the end that discussed her views on God and the Iraq War, she referred back to Abraham Lincoln though I would honestly say that her reference is a bit strained. She did manage to not come across like a total religious kook on the issue, she gets rather impassioned about extending freedoms to people, which is admirable though she comes across as trying to sell something Gibson's not buying in that segment.
UPDATE: Apparently Gibson's quote of what she said left out a couple of words. She said, "Pray that our national leaders are sending our troops on a task that is from God." Abraham Lincoln's quote fits better into the context of "Pray that our national leaders..."
This interview will not endear her to those that dislike her already. They will call her 'George W. Bush with lipstick', and will interpret extending NATO membership to Ukraine and Georgia as warmongering even though that is clearly a cooperative agreement. She pronounced 'Saakashvili' properly, still having issues with 'nuk-yu-ler', but I'm not going to quibble about that one. Jimmy Carter was a nuclear engineer and pronounces it worse, if possible. I am glad she was unequivocal about the Russian aggression in Georgia, I see it that way as well.
She needs a little more work on these questions, but maybe the domestic issues will be better for her. I hope she can put a stake in the "she lied about the Bridge To Nowhere" issue. There was a lot of editing, which can either help or hurt. She could have looked worse or better depending on what they cut out.
I think there is going to be a big sigh of relief at the Obama HQ tonight, particularly from the VP section. She may not be the Terminator in heels.
Wednesday, September 10, 2008
One Reason I Hope McCain-Palin Wins
My favorite story about Ronald Reagan was written by William Bennett as a letter to the late President after he announced his diagnosis of Alzheimer's disease:
I just love the idea of this big, tough conservative guy smiling as little hands put a face to his voice in their own way. I really love that he did it away from the cameras, not for credit but out of respect and decency.
That's the kind of person I want as my President. I could care less, honestly, if they can rattle off from memory the name of the Defense Minister for Uzbekistan. They have people for that. I care more about what kind of person they are.
Which is probably why these the stories of 'A' and Chloe and their families are something I find admirable.
Here's a quote from the story about 'A':
You're not going to read about this in the New York Times or Washington Post, and I have no evidence that Barack Obama doesn't do this kind of thing as well. But let's face it, we're down to something like 1300 hours before the election, and while you can cynically call this 'masterful retail politics' the fact that some of that time is being devoted to meeting with, acknowledging and supporting families like this makes me proud of the folks on the GOP ticket.
I'm sure a campaign is a long and difficult thing for all involved. You need to fuel up, physically, mentally and spiritually, and be careful where you spend that fuel. It makes me happy to see where McCain and Palin fuel themselves up.
That's all.
Sarah+Palin John+McCain decency
Congressman Dana Rohrbacher remembers a moment when he was a young campaign staffer back in California. You were giving a whistle stop speech, and there was a small group of blind children in the crowd. Their teacher asked if you could greet them.
Sure, you agreed, but not with the photographers or reporters around. After the press had left, Rohrbacher saw you go to the children and shake their hands. Then you knelt so they could "see" you by touching your face.
"What politician can you think of who would not have given a million dollars to have the press get pictures of him in a scene like that?" marveled Rohrbacher, "But not Reagan."
I just love the idea of this big, tough conservative guy smiling as little hands put a face to his voice in their own way. I really love that he did it away from the cameras, not for credit but out of respect and decency.
That's the kind of person I want as my President. I could care less, honestly, if they can rattle off from memory the name of the Defense Minister for Uzbekistan. They have people for that. I care more about what kind of person they are.
Which is probably why these the stories of 'A' and Chloe and their families are something I find admirable.
Here's a quote from the story about 'A':
I can’t give you the conversation by word, but she said, “Awwww” and kind of melted when she saw A. She asked her name and age. Then she hugged her. She actually got watery eyes (ed. 3rd and 4th pictures below, you can kind of see that). Remember, even though she is Governor, VP candidate, she is still new to the world of DS. She said she was so glad we brought A to see her. She just kept smiling and looking at A. I told her we brought a gift for Trig and gave her the t-shirt. (ed. Cousin ordered a t-shirt for Trig that said “fearfully and wonderfully made.” I thought that was sweet.) I told her that I have such admiration for her because when A was Trig’s age, I was still crying …. Oh yeah, I just remembered - A blew kisses to both John McCain and to Sarah during our little visits.
You're not going to read about this in the New York Times or Washington Post, and I have no evidence that Barack Obama doesn't do this kind of thing as well. But let's face it, we're down to something like 1300 hours before the election, and while you can cynically call this 'masterful retail politics' the fact that some of that time is being devoted to meeting with, acknowledging and supporting families like this makes me proud of the folks on the GOP ticket.
I'm sure a campaign is a long and difficult thing for all involved. You need to fuel up, physically, mentally and spiritually, and be careful where you spend that fuel. It makes me happy to see where McCain and Palin fuel themselves up.
That's all.
Sarah+Palin John+McCain decency
At Least He's Honest
Glad you made that point entirely clear, Joe.
Someone get this man a script, please.
To paraphrase Senator Lloyd Bentsen from 20 years ago, "I know passive-aggression, Senator Obama, and you're passive-aggressive." As commenter Tim Ryan sent to Glenn Reynolds of Instapundit.com:
"He's a skilled orator, and he brings it all back around to McCain and Palin. It is absolutely clear that he is tying Palin to the Pig and McCain to the Old Fish. He didn't construct this accidentally or innocently. Unless you think that he isn't skilled or smart, and we all know that he is. He tries to create some plausible deniability, but there are only two explanations - he is either a mean-spirited p***, or he's an idiot. And the latter simply isn't true."
This is that kind of scratch-your-eye-while-you-flip-someone-off snark that I guess is going to be the new Democratic meme, huh? Hey, I say, go for it. Make fart jokes about Vladimir Putin's last name, that's a great idea, too.
As long as the Democrats are going to go this route, I have some ideas:
1. Refer to McCain's policies as "that same old GOP rag."
2 Slip in the phrase, "If you can't stand the heat, stay out of the kitchen."
'Cause, those are common phrases, too, you know. No double-meaning there. I really question the wisdom of trying this with Joe Biden, walking a careful line of deniability is not one of Joe's strong suits. He's bound to step over the line, and soon.
Although I've made a post about this, the McCain campaign needs to just let this little verbal turd on Obama's part sit and steam. Stepping in it will just make Palin look weak and in need of defense, and I think that when you have a quick and funny candidate like Sarah Palin and a zinger speechwriter like Matt Scully there is a way to jiu-jitsu this one back on Obama with gentle humor.
I do have to admit I would like to see her give a little speech segment like this:
"The fact that Obama took three days to get to the right answer that John McCain had on Georgia must have been a shock to the Obama campaign. With their foreign policy credibility receding, and questions regarding the Senator's poor coverage of the event that might lead to questioning the strength of Senator Obama's foreign policy experience, there was clearly a problem. His Vice-Presidential search operation grafted in Joe Biden to plug the holes in Obama's already thin resume. This was a clear attempt to cover over his deficiencies, but I think we all know what they should have done. They should have called John McCain.
I don't think they should do that. But it would be funny.
But not as funny as a Presidential candidate getting his speeches from a political cartoon:
Joe Biden's old habits seem to be rubbing off on you, Senator Obama.
Sarah+Palin Lipstick Barack+Obama
Tuesday, September 09, 2008
Nice, Joe
Joe Biden at a rally in Missouri today.
He took a maybe-swipe at Sarah Palin's child, according to CBS News
This ignores, of course, that Sen. McCain supports stem cell research that is not embryo-destructive, and implies that there might be a stem cell issue involved in "fixing" Trig Palin if his witch momma wasn't such a Luddite, but hey, that's politics right? Has nothing to do with science, because Trig Palin had three copies of chromosome 21 at conception but it makes good theater and I believe that trumps taste, fact and reason.
This is also a bit of a funny statement coming from a lifelong Catholic who recently stated that he believes that life begins at conception. I believe that would make embryonal stem cell harvest the loss of a life, Senator? Bah, details. He's a lawyer and I'm not, so...
Apparently stem cell research was part of the theme, because while Joe Biden was at this rally in Columbia, MO today he introduced local politicians including Missouri State Senator Chuck Graham:
Senator Biden might have remembered that State Senator Graham had been mentioned in a New York Times piece about stem cell research in Missouri, but apparently he didn't see the picture.
Now, Biden recovered pretty quickly and was as gracious as could be about the whole thing, but this is what happens when you hire Joey Donuts as your chief surrogate.
Joe+Biden gaffe
He took a maybe-swipe at Sarah Palin's child, according to CBS News
“I hear all this talk about how the Republicans are going to work in dealing with parents who have both the joy, because there's joy to it as well, the joy and the difficulty of raising a child who has a developmental disability, who were born with a birth defect. Well guess what folks? If you care about it, why don't you support stem cell research?”
This ignores, of course, that Sen. McCain supports stem cell research that is not embryo-destructive, and implies that there might be a stem cell issue involved in "fixing" Trig Palin if his witch momma wasn't such a Luddite, but hey, that's politics right? Has nothing to do with science, because Trig Palin had three copies of chromosome 21 at conception but it makes good theater and I believe that trumps taste, fact and reason.
This is also a bit of a funny statement coming from a lifelong Catholic who recently stated that he believes that life begins at conception. I believe that would make embryonal stem cell harvest the loss of a life, Senator? Bah, details. He's a lawyer and I'm not, so...
Apparently stem cell research was part of the theme, because while Joe Biden was at this rally in Columbia, MO today he introduced local politicians including Missouri State Senator Chuck Graham:
Senator Biden might have remembered that State Senator Graham had been mentioned in a New York Times piece about stem cell research in Missouri, but apparently he didn't see the picture.
Now, Biden recovered pretty quickly and was as gracious as could be about the whole thing, but this is what happens when you hire Joey Donuts as your chief surrogate.
Joe+Biden gaffe
Slime Watch
Well, it's pretty cold in my office even if it's warm and rainy outside. If anyone else needs something to get their blood boiling, today is no exception for producing idiotic stories about Sarah Palin.
Salon.com has two mouth-breathers on deck today. First is Professor Juan Cole from the University of Michigan. Apparently he took time off from his day job as an apologist for extremist Islamism to pen this little ditty: What's the difference between Palin and a Muslim fundamentalist? Lipstick.
In this episode of Cretins With Keyboards, Dr. Cole lies about Gov. Palin's record, confuses her personal views with her actual record of governing, and manages to associate someone he doesn't like (Gov. Palin) with something he usually doesn't have a really big problem with (Hamas, Muslim fundamentalism). The stupidity of this piece is absolutely breathtaking, particularly his total disregard for the facts that have come to light in the last few days after the first, panicked "SHE'S A RABID PRO-LIFER!" stories of the last week.
Maybe the only thing more ridiculous than this article (or the next one) is that Salon.com considers it part of its "Premium" content and makes you watch a commercial about clean water before being allowed to view the article. If this is "Premium", then it does make one wonder about the regular content -- which brings us to our next bit of tripe.
The second article by Gary Kamiya is simply titled, The Dominatrix, with a now-required bad photoshop of Sarah Palin's head on a curvaceous body, holding a whip and leading a moose on a leash. Wow, that's about as clever as Caribou Barbie, Gary, those graphics guys are adding heft to your piece.
I would quote from it, but basically it's a recitation of a liberal's sexual issues superimposed on current events, and quite frankly if I want that, I can watch MSNBC.
A further failing is that it repeats the silly meme that the McCain campaign chose her solely to appeal to the women's vote that was kicked to the curb with the choice of Joey "Donuts" Biden as VP over Hillary Clinton. Sarah Palin has appeal to some women in the Hillary camp, this is undeniable -- but it's also undeniable that to the "womyn" who make up the progressive "Second Wave" feminists, she's kryptonite. I mean, her daughter got pregnant and she didn't make her have an abortion? Can you imagine?
No, Sarah Palin is the magic bullet for independent men, and it's not just the glasses or the up-do. Men like Sarah Palin because she's a spitfire, a political jock who nailed her shot at the buzzer as surely as Michael Jordan nailing the jumper at the end of Game 6 in the 1998 NBA Finals. Men like competitors, and this lady is a competitor. She projects authenticity, and men value authenticity. She may be really cute, but she comes across like one of the guys, the kind of woman you wouldn't mind being on your deer lease.
Finally today we have the scandal of expenses Sarah Palin claimed as governor, to the total of $60,451 for her and her family. Deeply buried in the story is the fact that her expenses and those of her family are a tiny fraction of the $463,000 former Governor Frank Murkowski spent in 2006, not including over $35,000 for Murkowski's wife's travel expenses. Palin also fired the chef in the governor's mansion as reported by Newsweek:
Man, if that's not a Mom response, I don't know what is. I think it would be hard to hire a chef (in Alaska) for less than $16,951 in 312 days ($54.33 a day). Sounds like she's done what she said she would -- saved the state a bunch of money. This Page A1 story on the Washington Post's front page sounds rather like a Tempest in Crock-Pot, at least to me.
Read and decide for yourself, as always.
The best strategy for the Democrats and the Obama-leaners in the MSM is to probably just leave Sarah Palin alone. I realize they can't for a variety of reasons, some professional and some ideological, but the Obama campaign really doesn't need to keep attacking her. If they're so sure she's an Empty Skirt, then they should just let her implode on their own.
UPDATE: Does it strike anyone else as either desperate or schizophrenic that Salon.com, in two articles on the same day, mixes metaphors so badly on the "real" nature of Sarah Palin? She's a burqa-wearing fundamentalist on one hand, and a purveyor of politico-sexual tension on the other.
Can't the editors just pick a slur and stick with it? It seems like what passes for diversity from Salon.com is differing opinions on the nature of the badness that is Sarah Palin. You stay classy, Salon.com!
Sarah+Palin bias
Salon.com has two mouth-breathers on deck today. First is Professor Juan Cole from the University of Michigan. Apparently he took time off from his day job as an apologist for extremist Islamism to pen this little ditty: What's the difference between Palin and a Muslim fundamentalist? Lipstick.
In this episode of Cretins With Keyboards, Dr. Cole lies about Gov. Palin's record, confuses her personal views with her actual record of governing, and manages to associate someone he doesn't like (Gov. Palin) with something he usually doesn't have a really big problem with (Hamas, Muslim fundamentalism). The stupidity of this piece is absolutely breathtaking, particularly his total disregard for the facts that have come to light in the last few days after the first, panicked "SHE'S A RABID PRO-LIFER!" stories of the last week.
Maybe the only thing more ridiculous than this article (or the next one) is that Salon.com considers it part of its "Premium" content and makes you watch a commercial about clean water before being allowed to view the article. If this is "Premium", then it does make one wonder about the regular content -- which brings us to our next bit of tripe.
The second article by Gary Kamiya is simply titled, The Dominatrix, with a now-required bad photoshop of Sarah Palin's head on a curvaceous body, holding a whip and leading a moose on a leash. Wow, that's about as clever as Caribou Barbie, Gary, those graphics guys are adding heft to your piece.
I would quote from it, but basically it's a recitation of a liberal's sexual issues superimposed on current events, and quite frankly if I want that, I can watch MSNBC.
A further failing is that it repeats the silly meme that the McCain campaign chose her solely to appeal to the women's vote that was kicked to the curb with the choice of Joey "Donuts" Biden as VP over Hillary Clinton. Sarah Palin has appeal to some women in the Hillary camp, this is undeniable -- but it's also undeniable that to the "womyn" who make up the progressive "Second Wave" feminists, she's kryptonite. I mean, her daughter got pregnant and she didn't make her have an abortion? Can you imagine?
No, Sarah Palin is the magic bullet for independent men, and it's not just the glasses or the up-do. Men like Sarah Palin because she's a spitfire, a political jock who nailed her shot at the buzzer as surely as Michael Jordan nailing the jumper at the end of Game 6 in the 1998 NBA Finals. Men like competitors, and this lady is a competitor. She projects authenticity, and men value authenticity. She may be really cute, but she comes across like one of the guys, the kind of woman you wouldn't mind being on your deer lease.
Finally today we have the scandal of expenses Sarah Palin claimed as governor, to the total of $60,451 for her and her family. Deeply buried in the story is the fact that her expenses and those of her family are a tiny fraction of the $463,000 former Governor Frank Murkowski spent in 2006, not including over $35,000 for Murkowski's wife's travel expenses. Palin also fired the chef in the governor's mansion as reported by Newsweek:
At the governor's mansion in Juneau, she got rid of the chef. The NEWSWEEK reporter asked her what working mother in her right mind would dismiss someone whose sole job was to cook for her family. She replied, "I don't want them thinking when I'm done being governor that it's normal to have a chef. It's OK for them to have macaroni and cheese."
Man, if that's not a Mom response, I don't know what is. I think it would be hard to hire a chef (in Alaska) for less than $16,951 in 312 days ($54.33 a day). Sounds like she's done what she said she would -- saved the state a bunch of money. This Page A1 story on the Washington Post's front page sounds rather like a Tempest in Crock-Pot, at least to me.
Read and decide for yourself, as always.
The best strategy for the Democrats and the Obama-leaners in the MSM is to probably just leave Sarah Palin alone. I realize they can't for a variety of reasons, some professional and some ideological, but the Obama campaign really doesn't need to keep attacking her. If they're so sure she's an Empty Skirt, then they should just let her implode on their own.
UPDATE: Does it strike anyone else as either desperate or schizophrenic that Salon.com, in two articles on the same day, mixes metaphors so badly on the "real" nature of Sarah Palin? She's a burqa-wearing fundamentalist on one hand, and a purveyor of politico-sexual tension on the other.
Can't the editors just pick a slur and stick with it? It seems like what passes for diversity from Salon.com is differing opinions on the nature of the badness that is Sarah Palin. You stay classy, Salon.com!
Sarah+Palin bias
Saturday, September 06, 2008
Senator Obama...Meet Col. John Boyd
This is absolutely hilarious:
Good-ness, this is unbelievable. Talk about getting inside the OODA Loop, McCain & Palin are sending people home from their rally in Colorado Springs with discarded (or as Fox News Channel puts it on their Chiron graphics, "RESCUED FLAGS" distributed by veterans and Boy Scouts-) from Barack Obama's 'Me Festival' at Invesco Field.
You know, the DNC could have carried them to a Veterans' Cemetary, or donated to some local organization. But finding them in ? Heh, using that is genius.
Now the Obama campaign gets to spend the rest of the day responding to this while the McCain-Palin pranksters roll down the highway.
Edit to add: Let me guess, Senator Obama -- that was your staff's fault?
Too funny.
UPDATE @5:40 p.m.: "Cheap political stunt" according to the Obama campaign spokesman. Does seem ironic that the DNC can have a crack recycling squad but somehow forgets about the flags. Did they file a report regarding their stolen merchendise, I mean, even at $1 a piece that's $12,000 worth of flags someone "stole". I mean, "wrongfully took", sorry, wouldn't want to misquote.
Heh.
This morning, Republicans tell me that a worker at Invesco Field in Denver saved thousands of unused flags from the Democratic National Convention that were headed for the garbage. Guerrilla campaigning. They will use these flags at their own event today in Colorado Springs with John McCain and Sarah Palin.
Before McCain speaks today, veterans will haul these garbage bags filled with flags out onto the stage — with dramatic effect, no doubt — and tell the story.
“What you see in the picture I sent you is less than half of total flags,” a Republican official emailed. “We estimate the total number to be around 12,000 small flags and one full size 3×5 flag.”
I’m not sure what the DNC was supposed to do with unused hand-flags, frankly. But the Republicans are obviously questioning someone’s patriotism here.
Good-ness, this is unbelievable. Talk about getting inside the OODA Loop, McCain & Palin are sending people home from their rally in Colorado Springs with discarded (or as Fox News Channel puts it on their Chiron graphics, "RESCUED FLAGS" distributed by veterans and Boy Scouts-) from Barack Obama's 'Me Festival' at Invesco Field.
You know, the DNC could have carried them to a Veterans' Cemetary, or donated to some local organization. But finding them in ? Heh, using that is genius.
Now the Obama campaign gets to spend the rest of the day responding to this while the McCain-Palin pranksters roll down the highway.
Edit to add: Let me guess, Senator Obama -- that was your staff's fault?
Too funny.
UPDATE @5:40 p.m.: "Cheap political stunt" according to the Obama campaign spokesman. Does seem ironic that the DNC can have a crack recycling squad but somehow forgets about the flags. Did they file a report regarding their stolen merchendise, I mean, even at $1 a piece that's $12,000 worth of flags someone "stole". I mean, "wrongfully took", sorry, wouldn't want to misquote.
Heh.
Friday, September 05, 2008
The Question That Needs To Be Answered
What if Joe Biden dies, and Barack Obama has to become the Commander-in-Chief?
A Tale of Two Speeches
"It was the best of times, it was pretty good times."
I think that about covers the Dickensian response to the Palin and McCain speeches, in order.
Watching the wind-up to Sarah's speech, with Baptist minister Mike Huckabee and America's Mayor Rudy Giuliani doing the warm-up, I have to admit I was worried that the preliminary speakers might outshine Sarah Palin. I mean, both of those guys have given speeches many times before, in front of crowds that large or larger. Rudy was a keynote speaker at the RNC in 2004, both of them spent months on the campaign trail. There were more people at the RNC than Wasilla, Alaska has residents.
The pressure was on. The credibility of John McCain, his judgment, the fate of the campaign was on her. Around the nation, 40 million people were watching. What did Sarah Palin do, bloodied from press accounts that she's unready, she's a bad mom, she's a hick from Alaska? I think Robert Redford dramatized this best:
As another internet wag put it, "Deer in the headlights? More like a deer-in-the-crosshairs look."
Sharp suit. Flawless makeup. Brilliant smile. Cool as the other side of the pillow, she strode out onto the stage and lit the fuze on the biggest stick of dynamite under the predictions and assumptions of the "in-the-know" political crowd since a former B-movie actor and GE spokesperson took a rhetorical baseball bat to a former peanut farmer. She was warm when describing her family, ironic when describing the criticism of her service as mayor, scathing in denouncing the hypocrisy of "Bittergate" and funny with an ad-libbed line about hockey moms, pitbulls and lipstick, among other moments.
Despite teleprompter problems, she showed a rare gift with timing and pacing for her crowd. Thirty-six minutes later the speech was in the can. The house lights came up and the family came out, including the impossibly-cute Piper, who spit-styled her brother's hair to a nationwide, "Awwwwww...", and the gum-chewing future son-in-law. They played the theme from 'Rudy', but they should have been playing the theme from 'The Natural'.
Folks, this just became a ball-game.
She so far-exceeded the low expectations of her performance that Keith Olbermann, the living embodiment of the Peter Principle in broadcast journalism, was reduced to spluttering, "People who like this sort of thing will find this ... the sort of thing they like."
They like her, Keith. They really like her. She definitely slammed the door on the "Eagleton option" an idea floated by Democratic operatives based on some querulousness on the part of some GOP talking heads. About the only people associated with the Vice-President who are having mental problems right now are the ones discounting her. Even Joe Biden is trying to lower expectations for the forthcoming VP debate (set your Tivos, it's October 2 at 8pm):
Let's just say we'll all be watching, Joe.
Twenty-four hours after Sarah Palin became 'Sarah' to a sizable percentage of the electorate, John McCain took the stage. The lead-in to his speech was not as good, frankly. Cindy McCain has never made a speech in front of so many people, the video introducing her was excellent, she's clearly an admirable person but she as clearly is uncomfortable speaking in front of such a large group. The video of McCain's life was about the three-hundredth mention of his POW experience, but there was one more yet to go from the man himself.
Of course, there were two Code Pink activists and a Ron Paul supporter who had to interrupt the proceedings, and McCain, who is not a teleprompter kind of speaker, was knocked slightly off by the crowd drowning out the protesters with chants of "USA! USA! USA!", that didn't help in the beginning. Both his speech and Senator Obama's were State of the Union-type addresses with relatively boring laundry lists of policies and things they wanted to do. And McCain is not nearly the orator that Senator Obama is, so it seemed to drag even more.
I do think the differences were apparent for anyone predisposed to see them. McCain was openly asking for bipartisanship, he promised Democrats and Independents in his cabinet. He took virtually no shots at Obama personally, even went out of his way to remind a partisan crowd that we're all Americans. I'm glad to see that my request for an apology regarding past Republican excesses made it into the speech, it had to be there. Maybe it will affect someone, maybe it won't.
The major distinguishing characteristic was his humility. I spent a few hours when I was in college with a guy named Charlie Plumb, who was also a Naval Aviator and also a Vietnam-era POW. Charlie is an inspiring guy, which is part of the reason he's a successful motivational speaker. While I can't imagine how hard it must have been to be an American POW in Vietnam named 'Charlie', from meeting him I have tremendous respect for the resiliency and mental toughness of Vietnam-era POWs, of the privations they went through, their brotherhood, and their love for our country.
When McCain finally told his own story, his reflections on his experience and how it changed him, I have to tell you I was near tears. It was the best part of the speech, I think it was the best part of any speech so far this year, because it was real and authentic:
If Obama is the poetry of Langston Hughes, John McCain's speech is the simple declarative sentences of Hemingway, and no less emotional for their unadorned simplicity and humility.
And so the balloons came down and the fight is on. McCain likes that word, he used it often last night. The run-up was the launching of a national political career for Sarah Palin, called a "Hail Mary pass" by many in the media. As it turns out, Sarah Palin can catch the ball, even if her QB has a bum arm -- a pair of them, actually. Hail Mary passes sometimes work out.
This is going to be a long race and a close election. But it will be fun to watch.
Sarah+Palin Obama McCain
I think that about covers the Dickensian response to the Palin and McCain speeches, in order.
Watching the wind-up to Sarah's speech, with Baptist minister Mike Huckabee and America's Mayor Rudy Giuliani doing the warm-up, I have to admit I was worried that the preliminary speakers might outshine Sarah Palin. I mean, both of those guys have given speeches many times before, in front of crowds that large or larger. Rudy was a keynote speaker at the RNC in 2004, both of them spent months on the campaign trail. There were more people at the RNC than Wasilla, Alaska has residents.
The pressure was on. The credibility of John McCain, his judgment, the fate of the campaign was on her. Around the nation, 40 million people were watching. What did Sarah Palin do, bloodied from press accounts that she's unready, she's a bad mom, she's a hick from Alaska? I think Robert Redford dramatized this best:
As another internet wag put it, "Deer in the headlights? More like a deer-in-the-crosshairs look."
Sharp suit. Flawless makeup. Brilliant smile. Cool as the other side of the pillow, she strode out onto the stage and lit the fuze on the biggest stick of dynamite under the predictions and assumptions of the "in-the-know" political crowd since a former B-movie actor and GE spokesperson took a rhetorical baseball bat to a former peanut farmer. She was warm when describing her family, ironic when describing the criticism of her service as mayor, scathing in denouncing the hypocrisy of "Bittergate" and funny with an ad-libbed line about hockey moms, pitbulls and lipstick, among other moments.
Despite teleprompter problems, she showed a rare gift with timing and pacing for her crowd. Thirty-six minutes later the speech was in the can. The house lights came up and the family came out, including the impossibly-cute Piper, who spit-styled her brother's hair to a nationwide, "Awwwwww...", and the gum-chewing future son-in-law. They played the theme from 'Rudy', but they should have been playing the theme from 'The Natural'.
Folks, this just became a ball-game.
She so far-exceeded the low expectations of her performance that Keith Olbermann, the living embodiment of the Peter Principle in broadcast journalism, was reduced to spluttering, "People who like this sort of thing will find this ... the sort of thing they like."
They like her, Keith. They really like her. She definitely slammed the door on the "Eagleton option" an idea floated by Democratic operatives based on some querulousness on the part of some GOP talking heads. About the only people associated with the Vice-President who are having mental problems right now are the ones discounting her. Even Joe Biden is trying to lower expectations for the forthcoming VP debate (set your Tivos, it's October 2 at 8pm):
“I will be unrelenting in my debate with governor, the governor of Alaska in terms of the positions she has taken,” Biden said. “But I will not do what she is able to do so well, and many others–not bad. I am not good at the one-line zingers that go at, you know, that’s not my deal. So if that is going to be the measure of how these debates go, then I’m not going to do very well.”
Let's just say we'll all be watching, Joe.
Twenty-four hours after Sarah Palin became 'Sarah' to a sizable percentage of the electorate, John McCain took the stage. The lead-in to his speech was not as good, frankly. Cindy McCain has never made a speech in front of so many people, the video introducing her was excellent, she's clearly an admirable person but she as clearly is uncomfortable speaking in front of such a large group. The video of McCain's life was about the three-hundredth mention of his POW experience, but there was one more yet to go from the man himself.
Of course, there were two Code Pink activists and a Ron Paul supporter who had to interrupt the proceedings, and McCain, who is not a teleprompter kind of speaker, was knocked slightly off by the crowd drowning out the protesters with chants of "USA! USA! USA!", that didn't help in the beginning. Both his speech and Senator Obama's were State of the Union-type addresses with relatively boring laundry lists of policies and things they wanted to do. And McCain is not nearly the orator that Senator Obama is, so it seemed to drag even more.
I do think the differences were apparent for anyone predisposed to see them. McCain was openly asking for bipartisanship, he promised Democrats and Independents in his cabinet. He took virtually no shots at Obama personally, even went out of his way to remind a partisan crowd that we're all Americans. I'm glad to see that my request for an apology regarding past Republican excesses made it into the speech, it had to be there. Maybe it will affect someone, maybe it won't.
The major distinguishing characteristic was his humility. I spent a few hours when I was in college with a guy named Charlie Plumb, who was also a Naval Aviator and also a Vietnam-era POW. Charlie is an inspiring guy, which is part of the reason he's a successful motivational speaker. While I can't imagine how hard it must have been to be an American POW in Vietnam named 'Charlie', from meeting him I have tremendous respect for the resiliency and mental toughness of Vietnam-era POWs, of the privations they went through, their brotherhood, and their love for our country.
When McCain finally told his own story, his reflections on his experience and how it changed him, I have to tell you I was near tears. It was the best part of the speech, I think it was the best part of any speech so far this year, because it was real and authentic:
Long ago, something unusual happened to me that taught me the most valuable lesson of my life. I was blessed by misfortune. I mean that sincerely. I was blessed because I served in the company of heroes, and I witnessed a thousand acts of courage, compassion and love.
On an October morning, in the Gulf of Tonkin, I prepared for my 23rd mission over North Vietnam. I hadn't any worry I wouldn't come back safe and sound. I thought I was tougher than anyone. I was pretty independent then, too. I liked to bend a few rules, and pick a few fights for the fun of it. But I did it for my own pleasure; my own pride. I didn't think there was a cause more important than me.
Then I found myself falling toward the middle of a small lake in the city of Hanoi, with two broken arms, a broken leg, and an angry crowd waiting to greet me. I was dumped in a dark cell, and left to die. I didn't feel so tough anymore. When they discovered my father was an admiral, they took me to a hospital. They couldn't set my bones properly, so they just slapped a cast on me. When I didn't get better, and was down to about a hundred pounds, they put me in a cell with two other Americans. I couldn't do anything. I couldn't even feed myself. They did it for me. I was beginning to learn the limits of my selfish independence. Those men saved my life.
I was in solitary confinement when my captors offered to release me. I knew why. If I went home, they would use it as propaganda to demoralize my fellow prisoners. Our Code said we could only go home in the order of our capture, and there were men who had been shot down before me. I thought about it, though. I wasn't in great shape, and I missed everything about America. But I turned it down.
A lot of prisoners had it worse than I did. I'd been mistreated before, but not as badly as others. I always liked to strut a little after I'd been roughed up to show the other guys I was tough enough to take it. But after I turned down their offer, they worked me over harder than they ever had before. For a long time. And they broke me.
When they brought me back to my cell, I was hurt and ashamed, and I didn't know how I could face my fellow prisoners. The good man in the cell next door, my friend, Bob Craner, saved me. Through taps on a wall he told me I had fought as hard as I could. No man can always stand alone. And then he told me to get back up and fight again for our country and for the men I had the honor to serve with. Because every day they fought for me.
I fell in love with my country when I was a prisoner in someone else's. I loved it not just for the many comforts of life here. I loved it for its decency; for its faith in the wisdom, justice and goodness of its people. I loved it because it was not just a place, but an idea, a cause worth fighting for. I was never the same again. I wasn't my own man anymore. I was my country's.
I'm not running for president because I think I'm blessed with such personal greatness that history has anointed me to save our country in its hour of need. My country saved me. My country saved me, and I cannot forget it. And I will fight for her for as long as I draw breath, so help me God.
If Obama is the poetry of Langston Hughes, John McCain's speech is the simple declarative sentences of Hemingway, and no less emotional for their unadorned simplicity and humility.
And so the balloons came down and the fight is on. McCain likes that word, he used it often last night. The run-up was the launching of a national political career for Sarah Palin, called a "Hail Mary pass" by many in the media. As it turns out, Sarah Palin can catch the ball, even if her QB has a bum arm -- a pair of them, actually. Hail Mary passes sometimes work out.
This is going to be a long race and a close election. But it will be fun to watch.
Sarah+Palin Obama McCain
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