Mike's Noise

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. 

ACORN, "Tony Romo," and other toughts about the voter registration process

If you follow the conservative blogosphere, you are no doubt aware of some of these curious stories:

In Ohio, during the first week in October, residents could register to vote and cast a ballot at the same time in an effort dubbed "Golden Week."  Needless to say, Democrats and their minions at ACORN pushed very hard to enfranchise thousands of homeless and severely low income Ohioans, mostly Blacks and Hispanics.  Although the folks involved in this effort seemed sincere, some of the results, needless to say, were quite comical.

However, all was not well in Ohio at the conclusion of "Golden Week":

Cuyahoga County Election Board members grilled representatives of a community group Tuesday about their links to suspicious voter registration cards.

In one case, a Cleveland resident was registered to vote three times in a single day, listing two different addresses.   

The man's registration was submitted to the Board of Elections by ACORN.   

... Board Member Robert Frost said the group failed to follow guidelines in its own manual to turn over suspected voter fraud to law enforcement to investigate.

Election officials subpoenaed three voters to appear before the Board next week to explain their multiple registrations. 

The list includes a Cuyahoga County resident whose name appears on 22 registration cards submitted in six months. 

Here's some of what the Cuyahoga BOE is discovering:

Barkley estimated he'd registered to vote "10 to 15" times after canvassers for ACORN, whose political wing has endorsed Barack Obama, relentlessly pursued him and others.

Claims such as his have sparked election officials to probe ACORN.

"I kept getting approached by folks who asked me to register," Barkley said. "They'd ask me if I was registered. I'd say yes, and they'd ask me to do it [register] again.

"Some of them were getting paid to collect names. That was their sob story, and I bought it," he said.

Barkley is one of at least three people who have been subpoenaed by the Cuyahoga County Board of Elections as part of a wider inquiry into possible voter fraud by ACORN. The group seeks to register low-income voters, who skew overwhelmingly Democratic.

And not surprisingly, investigators are turning up similar occurrences in Las Vegas:

State authorities on Tuesday raided an organization that registers low-income people to vote, alleging that its canvassers falsified forms with bogus names, fake addresses or famous personalities.

The secretary of state's office launched an investigation after noticing that names did not match addresses and that most members of the Dallas Cowboys appeared to be registering in Nevada to vote in November's general election.

"Some of these (forms) were facially fraudulent; we basically had the starting lineup for the Dallas Cowboys," Secretary of State Ross Miller said. "Tony Romo is not registered to vote in Nevada. Anyone trying to pose as Terrell Owens won't be able to cast a ballot."

Agents with the secretary of state and state attorney general offices served a search warrant on the headquarters of the Association of Community Organizations for Reform Now, or ACORN, at 953 E. Sahara Ave. shortly after 9 a.m. They seized voter registration forms and computer databases to determine how many fake forms were submitted and identify employees who were responsible.

They also sought information regarding current and past employees and managers.

"We don't know how many (falsified forms) are here; there may be two, or there may be thousands," said Bob Walsh, spokesman for the secretary of state's office.

Registration fraud typically stems from workers striving to meet their daily quota of submitted voter forms, Miller said.

Most organizations require their workers to sign up 20 voters a day. Fraudulent forms start filtering in when workers struggle to meet their quota and either fill in bogus names or accept documents with names that are clearly falsified, Miller said.

Likewise in New Mexico and in Missouri:

Officials in Missouri, a hard-fought jewel in the presidential race, are sifting through possibly hundreds of questionable or duplicate voter-registration forms submitted by an advocacy group that has been accused of election fraud in other states.

Charlene Davis, co-director of the election board in Jackson County, where Kansas City is, said the fraudulent registration forms came from the Association of Community Organizations for Reform Now, or ACORN. She said they were bogging down work Wednesday, the final day Missourians could register to vote.

"I don't even know the entire scope of it because registrations are coming in so heavy," Davis said. "We have identified about 100 duplicates, and probably 280 addresses that don't exist, people who have driver's license numbers that won't verify or Social Security numbers that won't verify. Some have no address at all."

And there's more in Wisconsin, Connecticut, and Indiana; apparently Indianapolis has 105% of its eligible population now registered to vote.  Is ACORN being targeted unfairly?  Not if you consider that ACORN was involved in virtually every major voter registration fraud investigation during the 2006 and 2004 elections, including investigations in Ohio, Missouri, and Washington State -- a case described by state officials as "the worst case of voter-registration fraud in state history."

How does ACORN respond to these allegations?  By playing the "Republicans hate the poor" card, of course:

[Jess Ordower, Midwest director of ACORN] said Wednesday that ACORN registered about 53,500 people in Missouri this year. He believes his group is being targeted because some politicians don't want that many low-income people having a voice.

"It's par for the course," he said. "When you're doing more registrations than anyone else in the country, some don't want low-income people being empowered to vote. There are pretty targeted attacks on us, but we're proud to be out there doing the patriotic thing getting people registered to vote."

So, what do we make of all of this? 

Although ACORN's goal is noble, their methods, quite frankly, stink.  Paying workers based on how many signatures they have at the end of the day is irresponsible and an invitation to fraud.  Can't ACORN find workers and volunteers (say, from local churches or high schools or colleges) who would be willing to sign up voters without being paid off?  Is the value of the franchise, undoubtedly our most precious right, now worth nothing more than "What's in it for me?"  And why are poor Americans so lacking in initiative that they cannot register to vote on their own?

This reminds me of the current row over requiring voters to present an ID at the polls in order to vote.  "Poor people would be discriminated against," is the story we always hear.  It's true that a surprisingly high number of poor people do not have driver's licenses (either they've never applied, or their driving privilege has been suspended, usually due to unpaid tickets -- don't get me started on that!) but it is relatively easy to get a state-issued ID card if you have a Social Security card and a birth certificate.  Again, why are poor Americans so lacking in initiative that they cannot obtain proper documentation and get an ID card?

Am I understanding this right? -- the forebears of today's Black youth risked their lives to challenge Jim Crow and earn the right to vote for their people, yet poor Blacks today just can't be bothered to get an ID card or register to vote on their own?  Is it because numerous stupid, pointless run-ins with the police and other authorities (those unpaid parking tickets again!) have created such overwhelming anxiety and contempt for the state among Blacks?  Or do they simply think that the system is for suckers, because groups like ACORN will always be there to toss the system aside and guarantee them unfettered access to the polls?

A responsible organization would have reformed itself by now, and gotten rid of procedures that it knew to be an invitation to fraud.  But ACORN-tinged voter registration fraud seems to be increasing, so I'm going to draw the logical conclusion and state that ACORN is not a responsible organization.  When you add in the provisional ballots cast by by the same people who were fraudulently registered to vote, you have an organization that seems to encourage actual voter fraud.  And the $800,000 funneled by the Obama campaign to ACORN through a front organization, Citizen Services, Inc., doesn't exactly give ACORN an air of impartiality.

Fortunately for us, county election boards take elections much more seriously than ACORN, and their efforts at identifying and discarding fraudulent ballots led the New York Times to famously report that nationwide, there was scant evidence of actual voter fraud from 2001 through 2006.  That's reassuring, but things could be better.

I know that it is difficult to get poor and minority residents to vote.  I don't have a good solution for this problem, but I am frustrated by how badly existing efforts have failed.  Really frustrated.  And I know that blaming the Republicans for everything is nothing more than a cop-out.  Certainly some segment of the population does not want to see their own interests overturned in favor of the poor, and will work very hard to keep the voices of the poor from being heard.  But does that justify voter fraud in the name of the poor?  If every poor person in America voted Democrat, that would be fine with me.  I really don't care how they vote.  I just wish that their votes could be obtained in an honest fashion, free from race baiting, fear mongering, and fraud. 

Okay -- enough ranting for now.  Here in Oklahoma, the last day to register to vote is tomorrow, Oct. 10.  If you are not registered to vote, DO IT TODAY.  And do it legally, please.

...

ADDED: Michelle Malkin is reporting that an Ohio judge has ruled that Ohio Secretary of State Jennifer Brunner is in violation of Federal election laws:

A federal court ruled tonight that Ohio Secretary of State Jennifer Brunner violated federal election laws by not taking adequate steps to validate the identity of newly registered voters.

The ruling from U.S. District Court Judge George C. Smith called the identification breakdown “a serious problem” and ordered Brunner to immediately comply with federal requirements to match voter registration data with the information in the Ohio Bureau of Motor Vehicles and Social Security Administration databases. The court accused Brunner of failing to provide county election administrators with “an effective way to access and review mismatches.” She immediately appealed the ruling.

I suppose I should ask the question that many others are asking -- if Democrats are so certain that they have already won this election, why are they working so hard to steal it?

WizBang's Lori Byrd is also on the same page with regard to this issue.

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.

Pint-size Propaganda

Everyone is talking about this "grassroots" video, linked this morning by Drudge.  It is a "We Are The World"-type production featuring children praising Barack Obama:

The video was produced by Kathy Sawada, a a teacher at the elite Colburn School of Performing Arts in Los Angeles.  Here is how Sawada describes the making of the video:

As Sunday approached, a neighbor volunteered a home. Production wizards got wind of the project and offered their help in recording it. The likes of Jeff Zucker, Holly Schiffer, Peter Rosenfeld, Darin Moran, Jean Martin, Andy Blumenthal, and Nick Phoenix rearranged schedules to participate. Holly Schiffer was able to get three High Definition cameras (Panasonic HVX250's), and an AVID editing facility. When Jeff Zucker went to pick up the camera package, Ted Schilowitz happened to be there and offered a RED camera set up on a Steadi Cam.

What we accomplished in a few hours on a Sunday afternoon embodies the nature of the Obama campaign: its grassroots inspiration, its inclusiveness, its community building. People pitched in quickly for a cause that resonated with them. There were not many conditions: "Think this is a good idea? Want to help? Great. Sunday at 12:00." At the heart of the project were 22 children and their music. The willingness of all involved to come together for them was a testament to our hope, unity, courage, joy and belief in the future represented by these children.

Bob Owens asks, "Does a concert-quality musician in an elite school in the middle of the most ego-centric city in the United States count as a "grassroots" effort?"  Owens also provides some brief bios of those involved:

Here's a partial list of those who helped produce this "grassroots" effort:

• Jeff Zucker — American television executive, and President & CEO of NBC Universal.
• Post-producer (former choreographer?) Holly Shiffer.
• Motion picture camera operator/steadicam specialist Peter Rosenfeld (appropriately enough, worked in "Yes Man," a movie about " a guy challenges himself to say 'yes' to everything for an entire year."
• Darin Moran, another motion picture industry professional, who just finished filming — how appropriate — Land of the Lost.
• Andy Blumenthal, Hollywood film editor.

Grassroots all the way, baby

(UPDATE: The Politico is reporting that NBC has denied that "the" Jeff Zucker was "involved" with this video.)

But of course!  In the elite Hollywood circles of the mega-rich, these folks are just your average next-door neighbors.  It's kind of like Sen. Christopher Dodd thumbing through his Rolodex and calling Countrywide CEO Angelo Mozilo personally when he needed a home loan.  Doesn't everybody have those kinds of connections?

What this is, of course, is astroturfing, an effort by a group of professionals to simulate grassroots political involvement.  What you're really looking at is the brainwashed progeny of some of Hollywood's richest, most talented, and most powerful players in a carefully orchestrated demonstration of Orwellian goodthinking.

Brainwashed, you say?  Read some of the hopey-changey-syrupy-smothered-in-rich-creamery-butter lyrics the kids sing:

Now's the moment, lift each voice to sing
Sing with all your heart!
For our children, for our families,
Nations all joined as one.
Sing for joy and sing abundant peace,
Courage, justice, hope!
Sing together, hold each precious hand,
Lifting each other up;
Sing for vision, sing for unity,
Lifting our hearts to Sing!

Sure, one of the kids wrote a little ditty called "We're Gonna Change The World" that appears in the video, but come on -- do you think for a minute that the Colburn School held a contest for songs praising John McCain as well?  This has nothing to do with "22 children and their music."  It's a group of well-connected Hollywood elites rehearsing the kind of propaganda that we will be forced to endure on TV, radio, movies, and online for the next four years if Barack Obama wins.

And for many of us, watching children performing propaganda engineered by wily adults is a bit disturbing.  Captain Ed Morrisey says that the video reminded him of "Tomorrow Belongs To Me" from the movie Cabaret.  If you don't know it:

I was reminded of this page from a German children's coloring book, reproduced in Time-Life's Prelude To War, p. 114:

Translation -

My Leader!
(the child speaks:)
I know you well and love you, like father and mother.
I shall always obey you, like father and mother.
And when I grow up I shall help you, like father and mother.
And you will be proud of me, like father and mother.

I'm sure that many people will be reminded instead of Jesus Camp, and the religious indoctrination of children offered by various sheltered fundamentalist sects around the world.  The difference, of course, is that religious fundamentalists pledge their allegiance to God, not to a man.  They also believe almost universally that mankind is broken and lost without God's guidance.  And their indoctrination is generally a private matter, taught in churches and private schools, not the kind of global effort that accompanied Stalinism, Naziism, or (I shudder as I write this) Obamaism.

The Anchoress was quite broken up by this video, and wasted no time encapsulating the efforts by Obama forces and Democrats to silence their opponents, which have been projected onto conservatives and President Bush:

To paraphrase Mark Steyn: when this many people I don’t trust are telling me something must be done for my own good…I don’t want it. I want to be far away from it.

We’re being sold a bill of goods, I think. I look at that beautiful child, with her lovely, lilting voice and her open mien, and I see lines for bread, lines for shoes, lines for meat, lines, lines, lines. I see the privileged few driving by the lines and giving the raised fist, encouraging the proletariat to “keep it real.”

There are extremists who behave in extreme ways - and with extreme hate - on both sides. The truth is the far right and the far left are so alike in their excesses that they are mirrors of each other, or twins of hate.

But we have never had such an extreme “leader” so close to the White House. Oh, I know, we’ve heard for 8 years about “the fascist Bush” but reasonable people know it’s hooey; they know that Bushbots have not actively organized to shut down liberal talk radio, they have not tried to intimidate, harass or suppress the many who have told lies and untruths about him.  For all of the preening rhetoric about “Bushhitler” the ones spouting it have known full well that Bush was no fascist; that he was not going to shut them down, or make their ideas and films unavailable. They’ve known it. They know, too, that they’ve been projecting their own instincts to silence “patriotic dissent” on a guy who would never do it.

I think they won’t have to project for much longer.

She closes her post with an excerpt from Michael Radford's film version of Orwell's 1984.

God help us if that is our future.

Others blogging:

Michelle Malkin
WizBang (Kim Priestap)
Roger L. Simon

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.

It's Here!

As promised - Andrew Sullivan, who hates Sarah Palin, reposted a 1984 video of Palin modeling a swimsuit as part of the Miss Alaska pageant.  How anyone could believe that such a video would be harmful is beyond me. 

I'm sure that the president of Pakistan has already cached his copy of the video ...

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.

This is your brain on liberalism

I've been blogging about a lot of serious stuff lately, so here is something to make you laugh, or at least roll your eyes and groan really loudly:

from The Crescat... via The Anchoress.

Stuff from my desktop - Sept. 20, 2008

The investment sector of our economy, which relies heavily on debt, is in financial trouble.  This week brought about the bankruptcy of one of America's oldest and largest investment firms, Lehman Brothers, and the collapse of insurance giant AIG, which suddenly found itself without legs because it was heavily invested in mortgage giants Freddie Mac and Fannie Mae.  When Fannie and Freddie collapsed last week, their stock became essentially worthless and AIG lost a substantial portion of its cash reserves.  The Federal Reserve will now secure half the value of AIG, worth roughly $85 billion.

This article from the NYT Freakonomics blog, which clearly explains the Fannie/Freddie collapse, the bankruptcy of Lehman Bros., and the bailout of AIG, is an absolute must read if you want to understand what happened this week.

John McCain has taken a lot of heat for saying that the fundamentals of our economy remain strong.  He was also pilloried for stating several months ago that he was "always for less regulation" , although the rest of his quote (conveniently omitted by Democrats) states that "there is a need for government oversight".

But is McCain right?  Read this Yahoo! News story and marvel at this:

New York's investment community was experiencing "a rather difficult crisis of confidence," but one where people haven't given up hope that opportunities to make money are still out there, somewhere.

Then consider the fact that foreign governments and investment firms are jumping at the chance to invest in struggling American financial institutions.  Despite the great debts that sunk those firms, there is still a considerable amount of real property wealth in this country, as well as positive future valuations for productivity and economic growth, the factors that keep the stock markets in positive territory.  Inflation is still low; unemployment has risen slightly but is only 60% of what it is in "progressive" European socialist states like France and Germany; consumer prices have risen this year, but not out of proportion to rising fuel costs; there has yet to be a single quarter of negative economic growth, so we are still no where near a recession.  American investors seem to have confidence that the massive, unpredicented government intervention this week will actually bring about economic stability -- the Dow swung wildly (down over 800 points at one point) but ended the week down only 34 points.

As I see things, we took it on the chin this past week, but those blows involved finally coming to grips with some extremely dangerous lending and debt policies that allowed financial firms to grow far beyond their ability to responsibly manage their debts and assets.  "Too big to fail" really just means "too big," period.  In order to maintain stability, the Federal Reserve (which is simply the financial arm of our federal government) ended up involved at an unprecedented level in the operation of our financial markets.  If you are a strict believer in laissez-faire economics and regret the abandonment of the gold standard 35 years ago, then undoubtedly you are very upset right now.  I am not an expert in these things, but the positive reaction of the stock market seems to indicate to me that we will weather these crises intact, though perhaps a bit humbled.

...

In California, Gov. Schwarnenegger vowed to veto the state budget, stating that it was overstuffed with deficit spending and accounting tricks.  The state's Democratic leadership capituated, and yesterday signed a budget compromise.

...

Did you know that we formally handed over security of Iraq's Anbar Province to Iraqi forces three weeks ago?  This is a huge milestone, and I imagine if a Democrat was in the White House it would have been celebrated with front page headlines from major newspapers and endless "special reports" on network news broadcasts.  General Petraeus has also publicly speculated that American troops could pull out of Bagdhad by next summer.  This has got to be bad news for Democrats, who wanted to be able to take credit by themselves for the eventual troop draw-downs in Iraq.

...

A few weeks ago, Forbes Magazine ranked Hollywood's most overpaid actors and actresses, based on the amount of money they make for the studio versus how much they are paid.  Actress Nicole Kidman tops the current list, earning only $1 in box office receipts for every dollar she was paid.

...

A group of conservative Evangelical pastors has declared that clergy have a constitutional right to endorse political candidates from their pulpits, and is openly defying the IRS.  This is interesting, since liberal churches have been involved in social and political action for decades, and rarely draw the ire of the tax man.  Specifically, Democrats have made black churches into one of their most effective political grandstands.

...

On the other side of the world, the Large Hadron Colider at CERN in Switzerland has successfully completed its first tests.  Fortunately for us, the elementary particle interactions that occurred in the machine's artificially-created environment (which simulates conditions in the universe just fractions of a second after the "Big Bang") did not create an earth-swallowing a black hole, as some theorists had feared.

Meanwhile, back in the States, Bell Laboratories officially announced that it would be pulling the plug on its fundamental physics research department -- a department that produced scores of invaluable patents and developed such crucial techonolgies as the negative feedback amplifier, information theory, sonar, radar, the transistor, and the laser.  In the process, Bell Laboratories scientists took home six Nobel prizes.

Fannie Mae - whose fault is it anyway?

Our major financial institutions are dropping like flies -- Merrill Lynch, JP Morgan Chase, Citigroup, Lehman Brothers, Fannie Mae, Freddie Mac -- along with some major collateral damage such as insurer AIG, which was heavily invested in Fannie Mae and Freddie Mac (their stock is now worth pennies) and has suddenly lost its cash reserves.

This is an election year, and Democrats want to win the White House and retain their majority control over Congress, so it is a sure bet that Republicans will be blamed for everything.

Fortunately, for those of us who like to see all of the facts before we make a decision, the Internet allows us to search news stories from the past 5 or 10 or 15 years, and track the financial meltdown from the time it was just a blip on the radar of a few astute folks, to the current market crisis.  Here are some interesting items that have recently been dug up by bloggers:

The three biggest total recipients of political contributions from Fannie Mae and Freddie Mac are: Chris Dodd, Barack Obama, and John Kerry.  All are Democrats.  This list is even more stunning when you consider that Obama has only been in the US Senate less than three years, compared to Dodd (27 years) and Kerry (23 years).  I'm going to guess that Obama's close ties to community organizing and advocacy outfits like ACORN, with their longstanding support for affordable housing, made Obama the most attractive member of the Senate in terms of supporting anything that Fannie and Freddie wanted.  And get this -- Congressional Democrats want to give ACORN and other advocacy groups money from Fannie and Freddie's coffers in the form of an "Affordable Housing Trust Fund."

Near the end of July, John McCain directly addressed the ill fortunes of Fannie Mae and Freddie Mac, and pushed for stronger regulation of both those entities.  This is before the bottom fell out of Fannie and Freddie.  At that time, Barack Obama had yet to make a statement about the solvency of Fannie and Freddie, or to propose a solution to the problem.

Whose policies led to the credit crisis?  Five years ago, the Bush Administration outlined the oversight problems at Fannie Mae and Freddie Mac and proposed much tighter government regulation of them, specifically a new federal oversight agency.  Speaking for the Democrats, Congressman Barney Frank said, "These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis.  The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."  In other words, in 2003, Democrats believed that more regulation was a bad idea, because it would put a damper on their expanded affordable housing programs.  The "free market" had nothing to do with Bush's proposal or the Democrats' opposition to it.

The Clinton Administration pushed for an aggressive expansion of community development and affordable housing funds, luring banks into providing these loans with guarantees that Fannie Mae and Freddie Mac would be underwriting them.  Two long-time Clinton cronies, Franklin Raines and Jamie Gorelick (of pre-9/11 law enforcement "wall" fame) together raided Fannie Mae for over $100 million in compensation, while their financial incompetence and accounting shenanigans cost the company billions.

Here's Robert B. Reich, former Clinton Administration Secretary of Labor, on MSNBC last night (transcript from RushLimbaugh.com):

REICH: In the latter years of the Clinton administration -- when I was not there any longer, I should add -- there was an attempt by Alan Greenspan and Bob Rubin and a few others to deregulate financial markets, and they did.  They split commercial banking off from investment banking.  And many people say, "Well, that was the beginning of the problem," and then, of course, in 2003-2004, Alan Greenspan reduced short-term interest rates to the point where every single bank wanted to lend money.  I mean, if you could stand up straight you could get a bank loan because there was so much pressure to get that money out the door.  Money was so cheap.  So, yes, there is some responsibility on Democrats, some responsibility on Alan Greenspan and the Fed.

This Washington Post editorial sheds a stunning amount of light on the additional 2005 attempt by Republicans to shore up Fannie Mae and Freddie Mac with additional oversight and regulation, and the successful efforts of Fannie/Freddie lobbyists and their Democrat acolytes to defeat those reforms.  To wit:

President Bush was receptive to reform. He withheld nominees for Fannie and Freddie's boards -- a presidential privilege. While it would have been valuable politically to use such positions to reward supporters, the president put good policy above good politics.

In subsequent years, officials at Treasury and the Council of Economic Advisers (especially Chairmen Greg Mankiw and Harvey Rosen) pressed for the following: Requiring Fannie and Freddie to submit to regulations of the Securities and Exchange Commission; to adopt financial accounting standards; to follow bank standards for capital requirements; to shrink their portfolios of assets from risky levels; and empowering regulators such as the Office of Federal Housing Oversight to monitor the firms.

The administration did not accept half-measures. In 2005, Republican Mike Oxley, then chairman of the House Financial Services Committee, brought up a reform bill (H.R. 1461), and Fannie and Freddie's lobbyists set out to weaken it. The bill was rendered so toothless that [Andrew] Card called Oxley the night before markup and promised to oppose it. Oxley pulled the bill instead.

During this period, Sen. Richard Shelby led a small group of legislators favoring reform, including fellow Republican Sens. John Sununu, Chuck Hagel and Elizabeth Dole. Meanwhile, Dodd -- who along with Democratic Sens. John Kerry, Barack Obama and Hillary Clinton were the top four recipients of Fannie and Freddie campaign contributions from 1988 to 2008 -- actively opposed such measures and further weakened existing regulation.

The story is certainly complicated, but much of the evidence suggested that it was Democrats, not Republicans, who opposed mortgage lending reforms and additional regulation of Fannie Mae and Freddie Mac.  Their opposition was linked directly to their support for "affordable housing" (a prominent civil rights/racial issue) and the lobbying dollars that they recieved from Fannie and Freddie.  Money definitely talked, and it was Democrats who were listening.

ADDED: Linked by JayTea at Wizbang.  Thanks buddy, and welcome WizBangers!

MORE:  Here's a link to a video of Daniel Mudd (son of CBS newsman Roger Mudd), CEO of Fannie Mae (he succeeded Franklin Raines) addressing the Congressional Black Caucus in 2005 and telling them, "In many ways I want to tell you today you are also the conscience of Fannie Mae."  Ouch.  Apparently Fannie Mae's conscience failed it, and big time.

One of the aspects of the Fannie/Freddie fiasco that has not been widely explored is the relationship between low-income housing and civil rights political activism. The sad truth is that Fannie/Freddie reform meant that Republicans would have to butt heads with the racial activists of the CBC.  And you know what that means -- if evil white Republicans question or oppose the CBC, they are "racists."

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Even though Barack Obama has made a big deal out refusing to take "corporate" donations during this election, he has scooped up millions of dollars in individual campaign contributions from officers, executives, and "bundlers" with deep ties to Lehman Brothers, Merrill Lynch, Goldman-Sachs, and other deep-pocket financial institutions.  And here's much more from Matthew Cooper, writing for Portfolio.com, who investigates more individual contributions and lobbying money that Obama has accepted. 

For those who still don't get it, this is not about tit-for-tat between McCain and Obama lobbyists.  It is about the fact that Obama was supposed to be an agent of change, a "community" man completely disconnected from corporate deep pockets, looking out for the little guy and doing what is right, as opposed to what corporate benefactors pay him to do.  So far, such independence seems to be, to use Bill Clinton's phrase, only a fairy tale.

Also, the Los Angeles Times says that Obama has effectively "voted present" with respect to recent economic crises, by refusing to either endorse or disapprove of last week's government's bailouts and management takeovers, and for refusing to discuss any details of his economic plan.