Mike's Noise

Mumbai

A few thoughts about this past week's terrorist massacre in Mumbai, India.

First, a heartfelt praise.  A long-time friend of mine who is a pilot with Delta Airlines was in Mumbai last week, and in fact was staying at the Taj Hotel.  He was away from the hotel when the terrorists attacked.  He was kept in safe custody by the police and put on a plane home Friday.  He lost all his things back at the hotel, but not his life.  I thank God for his deliverance as I pray for the souls and the families of those who were not so fortunate.

What we witnessed this past week literally looked like a scene from a Hollywood film or TV police drama -- a small group of well-trained and well-armed terrorists, coordinating their attacks and communicating with one another via satellite phones and GPS devices, attacks a large number of targets throughout the city of Mumbai, throwing the city's emergency response services into a state of chaos.  They take hostages, they torture and kill, they set off bombs and start fires.  Then they converge on their main target, the Taj Mahal Palace Hotel, killing dozens, taking hostages and torturing them, and planting bombs in an effort to implode the hotel and kill everyone inside, including themselves.  Despite the great loss of life it was in the end, as Instapundit noted, an "epic fail," with a final body count between 5% - 10% of the 5000 deaths that they originally planned.

As criminalists and police swarm the scenes of the attacks, looking for clues and attempting to assign "responsibility," we should be reminded that these attacks were not crimes.  With the exception of lovers quarrels and the work of psychopathic killers, crimes are generally committed for financial gain.  What these attacks represented was not a crime, but a fanatical commitment to an ideology.  Mark Steyn observes:

You're sitting in some distant foreign capital but you're of a mind to pull off a Mumbai-style operation in, say, Amsterdam or Manchester or Toronto. Where would you start? Easy. You know the radical mosques, and the other ideological front organizations. You've already made landfall.

It's missing the point to get into debates about whether this is the "Deccan Mujahideen" or the ISI or al-Qaida or Lashkar-e-Taiba. That's a reductive argument. It could be all or none of them. The ideology has been so successfully seeded around the world that nobody needs a memo from corporate HQ to act: There are so many of these subgroups and individuals that they intersect across the planet in a million different ways. It's not the Cold War, with a small network of deep sleepers being directly controlled by Moscow. There are no membership cards, only an ideology. That's what has radicalized hitherto moderate Muslim communities from Indonesia to the central Asian 'stans to Yorkshire, and co-opted what started out as more or less conventional nationalist struggles in the Caucasus and the Balkans into mere tentacles of the global jihad.

As I have written before, the ideology that drives these attacks is based on a corrupted version of Islam.  Young men (and now apparently women) are exposed to elements of this ideology from birth, and when they reach a certain age they immersed in it.  These young people (like all intelligent young people) know that something is wrong with the world, but instead of being encouraged to explore and learn and ask questions, they are brainwashed into the cult of radical, violent Islam.  They are taught to ignore their own obvious cultural and societal shortcomings, and to instead believe that their problems are solely the result of Allah's wrath.  His rage burns because His people have abandoned the teachings of the Koran, and have instead polluted themselves by accommodating the sinfulness of Western infidels and Jews.  Allah must be shown that a new generation of Muslims is committed to restoring holiness to the ummah, and the only way to do this is to slaughter infidels, Jews, and apostate Muslims, so that their blood can atone for the sins of all Muslims and persuade Allah to once again bless His people.

This bloody ideology, as Mark Steyn notes, has spread throughout the world.  Its adherents are linked simply by a shared body of literature and teachings.  Local organizations abound, some with international links, but there is no "central command."  Each group has its own leaders, but their members freely travel from one nation to another, from one group to another, keeping the movement alive and making attempts to quash it increasingly more difficult.  It is this elusive aspect that gives the movement such an ethereal and spiritual quality, and allows religious leaders to characterize it as a manifestation of the will of Allah.

In many ways radical Islam resembles the Marxist idealism that spread throughout the world following the Second World War.  However, that idealism almost immediately manifested itself in a series of full-scale violent revolutions, as Marxist forces overthrew governments and created Communist states.  Most of those governments ended in failure; those that took decades to fail provided a hard target for Western foreign policy and military operations.  Also, the appeal of Marxism varied greatly; it only attracted a substantial following in poor, post-colonial nations.  In nations brutalized by Communist governments, it is extremely unlikely that Marxism will ever again become a mainstream movement.  In America and other Western nations, Marxist agitators from the 1960's quietly slipped into the mainstream of society, assuming university professorships or becoming civil rights advocates.  They no longer pose an existential threat, but their ideas continue to influence younger generations.

Radical Islamists, on the other hand, have been very careful to build their movement in the shadows, in the privacy of mosques and madrassahs.  They have also been very careful to firmly link radical Islam with suffering at the hands of the wealthy and the powerful -- and the Jew.  By continually reinforcing this critical link with Marxist thinking, they have gained the sympathy of Western journalists and academics, who have unwittingly become some of their most powerful and influential allies.  This link has been established so thoroughly with respect to the Palestinian people that even the most open displays of radical Islamic bloodlust are almost universally greeted by Western journalists with heartfelt sympathy and pleas for an end to Zionist oppression.

Most radical Islamists have also been very careful not to openly or directly associate themselves with governments or nation-states.  After 9/11, the two most prominent state sponsors of terrorism, the Taliban in Afghanistan and the Baathists in Iraq, were wiped out by Allied military.  Libya gave up its nuclear program and pledged full cooperation with the West.  The Pakistanis and Saudis also decided that being linked to terrorists was a bad idea. And when Al-Qaeda forces made the tactical blunder of concentrating their numbers in Iraq, they were summarily decimated by Allied and Iraqi fighters.  Of the last remaining terrorist strongholds, Somalia is a shambles and is primarily controlled by a loose confederation of belligerent tribal leaders.  And Iran is a curious case, a nation governed by an extremely clever Islamic regime that has cleverly positioned itself as both a supporter of the oppressed Palestinians, and a victim of imperialist American aggression, thus avoiding condemnation from the West at large.  Iran is also the only Islamist nation that has inflicted a significant defeat upon the United States military.

So what are we left with, those of us in the cross-hairs of radical Islamists?  Certainly not conventional warfare.  Although we learned many lessons about guerrilla warfare in Vietnam, and although we have enlisted the invaluable aid of Israelis, who have been combating radical Islamists for decades, there is no way to mount a full-scale military assault against a shadowy enemy who is fully integrated into the world's civilian populations.  

We also suffer from a completely misguided urge to treat terrorism as a crime.  It isn't -- as I explained above.  Our overly sensitive, politically correct news media has been so besieged by people claiming to be victims of injustice that they cannot bring themselves to stop using the words "alleged" or "suspected" unless a perpetrator has been warranted, surveyed, arrested, indicted, tried, convicted, and finally denied an appeal.  Terrorists know this.  The tasteless exploitation perfected by "Paliwood" is sufficient proof of how easily our news media can be manipulated.  Captured training manuals instruct terrorists to claim mistreatment and torture at the hands of their captors, in order to gain sympathy from the media.  

Reports of the Mumbai massacre included detailed accounts of armed policemen refusing to shoot the terrorists, even when some of them had ample opportunities for clear shots.  Some policemen reportedly hid, fearing for their lives.  It's hard to say why this happened; certainly some situations would have provided the police with a good opportunity to neutralize the attackers, while others would not.  But undoubtedly many police simply did not know when it was acceptable to use deadly force.  Terrorists know this too, and they will not hesitate to take full advantage of it.

The pirates currently menacing the waters off the coast of Africa know it as well.  Of course piracy is a crime, an illegal enterprise that is nothing more than glorified theft.  The pirates know that we in the West abhor violence and death, and that we will pay anything or do anything to avoid bloodshed.  These things simply make their ends much easier to meet.

Some nations have been forced to put aside the West's aversion to killing in order to ensure their own survival.  Israel has learned the hard way that they must stop terrorists, even if they are forced to inflict casualties among the innocents that terrorists deliberately use as human shields.  Naturally Israel is condemned for such actions, but Israel knows, without any doubt, that no other nation is going to actually try to stop them -- because such an effort would itself involve violence.  But the flip side of such defiance is that Israel also knows that few nations -- perhaps only the United States and Great Britain -- would ever shed the blood of their own sons and daughters in order to defend them.

So it seems that we are left with two rather imperfect solutions, each involving a non-trivial margin of error.  First, we should not turn our world into a police state that spies on all its inhabitants and routinely jails people on the flimsiest of suspicions or complaints.  But we should understand that all civilized nations allow for the surveillance and detention of suspects for a good reason -- our own safety.  When we allow collective guilt to overtake common sense, and we begin to treat criminals or suspected terrorists as victims and law enforcement officials as criminals, then we have compromised our best non-violent security system and rendered it virtually useless.

Likewise, saber-rattling, massive buildups of offensive weaponry, and routine or heavy-handed use of aggression, violence, destruction, and killing are all examples of completely unacceptable behavior.  America and her allies should not be "enforcers," figuratively breaking kneecaps around the world whenever we feel threatened.  But we should realize that there are some situations, like the Mumbai massacre, where the use of deadly force is not an over-reaction or a crime against humanity, but a necessary course of action that will ultimately -- in spite of its temporary pain -- save far more lives than it takes.

We cannot force an end to any ideology, so long as its proponents succeed in convincing the gullible that they are victims of surreptitious conspiracies.  But we can protect ourselves from its followers.

Dollars, disorder, and death

Monday morning's top news story will undoubtedly be the volume of cumulative sales generated by American Christmas shoppers this weekend, as financial analysts argue over whether or not it was "enough."  But this year's "Black Friday" take-away story is undoubtedly the senseless death of a Wal-Mart employee in Valley Stream, NJ, who was trampled to death by an unruly mob of bargain hunters.

And those shoppers didn't just trample Jdimytai Damour to death; they continued to rush into the store, past his lifeless body, shoving paramedics out of the way until the agitated mob was finally pushed back by police.  Then they fumed when authorities cleared the store and closed it down.

What does it say about us, when the value we place on cheap video games and DVD players overwhelms our ability to do even the simplest of decent things, to step back and allow paramedics to try to save an injured man's life? 

It's easy to come up with a lengthy list of "-isms," to whose surface we can easily affix blame -- Americanism, capitalism, materialism, consumerism, racism, etc.  But the root cause is far more complex, and dare I say, far more painful.  Please consider this excellent analysis by The Anchoress:

I once actually saw two women quarrel over an item, just like in the movies, while Christmas shopping. I was very young, and knew everything at the time, so I blamed it on American materialism and its corruptive influence on the soul. Materialism CAN corrupt the soul, of course - as can capitalism untempered by compassion - but as I’ve matured, I’ve come to reject the easy and cynical course that finds “America” and its values to be at the core of every negative situation I encounter. Instead, I have decided to think of the aggression of the battling shoppers to be rooted in vulnerability. They’ve decided they want to purchase a particular item for someone they love. Perhaps this is how they express love. Perhaps they believe, subconsciously, that this is the only way they can be loved back. Perhaps this is a budgeted item and the only way they can afford to purchase it is at a heavily reduced price and - because they love - they’re willing to fight for it.

Looked at in this way, the “crassness” of all of this consumer excess seems less clear, and one finds oneself - as one does all too often, if one is paying attention - in the middle of yet another Holy Mystery. Love is the highest human aspiration, but when it lacks anchoring in something bigger than itself, it tends to drift a bit and take on some detritus (doubt, hurt, anger, self-hate) that gets into the workings and distorts the navigation, a little; in that case, suddenly love can lead us away from, and not toward, our best selves. And then where are you? You’re tugging on a toy with another shopper and sending all sorts of messages to your family and to the world-at-large, that you never intended to send. About yourself and your values, about your society, even about your nation.

There was an early episode of CSI, "Unfriendly Skies," that dealt with a similar ordeal.  A passenger on a transcontinental flight is suffering from undiagnosed encephalitis, or swelling of the brain.  This causes extreme discomfort and eventually leads to psychotic behavior.  A group of five fellow passengers fears for their lives, and what begins as an attempt to restrain the victim soon escalates into a violent attack that leaves the man dead.

Although this fictional story dealt with a much more serious issue (the taking of a life in order to subdue an unknown threat and thus save one's own life) the underlying premise is the same one faced by the mob of Wal-Mart shoppers --to what extent do we ignore our conscience in order to get what we want, particularly in a situation where we assume (or dictate) that responsibility is "shared," and therefore we are somehow allowed to abdicate our normal moral boundaries?

In fact, another essay linked by The Anchoress in an earlier post noted that those who commit or inspire the greatest acts of evil (think Cromwell or Robespierre or Mugabe or Hitler) often do so because they ultimately desire to accomplish something good (religious freedom, or equality, or security).  To satisfy this end, evil often masquerades as morality, imparting heavy doses of guilt and conviction to those who are judged to be less than fully committed to "the new way".

I'm sure that most of the people in that out-of-control Wal-Mart mob love other people greatly --  parents, children, neighbors, family -- and would make great sacrifices in order to impart happiness, even shallow, fleeting happiness, upon their loved ones.  Yet as we have seen, even these people are capable of commiting great evil through the disordered way in which they attempted to achieve a good end.  That disorder led to the death of an innocent man.  The Wal-Mart incident is simply a local representation of a global problem; a problem, I believe, that is beyond the capabiliy of mankind to solve on its own.

Stuff from my desktop - Nov. 24, 2008

Will Barack Obama try to introduce a "New" New Deal? -- Amity Shales notes that the Great Depression gave Democrats a platform from which they could launch a variety of progressive "reforms," many of which had been pet agenda items for over a decade and had little or nothing to do with economic stimulus.  Supporters of more government intervention in the economy should also read this report from UCLA, which states that many of FDR's New Deal programs (specifically artificial wage and price controlls) actually served to lengthen the Great Depression.

And now The New York Times is riffing on the same theme... But wait a minute - are these stories honest conclusions drawn from historical research, or are we seeing further proof that the media is attempting to soften criticism of the Obama administration if they can't keep their promises of tax cuts and prosperity?

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Big 3 bailout on hold for now -- The Senate has decided to postpone any government financial aid for the Big Three automakers.  The fact that their CEO's flew to Washington DC aboard mega-expensive luxury charter jets in order to plead en forma pauperis before Congress didn't help.  And president-elect Obama is staying far away from the issue.

Powerline blog notes an eerie similarity between the current financial woes of the Big Three, and a coming financial disaster for our own government:

The real story is the frightening extent to which Detroit is just the New Deal U.S. in microcosm...the Big 3 became essentially private versions of the middle class welfare state...social agencies for providing non-market validated income, health and retirement benefits, with a sideline of making cars....and now the model is unsustainable. In part it is because of the burden of the retired UAW workforce, which now vastly outnumbers the actual working members. As of 2007, the UAW represented 180,681 members at Chrysler, Ford and General Motors; it also represented 419,621 retired members and 120,723 surviving spouses.

This is not dissimilar to Social Security and Medicare for the U.S. economy as a whole. Both of these entitlement programs are unfunded liabilities of the U.S. government, politically, if not legally, and, on a current basis, consume almost 50% of the $3 trillion federal budget. They were viable on a pay-as-you-go basis only at inception and as long as the ratio of workers to beneficiaries is high. Neither condition obtains today. So it becomes an interesting question and rather soon I think: when the U.S. government becomes like Detroit...who does the bailing out?

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Sign of the apocalypse? -- Religious extremists often view the election of one political candidate or another as a choice that will bring either blessings or punishment from God.  But did you know that Shia Islam might be reserving a very special place for Barack Obama?

Mahmoud Ahmadinejad is a devoted follower of Shia Islam and an ardent believer in the end times teaching of Shia (yes, Virginia, there are other "end times" teachings besides The Revelation) which revolves around the appearance of the Mahdi, a Messianic figure who will deliver the entire world into the kingdom of Islam.  Noted Muslim author Amir Taheri pointed out a curious chain of events a few weeks ago that is linked directly to the Obama presidency:

Is Barack Obama the "promised warrior" coming to help the Hidden Imam of Shiite Muslims conquer the world?

The question has made the rounds in Iran since last month, when a pro-government Web site published a Hadith (or tradition) from a Shiite text of the 17th century. The tradition comes from Bahar al-Anvar (meaning Oceans of Light) by Mullah Majlisi, a magnum opus in 132 volumes and the basis of modern Shiite Islam.

According to the tradition, Imam Ali Ibn Abi-Talib (the prophet's cousin and son-in-law) prophesied that at the End of Times and just before the return of the Mahdi, the Ultimate Saviour, a "tall black man will assume the reins of government in the West." Commanding "the strongest army on earth," the new ruler in the West will carry "a clear sign" from the third imam, whose name was Hussein Ibn Ali. The tradition concludes: "Shiites should have no doubt that he is with us."

In a curious coincidence Obama's first and second names--Barack Hussein--mean "the blessing of Hussein" in Arabic and Persian. His family name, Obama, written in the Persian alphabet, reads O Ba Ma, which means "he is with us," the magic formula in Majlisi's tradition.

Mystical reasons aside, the Khomeinist establishment sees Obama's rise as another sign of the West's decline and the triumph of Islam. Obama's promise to seek unconditional talks with the Islamic Republic is cited as a sign that the U.S. is ready to admit defeat.

Liberals enjoy making fun of Christian evangelicals and their "Left Behind" mania.  Let's see how they respond to the politicization of eschatological teachings from another major religious tradition, particularly one that involves their own Savior.

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The planet has cooled since George W. Bush took office -- It's true, so deal with it.  If you're still not convinced, then here is much more. 

Of course George W. Bush had nothing to do with the current cooling trend, just like Bill Clinton had nothing to do with the warming trend of the 1990's.  But Bush does deserve credit for slyly robbing the environmental Chicken Littles of any opportunity to credit the Kyoto Protocol with the current global temperature decline. 

Truthfully, there are no current human initiatives that can be credited with any sort of global temperature offset.  That's fantastic news, because the last thing we need is a bunch of loony Gaia worshipers thinking that they have successfully appeased their Goddess.

That's not to say they won't keep trying however.  Two weeks ago, NASA's GISS team, lead by Al Gore's chief environmental high priest Dr. James Hanson, announced that October 2008 was the warmest month ever measured.  Their claim was immediately debunked after investigators discovered that much of their data from Russia and elsewhere were not real measurement data at all, but estimates derived from carrying over previous month's temperatures.

And in real scientific news, scientists working in Antarctica believe that they have detected special electron-positron particle pairs that can only emerge from weak interactions between massive particles of so-called "dark matter."  Dark matter is thought to comprise up to 25% of the known universe, but it has been virtually impossible to detect because it has zero interactivity with light.

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Here's your 'well duh!' blood-boiler of the day -- If you thought that selling bonds comprised of shares in risky mortgages was bad, then you should read this account of "tobacco bonds," municipal bonds sold by states to raise money in lieu of tobacco settlement cash; but with the current economic downturn, and the steadily shrinking supply of smokers, the tobacco companies can't pay out the money to cover the bond debts.  And if that's not bad enough, only one third of the tobacco settlement money was spent by states on health issues and tobacco control programs.  Arrrgh!

Stuff from my desktop - Nov. 18, 2008

Should we bail out the UAW ... er, GM, Ford, and Chrysler? -- John Hinderaker at Powerline says no, and notes that the $25 billion that GM wants is probably more than the market value of all Big Three auto makers combined.  He also provides a nice graph that succinctly illustrates the problem:

And writing for the Wall Street Journal, Michael Levine says that GM should not be bailed out; rather, they should file for Chapter 11 bankruptcy protection.  He writes, "The social and political costs would be very large, but if GM fails after getting $50 billion or $100 billion in bailout money, it'll be just as large and there will be less money to soften the blow and even more blame to go around."  Under Chapter 11, GM would be forced to renegotiate vendor contracts, dealer obligations, pension and health care benefits, property leasing and municipal bond agreements, and labor contracts. 

Foreign automakers like Toyota and Nissan who build cars in the US are not burdened by these obligations, many of them dating back 30, 40, 50, and even 60 years.  I agree with Mr. Levine.  Unless GM undergoes a major restructuring, there is no way it will ever be able to dig itself out from under these massive legacy expenditures.  Over the years, GM has promised more pieces of pie than it can now cut out of the pan.  Bankruptcy is probably the only way to force anyone to give up their piece of GM's pie.

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Well, knock me over with a feather, again -- "ACLU calls on governor to create privacy protections".  Ohio's governor, that is.  Seems that the roughshod treatment of "Joe The Plumber" Wurzelbacher even ruffled the feathers of the ACLU, known for its routine dismissal of civil rights cases that do not advance the radical liberal/progressive agenda.  But now even they are concerned.  Will wonders ever cease?

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"We seem to have crossed a cultural line into myth-making" -- writes Howard Kurtz, regarding the media's maniacal obsession with Barack Obama.  Unfortunately the honeymoon can't last forever.  "But what happens," Kurtz writes, "when adulation gives way to the messy, incremental process of governing?"

I think we are already seeing the beginning of a very cautious attempt by some of the more wizened members of the press to begin lowering the public's expectations of Obama, if perhaps only down to the upper levels of human achievement.  The LA Times' Dan Morain recently reviewed Obama's unimpressively thin legal resume and came away...well...less than impressed.  Naturally no one in the MSM was interested in this before the election, but now they are looking for anything with which to make a soft landing pad, in anticipation of The One's first major policy stumble. 

ADDED: Jonah Goldberg, NRO, 11/21/08 -

In an attempt to dial down expectations for his administration, President-elect Barack Obama’s supporters have dropped much of the “messiah” talk.  No more talk of him being The One (Oprah), or a Jedi Knight (George Lucas), or a “Lightworker” (the San Francisco Chronicle), or a “quantum leap in American consciousness” (Deepak Chopra). Instead we have more humble and circumspect conversation about the man. Now he’s merely Abraham Lincoln and FDR and Martin Luther King, combined.

Heh.  Exactly.

You should also check out John Ziegler's new website How Obama Got Elected.  Of course Ziegler doesn't "prove" that ignorance among the general electorate led to Obama's victory.  That's probably not true; people will often vote for a candidate they like or trust, regardless of the behavior of that candidate -- witness the re-election of William "Cold Cash" Jefferson in Louisiana and Jack "Col. Porky McABSCAM" Murtha in Pennsylvania.  But Ziegler does show, both through interviews and a poll carried out by the Zogby organization, that Obama voters generally knew very little negative information about Obama, compared to a tremendous amount of negative -- sometimes even fictional -- information about Sarah Palin.  This can be attributed to nothing short of full-blown news media bias.

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Can't take my eyes off of you ... -- It seems that the folks who put together the satirical OKC blog The Lost Ogle really do know their ogling; last week they posted a hilarious video of News 5 anchorman Paul Folger paying a curious amount of close attention to newsbabe Jessica Schambach:

By the way, The Lost Ogle is really named after Kent Ogle, Kelly Ogle, Kevin Ogle, and their father Jack Ogle, who together have infested OKC's broadcast television airwaves for fifty years.

Stuff from my desktop - Nov. 14, 2008

This headline says it all -- "Bailout Lacks Oversight Despite Billions Pledged"  As many bloggers including myself warned, we essentially gave Henry Paulson $700 billion with no real system for accountability:

In the six weeks since lawmakers approved the Treasury's massive bailout of financial firms, the government has poured money into the country's largest banks, recruited smaller banks into the program and repeatedly widened its scope to cover yet other types of businesses, from insurers to consumer lenders.

Along the way, the Bush administration has committed $290 billion of the $700 billion rescue package.

Yet for all this activity, no formal action has been taken to fill the independent oversight posts established by Congress when it approved the bailout to prevent corruption and government waste. Nor has the first monitoring report required by lawmakers been completed, though the initial deadline has passed.

Michelle Malkin notes:

The pulled-out-of-the-posterior “$700 billion” price tag has ballooned into the trillions. The “mortgage industry rescue” has expanded to banks, insurance companies, automakers, credit card companies, and possibly the entire national volume of consumer lending. Oh, and that vaunted “TARP” component, Paulson admitted this week, is nothing but a four-letter-word that rhymes with TRAP ... “Our assessment at this time is that this is not the most effective way to use TARP funds,” he sheepishly told the nation Wednesday. 

For what it's worth, Senators Tom Coburn, Richard Burr, and David Vitter (all Republicans) have sent a letter to the Treasury Department highlighting Paulson's naked bait and switch:

We are writing to express our deep concern over your announcement this morning that the Department of the Treasury will halt all plans to purchase trouble mortgage assets through the Troubled Asset Relief Program (TARP). We are concerned that the program has been fundamentally changed from its original intent and worry that continued changes may erode the structures of accountability put in to protect taxpayers.

... Although the legislation was passed on October 3, the program was never implemented and now has been officially abandoned in favor of alternative plans after little more than a month. Such a rapid reversal raises questions about the TARP’s original design as well as the propriety of future plans.

Congress never intended for the TARP to be a blank check that could be spent with unlimited discretion. To ensure proper boundaries are in place to protect the taxpayer, we hope and expect that congressional approval will be sought by the administration before further changes are made.

Apparently the Democrats have been too busy preparing for their Presidential coronation and subsequent power grabs to notice.

The Federal Reserve is also refusing to disclose the recipients of nearly $2 trillion in emergency loans, or to disclose the specific assets that they are accepting as collateral.  Lovely.

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Interesting -- "Not So Green - Voters Nix Most Environmental State Ballot Measures" -- but maybe ordinary folks understand the high cost of "alternative energy" a bit more than we realize.

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Well, knock me over with a feather -- "Teens who watch Sex In The City more likely to get pregnant"

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Knock me over with a feather pt. 2 -- "Obama likely to escape campaign audit"  It seems that the potenially massive donation fraud enabled by the Obama campaign will not be investigated by the FEC, simply because Obama took no public campaign funds.  On the other hand, John McCain will be forced to spend upwards on $10 million on manditory FEC audits because he accepted public campaign funds.  If you recall, Obama originally pledged to accept public money, but then reneged on his pledge.  One has to wonder if this is because he knew he could then accept unlimited donations without fear of an audit.  And of course our feckless, in-the-tank news media could care less.

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If you love numbers -- "The List: Which presidential polls were most accurate?"  Rasmussen and The Pew research center topped the list.  

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Maybe Sally Kern was on to something -- "Palm Springs Rally Turns Violent"  The post-Proposition 8 unhinged gay meltdown continues in California.  Witness angry gays attack a pro-Prop8 protester, wrestle her cross away, and stomp on it.  Then imagine the maniacal screaming fit national gay activists would have if a Christian protester ever ripped down a rainbow flag and stomped it into the ground:

Interestingly, Proposition 8 (which defined marriage specifically between a man and a woman) passed by a 52% - 48% margin, similar to the national Presidential election spread.  If liberals are willing to proclaim 52% as "America united" and a "mandate" for their party, what does that say about Proposition 8's 52% majority?

GayPatriot asks, "Where are the grownups?"

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Actually I prefer "Car Commisar" -- "What To Look for In A Federal 'Car Czar'":

If the proposed auto industry rescue is going to happen, and that should become clear next week as industry executives and union leaders testify before Congress, it makes sense for the government to name a "car czar" to watch over the Detroit Three as they spend $25 billion in taxpayer money.

Inescapable fact - the United Auto Workers is one of the nation's most powerful unions.  Big Labor spent in excess of $300 million during the 2008 election cycle, 90% of which went to Democrats.  It seems highly improbable to me that any Democrat-led "reform" of the auto industry will be able to address one of the biggest financial sinkholes plaguing the Big 3: the shocking compensation demands of UAW contracts.

As for me, I'm not holding my breath waiting for Detroit to produce Uncle Sam's version of the Trabant. Neither is blogger Orin Kerr.  Here is his concept of the new "US Government Model One:"

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A different world ... but then again, not so much -- "'Child-Witches' of Nigeria Seek Refuge"

Mary was found by a British charity worker and today lives at a refuge in Akwa Ibom province with 150 other children who have been branded witches, blamed for all their family's woes, and abandoned. Before being pushed out of their homes many were beaten or slashed with knives, thrown onto fires, or had acid poured over them as a punishment or in an attempt to make them "confess" to being possessed. In one horrific case, a young girl called Uma had a three-inch nail driven into her skull.

Yet Mary and the others at the shelter are the lucky ones for they, at least, are alive. Many of those branded "child-witches" are murdered - hacked to death with machetes, poisoned, drowned, or buried alive in an attempt to drive Satan out of their soul.

The devil's children are "identified" by powerful religious leaders at extremist churches where Christianity and traditional beliefs have combined to produce a deep-rooted belief in, and fear of, witchcraft. The priests spread the message that child-witches bring destruction, disease and death to their families. And they say that, once possessed, children can cast spells and contaminate others.

The religious leaders offer help to the families whose children are named as witches, but at a price. The churches run exorcism, or "deliverance", evenings where the pastors attempt to drive out the evil spirits. Only they have the power to cleanse the child of evil spirits, they say. The exorcism costs the families up to a year's income.(emphasis added)

Well, that explains it, doesn't it?  There is, I believe, a special place in Hell for those who would deceive the innocent and prey on their fears, using distorted religion and doing it all for money.  Then of course they can claim that God has "blessed them" for their good works.  Bastards.

Stuff from my Desktop - Oct. 22, 2008

I haven't put together a random news story post in a while, so here goes --

The current Battleground Polls show a statistical tie between Barack Obama and John McCain.  And the latest AP poll seems to confirm what Battleground is finding.  But it's the trend of the Battleground results that is important -- over the past two weeks, Obama has been losing momentum, and McCain has been steadily gaining.  Undecideds have remained relatively steady.

Yet John Zogby just released a poll showing a nearly 10 percentage point lead for Obama.  What gives?

DJ Drummond the "go-to" source for poll analysis, has repeatedly stated that polling internal numbers have been skewed heavily in favor of registered Democrat voters, based on the premise that Democrats are more excited about their candidate and therefore will go to the polls in greater numbers.  Drummond also notes that state-by-state polling results tell a different story than national polling results -- Barack Obama is in trouble in a lot of states that should be decidedly blue.  (As for Oklahoma, my home state, McCain has a roughly 2:1 lead over Obama.)

The conclusion is simply this -- it ain't over 'till it's over.  The race is currently too close to call.  Despite the outward confidence of Democrats, they are secretly very nervous.  Always remember this simple rule -- the only poll that matters is the one open on Nov. 4.

...

Connect the dots:

1)  The United States Military is the only -- ONLY -- area specifically mentioned by Barack Obama as a target for budget cuts.

2)  Joe Biden admits, "It will not be six months before the world tests Barack Obama like they did John Kennedy."

3)   Ralph Peters lists 15 possible tests, and concludes, "Think Bush weakened America?  Just wait."

...

This item didn't receive much mainstream press coverage, but when Iranian President Mahmoud Ahmadinejad was in New York last month addressing the United Nations General Assembly, a group of Quakers and Mennonites held a dinner and invited Ahmadinejad as their honored guest.  The dinner was hailed as a success, and according to the American Friends Service Committee, "The president was glad to meet. He was genuinely interested in further conversation with the religious community and engaging in a real discussion with the U.S. government."  A concurrent counter-protest, held outside the hotel that hosted the dinner, was organized by Women United, the Jewish Action Alliance, Stand With Us, Center for Security Policy, the Catholic League, the The Ethics & Religious Liberty Commission of the Southern Baptist Convention, and the Alliance of Iranian Women.  It is interesting to observe how Christians who espouse absolute pacifism, and those who support the doctrine of Holy War, choose to interact with leaders of nations hostile to the United States and Israel.

...

Those who consider "spreading the wealth around" to be a superior economic policy should note that a cholera outbreak in Africa's most oppressive Communist nation, Zimbabwe, has already claimed dozens of lives.  When Zimbabwe was Rhodesia, it was the bread basket of Africa.  But after years of violent, corrupt, and inept Communist rule at the hands if dictator Robert Mugabe, the nation has been economically destroyed.  Zimbabwe no longer has enough resources to provide even basic health care for its people.

Meanwhile, the same level of corruption and ineptitude that has crippled Zimbabwe has also severely damaged Venezuelan oil production.  Oil is Venezuela's primary source of income, and falling oil prices coupled with Hugo Chavez' clumsy mismanagement of Venezuela's oil production infrastructure could mean trouble ahead for this nation.  We could very well see a Venezuela-Cuba-Russia alliance form during the next 24 months.

ADDED: Venezuela has also severely neglected its electricity infrastructure, resulting in faulty power grids and numerous wide-scale blackouts.

...

Blood-boiler of the day: Ten Percent Of $700 Billion Bailout Could Go To Bonuses

...

Here is a comprehensive report on ACORN activities in Oklahoma.  I guess the Obama campaign's $800,000 never made it this far south.  Apparently ACORN abandoned its OKC office with rent left unpaid.  Sifting through the papers that ACORN left behind, a reporter found evidence of deliberate attempts by ACORN (supposedly a "non-partisan" organization) to use their organization efforts strictly for the benefit of Democrats.

...

Stanley Kurtz recently published a must-read piece at National Review Online about ACORN's direct involvement in the low-income sub-prime mortgage business.  Poor people didn't break the banks, but outfits like ACORN certainly helped because ACORN failed to understand simple mathematics -- within any income group looking to purchase homes within any price range (starter homes to McMansions) there will be a finite number of people who are a match for both the kind of home you are selling, and the cost of the loan.  ACORN simply kept pushing people into mortgage loans they couldn't afford, after the pool of qualified home buyers had essentially run dry. 

Steven Sailer published a similar article a few weeks earlier, citing the pursuit of diversity over common sense as a prime reason for bank failures.

And get this -- KFYI radio in Phoenix reported that up to five million illegal aliens currently hold mortgages.  That's just insane.

Orson Scott Card believes that if the chain of events leading to the current credit crisis clearly pointed to Republican malfeasance, the mainstream press would have immediately christened it "Fanniegate" and would still be running lead news stories about every Republican who was involved.  He asks, "Is getting people to vote for Barack Obama so important that you will throw away everything that journalism is supposed to stand for?"

But then again, who knows?  Maybe it's all God's doing.  It seems that a lot of charismatic/Word of Faith churches who preach the "prosperity gospel" foolishly interpreted easy credit as a blessing from God.  Yet another reason to stay as far away from the prosperity gospel peddlers as possible.

...

With all the worrying going on about politics, and the helplessness that each of us as individuals seems to feel when financial and economic circumstances are completely out of our hands, it is easy to succumb to acedia.  "At its Greek root, acedia means the absence of care, and in personal terms it means refusing to care, even that you can't care. It is a supreme form of indifference, a kind of spiritual morphine: you know the pain is there, but can't rouse yourself to give a damn."

For Christians, acedia represents a pattern of thinking that, along with pride and anger, has the potential to lead us into periods of deep despair.  Kathleen Norris writes,

Acedia in particular could shake the very foundations of monastic life: once a monk succumbed to the notion that his efforts at daily prayer and contemplation were futile, life loomed like a prison sentence, day after day of nothingness. In a similar way, acedia can make a once-treasured marriage or vocation seem oppressive and meaningless.

Western culture lost the word acedia because the monks' subtle psychology of the bad thoughts was eventually solidified into the Church's doctrine of the seven deadly sins. What the monks had recognized as temptations that all people are subject to became seen as specific acts or omissions, and as acedia was not easily characterized as either, it was subsumed into the sin of sloth, which came to signify physical laziness rather than a more serious existential indifference. (emphasis added)

Even though the world around us confounds us, we should never forget that there is always hope in Christ, and in the work necessary to build His Kingdom.  In the face of insurmountable adversity and turmoil, what can we do?  Perhaps it is as simple as helping the defeated among us wash away the dust of everyday life:

With her hair dyed an unnatural shade of red and a thin green shawl draped over her, Carmelite Sister Begona Arroya stands out among nuns in a convent overlooking St. Peter’s Square.

But when she is ministering in southern Spain to prostitutes from all over the world, she blends right in.

“I dress so I won’t intimidate the women I need to reach,” said Sister Begona, 41, with a smile.

... “It is so terrible. The girls get in the car, and when they come back, most look completely gone, like they don’t exist, they are destroyed by this,” she said. “We talk to them and pray with them. We serve them hot tea.”

We can also pray for our brothers and sisters in Christ around the world whose lives are threatened every day because they believe in the Gospel.  In Saudi Arabia, a young Christian girl was recently burned alive by her father in an honor killing, because she had published a profession of Christian faith on the Internet.  And this weekend, a young Christian missionary was gunned down by a Taliban remnant group in Kabul, Afghanistan.

And finally, we can pray for our nation and for ourselves as we vote.  We can pray that the election is honest, and we can ask for God's divine guidance to be bestowed upon the winner.  Above all, we can ask that we, the American people, continually seek His will and work to build His Kingdom.

Mark Foley / Tim Mahoney - who can tell the difference?

A big Nelson Muntz "Ha-Ha!" to the voters of Palm Beach Florida, who replaced sleazy Republican Mark Foley with sleazy Democrat Tim Mahoney.  Mahoney won Foley's House of Representatives seat after it was revealed that Foley had sent sexually suggestive text messages to teenage boys working in Washington, DC. 

On Monday, it was revealed that Mahoney had an affair with a staffer named Patricia Allen.  Mahoney promised Allen in a cushy $50,000 per year job with the agency that produces his campaign ads, and allegedly agreed to pay her $121,000 in order to avoid a lawsuit.

It was further revealed today that Mahoney -- who is married, of course -- might have been involved in yet another affair at the same time he was seeing Patricia Allen.  Ironically, Mahoney fashioned himself as a champion of family values and morality and promised to help restore integrity to the House of Representatives.  (By the way, Speaker Pelosi, how is that whole "most ethical Congress in history" thing working out?)

It seems that Democrat leaders will throw Mahoney under the bus (a very unusual thing for Democrats to do to a party member accused of a sex scandal) but only because they feel assured that they will retain a majority in the House.  Spealer Pelosi has called for a full ethics investigation (although the House is currently adjourned), and the FBI is reportedly involved.  As for Mahoney, he released a non-descript statement that said in part: “I have not violated my oath of office, nor have I violated any laws, and I consider this to be a private matter.  No marriage is perfect, but our private life is our private life, and I am sorry that these allegations have caused embarrassment and heartache.”

Naturally the talking heads on the major cable news networks are swarming all over this story:

NURENBERG: Five weeks before the election it seems unlikely that those Democrats will let the issue die.

MALVEAUX:  This is the last thing they anticipated five weeks before the midterm elections.

CHRIS CUOMO:  The implications could be very big for the election.

LIASSON:  I think the question now is how this affects the midterms.

EPSTEIN: You begin to get a very strong, wave and a sentiment out in the public to throw the bums out.

HARRIS:  A potentially massive, metastasizing scandal, just five weeks before Election Day.

Ha-ha again!  That was the press buzzing two years ago about Mark Foley.  The Mahoney case elicited virtually nothing yesterday.  Sure, it will get lots of local coverage and plenty of writeups (like this one) on blogs, but look for the network talking heads to give this story only scant, obligatory attention.

After all, they have an election to win for Barack Obama.

UPDATE - NewsBusters is reporting that in the two weeks following the breaking news about Mark Foley in 2006, the Big Three networks aired 152 stories.  In the three days following the breaking news about Tim Mahoney, there were ZERO broadcast news stories from the Big Three networks about the scandal. 

We Surrender! "Bailout" plan is now law

Well, now we know.  Nothing makes a Democrat smile like the intoxicating combination of pork and power.

The House of Representatives passed an amended version of the "bailout" bill on Friday -- a bill that is now over 450 pages in length (as opposed to three pages when it was first presented by the Treasury Secretary) and includes a staggering $100 billion+ in targeted special-interest tax breaks and pork barrel spending.

As I said before, this bill is our 9% confidence Congress at its worst.  It gives Treasury Secretary Henry Paulson, whose monumental misjudgments in part kept us from addressing the problem sooner, an unprecedented amount of unchecked power.  There are compelling arguments why it could fail spectacularly, just like Hoover's depression-proofing plans did in 1930.  And really -- if we are on the brink of disaster, how in God's name can we afford all this new government spending?  My feeling, obviously, is that we are not at the brink of disaster, and that the current crisis was manufactured -- after years of Democrat stalling and opposing any measure that would reign in Fannie Mae and Freddie Mac -- solely to justify the biggest government power grab in my lifetime.

And again following what I wrote in an earlier blog post, the bill still completely fails to address the underlying cause of the problem -- the ever-increasing number of loans that banks were forced to make to un-creditworthy borrowers.  But in an effort to sugar-coat that critical defect, the "bailout" bill increased the FDIC insurance limit on bank deposits from $100,000 to $250,000, and was further amended to include a mandate requiring health insurance coverage "parity" between psychotherapy and treatment of mental disorders, and physical therapy and treatment of physical disorders.  Neither of these things are bad (they are both good, actually) but they do not make up for this fundamental shortcoming.

Mickey Kaus made an interesting observation about the bill:

Actually, the thinking behind the push for "parity" and the now-questionable decades-long push to extend mortgages to "underserved" groups seems eerily parallel: 1) Stodgy/greedy old bankers say they can't afford to lend to minorities who don't meet traditional mortgage criteria. But we have a noble social goal to fulfill and we know they're wrong! ... 2) Stodgy/greedy old health plan administrators say they can't afford to cover hard-to-diagnose mental problems (e.g., anxiety) and substance abuse to the same extent that they cover easy-to-diagnose physical problems. But we have a noble social goal and ....

The article, written by Steve Malanga, to which Kaus links with respect to the "noble social goal" of loans for low income and minority borrowers, is so good that I'm going to excerpt it at length:

In the early 1990s I attended a conference designed to teach journalists the tools of an emerging field known as computer-assisted investigative reporting. One of the hottest sessions of the conference explained how journalists could replicate stories that other papers had done locally using computer tools, including one especially popular project to determine if banks in your community were discriminating against minority borrowers in making mortgages. One newspaper, the Atlanta Journal-Constitution, had already won a Pulitzer Prize for its computer-assisted series on the subject, and others, including the Washington Post and the Detroit Free Press, had also weighed in with their own analysis based on government loan data. Everyone sounded keen to learn if their local banks were guilty, too.

Although academic researchers leveled substantial criticisms against these newspaper efforts (namely, that they relied on incomplete data and did not take into account lower savings rates, higher debt levels, and higher loan defaults rates for many minority borrowers), bank lending to minority borrowers still became an enormous issue—mostly because newspaper reporters and editors in this pre-talk radio, pre-blogging era were determined to make it so. Editorialists called for the government to force banks to end the alleged discrimination, and they castigated federal banking regulators who said they saw no proof of wrongdoing in the data.

... One economist for the Federal Deposit Insurance Corp. who looked more deeply into the data, for instance, found that the difference in denial rates on loans for whites and minorities could be accounted for by such factors as higher rates of delinquencies on prior loans for minorities, or the inability of lenders to verify information provided to them by some minority applicants.

Ignoring the import of such data, federal officials went on a campaign to encourage banks to lower their lending standards in order to make more minority loans. One result of this campaign is a remarkable document produced by the Federal Reserve Bank of Boston in 1998 titled “Closing the Gap: A Guide to Equal Opportunity Lending”. 

Quoting from a study which declared that “underwriting guidelines…may be unintentionally racially biased,” the Boston Fed then called for what amounted to undermining many of the lending criteria that banks had used for decades. It told banks they should consider junking the industry’s traditional debt-to-income ratio, which lenders used to determine whether an applicant’s income was sufficient to cover housing costs plus loan payments. It instructed banks that an applicant’s “lack of credit history should not be seen as a negative factor” in obtaining a mortgage, even though a mortgage is the biggest financial obligation most individuals will undertake in life. In cases where applicants had bad credit (as opposed to no credit), the Boston Fed told banks to “consider extenuating circumstances” that might still make the borrower creditworthy. When applicants didn’t have enough savings to make a down payment, the Boston Fed urged banks to allow loans from nonprofits or government assistance agencies to count toward a down payment, even though banks had traditionally disallowed such sources because applicants who have little of their own savings invested in a home are more likely to walk away from a loan when they have trouble paying. (emphasis added)

Of course, the new federal standards couldn’t just apply to minorities. If they could pay back loans under these terms, then so could the majority of loan applicants. Quickly, in other words, these became the new standards in the industry. [Perhaps this is where one could make the case for corporate greed among lending institutions and bond traders. -ed] In 1999, the New York Times reported that Fannie Mae and Freddie Mac were easing credit requirements for mortgages it purchased from lenders, and as the housing market boomed, banks embraced these new standards with a vengeance. Between 2004 and 2007, Fannie Mae and Freddie Mac became the biggest purchasers of subprime mortgages from all kinds of applicants, white and minority, and most of these loans were based on the lending standards promoted by the government.

Meanwhile, those who raced to make these mortgages were lionized. Harvard University’s Joint Center for Housing Studies even invited Angelo Mozilo, CEO of the lender which made more loans purchased by Fannie and Freddie than anyone else, Countrywide Financial, to give its prestigious 2003 Dunlop Lecture on the subject of "The American Dream of Homeownership: From Cliché to Mission.” A brief, innocuous description of the event still exists online here.

Of course Mozilo is now the disgraced former CEO of Countrywide, who resigned after it was discovered that he not only massaged his company's books in order to pay himself and his cronies undeserved bonuses, but he also gave sweetheart mortgage deals to influential members of Congress. 

The hero worship of Mozilo reminded me of the way that Franklin Raines, former OMB director under Bill Clinton and former CEO of Fannie Mae, was praised for his "outstanding leadership" by Rep. Maxine Waters in 2004.  The criterion for her lavish compliment?  "The GSE's have exceeded their housing goals."  Apparently it didn't matter one whit to Rep. Waters that Raines' accounting shenanigans caused Fannie Mae to eat nearly $10 billion, or that he received at least $50 million in undeserved bonuses -- none of which has he ever offered to pay back, or give to his precious struggling low-income mortgage-holders.

Unfortunately, such irresponsibility is often part of the whirlwind of populism that accompanies broad-based "we're helping the little guy and sticking it to the system and everyone knows we're doing the right thing" policy efforts.  And in the case of loans for minorities and low-income borrowers, a crusade against "racial discrimination" became the primary motivator.  And no one -- NO ONE -- dares to challenge a crusade against "racial discrimination" because any such challenge would be labeled a de facto case of racism.  Because if you want a career as a civic leader or politician, or if you want your business to be successful or have a non-adversarial relationship with the government, then you will avoid being smeared as a racist at all costs, even if it means the abdication of common sense.

So far, only one Democrat has admitted his party's failure to objectively study the problems at Fannie Mae and Freddie Mac.  And characteristically, the Democrat leadership has announced, in completely unambiguous terms, that they bear absolutely no responsibility for the current banking mess.  Their willingness to lie about this issue is surpassed perhaps only by the willingness of Republicans to say anything or sign anything in order to avoid being labeled as "racists." 

And guess who's left paying the bill?  That's right -- us.  The American taxpayer.  We will pay for it through outright taxation.  We will pay for it through higher mortgage fees, higher interest rates, and less available credit.  And really -- is anyone expecting this $700 billion to actually "fix" the problem?  Of course not.  This bill only sets a precedent for request after request after request for bailouts to come.  Joe Biden is already talking about giving courts the power to reset the principal amount for mortgage loans.  What kind of financial insanity will be next?

Elizabeth Scalia, "The Anchoress," is by far my favorite Christian blogger.  Over the past few weeks, she has been praying and fasting.  Really doing it.  Really.  She had this to say a few days ago:

My prayer is not for victory. It is for the very best outcome for the country, and for God’s will to be done. Our ways are not God’s way, nor our minds God’s mind. To us, the “best” outcome might seem obvious, but really, when you think about it, when does God ever do the “obvious” thing?

... I’m thinking we’re in the middle of a mystery, that this whole, odd, unpredictable and too-long election season has been run along one of those threads connecting things seen and unseen, and we are so disoriented today that we do not really know which outcome is the outcome pleasing to God, and meant - by Him - to draw us into Himself.

The Holy Spirit, of course, uses whatever He chooses, to bring things about. Who knows if we are meant to be shaken, soundly, in order to be roused from our complacency and the status quo?

The sense I have is that the status quo won’t do any longer. That we are stagnant, too deeply comfortable in too much of the muck and mud of materialism, and we’ve lost sight of what and who we are meant to cling to.

So, let us not worry. Let us not wring our hands. For the Christian, anyway, I believe we are in a moment where the rubber meets the road. How do you respond to that? With trust that no matter what things seem like, that “all things work for good and to the Glory of God” or with wringing hands, depression and doubt?

If you are doubting…if you are thinking that only electoral victory - as defined by the world - will be a validation of either the existence of God, or His Intent, then you need to hunker down into scripture and get out of your own head. Do you believe that Christ is the Son of God, or do you not? If you do, do you really think that this election is all there is, and that a loss here is somehow static, and works to nothing in God’s purpose?

To everything there is a season, a time for every purpose under the heaven.

You either believe that, or you don’t. 

“Sufficient unto the day is the evil thereof.”

You either believe it, or you don’t.

But if you’re calling yourself a Christian, and you’re not believing it, then question what you say you believe.

I'm going to close this post by saying that over the last few months, God has been steadily dealing with me over the subjects of materialism and money.  Without going into a lot of details, my immediate future contains a disturbing amount of uncertainty, and like all of us, my first reaction is to worry obsessively over how all the bills are going to get paid.  I don't solicit prayers for myself very often on this blog (perhaps I should do it more often!) but the events of the past week have made it abundantly clear to me that my previous faith in financial systems and markets and government was grievously misplaced.  Please don't misunderstand -- I'm not giving up on hard work or sound investing, or throwing everything I have to the wind and hoping for some far-out miracle.  But now I realize how much I should have been trusting God rather than relying on my own skill and luck.  Please pray for a spiritual transformation that gives me the strength to place everything in God's hands first.

Bailout Blowup

Much was said a short while ago about the disheartening fact that only 9% of Americans expressed confidence in our Congress.  Yesterday's bailout vote showed why even 9% was undeserved.

First, the bill.  Michelle Malkin called it a shit sandwich.  (Well, okay, she was polite and called it a "crap sandwich."  But I'm not going to mince words.)  It was authored by Democrats, with Republicans deliberately excluded from authorship.  Nice.  Let's here it for bipartisanship, guys. 

The the primary purpose of the bill was to apportion $700 billion in federal money (that's just a starting point, by the way -- when have you ever seen a government program cost less than its projection?) that was to be used to buy "troubled assets" (i.e. bad debts) from banks, thus relieving the banks of the debt liabilities while providing them with operating cash.  The bill would have also mandated the creation of a federal insurance program (like the FDIC) to insure institutions holding large amounts of troubled assets; such an insurance program would act as a mechanism to ensure that bad debts do not sink more financial institutions.  But when Republicans finally got their hands on the bill, they found it stuffed full of pork (a bailout of union pension funds) and perks (a plan to skim revenue and give the proceeds to ACORN Housing and other race-based agitators who are tied exclusively to Democrats) and sneaky add-ons that would never otherwise pass (a ban on oil shale production). 

After these things were brought to light, Republicans managed to use public outcry as leverage and get many of those things removed, but the full text of the bill still has not been made public.  (Correction:  the bill was not made public until Sunday afternoon, barely enough time for anyone to discuss it before the Monday morning vote.)  After analyzing the bill, the Republican Study Committee issued a summary of the bill that included these concerns:

• Fails to adequately penalize the debtholders and shareholders (including many of the executives themselves), who should bear the risk of any losses, and indirectly infuses capital directly onto the books of these financial institutions.


• Alters fundamentally the nation’s free-market system in that it broadly socializes firm’s money-losing mortgage assets and places the U.S. on a slippery slope whereby profits may also be nationalized.


• Cedes massive authority to Treasury. Given the fact that the Presidential election is a mere six weeks away and a new Secretary will take office in January 2009, lawmakers have absolutely no idea what individual will ultimately be exercising this vast new authority over the long-term.


• Sets up Treasury to pay inflated prices for assets. Since there is nothing in the proposal that forces the financial institutions to sell their assets at a discount rate or event at all, many of these owners may simply wait on the government to increase their bid, leading to more inflated prices than the market would currently bear.


• Creates the potential for an enormous bureaucracy that will be needed to administer the purchase and insurance programs.


• Increases the federal deficit and national debt. The new mandatory spending, will cause a massive increase in the national debt and an immediate (although smaller) increase in the federal deficit. These annual deficits are funded by selling government bonds purchased by a host of large investors, including foreign countries. However, there is a limit to the amount of bonds that a government can float without adverse financial effects.


• Aids financial institutions that may not pose a systemic risk. Some companies, such as AIG, may truly pose a systemic risk to the entire market. However, there is no requirement under the proposal that a company truly be “too big to fail.” Instead, any financial institutions with mortgage-related assets would be eligible.

And about that "massive authority" given to the Treasury -- Secretary of the Treasury Henry Paulson asked for the power to reapportion the money any way he chooses, with congressional and executive oversight strictly forbidden.  It's a scary, naked power grab by the Department of the Treasury, and something that we don't need. 

In addition, there is also the possibility that the government (specifically Treasury Secretary Henry Paulson, an investment banker by trade) could be using the current credit crisis to leverage the largest trade windfall in history. Here's how -- the Treasury buys $700 billion in loan notes, but these notes are actually bundles of bad and good mortgage loans.  Assuming that mortgage failures have peaked, the Treasury may actually be buying mostly good notes at firesale prices.  Then as the Treasury slowly increases the money supply to spur economic growth (something that no other "investor" has the power to do) these notes may actually net a staggering profit of over $1 trillion dollars for the US Treasury. 

Finally, the bill contained no indications that Congress actually understood what caused the current banking crisis, or was prepared to make some sacrifices in order to help the nation get through it. 

The bill utterly failed to address the federally-mandated race and income-based lending quotas that forced banks to get into the subprime/unsecured lending business in the first place.  Make no mistake about this -- banks were forced to loan money to high risk borrowers who were members of ethnic minorities, and they were forbidden to use normal risk-assessment tests such as real income and credit scores, on the basis that such tests were "racist."  Banks developed sub-prime, 100% financing programs because many low-income borrowers could not afford regular mortgage payments or did not have enough savings for a downpayment -- but banks had to lend money to these borrowers or else face audits, government interference in mergers and other normal business operations, and public castigation and harassment from minority advocacy groups.

Fannie Mae and Freddie Mac sweetened the pot by offering to buy those risky loans and selling them as derivative bonds, backing them with the full faith and credit of the US Government.  The whole thing soon spiraled out of control as investors bought up these bonds, expecting them to be fail-safe long term investments.  The greed of banks (who were making good money from these bonds, and stupidly expected a windfall when the higher interest rates of subprime mortgages eventually kicked in) and bond traders is certainly to blame for part of the problem, but the record clearly shows that Fannie Mae, Freddic Mac, ACORN Housing, and numerous other organizations funneled millions of dollars in lobbying money and soft-money political contributions to Democrats so they would kill any legislation aimed at regulating or expanding oversight of Fannie and Freddie.  And to no one's surprise -- since it was written by Democrats -- the bill did not include any kind of lobbying reform or financial accountability for the CEO's and other corporate officers of Fannie and Freddie.

And how about some good faith offerings that showed Congress was really serious about helping out the taxpayer?  Perhaps some cuts in government spending, or a 12 month moratorium on earmarks?  Nope.  Nowhere to be found in the bill.

So was the defeat of the bill a good thing?  Yes and no.  Remember, two weeks ago Harry Reid said "No one knows what to do."  But in just a few days, House Democrats were able to miraculously put this bill together.  Haste usually means poorly-conceived ideas and ill-informed decisions.  There is an old maxim: "Unusual cases make bad law."  Steve Schippert notes, "Is it not troublesome that the "Bush Tax Cuts" have a defined shelf life and the largest government program in our history does not?" 

On the other hand, many people are still worried about an impending credit crunch that could force banks to end or severely restrict commercial lines of credit -- the money that businesses (generally large ones, or those that have irregular or seasonal cash flow) regularly borrow in order to keep operating.  The funding in this bill would have kept banks solvent and forestalled a bigger credit crunch.  No one was expecting a miracle cure; the best we could have hoped for was a crash landing instead of terminal velocity impact.

Now on to the Democrats, and their party's feckless leadership.

A mere party line vote would have ensured the bill's passage.  The House did not need a 2/3 supermajority, because the President promised to sign the bill as soon as it landed on his desk.  Yet, 95 Democrats voted "NO" on the bill.  What does this say about Nancy Pelosi's leadership?  Just before the vote, Pelosi (who declared last week that Democrats bore absolutely no responsibility for the current credit crunch) delivered a shrill kick in the balls to Republican House members, blaming them and the Bush White House for everything currently wrong with our financial system.  Her statement was one of the most ugly, deceitful partisan attacks I have ever heard.  Here is an excerpt:

$700 billion. A staggering number, but only a part of the cost of the failed Bush economic policies to our country. Policies that were built on budget recklessness when Pres. Bush took office, he inherited Pres. Clinton’s surpluses - four years in a row budget surpluses on a trajectory of $5.6 trillion in surplus. And with his reckless economic policies, within two years, he had turned it around. And now 8 years later, the foundation of that fiscal irresponsibility, combined with an “anything goes” economic policy, has taken us to where we are today.

Critics claim that Republicans who switched their vote after Pelosi's vitriolic rant were spineless.  But I ask, if someone keeps kicking you in the balls, how many times are you going to get back up and be kicked again?  The truth is that the Republican vote did not matter one bit.  The entire Republican delegation could have voted "NO" and the bill would have still passed.  That's what being the minority party means. 

Democrats, you can't have it both ways.  You can't blame the Republican minority for derailing this bill, while claiming that the Democrat minority was essentially powerless in 2003 and 2005, when they defeated two major Republican GSE reform bills.

Did Nancy Pelosi deliberately sink this bill, on the assumption that its defeat will hurt John McCain?  Considering the fact that this bill has been nothing but an exercise in divisive partisan politics and finger pointing, that accusation comes as no surprise.  Way to go Nancy.  You've certainly earned that single-digit confidence rating.

...

Fabius Maximus has a good post on the bill: "A Quick Guide To The Emergency Economic Stabilization Act of 2008."  And you should read his archives, which are linked at the bottom of his post.  He claims to not be an economist or a banker, yet his grasp of the problem is amazing, and his writing is easy to understand.

Fox News put together a good 2-part report explaining how Fannie Mae and Freddie Mac enabled banks to comply with federal mandates and make risky loans to unqualified minority borrowers:

And here is another video featuring excerpts from a 2004 House hearing on Fannie Mae and Freddie Mac's violation of regulatory rules.  This is when the Fannie Mae accounting scandal was just beginning to unravel.  Watch Congressional Democrats defend Fannie Mae and attack the regulators!  Rush Limbaugh has a transcript and commentary.

Are the poor to blame for the current credit crisis?

In the wake of last week's major lending market collapse, many conservatives have drawn a bead on low income housing as the root of the problem.  While there are some truths to their claims, I believe it is unfair to lay the blame completely at the feet of affordable housing advocates and their political allies.

To begin with, it is probably good to explain why we needed affordable housing legislation in the first place.

Seventy five to eighty years ago, inner-city neighborhoods were largely populated by European immigrants, who toiled at backbreaking blue collar jobs, and accumulated only minimal amounts of wealth.  Many of these older residents lived as tenants all their lives, never owning a home or a stake in the apartments where they lived.  The children of these residents, who weathered the Great Depression in these neighborhoods, came home from World War II and attended college on the GI Bill.  Many of them became professionals, joined the expanding middle class, and moved to the suburbs in the 1950's and 1960's.  When their parents retired, they moved out with them.  A few of the original residents remained, but of those, most stayed because they could not afford to move.

After WWII, a new influx of blue collar tenants moved into these neighborhoods, the majority of which were "non-white" -- blacks from the South, and immigrants from the Caribbean, Mexico, and South America.  These residents also rented, and owned little accumulated wealth.  Almost without exception, none of these residents could afford to purchase apartment buildings or storefront businesses within these neighborhoods.  A shadowy amalgamation of banks and other investors ended up owning these properties.  In some cases, rent controls meant that the property owners could not earn enough money in rental income to afford regular maintenance of their properties.  In others, the owners simply refused to spend the money.

Then during the 1960's, the urban renewal craze hit America's big cities.  Municipalities discovered that old residential and commercial areas could be razed, and in their place parks, civic centers, sports stadiums (and ancillary businesses like parking garages, hotels, and restaurants) could be erected, providing millions of dollars in badly-needed revenues.  This encouraged cities to deliberately neglect older neighborhoods, since it was much easier (and vastly cheaper) to acquire blighted neighborhoods through imminent domain powers than to have to purchase them on the open market.

As blue collar jobs began to move out of the inner cities, crime, out-of-wedlock pregnancies, drugs, alcoholism, and vandalism began to take their toll on inner city neighborhoods.  Run-down properties became decrepit.  When conditions deteriorated further, buildings were abandoned.  In areas where urban renewal was unlikely to happen, property owners attempted to recover what value they could from their properties through self-inflicted vandalism and arson.  As a result, insurers refused to underwrite those properties.  Banks refused to loan any money for the purchase or renovation of properties in those neighborhoods.  The outlook for the remaining residents seemed hopeless.

However, in the 1970's, pioneering community organizing efforts began to change that.  Residents rallied around neighborhood landmarks and began demanding that cities invest money in their neighborhoods in proportion to what wealthier areas received.  And they began pressuring banks and savings and loans to begin making small loans available to neighborhood residents.

A major community organizing milestone was the 1977 Community Reinvestment Act, signed into law by Jimmy Carter, which made it illegal for banks to "redline" blighted neighborhoods.  As a result of the CRA, major improvements began to be made in many poor urban neighborhoods.  This was a good thing.  It brought a sense of accomplishment to community residents, and rekindled a spark of hope among the millions who were prisoners in America's inner cities.

Unfortunately, after a decade and a half, common sense financial planning in urban neighborhoods began to be supplanted by the notion that "more of a good thing is always a better thing."

Perhaps in an effort to contrast themselves from the mythical 1980's "decade of greed" allegedly masterminded by the Republican party and evil Wall Street financiers, the Clinton Administration began a steady push to expand housing loans in low-income areas.  Investors Business Daily explains,

Lenders who refused would find themselves castigated publicly as racists. As noted this week in an IBD editorial, no fewer than four federal bank regulators scrutinized financial firms' books to make sure they were in compliance.

Failure to comply meant your bank might not be allowed to expand lending, add new branches or merge with other companies. Banks were given a so-called "CRA rating" that graded how diverse their lending portfolio was.

It was economic hardball.

"We have to use every means at our disposal to end discrimination and to end it as quickly as possible," Clinton's comptroller of the currency, Eugene Ludwig, told the Senate Banking Committee in 1993.

And they meant it.

In the name of diversity, banks began making huge numbers of loans that they previously would not have. They opened branches in poor areas to lift their CRA ratings.

Meanwhile, Congress gave Fannie and Freddie the go-ahead to finance it all by buying loans from banks, then repackaging and securitizing them for resale on the open market.

That's how the contagion began.

With those changes, the subprime market took off. From a mere $35 billion in loans in 1994, it soared to $1 trillion by 2008.  (emphasis added)

During the late 1990's, financial accountability at large mortgage lending houses largely evaporated via two extremely risky policies. 

First, loans to low-income borrowers were financed a sub-prime rates.  Normally, interest rates are calculated based on the prime rate, which is determined by the Federal Reserve, plus reasonable adjustments that cover banking costs and potential risks associated with the borrower.  Having a lower-than-average income usually translates into a higher potential risk, and therefore a higher interest rate.  This practice has obviously been abused (credit cards companies come to mind immediately) but in an effort to make loans more affordable to low income borrowers, banks were encouraged to loan money at rates below the prime rate.  This meant that banks were not collecting enough money in interest payments to offset the cost of defaulted loans.

Second, banks were allowed to make unsecured loans; in other words, banks were allowed to increase the value of their loans beyond the security value of their deposits, which is a very dangerous thing to do.  The mechanism that allowed them to do this was a clever scheme that allowed Fannie Mae to bundle unsecured mortgage loans and other financial instruments from banks and other lending institutions together, and sell them as givernment-vetted long-term securities (bonds, essentially) in the secondary market -- "Pooled FNMA Certificates."  Curiously, the first firm granted this privilege was Bear, Stearns, & Co.

Although I cannot find sufficient evidence to back up this theory at the time of this writing, it seems reasonable to me to assume that much of the financing for the so-called Tech Bubble of the late 90's could have been raised, and then absorbed as losses, through the mechanism of secondary market bundled mortgage securities -- if bonds or other instruments used to raise cash for the tech market financing were bundled with the unsecured mortgages.  As long as the value of the mortgages remained high, losses from the Tech Bubble could have been absorbed with relative safety by major financial institutions and insurers.   

It also seems reasonable to assume that the tech bust of 2000 - 2001 would have driven more investors (who were disillusioned with the stock markets, specifically the tech sector) toward mortgage securities, which then would have driven the value of these securities even higher due to increased demand.  In addition, the Federal Reserve has continually printed more and more money and made it available at lower and lower interest rates, in an effort to keep the economy growing.

All of this worked beautifully as long as the value of real estate continued to climb.  Greater demand for homes and a ready supply of mortgage cash meant that home prices soared year after year.  And as the book value for real properties steadily increased, the resulting increases in equity value translated into more and more money that could be borrowed against the current (and future) value of the property.

During the late 90's and early 2000's, bankers, politicians, and investors swore by the old maxim that "no bad news is good news."  This philosophy was responsible for the major accounting scandals of 2001 - 2002, which revealed that many business executives were more interested in perpetually rising earnings and stock valuations than they were in using standard accounting principles or actually making money.  It should come as no surprise that Fannie Mae itself was involved in a multi-billion-dollar accounting shell game that came unraveled in 2005.

Warning signs were abundant, yet criticism dating back as far as 1997 was generally ignored.  In 2003, the Bush Administration attempted to impose stricter oversight over Fannie Mae and Freddie Mac, specifically through the creation of a special department within the US Treasury to oversee those institutions.  Democrats balked at the idea and eventually defeated it, claiming that Fannie and Freddie were sound financially, and that any attempt to increase regulation would result in a decrease in available affordable housing ... and no one wanted to be accused of racism.  Republicans proposed another mortgage lending regulation program in 2005.  This program also failed after House Democrats drastically altered the Senate version of the bill, and it died in committee.

The whole thing came crashing down this year, with the softening and eventual meltdown of the overinflated California and east coast real estate markets, the near-bankruptcies of Merrill Lynch, Bear, Stearns, & Co., and CitiGroup, the bankruptcy of Lehman Brothers, the collapse of Fannie Mae and Freddie Mac, and the meltdown of insurance giant AIG (which had heavily invested its cash reserves in Fannie and Freddie).  Now the Federal Reserve and US Treasury Department are negotiating with Congress to approve a plan for the Federal Government to underwrite a minimum of $700 billion in bad debts.

So where does the blame lie?  Certainly not with the original Community Investment Act, or with the funds that the act originally managed to channel into blighted neighborhoods across the nation.

The correct answer, I think, is related to good old American greed, and virtually no one is completely exempt:

• The greed of homeowners who used their homes as ATM's, because they believed that the value of their homes would never decrease, and that they were free to spend as much borrowed money as they wanted, without ever having to worry about paying it back
     
  
• The greed of banks, who continued to loan unsecured money simply because bundled loan securities were selling like hotcakes, and the influx of cash from those sales was intoxicating
     
  
• The greed of investment groups, and their political allies, who earned billions off the trading of those mortgage loan securities
     
  
• The greed of investors, who bought billions and billions of dollars worth of those mortgage securities, because those investments were promised to be fail-safe
     
  
• The greed of mortgage lenders and their agents, who took home billions of dollars in fees, commissions, and bonuses, based on the sale of risky sub-prime mortgages, interest-only loans, and reverse mortgages
     
  
• The greed and ignorance of first-time home buyers who should never have qualified for a mortgage in the first place, who believed that they were entitled to get something for nothing, and felt no need to honor their financial obligations
     
  
• The greed of housing advocacy groups, who had no problem playing the race card if it meant generating a continuous supply of low-income borrowers for mortgage lenders, and therefore millions upon millions of dollars in fees and grants
     
  
• The greed of politicians who sold out to Fannie Mae, Freddie Mac, and affordable housing advocacy groups through lobbying money and campaign contributions, playing the race card and playing partisan politics as long as it kept those funds coming through the door

The Bible famously states that the love of money is the root of all evil.  I've never been against earning an honest buck, but perhaps it would do us all a lot of good to consider that sacred advice the next time we see a financial scheme that seems too good to be true.

...

The Anchoress has a thought-provoking explanation of much of this as related by Mark Levin on his radio program Friday.  Levin is audibly upset and passionate as he explains his take on the issue, and I think he comes down a little too hard on the affordable housing market.  Otherwise, it's a fascinating listen.

Also, Britain's Financial Times places a substantial portion of the responsibility for our current financial mess on the shoulders of Alan Greenspan.  Are they correct?

ADDED:  Since I checked her blog this morning, The Anchoress has yet another fabulous post about the faith aspect of all this.  She bemoans the fact that none of our current leadership seems to have the humility to ask God for wisdom and an understanding mind, like Solomon.  She explains:

And the prayer should not be, “O, Lord, fix this economy so that we do not suffer,” or “O Lord, fix the economy so that our guy wins!”  It should be something like:

“Have mercy on us in our confusion and weakness. Give unto us and our nation, and our leaders, Lord, an understanding heart, that we might trust your guidance and do your will, that, should it please you, we may recognize the firm path of rescue, one that treads upon honest ground and leads us to a place of secure foundation. You are our Rock, O Lord. Help us to lean upon you in these troubled times, to turn toward your light and truth, that we may safely steer this dangerous and murky road. Help us to mindful of those in particular need, the elderly, the unwell, that they do not escape our vision, but call us to proceed with extra care, and a determined dependence upon your light. We ask this through our Lord, Jesus Christ, your Son, who lives and reigns with you and the Holy Spirit, One God, forever.”

As I said, “something like that.”  Solomon’s prayer seems pretty good to me, all by itself.