Let's assume that the government had provided better regulation of GSEs: would that have made the difference?  Surely, it would have to some extent; however, it wouldn't have solved the problem altogether.  

   I suggest a deeper problem and it's one that most people won't be too well pleased to hear: willful ignorance on the part of many, many Americans.  Allow me to explain. 

First, many of our neighbors have been complicit in so-called 'no-doc' loans.  These neighbors lied about their income at the behest of mortgage brokers and loan officers.  

   The second issue is a bit more complicated.  It begins with the age-old paradigm of investment: diversify.  Doubtless, this is true; but it misses a very important point.  In order to diversify well, one must know something about that in which they are investing.  Far too many people left the entire savings, 401K, and other holdings in the hands of their financial advisor (with no oversight).  While advisors aren't bad in and of themselves, complete and utter dependence on them is a perilous.  Rather than leaving one's financial future in the hands of someone else, perhaps knowing something about the companies in which one invests and the industies in which these conpanies participate.  Here's a good example: Surely everyone who took basic economics understands leveraging as it applies to banks.  When a bank or investment house has exceeded healthy limits, an investor should be wary of such an institution.  In addition, an investor who has some basic idea of company processes would also be beneficial; for example, a company who orginates or buys 'no-doc' loans or securities based on these loans.  Beyond this sort of first-hand financial information, indepedent analysis is available.  The key here is to investigate all the companies in which you own stock.  Doublessly, this is a lot to ask of most people, but let's be clear - their life savings depends on it!  Who shouldn't guard preciously that for which they've toiled for 30 years or more, that which will allow them age with dignity and relative ease, that which will help their families in the years to come?

This morning while I was driving to work, the sun was creeping over the horizon, beginning to illuminate the sky.  It was the best part of having to wake up early on a Saturday morning; but, not as good others.  I'm sure many people woke up - conservatives especially - today wondering how our world has changed as of yesterday afternoon.  Indeed, it seems almost surreal that two words could have such a profound effect on the future of this country: "It passed."

With those words all the speeches spoken, articles written, and arms twisted resolved into a decisive defeat.  Indeed, the favorite in the battle emerged the clear victor.  Nevertheless, all week I hoped against hope for this bill to fail. Wouldn't it have made a great underdog story? Can you see the headlines: "House Fails Again." Toward this effort, some valiant, courageous men toiled: Neil Cavuto, Mike Huckabee, Mark Sanford (our Governor in SC), and Jim DeMint.  To be sure there are more, but these are the men that argued not only once, but twice.  Not only did they do when it was popular, they did when people were scared after Monday's drop in the market.  What's more, they did it for the right reasons: Regardless of the consequences, free-markets are ultimately better than socialism.  Not only in outcomes, but for the character of every single adult that toils for his keep, strives for those things he values in life, struggles for a little slice of the world that he can claim unequivocally, without fear of force or fraud taking this away from him.

Indeed, it's the ultimate in paradox: that man needs struggle to improve character, but most seek rest whenever possible.  From this paradox, we can see how capitalism necessarily provides that which makes men better.

This is not so in socialism; this is clear from the very benefit one derives under this system - security of outcome.  If you don't have to worry about thow things will shake-out, then there's no real struggle.

What becomes of a country when her people haven't the ability to care for themselves?  How can she expect those people to preserve her in times of distress? These are the most important questions this bail-out has stirred up.  These questions are the ones overlooked by republicans and supposed capitalists who cast away their principles for a trillion-dollar high - a high that will have the hangover of generations.

One final question: Do any of these people regret the incredible peril in which they placed the character of nation and each individual citizen therein?

 

The words that may blot-out conservatism came from the mouth of a vibrant, pretty, charismatic rising star in the republican party. Many pundits immediately said that she won or tied Sen. Biden.  That may be true, but the winner is liberal-socialism. the loser - Reagan's legacy.
Tonight the true perpetrators of our current economic trouble will forever be obscured for most people.  This fact stems from Gov. Palin's delcaration: Wall St.'s greed and lack of Government oversight caused our current dilemma.  In case you didn't notice - that's exactly what Obama and Biden are saying!  In case you didn't notice - that's what Mccain is saying!  And in case you didn't notice - it's not true! Say it ain't so Sarah!

Without our party leadership beating the drum against GSE's, against high tax, against regulation that makes all of our products are services more expensive - we will will watch Reagan's phoenix finally burn-out.  That fiery bird lit the path and lead the way out from Ford's republicanism to a period where it coalesced with conservatism.  Tonight, Sarah Palin tossed a cold bucket of water on those dim embers that remained, and lead the way back into the dark.

Indeed, she was in a position to do this, Mccain wasn't.  Mccain has never liked conservatism and conservatives have never liked Mccain; but with her, conservatives have fallen in love with a fiery upstart who is more heat than light.  In this aching desire for someone who has a presence like Reagan, they have embraced someone who doesn't have the same convictions about free-markets. 

This will have major consequences going forward: if free-markets are to blame, then markets shouldn't be free; this defeats the single most important tennant of conservatism.  After all, what is freedom without opportunity?

Perhaps I'm wrong, perhaps overreactive, perhaps weary from political bombardment; but if she has done what I suspect, we need to take a moment tonight.  We need to realize that Reagan's vision, work, and legacy have been lost in this present darkness - buried alongside that great man.  The only difference: while I believe that Reagan is looking down on us tonight, there is no heaven for ideas; however, ideas can be revived.

 

 

In a recent article on rollcall.com, Erin Billings and John Stanton layout the Senate leadership's strategy for passing bail-out legislation.  Interestingly enough, the authors of this article explain that both Reid and Mcconnel's strategy is nearly identical.  It consists of two main points: 1) talk about how 'inaction' will have dire consequences - give examples, &c - 2) rebrand it: try to overcome the initial sale of this plan to the public.  The second part of the plan is most interesting.  In essence, it implies that if senators talk about this as a 'main-street rescue' rather than a 'wall-street bail-out' that the public will collectively bend over and grab its ankles.

Underlying this plan is a perncious assumption - that citizens of the United States can be swindled into doing something they don't want to do.  Recall that constituents were contacting their representation in both houses of congress - the people's ire was in concert against this plan.  To overcome this strong sentiment, their plan it to rebrand this sucker? 

While I don't typically applaud the American public's ability to grasp issues, this one cuts across nearly all demographics into which people are placed.  In keeping with this, I suggest that our leaders in both houses of congress forget about rebranding and try a completely new idea.  Let the SEC tweek mark-to-market, slash the capital gains and corporate tax rates - take artifical risk out of the market.  This will immediately 'inject liquidity' (as many talking-heads are wont to say).

One more point: John F(ing) Kerry tells leaders of both parties and the media to "connect the dots" for the common person - will somebody please vote this dunder-head out of office???

Quickly, I would like to note that the price of oil fell to its lowest since February of this year on the news of the bail-out failure.  Also, the dollar gained a bit also.  It couldn't be that these three things have anything to do with one another...

Many brilliant people made the point that this bail-out would have real consequences vis-a-vis the international perception of the dollar.  If yesterday's events can be considered evidence, then it's clear the failed legislation would have done a great bit of harm.  Whether the harm would have out-weighed the possible 'good' is hard to know.

 

On to the next issue: since Palin's interview with Couric, many people have been criticizing Palin as being a bit to green (I don't mean eco-freindly) for the VP post.  Will those same people exclaim with similar vigor and veracity the complete lack of self-control displayed by Speaker Nancy Pelosi yesterday?  We all know that she's nothing more than a rich, persistent partisan; but what the hell?  Is she really no better than the heroine addict that knowlingly shoots-up in front of the police?  Yesterday was perhaps one of the only times she needed to zip it.  Indeed, after all the shreiking about the need for bipartisanship - she polishes her leftist credentials in front of the whole country? 

While this was a stupid move on her part, it's not a particularly bold or brilliant more for Boehner & Co. to claim that her words changed votes.

Nevertheless, I can't wait to see SNL's depiction of her... Not. 

   Though the answer may be obvious, it is far from representative of conservatism.  Indeed, both of the reasons are our recent and current standard-bearers.  In the case of Pres. Bush, this was clear from the moment he used the words 'compassionate conservatism' in his 2000 campaign.  Indeed, I doubt anyone could have imagined how 'compassionate' he was going to be with other people's money.

   Similarly, the question on economic literacy was answered years ago for Mccain as well.  Recall Pres. Bush first pushing his tax-cuts: Mccain referred to them as 'class warfare'.  Since then, he's tried to reposition himself as a true conservative in this respect.  Unfortunately, his true beliefs come out when he is even slightly off-script - and sometimes when he's 'on-script'...

   Ofcourse, some may argue that his record on spending supports his free-market credentials.  That's probably true.  But, he hasn't ever given a coherent account of how government spending causes loss of capital, inflation, debt, devaluation of currency, and crowding-out.  If hasn't ever, then it plausible than he can't or even that doesn't really believe in truly free markets.  If either of these possibilities are true, he simply won't be able to muster both the courage and gumption necessary to say 'no'.  Indeed, saying 'no' to so many industries, people, and institutions which are used to quasi-socialism requires a person with true conviction.  Not only will Mccain fail as conservative leader in tough times, he won't be able to convince the electorate why we can't afford Sen. Obama.   

Jim DeMint, SC's Jr. Senator, has made some very elegant arguments against the Paulson-Bush bail-out.  He made three points that are worth considering.  First, along with many economists, he questions whether this action is merely a band-aid that will bear ill effects in the long-run(1). 

   Second, he explains how this bail-out is largely politically motivated: he said that the China, the US's biggest banker, contacted the Bush administration and told them that if this crisis continues they will turn the spighot off.  If you take DeMint at his word, this would be quite alarming to many beaurocrats. 

   Third, DeMint proposed another way to stimulate the economy - deeply cut the corporate and capital-gains rate.  To this point, there is much objection; critics say that it's this 'voo-doo', supply-side economics that created this situation in the first place (which is utterly false).  To them, I make one simple point: an investment that yields 3% APR would end up yielding over 25%+ if both taxes were suspended.  Similarly, if an investment was losing 3% of its value per year, that would be conmpletely turned around to the tune of a 19%+ gain.  Imagine what that would do for jobs, expeditures, etc

   Of all our federal representatives, he has been most clear-minded and honest that I've heard on this matter.  This is one man about whom South Carolinians can be proud.

 

 

 

1- http://online.wsj.com/article/SB122238888884077341.html

To move beyond less purchasing power relative to gas, there is also another sense in which many of us will be left with another economic disadvantage.  This disadvantage is a direct result of the bail-out.  Consider the purpose of the bail-out: 1) Take 'bad mortgages' off the books of investment bankers and 2) keep house values from tanking.  The second consequence can be discerned from considering the consequences of not bailing out Fannie, Freddie, AIG; if these companies were forced to liquidate, imagine how cheap the paper on these houses would be. It would have a massive effect on housing prices.  This effect would be really bad for homeowners in the short-term and really great for people who want to buy a home. 

Consider the irony of this: the federal government wanted to let low-income earners buy houses.  Indeed, this whole mess was started for that cause.  Now, if Congress does nothing, low-income earners would be able to buy houses.  Shakespeare couldn't write this sh#t.