Friday, October 03, 2008

And Don't Forget Iran Either

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Al Qaeda’s politics are a product of the Arab world, specifically of
the radical and totalitarian Wahhabi sect of Islam founded in
the 18th Century in Saudi Arabia by the fanatical Muhammad ibn Abd-al-Wahhab. He
thought the medieval interpretations of Islam even on the backward Arabian
peninsula were too liberal and lenient. His most extreme followers cannot even
peacefully coexist with mainstream Sunni Muslims, let alone Shia Muslims, Jews,
Christians, Hindus, Buddhists, secularists, feminists, gays, or anyone else.
Their global jihad is a war against the entire human race in all its diversity
and plurality.
Read the whole article - it is excellent. Totten also
makes the case that Iraq was hardly a distraction.

One of the reasons it
is important to remind everyone of this fairly basic but mostly overlooked point
is that one of the reason we're finding it tough sledding to overcome this
threat is we're ignoring it's source - Saudi Arabia.

Bozos At The Helm

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From where I sit, the United States government has embarked on two pieces of
social engineering in the last few years. One was to make oil expensive as
expensive as possible to drive people to greater use of alternative energy
sources - because anything less would be irresponsible and destructive to the
environment. The other was to enshrine home ownership (i.e., easy-to-obtain
mortgages) as a new American right - because anything less would be unequal and

Then, once they became crises, both were blamed on ‘greedy capitalism’, instead
of what they really were: legislative interference into market forces.
At least in the business world, especially in the take-no-prisoners world of
high-tech that kind of venality and ineptitude either gets you fired or kills
the company; by comparison, in Washington, it puts you in charge of the recovery
He's right about the problem and how we got here.

Unfortunately -- and speaking as a high-tech nerd myself -- I'm not quite so sanguine about the ability of technology to get us out of it since it's very much a double edge sword. The barrier to entry for WMD is rapidly turning into a pumpkin for instance.

Welcome to the Tinfoil Apocalypse. With Bozos at the helm.

Thursday, October 02, 2008


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So Paulson's billions divert credit from working capital to long-term mortgages
- from where it's most needed to where it's most wasted.

Even if the
giveaway adequately props up the banks, which I doubt, they still can't make
working capital loans, because the raw material they used (commercial MM
deposits) will be desperately short.

I think it's very telling that in
two days of hearings and two weeks of discussion we have yet to see *any*
detailed mechanism for how Paulson's plan will increase the supply of, say,
inventory loans. It's not that every economist in the world is an idiot, it's
just not going to help. I think people have fallen into the fallacy that if it
costs a lot it must be valuable. Paulson's plan falls into the category of very
expensive way to hurt ourselves.

Lunacy Sandwich

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``If they pass this thing, it's awful what the consequences are
going to be in terms of an ongoing federal relationship that doesn't need to
exist with the institutions,'' O'Neill said. ``Are we going to insist on having
a federal representative on boards of directors to protect our

The main component of the legislation now under
consideration is giving the Treasury secretary authority to purchase distressed
mortgage-related assets with an amount of money equivalent to about half of
Canada's annual gross domestic product.

``We have no capacity in the
federal government and it's not possible to create a capacity to manage a $700
billion property portfolio,'' said O'Neill, who was chairman of Alcoa Inc., the
largest U.S. aluminum producer, from 1987 to 2000. ``It's crazy. It's like we've
lost our moorings.''
 blog it

Wednesday, October 01, 2008

They Mean It

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We Americans are accustomed to regarding political rhetoric much as Dr. Johnson did epitaphs. "They are not," he wrote, "given under oath."

In other words, we don't expect public men or women to speak the truth from public platforms. When it comes to our own parochial affairs, there's probably a bit of weary realism in that. However, this casual expectation of rhetorical hypocrisy has inhibited from the start our ability to recognize and deal with the threat posed by Islamist radicalism.

Time and again, the spokesmen for these movements have told the world precisely what they intend. Time and again, the scant handful of Americans who bothered to take notice have dismissed what was said as the product of political alienation, as the consequence of economic marginalization, as a hangover of post-colonial insecurity or as tactical bluster.

No. These people mean exactly what they say, and they mean it for precisely the reasons they say they do.

Missing The Point

Many defenders of the government’s efforts to prompt banks to lend more to minorities have claimed that this effort had little to do with the present mortgage mess. Specifically they point out that many institutions that made subprime mortgages during the market bubble weren’t even banks subject to the Community Reinvestment Act, the main vehicle that the feds used to cajole banks to loosen their lending.

But this defense misses the point. In order to push banks to lend more to minority borrowers, advocates like the Boston Fed put forward an entire new set of lending standards and explained to the industry just why loans based on these slacker standards were somehow safer than the industry previously thought. These justifications became the basis for a whole new set of values (or lack of values), as no-down payment loans and loans to people with poor credit history or to those who were already loaded up with debt became more common throughout the entire industry.

Tuesday, September 30, 2008

Not Pretty

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In the fall of 2005, some 65% said we have a leadership crisis in the country. By 2006, the number had risen to 69%. And last fall, no less than 77% declared there was a crisis of leadership. Moreover, 79% said the United States would decline unless we get better leaders.

Please note that this survey did not reflect just an unhappiness with President George W. Bush. It was widespread across 12 different institutions and leadership groupings. Only the military and the medical profession were given relatively high marks this past fall. Strikingly for purposes of understanding these past few days, the institutions and groups with the lowest levels of confidence were smack in the middle of this financial meltdown. Four of the five lowest rated groups in the index were business, Congress, the executive branch, and the press. No wonder the “leaders” of these institutions had so much trouble persuading the general public about the seriousness of our financial mess.

The Fish

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Here's a little poker rule to remember - if you can't identify the fish at
the table, you are probably the fish. Does government know it's the fish at the
table? If it is, then it's willing to be the fish. It has nothing to lose since
it's playing with other people's money and has no accountability to the people
whose money its playing with. In fact, it'll probably take the biggest cut of
the winnings (should there be any - which I doubt) for itself.

Whaddaya Know?!

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Think of the mortgage securities market as the World Series of Poker. In fact, a
great book about it is Liar's Poker, by Michael Lewis. Lewis was a trainee at
Salomon Brothers, and he learned phrases like "Big Swinging D___," which
describes a swaggering, aggressive mortgage banker. Henry Paulson fits the

The best players in this World Series of Poker are the folks at
Buffett just bought a stake in Goldman. That stake would be a lot more
valuable if there were actually a poker game—that is, if mortgage securities
were still trading. Right now, they're not trading. So Goldman is sitting
ready to play and no one is ready to play with

Along comes Uncle Sam, who wants to take a one-hour lesson
in poker and then sit down and play in the World Series with $700 billion in
chips. And whaddaya know? Warren Buffett thinks Uncle Sam really has to get in
the game.

That's Her

Democrats are questioning whether Sarah Palin is qualified to be Vice
President while Nancy Pelosi, the Speaker-In-Tongues-of-the-House is two
heartbeats (and one with issues) away from the Presidency. Nancy Pelosi is
proving herself completely unqualified to lead anything. I wouldn’t trust her to
lead a troop of Girl Scouts. At a time when she should have been, umm, actually,
leading the House (BTW, that means the entire House … both aisles), she morphed
into House Majority Leader Pelosi, made a vicious partisan attack on
Republicans, and derailed the $700B bail out.

I’ll leave the parsing of her motivations to more connected observers, but I
suspect it was based on partisan calculus, since the only leadership Pelosi has
ever shown is in her capacity to attack the opposition.

That's her.

Did I forget to mention she doesn't think we need to drill to get natural gas? It would be impolite to say what I'm thinking now...

Bankruptcy Instead

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Jeffrey A. Miron is senior lecturer in economics at Harvard University. A
Libertarian, he was one of 166 academic economists who signed a letter to
congressional leaders last week opposing the government bailout plan.

The current mess would never have occurred in the absence of
ill-conceived federal policies. The federal government chartered Fannie Mae in
1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the
center of the crisis. The government implicitly promised these institutions that
it would make good on their debts, so Fannie and Freddie took on huge amounts of
excessive risk.

Worse, beginning in 1977 and even more in the 1990s and the early part of
this century, Congress pushed mortgage lenders and Fannie/Freddie to expand
subprime lending. The industry was happy to oblige, given the implicit promise
of federal backing, and subprime lending soared.

The obvious alternative to a bailout is letting troubled financial
institutions declare bankruptcy.

Peace From Saudi Britain

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Monday, September 29, 2008

Welcome To Pravda West

I have a couple friends who work in the MSM, too, and one of them tells me
the newsroom is (exact words) “unbelievably cavalier” about any
complaints viewers register about their reports, what they ignore, their bias or
the way they edit Republicans vs. the way the treat Dems. “Cavalier” as
in the fix is in and they don’t even have to pretend to care what half the
country thinks or wants.

I suppose this is why print media and the press in general don’t care
about their tumbling revenues;
when The Pelosi gets the regulated internet and restricted Congress that she wants, and Obama gets his thugs and his Justice Department monitoring, intimidating and shutting down alternative media (and the dissenting voices we’ve been told are “patriotic” when a Republican is in
the White House) the incestuous mainstream press will go back to being the only game in town. Pravda West.

The Missing Wind Down

I do not understand why those who've voted no should be
labeled "irresponsible."  The senate evidently will not deign to take up
this crisis legislation until Wednesday.  Meanwhile, even if you don't
reject the bill on philosophical grounds (see e.g., Dick Armey's article on NRO today), there is massive room for improvement.  Why not take the
time to try to improve it?

This was a terrible bill.  To take just a few particulars, why is there no reform of the government interventions that got us to this point in the first place?  Why aren't Fannie and Freddie being wound down — even after
we've now had to make explicit the implicit, disastrous government
guarantee?  Why is Pelosi saying (as I noted in an earlier post) that the authority in the bill will allow the Treasury Department (perhaps soon an Obama Treasury Department) to take bad debt off the hands of mismanaged state and local governments?

Sunday, September 28, 2008

Not So Lightly Back Then

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Speaking of "bitch is the new black," the press didn't tread so lightly around Obama's
astroturfing when it smeared Hillary. Remember that anti-Hillary "1984"
way back in March '07, which was supposedly created by somebody with no
connection to the Obama campaign? Well...

The creator of the faux-Apple ad against Sen. Hillary Rodham Clinton has been unmasked as a Democratic operative who worked for a digital
consulting firm with ties to Sen. Barack Obama, NBC News confirmed Wednesday
night -- leaving Obama on the spot.

Andrea Mitchell said that. On MSNBC. For some
reason, way back in the old days (18 months ago) it wasn't racist to hold Obama
accountable for his actions. Mitchell even said:

The entire episode hangs a cloud over the Obama

Oh, I get it. A
dark cloud, right? Next time leave your white hood at home, Andrea! No,
on second thought, please wear it whenever you're on the air.


Original Sin

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The response? Rep. Barney Frank, who now vilifies Republican House members for
questioning a policy of throwing another $700 billion on the bonfire

"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."

The tale of lost opportunities and thwarted reform is a long one. As a
reporter who covered the savings and loan meltdown of the late 1980s, I wish I
had paid more attention to the next impending disaster. I knew Fannie Mae and
Freddie Mac were bad-faith actors. I just didn't realize how much their
recklessness would spread to other players in the financial markets and create
the conditions for the current meltdown. But make no mistake. When the history
of this debacle is written, Washington's failure to supervise and rein in Fannie
and Freddie will be seen as the original sin.

Will Emerging

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In this sense, the linguistic turn — along with those who’ve worked to
insinuate its teachings into our very epistemic interpretive substructure — is
moving toward its ultimate victory: turning descriptive postmodern
philosophy into a prescriptive postmodern paradigm, one that
deconstructs the very notion of meaning, turning every battle into one of will,
with “meaning” becoming nothing more than that narrative which is imposed upon
us by the plurality.

This is akin to tyranny of the majority — akin to “democratizing” something
(namely, meaning as fixed by intent, and a recognition of whose intent one is
privileging) that should, by its very nature, be assumed fixed and intractable
for purposes of interpretation.

Concludes Kurtz:

So continued media silence on Obama’s intimidation tactics threatens
not only the fairness of this election, but press freedom itself. Yet to defend
the freedom of the right as if it were their own is something our left-leaning
press has forgotten how to do.

Al Qaeda Marches In Manhattan? Umm... No

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Welcome to our new puerile overlords. You know. The ones that are uniformly sophisticates and intelligentsia.

Like Stalin.

And soon to have the guns and kangaroo courts to match.