Celebration [Jay Nordlinger]

http://corner.nationalreview.com/post/?q=MzgxYTNmODIxOTEwNWQ1OTYyNDEzNGZlNWQzYTliNzA=

Friends, have you seen this video? Maybe you have. Maybe I'm the last person to have seen it (I've been a little out of the campaign loop). Maybe it has been presented, celebrated, picked over, celebrated again. If so, forgive me — or celebrate some more. The fellow in this video is unbelievably refreshing, joyous, and gratifying. You'll hear some of your own beliefs and emotions echoed back at you, in an entertaining, fearless way. Check him out — and sign him up for political office.

Snoozer in Nashville [Andy McCarthy]

http://corner.nationalreview.com/post/?q=YjhkOTc0NWYzZTE1YWI4OTBlM2IxOGZkMzBjM2UyMmY=

McCain's only shot is/was to show that Obama cannot be trusted with the presidency.  If Obama is plausible, McCain loses.  And McCain, unfailingly, treats Obama as if he is totally plausible.  Ballgame.

Camille Paglia on Sarah Palin

http://www.salon.com/opinion/paglia/2008/10/08/palin/index1.html

The mountain of rubbish poured out about Palin over the past month would rival Everest. What a disgrace for our jabbering army of liberal journalists and commentators, too many of whom behaved like snippy jackasses. The bourgeois conventionalism and rank snobbery of these alleged humanitarians stank up the place. As for Palin's brutally edited interviews with Charlie Gibson and that viper, Katie Couric, don't we all know that the best bits ended up on the cutting-room floor? Something has gone seriously wrong with Democratic ideology, which seems to have become a candied set of holier-than-thou bromides attached like tutti-frutti to a quivering green Jell-O mold of adolescent sentimentality.

Planting Seeds of Disaster by Stanley Kurtz on National Review Online

http://article.nationalreview.com/?q=ZjRjYzE0YmQxNzU4MDJjYWE5MjIzMTMxMmNhZWQ1MTA=&w=MA==

I've already told the story of Obama's close ties to ACORN leader Madeline Talbott, who personally led Chicago ACORN's campaign to intimidate banks into making high-risk loans to low-credit customers. Using provisions of a 1977 law called the Community Reinvestment Act (CRA), Chicago ACORN was able to delay and halt the efforts of banks to merge or expand until they had agreed to lower their credit standards — and to fill ACORN's coffers to finance "counseling" operations like the one touted in that Sun-Times article. This much we've known. Yet these local, CRA-based pressure-campaigns fit into a broader, more disturbing, and still under-appreciated national picture. Far more than we've recognized, ACORN's local, CRA-enabled pressure tactics served to entangle the financial system as a whole in the subprime mess. ACORN was no side-show. On the contrary, using CRA and ties to sympathetic congressional Democrats, ACORN succeeded in drawing Fannie Mae and Freddie Mac into the very policies that led to the current disaster.

In one of the first book-length scholarly studies of ACORN, Organizing Urban America, Rutgers University political scientist Heidi Swarts describes this group, so dear to Barack Obama, as "oppositional outlaws." Swarts, a strong supporter of ACORN, has no qualms about stating that its members think of themselves as "militants unafraid to confront the powers that be." "This identity as a uniquely militant organization," says Swarts, "is reinforced by contentious action." ACORN protesters will break into private offices, show up at a banker's home to intimidate his family, or pour protesters into bank lobbies to scare away customers, all in an effort to force a lowering of credit standards for poor and minority customers. According to Swarts, long-term ACORN organizers "tend to see the organization as a solitary vanguard of principled leftists...the only truly radical community organization."

Up to now, conventional wisdom on the financial meltdown has relegated ACORN and the CRA to bit parts. The real problem, we've been told, lay with Fannie Mae and Freddie Mac. In fact, however, ACORN is at the base of the whole mess. ACORN used CRA and Democratic sympathizers to entangle Fannie and Freddie and the entire financial system in a disastrous disregard of the most basic financial standards. And Barack Obama cut his teeth as an organizer and politician backing up ACORN's economic madness every step of the way.

Thomas Sowell: Do Facts Matter?

http://townhall.com/columnists/ThomasSowell/2008/10/03/do_facts_matter

It was liberal Democrats, again led by Dodd and Frank, who for years pushed for Fannie Mae and Freddie Mac to go even further in promoting subprime mortgage loans, which are at the heart of today's financial crisis.

Alan Greenspan warned them four years ago. So did the Chairman of the Council of Economic Advisers to the President. So did Bush's Secretary of the Treasury, five years ago.

Yet, today, what are we hearing? That it was the Bush administration "right-wing ideology" of "de-regulation" that set the stage for the financial crisis. Do facts matter?

We also hear that it is the free market that is to blame. But the facts show that it was the government that pressured financial institutions in general to lend to subprime borrowers, with such things as the Community Reinvestment Act and, later, threats of legal action by then Attorney General Janet Reno if the feds did not like the statistics on who was getting loans and who wasn't.

Is that the free market? Or do facts not matter?

Main Street vs. Wall Street

http://www.american.com/archive/2008/october-10-08/main-street-vs-wall-street

Harvard finance professor Robert Merton, a Nobel laureate, notes that one of the problems at large financial institutions is the gap between the executives and the financial engineers, or what I call the "suits" and the "geeks." The geeks possess knowledge that is highly specialized and extremely technical. Many suits have never even taken a course in the fundamentals of valuing complex financial instruments, even though the health of their firms depends crucially on that very issue.

Today, the suits are saying that mortgage-backed securities are undervalued, and that if the government just holds them to maturity it will make a profit. But the geeks will tell you that we cannot be certain these securities are undervalued.

The valuation of mortgage-backed securities is marked by an enormous asymmetry. If house prices rise, the security holder gains little. He or she is happy to be relieved of the risk of default, but he or she cannot share in the homebuyer's profit. On the other hand, each drop in house prices lowers the value of the security further.

Franks Accused of Fannie Mae Conflict of Interest

http://www.foxnews.com/printer_friendly_story/0,3566,432501,00.html

Unqualified home buyers were not the only ones who benefitted from Massachusetts Rep. Barney Frank's efforts to deregulate Fannie Mae throughout the 1990s.

So did Frank's partner, a Fannie Mae executive at the forefront of the agency's push to relax lending restrictions.

Now that Fannie Mae is at the epicenter of a financial meltdown that threatens the U.S. economy, some are raising new questions about Frank's relationship with Herb Moses, who was Fannie's assistant director for product initiatives. Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie.

Both Frank and Moses assured the Wall Street Journal in 1992 that they took pains to avoid any conflicts of interest. Critics, however, remain skeptical.

"It's absolutely a conflict," said Dan Gainor, vice president of the Business & Media Institute. "He was voting on Fannie Mae at a time when he was involved with a Fannie Mae executive. How is that not germane?

"If this had been his ex-wife and he was Republican, I would bet every penny I have - or at least what's not in the stock market - that this would be considered germane," added Gainor, a T. Boone Pickens Fellow. "But everybody wants to avoid it because he's gay. It's the quintessential double standard."

A top GOP House aide agreed.

"C'mon, he writes housing and banking laws and his boyfriend is a top exec at a firm that stands to gain from those laws?" the aide told FOX News. "No media ever takes note? Imagine what would happen if Frank's political affiliation was R instead of D? Imagine what the media would say if [GOP former] Chairman [Mike] Oxley's wife or [GOP presidential nominee John] McCain's wife was a top exec at Fannie for a decade while they wrote the nation's housing and banking laws."

Frank's office did not immediately respond to requests for comment.

Rich Lowry on the VP Debate

http://corner.nationalreview.com/post/?q=NDYzMGFiNjQ0MWRjNmI0ZTlkYjgwZTExMjA3MWNiZTk=

I'm sure I'm not the only male in America who, when Palin dropped her first wink, sat up a little straighter on the couch and said, "Hey, I think she just winked at me." And her smile. By the end, when she clearly knew she was doing well, it was so sparkling it was almost mesmerizing. It sent little starbursts through the screen and ricocheting around the living rooms of America. This is a quality that can't be learned; it's either something you have or you don't, and man, she's got it.

Michelle Malkin » A debate “moderator” in the tank for Obama

http://michellemalkin.com/2008/09/30/a-debate-"moderator"-in-the-tank-for-obama/

In an imaginary world where liberal journalists are held to the same standards as everyone else, Ifill would be required to make a full disclosure at the start of the debate. She would be required to turn to the cameras and tell the national audience that she has a book coming out on January 20, 2009 – a date that just happens to coincide with the inauguration of the next president of the United States.

The title of Ifill's book? "Breakthrough: Politics and Race in the Age of Obama." Nonpartisan my foot.

Jeffrey A. Miron: Bankruptcy, not bailout, is the right answer

http://www.cnn.com/2008/POLITICS/09/29/miron.bailout/index.html?iref=mpstoryview

Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.

Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents.

The costs of the bailout, moreover, are almost certainly being understated. The administration's claim is that many mortgage assets are merely illiquid, not truly worthless, implying taxpayers will recoup much of their $700 billion.

If these assets are worth something, however, private parties should want to buy them, and they would do so if the owners would accept fair market value. Far more likely is that current owners have brushed under the rug how little their assets are worth.

The bailout has more problems. The final legislation will probably include numerous side conditions and special dealings that reward Washington lobbyists and their clients.

Anticipation of the bailout will engender strategic behavior by Wall Street institutions as they shuffle their assets and position their balance sheets to maximize their take. The bailout will open the door to further federal meddling in financial markets.

So what should the government do? Eliminate those policies that generated the current mess. This means, at a general level, abandoning the goal of home ownership independent of ability to pay. This means, in particular, getting rid of Fannie Mae and Freddie Mac, along with policies like the Community Reinvestment Act that pressure banks into subprime lending.

The right view of the financial mess is that an enormous fraction of subprime lending should never have occurred in the first place. Someone has to pay for that. That someone should not be, and does not need to be, the U.S. taxpayer.

Steyn on the Bailout Failure

http://corner.nationalreview.com/post/?q=NTE4NjZjMDkwMWE4YjY3ZTdhMGI5M2ZiNGU5MWRjZjg=

But isn't it the case that we're in this mess because US politicians previously subordinated "the general reason of the whole" to "local interests" and "local prejudices"? That's to say, with their usual casual destructiveness dressed up in the baby talk of "diversity", they chose to turn the mortgage industry into just another branch of the affirmative-action racket. The United States government in effect decreed credit a human right rather than a privilege judiciously granted by one independent contractor to another. 

As a general proposition, when told by unanimous elites that a particular course of action is urgent and necessary to avoid disaster, there's a lot to be said for going fishing. 

My Vote: NO by Dick Armey on National Review Online

http://article.nationalreview.com/?q=ZDFkMTc3NWMwOGQxN2Y3MjNkMjQ5ZTJkYmMyMjJlYWQ=

As a free-market economist I unequivocally oppose this legislation because it violates the basic working tenets of free-market capitalism and individual responsibility.

Granting the Treasury broad authority to buy troubled assets from private entities poses a significant threat to taxpayers and fundamentally alters the relationship between the private economy and the federal government. Despite the sweeping breadth of the proposed bailout, there is virtually nothing in the bill that addresses the underlying problems that created the housing bubble and the oversized and over-leveraged financial services sector that grew with it. 

As a Public Choice professor, I used to begin class each semester with Armey's Axiom number one: "The market is rational and the government is dumb." Those quick to call for more regulation forget the power of markets, and refuse to acknowledge government culpability in the current mess. Time and again, governments the world over have attempted to outsmart the market and the current legislation is no exception. And time after time, markets respond, toppling the best-laid government plans as they move to correctly price the underlying assets in exchange.

The Bailout Follies: Taxpayers Will Be Forced to Buy the Bad Debt of LOCAL GOVERNMENTS [Andy McCarthy]

http://corner.nationalreview.com/post/?q=ZGI0NTU1MTY0ZDBkNTYxMjJmYmY4N2RjMmNhY2ExY2U=

Nancy Pelosi yesterday released a summary of the bailout.  Under the heading of "Protection for Taxpayers ..." Madame Speaker includes this whopper (my italics): The scheme "[a]llows the government to purchase troubled assets from pension plans, local governments, and small banks that serve low- and middle-income families."

So in addition to rewarding irresponsible lenders and borrowers, we taxpayers are now to be "protected" by buying the toxic debt of states, cities and municipalities.  It's one thing to throw a life-line to the credit industry; local governments, by contrast, have the ability to cut spending drastically or raise taxes if their inhabitants want government services.  Elected politicians are then accountable for runaway spending and mismanagement.  If Detroit or Chicago is sinking because of big-government policies, that's what the citizens of those cities asked for by voting for Democrats year in and year out.  Why should the rest of us be on the hook for that? 

Hanson: This Was All Predictable

http://corner.nationalreview.com/post/?q=OTY5NWIzZDI4MDBiMjg3Y2QyMTIwNjM2MGVlMDc1YjA=

As I recall Raines was the one who, following the Enron scandals, gave public lectures about corporate responsiblity and CEO honesty. And as one begins to read about Raines, James Johnson, Jamie Gorelick, and Leland Brendsel at Freddie Mac, one begins to understand their modus operandi. Freddie and Fannie were landing pads for former Democratic insiders, who milked the agencies for millions in bonuses as they covered their tracks by donations to Congressional candiates and pseudo-racial-populism of helping minorities buy homes with little down. Their careers are every bit as nauseating as anything at Enron — and yet the press strangely does not go after them in the manner we learned of Ken Lay's deceit. God help us all.

Democrats in their own words Covering up the Fannie Mae and Freddie Mac

http://www.youtube.com/watch?v=_MGT_cSi7Rs

Democrats in their own words Covering up the Fannie Mae, Freddie Mac Scam that caused our Economic Crisis.

At a 2004 hearing see Democrat after Democrat covering up and attacking the regulations to protect Fannie Mae and Freddie Mac (their Cash Cows) that are now destroying our economy because the Democrats let them cheat.

Note to Paulson: The Key to Passing the $700 Billion Bailout Is Insurance - Michael Barone (usnews.com)

http://www.usnews.com/blogs/barone/2008/9/26/note-to-paulson-the-key-to-passing-the-700-billion-bailout-is-insurance.html

What do House Republicans want? A senior House Republican gave me and some other reporters a look yesterday at what a working group headed by Assistant Minority Whip Eric Cantor is demanding. The senior House Republican (hereinafter SHR) has what sounded to me like an ingenious approach. He cited Ginnie Mae loans to low-income borrowers, which the government can insure. He proposed that the government (presumably through the entity envisioned by the Paulson plan) offer to sell insurance to financial institutions that hold mortgage-backed securities (hereinafter MBS). Premiums would be determined by the rates of foreclosure on each class of securities so far. Under this plan, the government would be taking in money, not paying it out. Of course, if the premiums are not enough to cover losses, the government might eventually take losses, as it did when the savings and loan industry collapsed. But losses don't seem inevitable and in any case will mostly occur in out-years, not now.

Frank blames House GOP for breakdown of deal - Yahoo! News

http://news.yahoo.com/s/ap/20080926/ap_on_bi_ge/financial_meltdown;_ylt=AuV01JBSOUh2IazkDW.pda6yBhIF

What caught some by surprise, either at the White House meeting or shortly before it, was the sudden momentum behind a dramatically different plan drafted by House conservatives with Minority Leader John Boehner's blessing.

Instead of the government buying the distressed securities, the new plan would have banks, financial firms and other investors that hold such loans pay the Treasury to insure them. Rep. Paul Ryan, R-Wis., a chief sponsor, said it was clear that Bush's plan "was not going to pass the House."

But Democrats said the same was true of the conservatives' plan. It calls for tax cuts and insurance provisions the majority party will not accept, they said.

Greed, Or Incentives? - Forbes.com

http://www.forbes.com/opinions/2008/09/22/libertarian-mortgage-lease-oped-cx_re_0923epstein.html?partner=rcm

One bad regulatory turn leads to another, and lo, the bailouts come thick and fast. At the nth hour, wise heads often rightly conclude that some desperate measure has to be taken to prevent the financial disintegration brought on by, well, prior government regulation. Those bailouts, of course, come from the hides of taxpayers who borrowed prudently. The entire system subsidizes destructive behavior, which means that we will get more destructive behavior in the future. We might as well sell flood insurance at bargain prices in Galveston, Texas, and New Orleans.

An Alternative to the Wall Street Bailout

http://pajamasmedia.com/blog/an-alternative-to-the-wall-street-bailout/

However, the market could be clogged because the prospects for a bailout are destroying the motivation to sell mortgage securities. If you sell this week and take a big loss, you will look pretty stupid if there is a bailout next week where comparable securities fetch much higher prices.

It could be that a Congressional rejection of the bailout proposal, rather than clogging the markets, will unclog them. If Congress goes home having sent financial institutions a clear signal that there will be no bailout of any kind, then sellers will bring their securities to market, and we will find out what the market thinks they are worth.

In the worst case scenario, the market will assign low values to the securities. Firms that are sufficiently capitalized to hold mortgage securities will earn profits at the expense of weaker companies that have to sell securities or go bankrupt. In the end, it may turn out that the winners really took advantage of the losers. That is capitalism at work in financial markets.

Ben Bernanke and Henry Paulson are asking Congress for a $700 billion stake to enter this business at a time of unprecedented difficulty in predicting home prices. If they were taking their plan to a venture capital firm to seek funding, they would be laughed out of the office. Their proposal is sketchy, with no financial projections included. Their qualifications for running the business are unimpressive-neither Bernanke nor Paulson has a background in mortgage default modeling. The business is sure to be encumbered with all sorts of political mandates and requirements from Congress, imposed by the same Congressional leaders who encouraged Freddie Mac and Fannie Mae to plunge into subprime mortgages.

George F. Will - McCain Loses His Head

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/22/AR2008092202583.html

In any case, McCain's smear -- that Cox "betrayed the public's trust" -- is a harbinger of a McCain presidency. For McCain, politics is always operatic, pitting people who agree with him against those who are "corrupt" or "betray the public's trust," two categories that seem to be exhaustive -- there are no other people. McCain's Manichaean worldview drove him to his signature legislative achievement, the McCain-Feingold law's restrictions on campaigning. Today, his campaign is creatively finding interstices in laws intended to restrict campaign giving and spending.

Conservatives who insist that electing McCain is crucial usually start, and increasingly end, by saying he would make excellent judicial selections. But the more one sees of his impulsive, intensely personal reactions to people and events, the less confidence one has that he would select judges by calm reflection and clear principles, having neither patience nor aptitude for either.

It is arguable that, because of his inexperience, Obama is not ready for the presidency. It is arguable that McCain, because of his boiling moralism and bottomless reservoir of certitudes, is not suited to the presidency. Unreadiness can be corrected, although perhaps at great cost, by experience. Can a dismaying temperament be fixed?