Bill Ayers--The Next Secretary of Education?

Former 60's radical and domestic terrorist (there really is no other term for a man who set bombs to kill police officers) Bill Ayers has become a figure in "education reform" circles and has the ear of Barack Obama, making some people wonder if Ayers is poised to become the next secretary of education. Investor's Business Daily editorializes:

"School reformer" is how Brokaw identified the co-founder of the Weather Underground, the radical organization that, among other activities, bombed government buildings, banks, police departments and military bases in the early 1970s.

Yeah, right: Ayers is a school reformer in the same sense, as City Journal's Sol Stern put it, as Joe Stalin was an agricultural reformer.

An idea of what Ayers has in mind for America's schools was provided in his own words not 40 years ago when Obama was eight years old, but less than two years ago in November 2006 at the World Education Forum in Caracas hosted by dictator Hugo Chavez.

With Chavez at his side, Ayers voiced his support for "the political educational reforms under way here in Venezuela under the leadership of President Chavez. We share the belief that education is the motor-force of revolution. . . . I look forward to seeing how . . . all of you continue to overcome the failures of capitalist education as you seek to create something truly new and deeply humane."

Ayers told the great humanitarian Chavez: "Teaching invites transformations, it urges revolutions large and small. La educacion es revolucion." It is that form of socialist revolution that Ayers, and Obama, have worked to bring to America.

Ayers, now a tenured Distinguished Professor of Education at the University of Illinois, Chicago, works to educate teachers in socialist revolutionary ideology, urging that it be passed on to impressionable students.

As Stern points out, "Ayers and his education school comrades are explicit about the need to indoctrinate public school children in the belief that America is a racist, militarist country and that the capitalist system is inherently unfair and oppressive."

If Ayers was just another nutty professor, we'd be lucky. But he wields great influence in academic circles and has had Obama's ear. He's the author or editor of 15 books. Chicago's current mayor, Richard M. Daley, has employed Ayers as a teacher trainer for Chicago's public schools and consulted him on the city's education-reform plans.

I suppose one could say that Ayers, as he has grown older has outgrown his childish ways and to be fair, it is not an unreasonable request to make of the public.

But Sol Stern, a long time voice in education circles thinks that we are not looking at a repentant man looking to make up for the errors of his ways, but a radical revolutionary looking to build an army of ideologues entrenched in our schools.

Calling Bill Ayers a school reformer is a bit like calling Joseph Stalin an agricultural reformer. (If you find the metaphor strained, consider that Walter Duranty, the infamous New York Times reporter covering the Soviet Union in the 1930s, did, in fact, depict Stalin as a great land reformer who created happy, productive collective farms.) For instance, at a November 2006 education forum in Caracas, Venezuela, with President Hugo Chávez at his side, Ayers proclaimed his support for “the profound educational reforms under way here in Venezuela under the leadership of President Chávez. We share the belief that education is the motor-force of revolution. . . . I look forward to seeing how you continue to overcome the failings of capitalist education as you seek to create something truly new and deeply humane.” Ayers concluded his speech by declaring that “Venezuela is poised to offer the world a new model of education—a humanizing and revolutionary model whose twin missions are enlightenment and liberation,” and then, as in days of old, raised his fist and chanted: “Viva Presidente Chávez! Viva la Revolucion Bolivariana! Hasta la Victoria Siempre!”

As I have shown in previous articles in City Journal, Ayers’s school reform agenda focuses almost exclusively on the idea of teaching for “social justice” in the classroom. This has nothing to do with the social-justice ideals of the Sermon on the Mount or Martin Luther King’s “I Have a Dream” speech. Rather, Ayers and his education school comrades are explicit about the need to indoctrinate public school children with the belief that America is a racist, militarist country and that the capitalist system is inherently unfair and oppressive. As a leader of this growing “reform” movement, Ayers was recently elected vice president for curriculum of the American Education Research Association, the nation’s largest organization of ed school professors and researchers.

While Obama may be a believer in what Ayers espouses and Obama does apparently have a plan to overhaul graduate schools that produce most of our nation's teachers and it is not based on science or statistics or what works, but upon Ayers ideas of schools as institutions of social justice.

Makes me want to homeschool.

Beckham, Celebrity and Soccer

Grant Wahl looks at David Beckham, the L.A. Galaxy and the mess that has become Mickey League Soccer.

There is not doubting that Beckham is one of the highest profile athletes on Earth. It is more a combination of his drive for celebrity that his celebrity may be larger than his prowess on the field.

There is no doubt that Beckham is in the twilight of his career as a player. But that twilight has taken on the tinge of absolute pitch blackness of late. Beckham's play is dismal and one has to wonder why:

From a soccer perspective, Beckham has had an up-and-down year. Before the All-Star Break he played well, creating chances for the Galaxy from his right midfield position and displaying the full-on effort he's known for. Since the All-Star Game, however, Beckham has struggled. He has failed to connect with Landon Donovan and the Galaxy's other scoring threats. He has failed to produce any magic with his renowned free kicks.

And, most surprising of all, his work-rate has declined. Maybe Beckham is gassed from all the travel for MLS games and England games and Olympics visits. Maybe he's just throwing up his hands at the Galaxy's poor personnel decisions and an MLS salary cap that forces him to play alongside some skill-poor teammates making less than $20,000 a year. Maybe it's a combination of all those things.

I kind of think it is all of these things.

Everything I have heard of Beckham's conduct in the locker room is that he has never allowed his celebrity to get in the way of his work rate on the training ground or playing field. But since the All-Star game, Beckham looks like a man who is more interested in being anywhere else.

Beckham's stated goal when he joined the Galaxy was to help build soccer as a professional sport in America. I would argue that in this regard he has failed. Soccer is a grassroots sport and Beckham has not done nearly enough to grow the sport at the grassroots level. He has not broadened the appeal of the game because he and his team do not play at the highest level of sport in this country, let alone on the world stage. Yes, he sells a lot of tickets and a lot of jerseys, but that does not make him a successful ambassador for the sport.

What amuses me more is not that his work rate has declined, for it surely has not. It is just that Beckham, like all humans has only so much time and effort to devote. When Beckham was playing at Manchester United and Real Madrid, he considerable work effort served him well in training and in playing. But upon coming to the United States, he has spent more than a fair share of his time tending to his imgage and that has cut into his time tending to his game and his team.

Were Beckham to put as much time into the Galaxy, mentoring these young, $20,000 per year players, helping improve the game of the team as a whole, I would wager that L.A. would not be looking up at the entire league, but rather would be looking down at a professional sport on the cusp of greatness in this country.

Alas, it is the missed opportunities that we rue the most. Will Beckham rue his missed opportunity to make soccer in America more palatable to the armchair fan? Who knows, but I do say it is a shame that he hasn't done better by his club, his sport and even his own name.

Of Horses, Barns and Carts and Financial Regulations

Now that Congress and the President have signed the abomination known as the financial rescue, bailout or what ever the term du jour is, Congress if finally starting to inquire in to what has actually happened. Now, aside from the oddity of now concentrating on the causes of a problem after the solution has been passed into law, there is a growing belief that deregulation is the cause, or at least a leading cause of the finanical crunch. Sebastian Mallaby has a different take on the root causes of the financial moreass. It is not just the subprime mortgage market collapse, but something entirely different---China.

The real roots of the crisis lie in a flawed response to China. Starting in the 1990s, the flood of cheap products from China kept global inflation low, allowing central banks to operate relatively loose monetary policies. But the flip side of China's export surplus was that China had a capital surplus, too. Chinese savings sloshed into asset markets 'round the world, driving up the price of everything from Florida condos to Latin American stocks.

That gave central bankers a choice: Should they carry on targeting regular consumer inflation, which Chinese exports had pushed down, or should they restrain asset inflation, which Chinese savings had pushed upward? Alan Greenspan's Fed chose to stand aside as asset prices rose; it preferred to deal with bubbles after they popped by cutting interest rates rather than by preventing those bubbles from inflating. After the dot-com bubble, this clean-up-later policy worked fine. With the real estate bubble, it has proved disastrous.

So the first cause of the crisis lies with the Fed, not with deregulation. If too much money was lent and borrowed, it was because Chinese savings made capital cheap and the Fed was not aggressive enough in hiking interest rates to counteract that. Moreover, the Fed's track record of cutting interest rates to clear up previous bubbles had created a seductive one-way bet. Financial engineers built huge mountains of debt partly because they expected to profit in good times -- and then be rescued by the Fed when they got into trouble.

Why would financiers believe they would be bailed out--well in large part because they believed and rightly as it turned out, that these financial institutions were too large and comprised too large a segment of the American economy for the govnernment to simply stand aside as they tanked. So the finance community deserves a lion's share of the blame for the current debacle, but the shambolic nature of the government response to the growing housing bubble and the shaky understructure is now being used by the Obama camp and the Democratic Congress to attack the notion of a Bush-McCain deregulation. Never mind that the morass may have been caused by a Democratic push to expand homeownership and the requirement that mortgage lenders ignore basic credit and lending principals or face stiff penalties.

Of course, the financiers did create those piles of debt, and they certainly deserve some blame for today's crisis. But was the financiers' miscalculation caused by deregulation? Not really.

The key financiers in this game were not the mortgage lenders, the ratings agencies or the investment banks that created those now infamous mortgage securities. In different ways, these players were all peddling financial snake oil, but as Columbia University's Charles Calomiris observes, there will always be snake-oil salesmen. Rather, the key financiers were the ones who bought the toxic mortgage products. If they hadn't been willing to buy snake oil, nobody would have been peddling it.

Who were the purchasers? They were by no means unregulated. U.S. investment banks, regulated by the Securities and Exchange Commission, bought piles of toxic waste. U.S. commercial banks, regulated by several agencies, including the Fed, also devoured large quantities. European banks, which faced a different and supposedly more up-to-date supervisory scheme, turn out to have been just as rash. By contrast, lightly regulated hedge funds resisted buying toxic waste for the most part -- though they are now vulnerable to the broader credit crunch because they operate with borrowed money.

If that doesn't convince you that deregulation is the wrong scapegoat, consider this: The appetite for toxic mortgages was fueled by Fannie Mae and Freddie Mac, the super-regulated housing finance companies. Calomiris calculates that Fannie and Freddie bought more than a third of the $3 trillion in junk mortgages created during the bubble and that they did so because heavy government oversight obliged them to push money toward marginal home purchasers. There's a vigorous argument about whether Calomiris's number is too high. But everyone concedes that Fannie and Freddie poured fuel on the fire to the tune of hundreds of billions of dollars.

Mallaby seems to be making the case, by comparing the lightly regualted hedge funds with the more heavily regulated investment banks and others, that the problem was not a lack of regulation, but a plethora of it. Fannie and Freddie were heavily regulated, with probably dozens of Congressional committees and alledged involved investors providing oversight for their actions. But as long as investors were making money--they didn't care and as long as Fannie and Freddie were pushing loans to less than fully qualified individuals, and funnelling large amounts of campaign contributions to favored members of Congress to sweep the problems under the rug, Congress really didn't step in.

Rather than deregulation being the cause, perhaps it is the presence of so much regulation that gave these investment banks, Freddie and Fannie and other institutions such comfort that they would never be held responsible for their failure to use a little common sense and business judgment. It doesn't take a genius to know that the housing bubble, like all other bubbles, was doomed to burst--it was only a matter of time.

So blaming deregulation for the financial mess is misguided. But it is dangerous, too, because one of the big challenges for the next president will be to defend markets against the inevitable backlash that follows this crisis. Even before finance went haywire, the Doha trade negotiations had collapsed; wage stagnation for middle-class Americans had raised legitimate questions about whom the market system served; and the food-price spike had driven many emerging economies to give up on global agricultural markets as a source of food security. Coming on top of all these challenges, the financial turmoil is bound to intensify skepticism about markets. Framing the mess as the product of deregulation will make the backlash nastier.

The next president will have to make some subtle choices. In certain areas, markets need to be reformed -- by pushing murky "over-the-counter" trades between banks onto transparent exchanges, for example. In other areas, government needs to fix itself -- by not subsidizing reckless mortgage lending. But a president who has a mandate only to reregulate will be a boxer with a missing glove. By going along with the market skepticism of his party, Obama may end up winning an election while compromising his presidency.

If Obama is elected, and with a Democratic Congress (no matter how ineffective they may be) the push for regulation is sure to come. But as Mallaby suggested, government needs to take a good long look in the mirror before embarking upon a new plan for "re-regulating" an already regulated industry.

Yes there are legitimate questions related to how the markets have operated and those should be explored. But it seems rash in the extreme to pass a solution to a problem that few people have really explored in depth, particularly those policy and lawmakers responsible for the already passed solution.

Future American Star--Matthew Taylor

Matt Taylor had a hat trick over the weekend for TuS Koblenz. Who is Matt Taylor, well go read the story of how he got his contract with Koblenz. Taylor is getting a consistent amount of minutes for the Bundesliga 2 side and now has four goals in five appearances.

It may be early for Bob Bradley to be thinking about regularly playing Taylor in the National Team line up, but if he stays on form, he will certainly be worth a call into the National team camp in January. After all, Taylor would not be the only player from the Bundesliga 2 in camp, Heath Pearce from Hansa Rostock gets lots of starts for the U.S.

I'm just saying.

Bradley Names Roster for Cuba World Cup Qualifier

A day late, but good to see some names long missing and a few added surprises other than Jose Francisco Torres. Here is the list:

GOALKEEPERS:
Brad Guzan (Aston Villa)
Tim Howard (Everton FC)
Troy Perkins (Valerenga IF)

Howard is still the number one, but if the U.S. beat Cuba, don't be surprised to see Guzan in the net against Trinidad. Former DC United keeper (United really should have held onto him) Troy Perkins getting a call up is good to see. He is not nearly as big as Guzan or Howard, but he is a fine keeper and I am glad that Bradley called him in. I don't expect playing time for him anytime soon, but you never know.


DEFENDERS:
Carlos Bocanegra (Rennes)
Danny Califf (FC Midtjylland)
Steve Cherundolo (Hannover 96)
Jay DeMerit (Watford FC)
Frankie Hejduk (Columbus Crew)
Oguchi Onyewu (Standard de Liege)
Michael Orozco (San Luis)
Heath Pearce (Hansa Rostock)

No real surprises here. Look for a back line of Cherundolo, Bocanegra, Onyewu and Pearce to start agaisnt Cuba. I think DeMerit and Califf have a good chance to see some action soon. The U.S. Energizer Bunny Frankie Hejduk is also good to see still. With Columbus already in the MLS play-offs, losing Hejduk to National Team duty isn't a concern for Sigi Schmid. Orozco has been seeing a fair amount of minutes for San Luis and an full national team appearence would probably boost his confidence following a dismal Olympic showing. Against Trinidad, look to see Califf, Onyewu/Bocanegra, DeMerit, and Orozco. Marvell Wynne is missing from this squad, but with Toronto FC sitting on the playoff bubble and the decimation of last FIFA dates, I am not surprised to see Wynne's name missing.


MIDFIELDERS:
Freddy Adu (AS Monaco)
DaMarcus Beasley (Glasgow Rangers)
Michael Bradley (Borussia Moenchengladbach)
Maurice Edu (Glasgow Rangers)
Sacha Kljestan (Chivas USA)
Danny Szetela (Brescia Calcio)
José Francisco Torres (Pachuca)

Of course, the big suprise is Torres' inclusion into this squad, but even more suprising is the youth of this midfield. Here are the ages Adu (19), Beasley (the old man at 26), Bradley (21), Edu (22), Kljestan (23), Szetela (21), Torres (20) and comes to an average age of 21.7 years. A probable starting line in a bucket 4-4-2 would be Beasley, Edu, Bradley and Klejstan. In a 4-2-3-1 that Bradly has been sort of experimenting with, you would probably see Beasley, Bradley, Edu, Adu, Klejstan, with Torres coming as an impact sub. Beasley has the most caps of this group (80) and Bradley is a distant second with 24. The remaining five players have a combined 29 caps between them and Szetela and Torres have none at the senior national team level. Can this relatively inexperienced midfield line get it done?

FORWARDS (5):
Jozy Altidore (Villarreal C.F.)
Brian Ching (Houston Dynamo)
Charlie Davies (Hammarby IF)
Clint Dempsey (Fulham FC)
Landon Donovan (Los Angeles Galaxy)

The best news in this group is that Charlie Davies, who was impressive in his few minutes of Olympic time and getting lots of minutes with his club, is on this list and Eddie Johnson is not. Good. I am glad that Jozy Altidore is getting a nod, but I wouldn't expect to see him on the field in anything less than a sub role, which goes for Davies as well. Look for Ching and Dempsey to get the nod. Donovan's LA Galaxy play on Sunday the 12th (the day after Cuba) and given their push to get into the MLS playoff's, I would not be surprised if Galaxy Coach Bruce Arena asked Bob Bradley to agree to limit Donovan's playing time or sit him on the bench if at all possible. Additionally, Dempsey has been in good form for the National Team of late by scoring goals. Given his lack of minutes a Fulham though, I think his first touch might be suspect. With Houston all but assured of a Playoff spot and the depth on the Dynamo squad, Ching is not as crucial. Ching's harassment of defensive lines and his ability to take punishment means he would get the nod over Altidore. However, come the Trinidad match, don't be surprised to see Altidore up top. Also don't be surprised to see Kenny Cooper join the team for the Trinidad match.

Against Cuba, look for one of these two line ups:

4-4-2

--------Ching-----Dempsey--------

Beasley------------------Kljestan
--------Bradley----Edu-----------

Pearce--Bocanegra--Onyewu--Cherundolo

------------Howard-----------------

Most Likely subs:
Torres for Beasley
Altidore for Ching
Donovan for Dempsey

4-2-3-1

-----------Ching--------------

Beasley-----Adu---------Kljestan
-------Bradley---Edu-----------

Pearce--Bocanegra--Onyewu--Cherundolo

------------Howard-----------------

Most Likely subs
Torres for Beasley
Altidore for Ching
Dempsey for Kljestan

USA Roster Surprise

Midfielder Jose Francisco Torres, a twenty year old who was born in Texas and whose father is Mexican will join the U.S. squad in training camp starting Monday. To be frank, this was not the surprise I was hoping for--see here. But Torres, who plies his trade in Mexico with Pachuca, might be the future left winger and will no doubt challenge DaMarcus Beasley for that starting slot. With Eddie Lewis in his mid-30's (playing very well mind you, but still aging) and Beasley not showing a great deal for the U.S. national team and not getting very many minutes with Glasgow Rangers, Torres might very well be the future on the American left wing.

I have seen Torres in only one game this year and he was quick, likes to attack and go at players (something we desperately need). I do worry that his attack mindedness will cost him minutes since Bob Bradley likes his midfielders and wingers to defend an awful lot.

Rob Turnoe: Pelosi, PAC Money and Keeping the Money in the Family

A funny Cartoon from PolitickerCA's Rob Turnoe.

No U.S. Roster Today

I was waiting on the announcement of the U.S. roster for the upcoming World Cup Qualifier against Cuba, but alas, Goff is reporting no roster today. He is also reporting a surprise naming to the roster.

OK, surprise naming? No Altidore, Adu don't count as surprises. Kenny Cooper not so much given the clamor to get him in the U.S. squad. Edson Buddle would be a surprise, but with the L.A. Galaxy on the bubble for MLS playoff qualifying, I can't see Bruce Arena giving the go ahead to have Landon Donovan and Edson Buddle gone (there goes some 60 percent of L.A.'s goal scoring). Knowing Bob Bradley, the surprise would probably be defensive, like a Chad Marshall of the Columbus Crew. The Crew are already in the playoffs and

To me a surprise would be Neven Subotic, the Croatian-American who has been getting lots of minutes for the German Bundesliga side Borussia Dortmund. Subotic has appeared in all five of Dortmund five Bundesliga matches and has played 90 minutes in Dortmund's UEFA Cup match against Italian side Udinese as well as full time in two DFB Pokal (the German Club cup competition) matches. Subotic has been considering playing for Croatia as well as the U.S.

If the U.S. win against Cuba on Oct. 11 at estadio RFK, look for the long term veterans to be sent back to their clubs and Bob Bradley give a bunch of younger, lesser capped players a shot. A win over Cuba and the U.S. would clinch the next round placement in the Hexagonal. The next game would be October 15 against Trinidad & tobago in Trinidad before closing out this round of qualifying against Guatamala on November 19 in what will be a chilly Dick's Sporting Goods Park in Colorado.

Instapundit: Support the Right Wing Media

Tired of the Obama crazed media? Glenn Reynolds suggests that instead of whining about it or cancelling your subscriptions, you shoudl subscribe to right leaning or fact reporting news media instead:

But if you really want improvement over the longer term, you need to support competition that isn't an arm of the Democratic Party. The New York Sun folded yesterday. It was a serious, right-leaning newspaper in New York City. It was undercapitalized, and its shutdown is probably symptomatic of what's going to happen to a lot of bigger newspapers soon, but if even a fraction of the people who are unhappy with the Times had subscribed it would still be in business. And, still, while the New York Times gets in deeper trouble, the New York Post seems to be doing fine.

If you want to have a media environment that isn't dominated by the Gwen Ifills and Keith Olbermanns of the world, you need to ensure that other kinds of voices flourish. That means supporting the alternatives with your eyeballs, your subscriptions, your advertiser-patronage (and you could write those advertisers and tell them you're happy that they're supporting that kind of programming, too -- they probably don't get many letters like that, so they'll be noticed) -- basically, your money. Businesses need money to flourish. There's a vast underserved population out there, for news, entertainment, movies, etc., and if people start serving it, the current "mainstream" media won't be so mainstream anymore. So if you're unhappy with current offerings, put your money where your mouth is.

And if you're one of the people with creative interests, start making alternative stuff. Not just news and punditry, but entertainment, documentaries, etc. If An American Carol does well this weekend, it'll make it a lot easier for the next film of its type to be made. If Evan Coyne Maloney's documentary work does well, it'll encourage a lot more of that kind of work.

That Whole Gwen Ifills Thing

Honestly, of campaign issues, this is a pretty lame one, that Gwen Ifills might be partial to Obama. Ed Morrissey over at Hot Air notes that Ifills didn't tell the Commission on Presidential Debates about her book, which seems like a ludicrous omission. If you omit a 500 or 1000 word column, one could be forgiven, but omitting a book one needed to spend months working on is a bit over the line.

But really, why are Republican so out of joint over this? If Ifills is patently biased in favor of Obama, it will become obvious during the debate. The American public is pretty smart and they will see it. If Ifills is that bad, even Democrats will have a hard time claiming she was impartial.

On a similar note, is impartiality a requisite for being a moderator? Doesn't a moderator serve to moderate the debate? If all the questions are softballs for Obama and bean balls for McCain, isn't there going to be an obvious display here.

Softballs for Obama will make it look like Obama can't answer the hard questions, whereas if McCain has solid, thoughtful answers to the hard questions, the easy ones would, by default, be easier for McCain.

Making the Crap Sandwich Palatable

Intersting reading:
* Sec. 105. Energy credit for geothermal heat pump systems.
* Sec. 111. Expansion and modification of advanced coal project investment credit.
* Sec. 113. Temporary increase in coal excise tax; funding of Black Lung Disability Trust Fund.
* Sec. 115. Tax credit for carbon dioxide sequestration.
* Sec. 205. Credit for new qualified plug-in electric drive motor vehicles.
* Sec. 405. Increase and extension of Oil Spill Liability Trust Fund tax.
* Sec. 309. Extension of economic development credit for American Samoa.
* Sec. 317. Seven-year cost recovery period for motorsports racing track facility.
* Sec. 501. $8,500 income threshold used to calculate refundable portion of child tax credit.
* Sec. 503 Exemption from excise tax for certain wooden arrows designed for use by children.

I sense a theme a bit here, lots of energy tax credits. Not a bad thing really, but it is apparent that these credits are there to make that crap sandwich a lot more palatable.

The Bailout Plan

The Senate passed bailout plan has "enough "sweeteners" to put free-market devotees into an ideological diabetic coma."

The bailout-stimulus-Christmas-in-October-bill that just passed the Senate should not be confused with thoughtful legislation. It's larded with junk designed to convince Main Street that it too will share in the welfare being doled out to Wall Street Masters of the Universe. The need for the bailout has yet to be demonstrated. The efficacy of the proposed plan has yet to be demonstrated. Here's hoping that the House of Representatives, that great holding pen for would-be senators and future criminals, keeps it spine and still votes no. At the same time, this might be a good time to declare citizenship in another country.

Well, I am not ready to do that, but I am ready to chastize every Member of Congress who has bought into the hysteria, or more specifically, every Republican who has done it. Fearmongering and massive government intervention into the economy is standard Democratic fare, I don't expect them to change their spots.

Yes, the markets have tanked, and yes, IRA and 401(k) plans have taken a hit and not to mention that the notion of a "privatized" market based Social Security is now DOA even if there were a GOP Congress in control.

Have Americans gotten so used to phenomenal growth and nothing but profits that we are so addicted that we will take and approve of such drastic steps like this one? Business comes in cycles (that is why it is called a business cycle). With every upswing comes a downturn. But face it, we are better off now that we were 10, 20, 30 or 80 years ago. People have not lost their lifesavings. People are standing in line not for bare necessities like food, but for luxury items like an iPhone or new computer.

We need to stop looking for the dark cloud and the government handout and fix this mess ourselves.

Is Sarah Palin's Lipliner A Tattoo?

The brilliance that is Huffington Post. Hat Tip: Althouse

Change name from ‘bailout’ to ‘rescue’ - Andy Barr - Politico.com

Yeah, John McCain, that will help.

Not the best thing to say.

This is a Little Creep

Children singing to the glory of Obama. The deification continues.

Hillary Clinton--Hysterical Over Economy

This is simply inexuseable hysteria: "It sounds dire but there is a risk that commerce could grind to a halt," she said.
So much for the calming voice of reason.

How did Wall Street get into this mess?

Michael Flynn of Reason.com writes:

Let's be clear: This is a Wall Street crisis, not a national economic crisis. The overall economy, while a bit weak, is still growing. Some politicians are comparing the current environment to the Great Depression. But in 1932, when the federal government last moved to bail out the banking sector, economic output had fallen 45 percent and unemployment was a staggering 24 percent. Today, economic output is actually up and unemployment is a historically modest 6.1 percent.

The overall economy doesn't even face a liquidity crisis in the current turmoil. Consumer, commercial/industrial, and real estate loans are all up over last year. Main Street is doing fine. The liquidity crisis is confined to Wall Street, between and among investment banks, insurance and securities firms, and hedge funds. There is the possibility that the contagion could spread, but in a global capital market, this is hardly certain.

It is the intersection of several underlying trends that have brought us to this point, not a breakdown in any specific part of the financial sector. The fundamental flaw with the bailout approach is that it ignores these trends and simply seeks to shore up the finances of certain Wall Street institutions.

Then there is this:

Fannie Mae and Freddie Mac were going through a crisis. In 2003 and 2004, an accounting scandal was revealed. The two public-private partnerships were cooking the books to show phantom profits. The Bush administration and its allies on the Hill pushed a strong bill to reform how these institutions operated. The measure came very close to passing, but Fannie and Freddie cut a deal. They would refocus on expanding mortgages for low-income borrowers if the feds kept out of their operations. The bargain worked. Virtually all the Democrats and a few Republicans backed the two companies and the reform effort failed.

Fannie and Freddie then went on a subprime bender. They made it clear that they wanted to buy all the subprime or Alt-A mortgages that they could find, eventually acquiring around $1 trillion of the paper. The market responded. In 2003 subprime mortgages made up less than 8 percent of all mortgages. By 2006, they were over 20 percent. Banks knew they could sell subprime products to Fannie and Freddie. Investments banks realized that if they laced ever increasing amounts of subprime mortgages into the MBSes, they could juice the returns and so earn bigger fees. The rating agencies, thinking they were simply dealing with traditional mortgages, didn't look under the hood.

So really, what have we learned so far.

1. Mortgage Backed Securities are not a sure deal and not a guaranteed return. There never were, mind you, but with the housing bubble, it sure looked that way. The thing is that most of these Wall Street types should have known that they were sitting on a bubble and that all bubbles break. The dot com bubble broke and it seems like everyone forgot that. The housing market was unsustainable and it was obvious to most Americans and should have been a plain as day at Wall Street institutions.

2. Government sponsored entities are not the same as the government. Fannie Mae and Freddie Mac were incentivized and indeed practically explicitly brokered a deal by which they would become the only real subprime backer. Instead of spreading the risk around, Fannie and Freddie backed some 70 or 80 percent of all subprime mortgages. That is too much risk in one place.

3. A subprime mortgage in and of itself is not a bad thing. However, banks and lenders were again not only incentivized, but basically required by such laws as the Community Reinvestment Act and other legislation to ignore common sense risk measurement and basically give loans away. For decades, most first time homebuyers were in subprime mortgages, but banks and mortgage lenders made sure to limit the number of such mortgages and make efforts to minimize the risk as much as possible. Many of these first time homebuyers then go on to become solid credit risks and get into regular mortgages a few years down the road. This process still happens (it happened to my wife and I--with a little help from the VA) and will continue to happen. But it should happen on a far less frequent basis.

4. Too much emphasis has been placed on the financial sector of our economy. Yes, the financial sector is a big part of teh economy, but it is not the end all be all. As Flynn points out, there are other economic indicators that point in a positive direction.

I do thing a recession is likely, but it is not a foregone conclusion. So-called experts and pundits have been claiming we are in a recession and have been doing so for a couple of years, but it hasn't happened. Will it happen now? Maybe...


But then again...Maybe not.

Propping Up Banks Will Not Rescue A Debauched Financial System

So says the headline at London's Daily Telegraph. In a column written by Jeff Randall,

But the hard-sell of President Bush and the US Treasury Secretary felt too much like the pressure patter of a door-to-door hawker. Their message was crude: “Trust us. You are in a terrible place. Only we can get you out of this mess. No need to check the details. Hurry now, or it will be too late. Here’s a pen. There’s the dotted line. Just sign.”

But with the President’s ratings so low, few would let him leave the House with anything more than small change. Congress asked, not unreasonably: “If you guys know so much about banking, how come we are in such trouble?”

Having spent most of the year telling America, contrary to mounting evidence, that the US economy was just dandy, Mr Bush’s credibility is threadbare. When making statements, he’s beginning to look as if he doesn’t even believe himself. As for Mr Paulson, his long association with the jackpot culture of Goldman Sachs is, in the eyes of many outsiders, a gilded millstone.

Predictably, the refuseniks have been pilloried as ill-informed nihilists. They have been lambasted for failing to understand the consequences of their actions. They are, according to the Big Bail-out Brigade, condemning the rest of us to be buried alive in the rubble of a disintegrating banking system.

Try a different take. Yes, the West’s financial infrastructure is in severe distress. Yes, more banks are going to crumble. Yes, there will be a recession. But allocating $700bn (it would almost certainly turn out to be more) to a clean-up programme for toxic assets, in effect socialising the poison of private greed, has no merit other than to delay the inevitable. No amount of federal cash can rewind the X-rated horror video.

I heard a quote by my Congressman, Roscoe Bartlett (R-MD), when commenting on teh bailout plan "it privatizes profits but socializes losses" which is exactly dead on. This bailout takes the risk out of any future risky behavior by banks because a precedent will have been set for the bailout and no one will learn the lesson about taking future risks.

Only when banks fail will the lesson be learned.

Oregon Students Sanctioned for Obama Effigy

Four Oregon college students have been sanctioned by their school for hanging a cardboard cutout of Barack Obama from a campus tree.

OK. Now before anyone gets all bent out of shape, George Fox University is a private college and they can mete out punishment as they see fit for breaches of the student code of conduct (not that I can find one on the school's website). The school has handed out long term suspensions and public service punishments for the unnamed offenders. Fine.

But can anyone explain to me why the FBI is investigating whether "any civil rights were violated?" The cardboard figure of Obama had a message which referenced a minority and low-income scholarship program at the university. I am not sure if that is a supposed "civil rights violation" or not but on the face of it, I would have to say no. Whose rights, precisely would have been violated.

A university official made the following statement:

"Regardless of the students' intent, the image of a black man hung from a tree is one of the most hurtful symbols of racism in American history," Lau said in the statement. "Displays such as this have no place on a campus that is dedicated to living out the teachings of Jesus."

I will grant that the image of a hanging is not exactly within the teachings of Jesus. I will also admit that such an image is tainted with racist overtones from history.

But is the display itself racist? Given the overtones and the written message regerring to a minority and low-income scholarship--maybe. Further, I am not sure that racism in and of itself is necessarily a civil rights violation. These students quite possibly have racist thoughts and racist intentions. But there is the "civil rights" creep factor. Formerly, to punish someone for violating the civil rights of someone, you had to actually violate someone's civil rights, a person, not some anonymous, amorphous group, but an actual person. Now, college campuses and liberals can simply claim, someone's rights were violated and a FBI investigation is launched. There is no indication that a particular person was even offended, let alone have their rights violated. Rubbish, I tell you.

Then we have the Obama factor. What if this had been McCain hanged in effigy at say UC-Berkely--would there be a civil rights investigation? No. Would the students have been punished. No. What if this had been a McCain effigy at a private liberal arts college? Again, I seriously doubt anyone would be punished or at least not punished to the point of long term suspensions. But the mere presence of an Obama image has raised the level of this matter from a poorly executed protest against a scholarship program and perhaps a political display to the level of a civil rights violation.

Really, has it come to this? Have we become so politically correct that any negative display with a picture of a black man present is now a civil rights type offense?

What have we become?

Pelosi Paid Husband with PAC Funds

Washington Times has the exclusive that Speaker Nancy Pelosi has paid almost $100,000 to her husband's real estate and investment firm over the past nine years.

Big deal, right? Doesn't everyone in Washington do that? Well, maybe, but then they are not the Speaker who supported a bill last year that would ban such activity. From the Wash.Times:

The payments have quadrupled since Mr. Pelosi took over as treasurer of his wife's committee in 2007, Federal Election Commission records show. FLS is on track to take in $48,000 in payments this year alone - eight times as much as it received annually from 2000 to 2005, when the committee was run by another treasurer.

Lawmakers' frequent use of campaign donations to pay relatives emerged as an issue in the 2006 election campaigns, when the Jack Abramoff lobbying scandal gave Democrats fodder to criticize Republicans such as former House Majority Leader Tom DeLay of Texas and Rep. John T. Doolittle of California for putting their wives on their campaign and PAC payrolls for fundraising work.

I think that technically, what Pelosi has done is not illegal, but it sure doesn't look right.

But what is really not on the up and up is this:

Between 1999 and 2006, FLS collected $500 per month to cover rent, utilities and equipment for the leadership PAC, according to the FEC records. The PAC's address is listed as a personal mailbox in San Francisco, across the street from FLS's Montgomery Street office building, but the rent payments went to an office space.

In early 2007, the PAC's treasurer, Leo T. McCarthy, former Democratic speaker of the state assembly and lieutenant governor in California, died. Mr. Pelosi took over as treasurer and his company's PAC payouts rose.

At that point, FLS started charging the PAC $24,000 per year for accounting work. In January 2008, the PAC's rent - paid to FLS - also quadrupled from $500 to $2,000 per month.


Katie Falkenberg/The Washington Times PARTNERSHIP: Nancy Pelosi's husband, Paul F. Pelosi, was by her side at a Democratic event in 2006.

Mr. McCarthy, the previous treasurer, had done the work as a volunteer, according to FEC documents and Jennifer Crider, a senior adviser to Mrs. Pelosi and spokeswoman for the Democratic Congressional Campaign Committee. She said FLS' accounting fees are in line with costs for other PACs.

So when Paul Pelosi becomes the treasurer, accounting fees become necessary, but not under the previous treasurer. According to FEC reports, in 2004, PAC to the Future paid just shy of $17,000 for legal, bookkeeping and FEC reporting services. In 2007, the figure jumped to $32,718.75 for the same services. Leo McCarthy was the treasurer, officially, until April 2, 2007, but had passed away on February 5, 2007. This in itself is no big deal, but really Pelosi's PAC should have had an assistant treasurer since the last report that McCarthy "signed" was just a week before his death.

Still while I don't think what Pelosi has done is illegal in any sense of the word, it does seem, well, hypocritical at least that the Democrats tarred and feathered Tom DeLay and John Doolittle for these kinds of things.