Sunday, March 29, 2009

McCain-Feingold: Court Test for the New Royalty’s Right to Censor

From its conception, the McCain-Feingold campaign-finance law was an assault on the First Amendment. Signing that unconstitutional bill into law, knowing it to be unconstitutional, was one of the worst moments of George W. Bush’s presidency. Yet this malignancy lurks in the legal code, widely accepted, even celebrated. Now Deputy Solicitor General Malcolm Stewart has gone before the Supreme Court arguing that McCain-Feingold gives the government the right to ban books and films…A Clear Danger to Free Speech, The Editors, National Review, 3/27/2009

As any gossip knows, once you introduce poison into a living system, it’s very hard to get it out. And McCain-Feingold, what was claimed to be political reform has poisoned the relations between the governors and the governed. An issue settled at the Constitutional convention more than two centuries back must now be re-argued because our political elite feel that their lifetime employment in the Senate and House is threatened by critics taking note of their behavior. The law is an embarrassing and transparent attack on the liberty of any organized critique of anyone running for national ofice, the legal foundation for a New Royalty which, like the one thrown out of the US in the 18th century, will not be required to bear the burden of democratic debate.

This is the second time that McCain-Feingold’s law has appeared before the Supreme Court. Limited in a split decision several years back, it has come back again for testing on its executors’ rights to suppress political speech by organizations expressly designed to exploit the first amendment rights of American citizens. It’s not hard to comprehend why this law was a fusion of thinking on both sides of the aisle in Washington. Nothing so offends princes and princesses as a citizen’s insistence on an alternative point of view; and these New Royals are found in quantity in the District of Columbia.

The First Amendment was intended to protect political speech, the right to advocate causes and criticize government officials, and McCain-Feingold holds that organizations incorporated for the express purpose of engaging in political speech are to be burdened with special restrictions. Put another way, a stripper pole-dancing in Vegas has more robust First Amendment protections under current practice than does a political-advocacy group organized as a nonprofit corporation…(Threat to Free Speech, National Review…(cont’d))

Hasn’t that been the whole drift of judicial action on the first amendment for decades? More and more rights of free expression are extended to the baring of skin and the shouting of expletives, while, between the consolidation of the news business (financially and politically), the divergence of political opinion has been practically erased. The fierce debate on state vs. private development of the economy is a never-ending struggle, and has been for more than a century, but, as the current administration demands wider and wider areas to bring under state control, where but on blogs and one or two financial papers do you find any but positive discussion of what’s being done? The struggle between a state that wants to suppress all public display of religious faith and a constitution that guarantees free exercise of religion is relentlessly falling on the side of the state, but where besides the Internet can you find any discussion of the consequences of a completely secularized society?

Introduced in the Senate and the House is a bill that would bail out financially troubled newspapers, including enormous chains like Gannett. There’s an extension of the limitation of speech in that rescue. Papers and chains which accepted the money could no longer endorse political candidates, a further guarantee for lifetime employment for US Representatives and Senators. And the exemption in McCain-Feingold for newspapers, if the Court decides in favor of the government, might well be thrown aside, yielding an effective silencing on all political debate in organized media, a situation not familiar in America, but very recognizable in the old USSR and its successor under the dictator Putin.

Practically every media business and book publisher of any consequence is a corporation under the law. A Supreme Court decision in favor of McCain-Feingold threatens the free-speech rights of most of the organized enterprises engaged in political debate…The big companies can hire lawyers and figure out ways to comply. Ordinary small groups of citizens end up silenced….(Threat to Free Speech, National Review…(cont’d))

Rather like socialized medicine, where institutions are rewarded, doctors restricted and patients have to wait on line….

Like any other generation in American history, this one has to confront powerful institutions and interests whose management doesn't want us a voice in the proceedings.. The most important way to face down power is the free press and its guarantor, the first amendment. That’s why Senators McCain and Feingold wrote this law. They know what weapons their opponents will use. Watch out for efforts to extend this to the Internet next under the tainted banners of "fairness" or "reform".


Friday, March 27, 2009

Meanwhile, in Senate Fantasy Land

Everyone from President Barack Obama on down to fans has criticized how college football determines its top team. Now senators are getting off the sidelines to examine antitrust issues involving the Bowl Champion Series…The current system "leaves nearly half of all the teams in college football at a competitive disadvantage when it comes to qualifying for the millions of dollars paid out every year," the Senate Judiciary's subcommittee on antitrust, competition policy and consumer rights said in a statement Wednesday announcing the hearings….Senate reviewing how college football picks No. 1, Frederick Rommer, Google, 3/26/09

It’s good to know that the United States Senate, in the midst of two wars, a worldwide financial crisis, and the first, shaky months of a new administration is focused on issues central to good government. What football bettor isn't concerned about college rankings?

Perhaps next the House can join in with an investigation of the rights of pederasts. Perhaps Barney Frank can chair.


George Soros Thoroughly Stimulated

'I'm having a very good crisis,' says Soros as hedge fund managers make billions off recession…George Soros said the current economic crisis has been the culmination of his life's work… George Soros, who predicted the global financial crisis twice before, was one of the few people to anticipate and prepare for the current economic collapse… Soros: I’m having a very good crisis, The Daily Mail, 3/26/09

In your office, there must be at least one person who uses poisonous gossip to create an artificial crisis around the cubicles, then presents a solution, usually a bitter pill, that just so happens to mostly benefit the person who prescribed the cure. Parasites operate this way, sometimes with devastating effect. George Soros has been a financial parasite on crises often of his own creation for decades. Look at the British banking crisis of a decade or so back, the mess in the Ukraine, his efforts to intervene in American politics. Was it all for the good? He made $1.1 billion in the crash.

Parasites have a gift of seeing profit in what for everyone else is ruin. A naturalist might describe them as a hideous necessity. One would hardly fault the maggot for eating a corpse. To avoid parasites, good or evil, one must not fall ill and therefore become a target for worms. Part of that preventative health care includes acknowledging that, if you have something you treasure, there is probably someone out there who wants to take it away from you.


Iran, North Korea, Russia, China: Happy Days Are Here Again

Secretary of State Hillary Clinton (you know that gal married to the Saudi hireling) crawled to Beijing to tell the party bosses that human rights don't matter. Our "relationship" is more important than freedom and human dignity….Beijing's response? A staged military confrontation with an unarmed US Navy vessel; continued screw-America currency cheating; a renewed crackdown on dissidents and, yesterday, a call for a new global currency to replace the dollar…Obama’s Foreign Failures, Ralph Peters, NY Post, 3/26/09

Emulating a hero takes many forms. For all his talk about Lincoln, Obama’s mentor-in-spirit for a long time has been JFK. He even hired octogenarian Ted Sorensen, who wrote JFK’s inaugural address, as a consultant. Getting Uncle Teddy's endorsement was a crowning glory of his 2008 campaign.

Emulating JFK’s foreign policy seems to be his administration’s version of hero worship of a more woeful kind. While JFK fumbled into the Bay of Pigs and nearly got us into World War III in his first eighteen months in office, the President has embarrassed the Prime Minister of Britain (not necessarily a bad thing – see YouTube link below); run pleading to Iranian mullahs, who responded with scornful laughter; temporized on North Korea, which has responded with a threat of war; offered to re-start relations with Moscow, which promised to re-arm the Red Army and modernize its missile force; and offered to open broad contacts with Cuba. Fidel responded with another lecture. A basketball player ought to know that you can’t negotiate with an opposing, shooting guard. If you don’t defend against his shot, he’ll score.


Thursday, March 26, 2009

Gordon Brown Lambasted, Preview for President?

Posted for barely a day and a half, this recording of Daniel Hannan, MEP (Member European Parliament), has been seen over a million times on YouTube. Just in case you can't find it for yourself, here it is. It's a brilliantly delivered lecture to a socialist Prime Minister of Britain on the bankrupt and bankrupting policies of his government. Hannan, if he delivered in this in Congress, would only have to change the name of the person he addressed and the currency. I hope they're watching in the White House, but I doubt they'll notice until similar speeches start coming from Chicago and Detroit.


Something Is Happening And You Don't Know What It Is

Long ago, if you wanted to put on a good taxpayer revolt, you marched in the streets, waved flaming torches, and maybe dumped a load of British tea into the harbor…Today, you go on the "John and Ken Show."…John Kobylt and Ken Chiampou have roused the masses, and their show on KFI-AM (640) talk radio has become Southern California's rant room for those who are fed up with government spending, government bailouts and government tax hikes…There’s a Tax Revolt in the Air, John Weeks, Whittier Daily News, 3/21/2009

Between this kind of radio talk show and the Tea Party movement, something is going on out there. Because of the concentration of attention by the major media on tax relief from the federal government, that 95%-of-the-workers’ relief plan that Obama promised (and that Congress is turning away from, perhaps seeing it for what it is, wealth transfer from taxpayers to non-taxpayers), the real tax horrors are ignored. What are they?

In a northern town, at the very tip of Westchester, property taxes on a fairly modest house are pushing toward $15,000 a year. On top of a mortgage payment, however much deductible, just maintaining that sample house requires over $50,000 a year. Westchester County is not the best example, as it has a high average income, pushing $120,000. But, one should note that, after taxes, that’s not much money. $50,000 represents more than half of the after-tax remainder, and doesn’t include utilities and maintenance of the house, not to mention food, costs of commuting, clothing, that fund to get the kids through college, insurance for car, house, life, etc., etc., etc.. Property taxes in New York, New Jersey, California, and many, many other states are the proverbial straw. And, it’s getting to be a pretty damn big straw. Why?

To be fair, police, fire, sanitation, sewage, highways and schools are not free. The days of heroic volunteer firemen are pretty much gone. Somebody’s gotta pay those people. But there are also huge federal and state mandates for services no town ever thought of having to pay for (nor did they have representation in Congress for their side of an argument that mandated them to raise taxes), not to mention arrays of compliance officers to assure that towns were meeting regulations and mandates from the state and federal government. With a marked unwillingness at higher levels to raise taxes (not to mention the risk of political risk), the job of paying for a Congressional or Presidential cause has increasingly been forced onto localities. In New York, it’s led to taxpayer flight. That’s when someone living on the border of Vermont, for instance, notes that it’s cheaper to live there and work in New York State than to live and work in New York. And it’s also when companies, plagued with taxes from localities and the state, which are as high in New York as in any other state, move across borders, sometimes national borders, so that they can afford to do business, make some money, and pay their taxes.

You can only do so much of that. The option to leave is not available to everyone. And, when the pressure is at its high, whether in the days of Howard Jarvis or now, citizens, noticing that their wallets are about empty, start asking questions and raising hell. It’s about time. Governments that assume their citizens are always rich enough to pay more taxes usually find themselves at the wrong end of change when the people start to speak.


Back to the 70s: The Threat of Inflation is Real Again

"The best way to destroy the capitalist system is to debauch the currency," said Lord Keynes. Ben Bernanke disagrees…Bernanke is printing money to buy U.S. bonds…This new gusher from the Fed, after the $700 billion TARP bailout, comes on top of a Congressional Budget Office estimate that this year's deficit will be $1.85 trillion, 13.1 percent of gross domestic product, more than twice the share of the U.S. economy of the largest previous postwar deficit…Concluding the dollar is being abandoned…markets reacted instantly. The dollar plunge was the steepest since the Plaza Agreement of 1985…The Weimar Solution,, Patrick Buchanan, 3/24/2009

In Weimar, in the 1920s, when the deutschmark was devalued, it got so bad that a shopping basket full of money wouldn’t buy one egg. It got so bad that when a thief attacked someone carrying all those billions of deutschmarks, the robber would let the money fly into the wind because the basket was worth more money. That’s what inflation does.

In the 1970s, beginning when Buchanan was one of Richard Nixon’s aides in the White House, and continuing for years afterwards under Carter, prices were rising at more than ten percent a year. This was partly because of Nixon's action to take the dollar off its indexing to a fixed gold price of $35 an ounce, but more because a mountain of debt from the deficit-financed Vietnam War and Great Society was monetized, i.e., bought with printed money. Both policies and three administrations effectively devalued the dollar by more than sixty percent over the decade. A $50,000 salary in 1970 was worth less than $20,000 in 1979 and taxed at the same rate. A three-year battle led by Paul Volcker and the Reagan Administration stopped inflation cold in 1983, but it took 20% prime rates and sharp restrictions on the money supply to do it. A lot of people lost their jobs. We recovered. It’s a funny thing about sane fiscal policies in response to a crisis. When the country’s government began to act as though it ought to manage the household budget, the country began to find it had room to grow.

However, from the 1973-74 bear market to 1983, inflation sapped much of the creativity and life out of the U.S. economy. Someone in their early twenties in 1973 didn’t see much promise in the future for nearly a decade. The writer speaks from personal experience. The remarkable hope and expansion of the next thirty years was not a paradigm for life anyone in America recognized in the 1970s. Typical cultural responses were movies like The Godfather Network, and Serpico, deeply cynical and dark, however brilliant, or, for that matter, Star Wars, a fantasy about a world that had never been and would likely never be.

In New York, the confidence gamers played for rent-controlled, or rent-stabilized, apartments. It wasn’t just the scam that it is now, but a matter of survival. In a desperate effort to index city worker incomes to inflation, Mayor Lindsay, in a series of very foolish agreements, bankrupted the city, whose citizens effectively lost control of their own government as makeshift bureaucracies stepped in for both the Mayor and the City Council. In a cynical and desperate strategy to get some kind of income from properties bound by rent price controls on one side and skyrocketing prices on the other, landlords set tens of thousands of apartment houses on fire for insurance money. The scam became the only game in town. A master of the universe in the 1970s put his or her income in a Cayman Islands tax shelter, dodged for a rent-controlled apartment, claimed twice as many dependents as he or she had, and, in many neighborhoods, preyed on the old, the infirm, and the unwary to make a living, in short acted like a Soviet citizen trying to make it in Moscow in 1935. Every system the city depended upon, from subways to water mains, began to break down. In the blackout of 1977, the cameraderie of the blackout of the 60s was replaced by citywide looting and riots. It was an urban miniature of Atlas Shrugged. This is what inflation does.

That is also what happens when you spend far beyond your means. And, by comparison, what the Congress and White House are trying to do now dwarfs what happened in the 1970s. They are risking Weimar by flooding the market with phony money. And what followed Weimar was not a rational reconstruction of Germany but Adolf Hitler. This is a lesson they're about to learn in Britain all over again. And it's coming here fast.

Buchanan puts it best:

Inflation is theft. It make liars and cheats of governments. By eroding the value of a currency, inflation punishes savers and creditors and rewards debtors. And what nation is the biggest debtor of them all? The United States of America. Insidiously, inflation consumes the value of cash, savings, municipal bonds, corporate bonds, Treasury bonds and T-bills. Friends who lent America money, who bought our debt in good faith, are robbed…(The Weimar Solution, Buchanan…cont’d)


GIVE and SERVE Acts: George Soros Gets His Own Bonus

Maybe it's just me, but I find federal legislation titled "The GIVE Act" and "The SERVE Act" downright creepy. Even more troubling: the $6 billion price tag on these bipartisan bills to expand government-funded national service efforts…The volunteerism packages on the Hill are less about promoting effective charity than about creating make-work, permanent bureaucracies and left-wing slush funds…To Give and to Serve the $6 Billion National Service Boondoggle,, Michelle Malkin, 3/25/09

Delivered as promised last summer by candidate Obama to a gathering that included George Soros.

Social Innovation Fund and Volunteer Generation Fund -- $50 million in 2010; $60 million in 2011; $70 million in 2012; $80 million in 2013; and $100 million in 2014…Social Innovation Fund? If that sounds familiar, it should. I reported last fall on the Democratic Party platform's push to fund a "Social Investment Fund Network" [See below – Ed.] that would reward "social entrepreneurs and leading nonprofit organizations" and "support results-oriented innovators." It is essentially a special taxpayer-funded pipeline for radical liberal groups backed by billionaire George Soros that masquerade as public-interest do-gooders… Those who have watched…are all too familiar with how government volunteerism programs have been used for propaganda and political purposes. AmeriCorps "volunteers" have been put to work lobbying against the voter-approved three-strikes anti-crime initiative in California and protesting Republican political events while working for the already heavily tax-subsidized liberal advocacy group ACORN…(To Give and To Serve…Malkin, cont’d)

You gotta give the guy credit. He said he was gonna do it and he did it. But, what sort of politics legislates monies to be used to advocate a one party government’s program?

Do you have to ask?


Tuesday, March 24, 2009

Update on "Global Warming"

From the "What Oft Was Thought But Ne'er So Well Expressed" Dept.:

Hat tip to

Obama: Debasing the Currency -- Whose Side is He On?

On Wednesday Bernanke announced the Fed will print money to buy U.S. Treasuries in unheard-of amounts - nearly $1.2 trillion…Nowadays, the success of our Treasury bond sales depends on the good will of China's Gao Xiqing, who controls over $700,000,000,000 of outstanding US treasury notes and who reportedly is a hard core Chinese Communist who regards America as China's enemy…Why, then, is Obama pursuing this risky maneuver? We can imagine at least four possibilities, in order of increasing infamy:
* He is too naïve or ignorant to understand what he is risking.
* He knows but doesn't care, being interested only in what looks good for the moment.
* He wants to cause inflation, because inflation favors debtors and the biggest debtor in the United States is the United States. Moreover, inflation leads to devaluation of the dollar, which, as James Lewis recently pointed out, is one of the key objectives of puppet master George Soros.
He wants to provoke a crisis of capitalism, as James Simpson has already suggested.
Is Obama Creating a BC Bubble? The American Thinker, 3/24/09

It is a measure of the crisis we are in, which has become less financial than political, an opinion shared by many commentators across the world, that serious writers are now questioning whether or not the Chief Executive of our country, sworn to “preserve, protect and defend the Constitution of the United States,” is deliberately subverting our national economy and national sovereignty to fulfill political objectives more alien to America than anything that might have landed at Roswell in 1947.

Is, for example, our President an ally of George Soros, the notorious financial thug who set off a major financial crisis in Britain, is accused of sabotaging elections in the Ukraine, and has described the U.S. as a fascist power that merits humiliation?

Obama owes much of his political success to financial support from radical, left-wing billionaire and leading “social entrepreneur” George Soros…no doubt with Soros’s approbation…Obama fleshed out his Social Investment Fund Network plan last December. In concert with his mandatory volunteerism pitch and $6 billion anti-poverty plan, Obama called for the creation of a Social Entrepreneurship Agency to dispense funds in unspecified amounts…Obama cites the Harlem Children’s Zone…HCZ’s former senior leader, Shawn Dove, is now an official at Soros’s Open Society Institute…Soros has donated some $5 billion of his fortune to left-wing non-profit groups through the Open Society Institute, which is committed to Soros’s militant ideology of toppling the “fascist” tyranny of the United States…/ The Democrat Party Platform’s Hidden Soros Slush Fund, Michelle Malkin, 8/20/2008

The writer must have been part of that vast right wing conspiracy, eh? What American candidate for President would promote the agenda of an avowed enemy of the United States?

Did I mention that the House passed a $6 billion volunteerism bill (the “GIVE Act”) on Wednesday to provide yet another pipeline to left-wing advocacy groups under the guise of encouraging national service?….Look Beyond the Bogus Bonus Smokescreen, Michelle Malkin, 3/20/2009

Uh, yep, President Barrack Hussein Obama. When he and the Chief Justice fumbled “preserve, protect and defend,” possibly it was an omen.

But, we live in rational times, right?


Hugo Chavez on the Potomac: Change Deranged?

With the braying of 328 yahoos -- members of the House of Representatives who voted for retroactive and punitive use of the tax code to confiscate the legal earnings of a small, unpopular group – still reverberating, the Obama administration yesterday invited private-sector investors to become business partners with the capricious and increasingly anti-constitutional government…The Toxic Assets We Elected, George Will, Washington Post, 3/24/2009

Will, a conservative writer who openly disliked the previous President’s policies, is a centrist conservative who usually tries his best to find the American, legal thread in any administration. He writes for the mainstream paper of the U.S. capital. He’s the one conservative frequently invited to CNN or other networks to provide alternative commentary. This column suggests an explosive break, an unbreachable polarization. In a way, Will’s J’accuse is as startling as the unconstitutional bill of attainder passed in the House last week trying to seize contractual, however ill-earned, payments from AIG executives.

Another embarrassing auditor of American misgovernment is China, whose premier has rightly noted the unsustainable trajectory of America's high-consumption, low-savings economy. He has also decorously but clearly expressed sensible fears that his country's $1 trillion-plus of dollar-denominated assets might be devalued by America choosing, as banana republics have done, to use inflation for partial repudiation of improvidently incurred debts…(Toxic Assets We Elected…Will, cont’d)

This is no small matter that Will illuminates. For several decades, China has willingly engaged in a game whereby the government of the PRC covers our government deficits while we look the other way on the sale of hundreds of billions of cheap, and often dumped, Chinese products in the United States. While a de facto arrangement, it has nonetheless been observed for several decades. To scorn that and force China to withdraw from the gaming table, the U.S. will risk having to dramatically expand the Fed’s purchase of American debt, printing money to pay bills, as the Fed did last week by buying $300 billion in U.S. bonds. Monetizing the debt, substituting newly printed paper for value, is what Argentina and other countries south of the border did for decades, bankrupting their societies in every meaningful sense to preserve the delusions of their governments.

Congress, with the approval of a president who has waxed censorious about his predecessor's imperious unilateralism in dealing with other nations, has shredded the North American Free Trade Agreement…Mexico has resorted to protectionism -- tariffs on many U.S. goods -- in retaliation for Democrats' protection of the Teamsters union…NAFTA, like all treaties, is the "supreme law of the land." So says the Constitution. It is, however, a cobweb constraint on a Congress that, ignoring the document's unambiguous stipulations that the House shall be composed of members chosen "by the people of the several states," is voting to pretend that the District of Columbia is a state…(Toxic Assets We Have Elected…Will, cont’d)

Another spit on the law – was NAFTA just another "living document"?

In each of these, one can find the essence of mob rule, the primary mark of a dictatorship. For over a decade, Democrats and their constituents have howled about the unfairness of a trade treaty which has brought sharp increases in exports in both directions, more employment on both sides of the border, and a sharing of north American wealth. The politics of feeling doesn’t measure actual consequences of this treaty, only the fear of constituents. The law is nothing to this kind of politics. The politics of feeling, mob rule, is lawlessness on a national scale.

For two and a quarter centuries, it has been generally understood that constitutional restraints on statehood representation in Congress for the District of Columbia actually meant that Congress could not simply decide, on the basis of DC residents who feel bad about this, to override the supreme law of the land on a populist whim. One can make a case for shrinking the district, to allow most of its citizens to be represented as members of Virginia and Maryland. But one cannot simply decide, without the mandated amendment process, to toss aside an article of America’s supreme law. To do that is to scorn all law, to become as lawless as Venezuela under Hugo Chavez. What the national legislature and the President have done in pushing this is not to show the constitution as a “living document” but as a dead letter.

Jefferson warned that "great innovations should not be forced on slender majorities." But Democrats, who trace their party's pedigree to Jefferson, are contemplating using "reconciliation" – a legislative maneuver abused by both parties to severely truncate debate and limit the minority's right to resist – to impose vast and controversial changes…This is but a partial list of recent lawlessness, situational constitutionalism and institutional derangement. Such political malfeasance is pertinent to the financial meltdown as the administration…tries to stabilize the economy by vastly enlarging government's role (Toxic Assets We Have Elected…, Will, cont’d)

This is the behavior of dictators and one-party governments, a history deep in human blood. How can Congress and the White House so blithely ignore the previous century of catastrophes led by such government behavior?

Theodore Dalrymple, the noted essayist whose columns are often found on City Journal, has strong thoughts on ideologically driven leaders:

One of the first to notice the politicization of intellectuals was the French writer Julien Benda, whose 1927 La trahison des clercs—"the treason of the clerks," with "clerk" understood in its medieval sense as an educated person distinct from the uneducated laity—gave a phrase to educated discourse. Today, people most frequently use the phrase to signify the allegiance that intellectuals gave to Communism, despite the evident fact that the establishment of Communist regimes led everywhere and always to a decrease in the kind of intellectual freedom and respect for individual rights that intellectuals claimed to defend…Benda meant something much wider by it…: the increasing tendency of intellectuals to pursue lines of thought not for the sake of truth, or for guiding humanity sub specie aeternitatis, but for the sake of attaining power by adopting, justifying, and manipulating the current political passions of sections of humanity, whether national, racial, religious, or economic… The Persistence of Ideology, Theodore Dalrymple, City Journal, 1/19/2009

Is Obama, a product of the most exalted side of American education, and a former professor at the University of Chicago, such an ideologue? How could he not be? For thirty years our colleges and universities have been dominated by a program designed by people whose pedagogy defines all relationships between human beings as matters of dominance – political, economic, cultural. Should it be any surprise that a product of that program would act as his professors hoped, taking any step, bearing any cost, in the pursuit of absolute power and all the unpredictable and terrifying change that implies?

Will took a big risk in writing this. His invitations to comment on CNN may start to decline.


Organizing for America (OFA): Democrats' Chekha?

A sitting President of the United States is organizing a political organization loyal to him, bound by a pledge, outside the government and existing party apparatus. The historical precedents are ominous…A visit to the Organizing for America (OFA) website reveals that supporters are not simply asked to sign up, they are asked to take a pledge. A pledge to support -- not the flag, not the constitution, not the country, not even the Democratic Party, but Obama and his "bold plan." OFA does not use the Democratic Party logo but the "O"-shaped logo of the Obama campaign….hHe Knock on the Door, Lona Manning, the American Thinker, 3/23/09

It is a measure of the historical ignorance of today’s American young people that few, if any, of Obama’s young supporters have pointed out the dismal parallels to this organization, found, as Manning notes, in Chavez’s Venezuela, Mao’s China, Hitler’s Germany, Pol Pot’s Kampuchea, and Stalin’s USSR. Pledging political support to an individual, what used to be called the cult of personality, is a political pathology appropriate to dictatorships and regimes. It marks the total abandonment of the notion of a law regulating the lives of human beings. Instead, one person, unanswerable to any law, regulates the lives of all. How many tens of millions of examples of where this terminates are necessary? Is it a semantic problem, the meaning, for example, of never again?

Keep in mind that these acolytes have renounced any thought of questioning the actual policies of the maximum leader. Whatever he says, they are for it. They have given their word…(Knock on the Door…cont’d)

Taken with then-candidate Obama’s promise last August of a civil defense corps, funded at the same level as the armed forces, this is more than suggestive of a totalitarian bandit hoping to so totally dominate discussion as to obliterate opposition. Picture, if you will, a million young men and women, answerable to no one, patrolling American streets. Does this suggest a free republic or Bolshevik Russia? Perhaps Jim Cramer, the financial impresario, is right in describing Obama as a latter day Lenin.


Monday, March 23, 2009

AIG: Obama, the Good Humor Man

You’re outraged, OUTRAGED that bonuses are being handed out at companies the American taxpayer is bailing out. Yes, to be sure, the bonuses were specifically provided for in the legislation, don’t have time to read every footling trillion-dollar bill …And yes, true, the specific passage addressing these particular bonuses was…added to the bill in your name, but that was nothing to do with you...To his credit, the Hopeychanger-in-Chief has had some difficulty doing the outrage kabuki with a straight face. In the middle of his press conference…he got a tickle in his throat and departed from his telepromptered script to joke: “Excuse me, I’m choked up with anger here.” How the assembled hacks laughed!…almost as funny as,…referring to his 129 score at the White House bowling alley, the president cracked that “it was like the Special Olympics.” Ha-ha! What a card that Obama is when he unplugs the prompter…Maybe next time he can toss in that the Dow Jones has got “Down” syndrome — geddit? …And besides, anyone who says the president shouldn’t be doing crip jokes is a racist….The Outrage Kabuki, Mark Steyn, National Review, 3/23/2009

Is this why Sixty Minutes asked the President if he was punch drunk this past Sunday? Who wouldn’t be? Hope and Change, as many already knew, were nice words to replay forty thousand times in the campaign, but now seem to have a present trading value approximately equal to, and as real as, a 3-dollar bill.

Hope: That this worldwide economic disaster, largely generated by wildly irresponsible national politicians and international banks and brokerages (representatives from which have come the economic advisers to the Obama Administration) won’t blow up in a re-run of the Depression.

Change: Different face in the White House; different group of advisers, most of them from disintegrating money center banks, busted brokerages and the Clinton Administration; a dramatically devalued dollar; hugely lowered expectations for most; a triumph over America by Obama supporter George Soros and his allies; denials that terrorists are anything but gangsters subject to the rational proceedings of the judiciary; different rhetoric; much better delivery of same; bankrupting the taxpayers and the future of their children to bail out institutions a free market would have hung out to dry years ago.

Any sentient being dumb enough to fall for this AIG huffin’ an’ a-puffin’ from Barry, Barney, Doddy, and the gang is a fool who deserves the vaporization of his assets that the national political class is lining up for him. As Charles Krauthammer pointed out, the $165 million in bonuses is less than 1/18,500 of the $3.1 trillion budget. The massive expansion of government the president is planning is forever, and will ensure that you end your days in what Peggy Noonan calls “post-prosperity America.” More immediately, what message do you send to the world when legal contracts can be abrogated by retrospective confiscatory bills of attainder? You think that’s going to get anyone investing in America again?…(Kabuki…Mark Steyn, cont’d)

The President’s behavior, as noted by Steyn, is more like the Teflon Don’s amusement at his prosecutors than that of a Chief Executive. And it won’t be long before the Obama Youth are out on the streets confronting taxpayers about the need for another couple of trillion in deficit spending. As Argentina has demonstrated over the last twenty-five years, once the lying starts, once the mob in the streets is listened to by the national legislature and the national executive, it always ends in bankruptcy, often in war, and always in national humiliation. When this fool and his supporters come ringing their bells on your street, keep your door closed. Watch out for your children. The only flavor these good humor men have to offer is a poisoned future.


AIG, and the People's Response

Singer Lloyd Marcus told the crowd assembled in Lake Eola Park on Saturday that he was going to give them his take on the first days of the Obama administration. Then he shrieked. That pretty much summed up the mood in the park Saturday afternoon, when more than 4,000 people attended the Orlando Tea Party, a conservative rally aimed at expressing discontent with Washington. "This is maybe the greatest single gathering of God-fearing patriots in the history of Orlando, Florida," local conservative radio host Bud Hedinger, who emceed the event, told the crowd. The attendees, many of whom said they'd heard about the rally on Hedinger's radio show, brandished flags and homemade signs bearing slogans such as "Repeal the pork or our bacon is cooked" and "Obama lied, liberty died."…Orlando Tea Party Draws More than 4000, Helen Eckinger, 3/23/2009

Meanwhile, back in the middle class that Vice President Biden said the Democrats were going to save, there are some cranky individuals out there, you know, those deemed worthless by the Obama Administration, those who go to work, pay their taxes, pay their mortgages, manage their household budgets, and try to plan for a retirement that looks like it might be very far off. These tea parties are marvelous events; and they’ve been happening nationwide. The people can differentiate between democratic leaders and a new George the Third.

Sadly, their events remind this writer a great deal of the farmers’ rallies in the Carter Administration in the 1970s, when family farmers drove their tractors to Washington to express their shock and outrage at the bias in federal farm policy toward subsidizing corporate farms, highly conglomerated competitors who could cut prices until they shut down any survivors, even as they salted out the land they managed. Fact is, those policies did just what those protesters claimed. The family farm, by and large, is now a hobbyist’s vocation. Big Agriculture, rather like big agriculture under Lenin and Stalin in the old USSR, simply wiped out the competition.

But this writer is going to continue to beat his drum, hoping that Joe Biden’s targets of salvation keep raising holy hell to stop the manic hypocrisy and lying in Washington, DC. Because, the only real bankruptcy that will be a tragedy in the next few years will be when people who really are responsible are left in the impoverished shadows of bailed out dinosaurs like AIG and Citibank.

If you wanted to have an example of how the government’s operation of the economy works, you couldn’t ask for a better one than the government’s handling of AIG. It works to the advantage of those who are most like the government: bloated; overbearing; tyrannical; greedy; grasping; arbitrary – a highly organized class of thieves.


Saturday, March 21, 2009

Obama Spending Spree and the Imperial Dream

For decades, the United States has relied on a tortuous financial arrangement that knits together its economy with those of China and Japan. This informal system has allowed Asian countries to run huge export surpluses with the United States, while allowing the United States to run huge budget deficits without having to raise interest rates or taxes, and to run huge trade deficits without abruptly depreciating its currency…an obsession of bankers, international economists, and high officials like Fed Chairman Ben Bernanke…” Debt Man Walking, John B. Judis, the New Republic, 12/3/08

Did you think it was going to last forever? Nothing is free. An individual life comes and goes, a candle in the wind. The triumph in the Cold War in 1989 led to a two-decades party in which the celebrants, dancing naked past the cemetery of a dozen old empires, neglected to notice the blank marble tombstone and the open grave. If they had, would they have known it was for them?

The writer, scorned by family and friends for his opinions, has been noticing this for a very long time. Hubris, that ancient Greek word, has been raising its skeletal fingers in warning for years. Historical parallels, even within our own time, are laughed at, or simply unknown. Think, for instance, of the transition between the Kennedy-Johnson era and that of Richard Nixon. For eight short, intense years, the United States acted as if, in the old communist locution, anything was possible. We had conducted an enormous war without considering taxes to pay for it. We had launched a series of missions to send human beings to the moon. We threw off our clothes. We plunged into drugs. We drove cars so fast that the officers and EMS medics at accident sites suffered post-traumatic stress from the ghastly scenes of blood and gore. We spat on history, tradition, family, economic sense, and imagined a timeless space of endless triumph. We believed it possible to liberate human beings from work, duty, and mortality. We lost everything and hated Richard Nixon for six years for his struggle to right a shattered republic, finally chasing him out of Washington as if he were a cancerous lesion.

Americans don’t like to admit the failure of dreams. Even in telling the truth about the way our material desires have been paid for, Judis can only go so far as to recommend the same sort of programs that contributed so much to the federal and private debts financed by the Japanese, the Saudis, and the Chinese over the past twenty years. And the previous and new Administrations? They’ve proceeded as if the world were made of cotton candy, all of it destined to be eaten by their constituents.

I ask you now to turn away from the bogus bonus smokescreen over…compensation for AIG employees. It is a pittance compared to the gargantuan spending spree happening right under our noses. The AIG bonus price tag amounts to one-tenth of one percent of the total AIG giveway ($85 billion in September, $37.8 billion in October; $40 billion in November; $30 billion in early March, which took place with the assent of a Republican administration, a Democrat administration, and the congressional leadership of both parties…they moved Thursday to dump another $5 billion into the failing auto industry…on top of the Thursday announcement by the Federal Reserve to print up $1 trillion to buy up Treasury bonds and mortgage securities sold by the government…that no one else wants to buyLook Beyond the Bogus Bonus Smokescreen, Michelle Malkin, 3/20/2009 (syndicated column)

What is the effect of such a grandiose expansion of public debt?
A)Those expected to buy it, such as the Chinese, who talk and write every day about their plan to extinguish American hegemony within the next decade, will, if they choose to pay for a very low grade investment vehicle, have enormous influence over every area of American government policy, foreign and domestic. If they choose not to buy, as looks to be increasingly likely, they will force us to devalue our currency by printing money to buy T-bills (already happening). The loss of wealth and spending power has been estimated to start at fifty percent or more for every American.
B)It shows an American leadership utterly out of touch not only with a vast proportion of Americans, but with reality itself. Like an Argentine Colonel in the 1980s, the current President apparently believes that all he has to do to revolutionize America, is print the money, go on the Leno show, and promise health care for all, clean air for the entire world, and green jobs for everyone. The man is a fabulist. His policies will, as a group of Argentine Colonels in the 1980s, destroy America as a world center for development.
C)The fantastic increase in government debt will crowd out American entrepreneurs from investment capital for a decade or more. There are suggestions that this will create a mess like the depression of 1873, which lasted for twenty-three years. For a generation in their twenties, vanished expectations will mark the bulk of their most creative and productive years.

This writer would go further and describe this as a massive crime wave originating in Washington, DC. Rather than buck up, cut spending, open our energy resources to domestic development, restrain consumption with a flat tax and value added tax, steps absolutely required in most opinion on the subject, from The Wall Street Journal to Investors Business Daily, for the American economy to recover the robustness lost in the housing crash, the gang from Chicago has decided to loot the entire society, spread some of the booty to their favored special interest groups, and put us at risk of losing control of our sovereignty to a hostile government. This is a long way from “preserve, protect and defend.” Why would they take such steps?

Like it or not, they’re defending not the Constitution, but the mob’s fantasy of the good life. Everyone’s entitled. Everyone gets their choice of everything that’s out there. Nobody has to worry about not having enough money or spending too much. This is the mob, with their imperial dream, that the gang from Chicago is serving. They are not serving you.


AIG: How Others See Washington and Our Future

As an aghast world – from China to Chicago and Chihuahua – watches, the circus-like U.S. political system seems to be declining into near chaos. Through it all, stock and financial markets are paralyzed. The more the policy regime does, the worse the outlook gets. The multi-ringed spectacle raises a disturbing question in many minds: Is this the end of America? Is This The End of America, Terence Corcoran, National Post, 3/19/2009

Accompanied by a chart that shows the US monetary base trending straight up from the fall of 2008 to the present, Corcoran doesn’t mince words. It’s not the U.S. economy that’s going crazy. It’s the United States government under the leadership of Obama, Pelosi, Reid, Frank, the Fed, and the Treasury.

The AIG bonus firestorm is a diversion from real issues, but it puts the ghastly political classes who make U.S. law on display for what they are: aging, self-serving demagogues who have spent decades warping the U.S. political system for their own ends. (Is This the End…,Corcoran, National Post, cont’d)

Put that in a frame and hang it on the wall – without doubt the finest description of government out of Washington, DC, that the writer has heard since P.J. O’Rourke described Congress as a “parliament of whores.” O’Rourke’s remark is actually insulting to the sex worker business. The worst, burnt-out, track-marked tart on the Minnesota strip would take offense at being compared to Congress’s Democrat leadership.

We’ve survived this before, Corcoran says, but this time, in the new McCarthyism where the IRS is being openly used to target individuals with tax penalties, we may not survive. One reason is the dictatorial, Hugo Chavez-like arrogance of the current administration.

Expansion of government spending, plunging the U.S. into unprecedented deficits, is without parallel. In economic policy, through regulation and control of energy output, financial services and monetary expansion, the U.S. government has embarked on a fundamental reshaping of America. It is designed, in short, to bring on the end of America. (Is This the End…,Corcoran, National Post cont’d)

Since domestic coverage of this disaster is so heavily biased in favor of the notion that if Obama says it’s good, it must be good it is necessary to look outside of MSM, and even America itself, for revelations about what the White House and Congress are doing to our country. And the bold fellows on the Hill and at 1600 Pennsylvania may have a rude surprise in store for them.

A paper just published by the Federal Reserve Bank of St. Louis..says that the Fed will have to be prepared to absorb all the excess money it has poured into the U.S. economy. It will be a technical and political challenge unlike any central bank has ever undertaken. The future of America is at stake. (Is This The End…,Corcoran, National Post, cont’d)

What would absorbing the money entail? Look at the price of anything. Close your eyes. Then look again after the Fed does this. That $1.58 milk? It’s $3.16 now. That $26,000 Prius? It’s $52,000 now. That nice $95,000 salary you have? It’s worth what $47,500 used to be worth. This is called inflation, when too much money chases too few goods, the inevitable result of printing money. You could ask any refugee from Argentina what that’s like.


Friday, March 20, 2009

AIG: Tax Authority as Political Weapon?

"It's difficult for me to think of the code as a political weapon," said Rangel, who spoke to a handful of reporters outside his office...." U.S. Representative Charles Rangel (DEM-NY), 3/19/2009

Okay, Congress, with Charlie "Didn't Know I Owed Taxes" Rangel, Democrat of NY, and U.S. Representative to Congress since the Middle Ages, passed a personally punitive tax package, directed at 74 people who work for AIG. Even 85 Republicans went along with this. What's really going on, Charlie?

Some of this history we know, or at least those of us who read or watch something other than the MSM. AIG, the world's largest insurance company, and a major contributor to campaigns by U.S. Senator Christopher Dodd (DEM-CONN) and U.S. President Barrack Obama (DEM-Washington DC), got into trouble last fall when the credit default swaps it was selling as insurance against subprime mortgages soured (AIG had to pay out instead of sell). Ben Bernanke, Chairman of the Fed, and Timothy Geithner, U.S. Secretary of the Treasury under President Obama (DEM-Washington, DC), arranged for an 85 billion bailout.

When the United States Congress (Democrat majorities, both houses) wrote, but apparently did not read, the Stimulus Bill ($787 billion), and then passed it, as if by magic, and at the behest of the Treasury Department (see reference to Timothy Geithner, US Secretary of the Treasury), Senator Christopher Dodd (DEM-CONN) wrote a little clause in exempting contracted bonus payments to AIG executives. Yesterday, Senator Dodd (DEM-CONN) denied having written that clause. Today, Senator Dodd (DEM-CONN) admitted that he had, at the behest of the Department of Treasury (Timothy Geithner, Secretary of Treasury), written that clause but wished he hadn't. This was as discussions built up about giving another $85 billion to AIG which, without federal protection from anti-trust actions, would never have existed in its current form. Without federal intervention (Community Redevelopment Act) in the mortgage market, where banks and other mortgage holders were required to give subprime mortgages to people who couldn't pay them back, it is unlikely that credit default swaps would have been sold in large numbers by AIG.

The big to-do about AIG bonuses (prompted by actions involving two Democratic national officials, Sen. Dodd (DEM-CONN) and Timothy Geithner (Secretary of Treasury, Obama Administration) looks an awful lot like a political storm to cover up the biggest American scandal since the S&L mess in the 1980s. The Democrat answer to their own party and government corruption is to use the IRS to penalize people that they had originally intended to be rewarded for -- for what? Bad behavior?

Sounds a lot like paying off somebody's mortgage because they failed to pay it on their own, then sending them a bill for the same amount under threat of arrest.

Hey, defaulting mortgage holders, better watch out. The Congress (Democrat majorities, both houses) may decide that they don't remember bailing you out.



Tuesday, March 17, 2009

Sen. Christopher Dodd (D - Conn) & AIG: Suivez de L'Argent

Senator Chris Dodd (D-Conn.) on Monday night floated the idea of taxing American International Group...bonus recipients so the government could recoup the $450 million the company is paying to employees in its financial products unit. Within hours, the idea spread to both houses of Congress, with lawmakers proposing an AIG bonus tax...While the Senate constructed the $787 billion stimulus last month, Dodd unexpectedly added an executive-compensation restriction to the bill. That amendment provides an “exception for contractually obligated bonuses agreed on before Feb. 11, 2009,” which exempts the very AIG bonuses Dodd and others are seeking to tax. The amendment is in the final version and is law...Also, Sen. Dodd was AIG’s largest single recipient of campaign donations during the 2008 election cycle with $103,100, according to AIG Furor, Dodd Tries to Undo Bonus Protections He Put In, Rich Edson, Fox Business, 3/17/09

Don't miss Edson's graphic study of the culture of corruption on Capitol Hill.

Oh, Dodd, poor Dodd, somebody's unlocked the closet to uncover your fraud!


Back to the 70s: First, Attack Your Allies

He hasn't called anyone an "evildoer" or denounced an "axis of evil." But make no mistake: President Obama is putting together an enemies list...Obama's search for an enemy: The President beating the class warfare drum, Michael Goodwin, NY Daily News, 3/8/2009

That list grew by one from an urban-standard liberal tabloid with this column.

Strangely, though, those on it are not terrorists or foreign dictators. They are mostly Americans lucky enough to have succeeded through capitalism and democracy...(Obama's search for an enemy...(cont'd))

It's a funny thing about a political enemies list. When the enemies are also enemies of the United States, it's a normal activity to maintain such a file; indeed, for the President it's a constitutional mandate. When the enemies are personal, however, one thinks back to Lyndon Johnson and Richard Nixon, whose exercise of the paranoid style in politics still makes this writer cringe.

Obama has expressed little interest in prosecuting those who cooked the books to make billions and undermined the financial system. Nor is he interested in rebuking Congress, including leading members of his own party, who fostered destructive lending and borrowing policies. He seems comfortable with his aides, including those who saw nothing amiss in their former roles as Wall Street players and regulators...Obama's class-war language...looks like selective anger, calculated to stoke public emotion to build support for his expansive agenda...which revolves around a dramatic increase in Washington power, relies on tax hikes on the same successful businesses and individuals he denounces...First he demonizes them, then he taxes them...(Obama's search for an enemy...(cont'd))

One hopes that being on an enemies list is still as fashionable in New York City as it was thirty-five years ago. If Goodwin has invited himself in, one suspects that more will follow into the club.


AIG: Owner Rage

The bonuses AIG wants to pay its employees are a pittance compared with the $170 billion it has received in government bailouts, a trifling .097 percent. But nothing so angers the gods of populism as the word “bonus” (surely some genius is formulating a suitable euphemism even as we speak). Pres. Barack Obama wants to try to block the bonuses, and other administration officials talk of making AIG pay back the government for the amount of the bonuses. Fine, but where do we go to get the other $169.835 billion back?...AIG Shame, Rich Lowry, 3/17/2009

In Parkinson's Law, a wonderful satire written by C. Northcote Parkinson in 1955, one law is that "the time spent on an agenda item is inversely proportional to the amount of money involved." As Rich Lowry makes vividly clear in this sane article about an insane policy, there have been few better examples than the populist hysteria about bonuses that AIG just happens to be contracted to pay.

Contract law doesn't stipulate that bonuses included in a contract must reflect good performance. If that were true, half the overpaid ballplayers in major league baseball would be earning about 40% of their current salaries. Contract, however, once agreed upon and signed, is a lawful arrangement between consenting parties, and held as being as strong as a law passed by Congress. Scorn for a contract is no different than scorn for a law. Doing so yields economic, political and cultural chaos.

Would that the Obamastration would pay attention to restructuring the law surrounding credit default swaps, an outlandish financial instrument (see other entries below) that is currently neither regulated by any agency, nor comprehensible to buyers or brokers. Exposure to these instruments, made vastly worse by the bizarre mark-to-market rules that force daily valuation of assets which may be unsaleable at a given time, while still generating income, is what sank AIG (indirectly) and may yet sink Citibank. $167 million in bonuses for officers and employees who've wrecked a company is a scandal, but this mess is about hundreds of billions of American taxpayers' money, not ill-gotten gains in the millions. And we've been lied to about those.

AIG has been the bailout from hell, dysfunctional and opaque. The government has had to restructure its rescue over and over, throwing billions more into its maw. Only now have we learned the identity of the true recipients of the bailout, the so-called counterparties to AIG’s credit default swaps, financial firms strewn around Wall Street and the globe, from Goldman Sachs to Deutsche Bank and France’s Société Générale...(AIG Shame, cont'd)

That's right. The "bailout" of AIG is about paying holders of credit default swaps, themselves a barely legal and totally unregulated instrument. There is virtually no bottom to this mess; these securities are measured in the tens of trillions! AIG wants another hundred billion for the same purpose. And the asset sale promised by new CEO Edward Liddy back in October of 2008 has been a complete bust.

American International Group Inc may scrap a plan to repay a $60 billion US government loan by selling businesses, after failing to find enough promising bidders, Bloomberg said, citing people with knowledge of the matter...AIG Chief Executive Edward Liddy, who took charge in September and unveiled the strategy the following month, has concluded it will not work...AIG May Abandon Asset Sales Plan, Reuters, 2/25/2009

You want reason for outrage. There are two. It's bad enough to give these losers bonuses, but that's not even a crime compared to putting the entire United States, and world, economy at risk to make some 25-year-old MBAs a few million bucks.

As to why these credit default swaps were invented, they were designed to help ease the risk of the trash mortgages forced upon Fannie Mae, Freddie Mac and most of the other mortgage brokers by the expansion of the Community Reinvestment Act -- a political intervention in what used to be a free market in mortgages.

The list of people who should be arrested and jailed for this robbery of the American taxpayer goes right to the top slot in AIG, to the economic advisors in the White House (Robert Rubin, Larry Summers, who promoted credit default swaps), to the Secretary of the Treasury, Tim Geithner, who arranged (with Ben Bernanke) the original bailout of AIG.

The further the country dives into this abyss, the more it seems that these columns should be written in French.


Friday, March 13, 2009

Socialism by Any Other Name...

When Rep. Barney Frank was looking to aid a Boston-based lender last fall, the Massachusetts Democrat urged Maxine Waters..."stay out of it."...The reason: Ms. Waters, a longtime congresswoman from California, had close ties to the minority-owned institution, OneUnited Bank...Ms. Waters and her husband have both held financial stakes in the bank. Until recently, her husband was a director. At the same time, Ms. Waters has publicly boosted OneUnited's executives and criticized its government regulators during congressional hearings. Last fall, she helped secure the bank a meeting with Treasury officials...Such potential conflicts of interest are more serious as the banking system's crisis has led the government to take an increasingly active role in overseeing financial institutions, including OneUnited. The financial-services committee on which Ms. Waters sits oversees banking issues, and the lawmaker is a potential future chairman....Waters Helps Bank Whose Stock She Once Owned, Susan Schmidt, The Wall Street Journal, 3/12/2009

WSJ reporter Schmidt doesn't specify charges in this interesting article on corporate/government socialism, but she doesn't have to. OneUnited Bank, from its inception, has been driven by a political purpose as being a "minority-owned" bank. A free market's only political purpose is to create opportunities, including jobs, products and services, and profits for investors. When you serve political ends as a so-called private company, trouble is just around the corner.

The bank received "outstanding" Community Reinvestment Act ratings for lending in Los Angeles...In January, Ms. Waters acknowledged she made a call to the Treasury on OneUnited's behalf. The bank's capital, which was heavily invested in shares of Fannie Mae and Freddie Mac, was all but wiped out with the federal takeover of the two mortgage giants, and the bank was seeking help from regulators....OneUnited eventually secured bailout funds under the government's $700 billion Troubled Asset Relief Program, which was set up later that month....(Waters Helped Bank...Schmidt, WSJ, cont'd)

Too big to fail?


Back to the 70s: More than One Road to Socialism

Congress is considering legislation aimed at making our food supply safer, but for small farmers and ranchers, one such bill looks like another example of big business and big government teaming up to get the little guy out of the way....Livestock Tracing Bill Could be End of Family Farms, Ranches, Timothy P. Carney,, 3/13/09

For those of you too young to remember some of the aftermath of the expensive accident at 3-Mile Island, one of the more startling revelations was that a number of American coal companies were leading sponsors of anti-atomic-power organizations. It's a standard tactic by dominant organizations. Use any means to fight the competition. Disciples of any crusade really need to take care when confronted by some new cause, whether the terror of the cleanest power generation ever devised, or of global warming.

In the matter written about by Timothy P. Carney, this has been going on for decades. In New York City, City Council flurries about the cleanliness of local coffee shops and inexpensive family restaurants is often followed by a) health violation citations, b) closings, and c) the arrival of McDonald's, Burger King, and Dunkin' Donuts. You don't have to ask whose attorneys brought the City Council's attention to the health conditions in family-operated coffee shops. And if they can't get away with that, they'll sponsor a consumer organization to make the case for them.

Writ large, this is how American socialism has come to pass. Despite evidence that suggests large corporate enterprises foster mediocre products (see Detroit's auto industry), high level and expensive corruption, now, as in the 1970s, the exact opposite of what the market is dictating is being advocated, and acted upon, as official policy. The market suggests, for instance, that a super-sized bank like CitiBank is grossly inefficient, approximately useless to investors, a danger to depositors, underwriters and insurers, and populated by a management more suited to a government agency than to a private business (i.e., more into turf protection than profit-making). What's policy under the new administration? Throw a hundred billion at Citibank, on the advice of a White House team populated by many ex-senior managers from -- gasp! -- Citibank. Why does this happen?

Corporations, at a certain size, are virtually indistinguishable from socialist departments of government. In the ancient days of the 1970's, a popular saying was "Senior corporate officers and the members of the Politburo of the USSR belong to the same union." For students of films by Sidney Lumet, this was illuminated, to a magnificent extreme, in a scene in "Network" when Ned Beatty instructed his network's new prophet on the realities of corporate and communist life. Corporations, as anyone in small competing businesses knows, abhor competition almost as much as the communist party does. And, if they can't beat it, they buy it. Look at Microsoft's gobbling up of small software companies, and its ongoing efforts to make Windows the only alternative. In this, the software giant is only emulating its precedessor IBM's behavior. (IBM's idea of customer service was first to blame the user -- should sound familiar.)

When you dominate a market, quality of product is far less important than turf protection. One of the reasons General Motors is in such sorry shape is that its management, after twenty-five years of getting whomped by the Japanese (Toyota is now the largest auto company), still seems unaware that there are other games in town. Assuming that sheer size can overwhelm such issues as the likelihood that gasoline prices will skyrocket as the economy recovers, they still try to peddle vehicles that get 20 miles per gallon only at an EPA laboratory. On the road last summer, those "efficient" Escalades, Expeditions and the like gobbled up their owners' wallets at a rate of 60-100 dollars a tank.

When you dominate, the behavior you're emulating is that of the state itself which, as Hobbes (or Mao) put it, has not only economic power but possession of most of the means of violence. Even in America, for every psychopath that shoots a dozen people in a schoolyard, there are a dozen bombers and a thousand missiles that can kill a billion people in an hour. As with apes, every bully prefers to associate with the dominant individual. It's no different with senior management at the Fortune 500.

As such, human creativity is choked, as it was throughout the 1970s, in such an environment. So much the better for the dominant. When General Motors was truly the strongest auto company on the earth, they could sell a product that had matured technologically in the 1940s. In the mid-1970s, the only difference between a Cadillac built then and one built in 1953 was the shape of the body and the presence of safety equipment mandated by the federal government. The latter was also a perfect excuse for continuing price increases for an increasingly mediocre product. The advent of Japanese competition in the 1980s was Detroit's Pearl Harbor. Their first response wasn't to build better products but to lobby the federal government for trade protection! Were you surprised? How long after that did you hear consumer groups howling about small cars being too dangerous for the American road? And could we hazard a guess as to who footed the bill for those groups?

Politicians, claiming to safeguard the people and spurred by self-proclaimed consumer-protection groups, advance regulation favored by industry giants who understand that the regulations’ burden may crush smaller competitors...(Animal Tracing...Tracey Carney, cont'd)

Americans are too smart to be fooled by a totally Red agenda. And, surprisingly enough, American political and corporate elites know very well that the state isn't capable of running the entire economy. So, what they join up to do is to divide the economy into segments they feel competent to run. With the stock market down 50%, even with the current rally, the credit market in tatters, the government with a trillion and a half fiscal deficit, welfarism on the rise again, and some of America's largest companies on the rocks, corporate and government self-esteem looks more narcissistic than real.

That rarely troubles socialists. To them, narcissism is an affect of anyone trying to break into their game.


Monday, March 09, 2009

Update: Wonker Weathers the Depression, cont'd.

WARNING: Long entry, but if you like detail, it's here, by subject head.

I suddenly realized last night that--as I busily try to survive a paid of Wonker family layoffs, the destruction of our 401(k) portfolios, and the threat of the erosion of value vis-a-vis our real estate holdings--I hadn't updated our legion of avid fans on the progress (or lack thereof) we've made in dealing with this Depression on a personal level. (Yes, Depression, let's tell the truth here.)

So let me catch you up as quickly as possible, without throwing Germanic sentences at you. Like the first one above.

After battling our portfolios back to about -20% since the carnage began in earnest late last summer, the second wave of stock average crunching attacked us again in February and, thus far, through much of this month. We're probably down about 30% now.

That said, if I don't worry about the actual value of our various holdings and focus on the yields I've been buying, portfolio 1--the only one we have that's not in various retirement vehicles--is now generating roughly 9% per annum in yield. The portfolio is a mix of equities and bonds or bond-like instruments, and the yields are probably, by and large, safe and protected, although you always have to qualify such statements in this market.

I'm going to give you some details now, but please observe the usual common sense, informal disclaimer here. I was once a registered representative-financial advisor but am not currently one. But in any event, if you have any sense, please realize that nothing here should be construed as a recommendation to buy or sell, that if you do what I do you could lose all your money (as I could mine), etc., etc. In other words, use your noggin and understand that no one, including myself, is infallible in a mess like this. (If I were infallible, I'd be UP 30%.)

As indicated, portfolio 1 is generating roughly 9% per annum in yield. I've gradually gotten more conservative in here regarding what I buy or sell. I haven't hedged with options, as the options for many of these vehicles either don't exist or don't have enough premium value to warrant the hedging. So this stuff is what it is.

First and foremost, I've switched to a higher percentage of fixed income type stuff. It's been badly underpriced in my estimation, and as a result, may eventually provide stock-like capital gains when eventually sold or maturing.

BONDS (Corporate)

National City: Bond holdings include one sort of leftover of my late Dad's old bank, National City. The bank has now been swallowed by PNC, due to its inability to get TARP money from the Feds, but its bonds still live on under its name. I bought some early-maturing bonds at a deep discount, with an annual yield (coupon) of 6.25% but at a price that gives me a yield-to-maturity of about 10%. To my surprise and delight, the bonds bounced up to par value (1000 per bond, full value at redemption) right after the company's takeover by PNC, so I'm now sporting a 20% capital gain here. Best yet, I figure I'll just hold 'em to maturity and collect the remaining interest until they mature in 2010. And they're likely to, since the Fed gave plenty of TARP money to PNC to effect the takeover.

BONDS (Municipal)

Ohio Tobacco Bonds: Remaining two straight bond holdings are rather odd: Ohio tobacco revenue bonds with long maturities--i.e., probably maturing after my inevitable death. Bought 'em at a deep discount, but they've sunk about 20% apiece. But I can afford to be patient. The coupon yields are 6 and 6.25% respectively. The yields to maturity (if they ever mature) are in the 11% neighborhood. And these suckers are TAX FREE. Like the tobacco revenue bonds of many states, the Ohio bonds were issued so the greedy legislatures could pre-fund their tobacco graft revenue from the multi-state tobacco extorion settlement and start spending it right away.

Problem with tobacco bonds is, however, that the states are now happily raising tobacco taxes to finance their shortfalls, and Obamanation is making nasty noises about raising Federal tobacco taxes as well. Both idiotic actions could kill the Golden Goose by causing further erosion in tobacco product purchases.

However, Ohio and at least one other state realized this would more than likely happen--that the tobacco revenue actually funding the bonds might erode faster than they thought, making the bonds difficult to repay. So they incorporated a sinking fund, and will actually start redeeming these guys at par value, on a random basis, starting circa 2017. So in spite of their lousy BBB rating, these tobacco bonds are safer than most.

And oh, yeah, here's the best part. That big 6-6.25% coupon is FEDERAL TAX FREE! So I figure I can afford to sit in my negative position in these bonds indefinitely and am not terribly worried they'll default.

Muni Bond Closed-End Mutual Fund. We have another "set" of bonds as well, but they're in a different type of investment, a Blackstone Municipal Bond Closed-End Mutual Fund. Blackstone has a huge number of these funds, some general munis, some keyed to specific states' bonds. The advantage of owning muni bonds of your own state is that they are both Federal tax free and STATE TAX FREE. So while my Ohio bonds above escape Fed tax, my home state of VA gets to tax the yield. But the Blackstone Virginia Bond Closed-End Mutual Fund I own invests in a collection of Virginia bonds that's double tax free. Current yield (which fluctuates a bit, since this is a fund) is roughly 6.45% TOTALLY TAX FREE. Gotta love it.


Oil and Gas Revenue. A bond-like investment I hold in this account is a Kinder Morgan "Trust," actually a sort of REIT (Real Estate Investment Trust) that must disburse most of its income to shareholders ("partners") each year to retain a tax advantaged status. (I won't get into the details of this stuff, but the yield I get IS taxable.) Yield on this, which can fluctuate, is currently roughly 10% due to a massive recent price drop. But I continue to hold as I think the yield is stable. While natural gas prices have tanked, oil is firming, and revenue should be stable for the coming year.

Telephone Company, aka Telco. An investment I picked up some time ago, which took a brutal downturn not long after, is the common stock of rural telephone carrier Century Telephone (CTL). Its dividend yield is nearly 12% and should be safe for at least another year as its earnings are stable. The reason for the surprisingly huge initial price drop last year, right after I bought, was Century's pending purchase of semi-rival rural carrier Embarq. Century intends to maintain the dividend after the merger completes (allegedly the end of this month) and the stock price should stabilize after that while the value, of course, will be greater.

The large price drop was largely due to the actions of arbitrageurs (check the link, complicated to explain) who drove Embarq up and CTL down. Oddly enough, I traded Embarq at the same time for a nice gain, but had no clue traders would smack CTL so badly in the meantime. Acquirers, in fact, usually go down at least a bit after they announce a takeover (while the target company goes up), but this move was unexpectedly volatile.

Anyhow, I choke when I see the paper loss, but delight every time I get a dividend. And dividends an interest out of this account are paying at least a portion of the Wonker family expenses.

Preferred Stocks: What's left? Preferred shares of JP Morgan (JPM-I) and Public Storage of America (PSA-M), the former yielding nearly 15% taxable and the latter yielding nearly 12% taxable. Both are senior to the common stock in the event of economic destruction, but I expect they're safe even though the JPM took a real beating last week due to more bad news on the banks.

Reason I figure JPM is safe in the end, even from nationalization, is that they've remained strong and have, frankly, played serious patty-cake with the Fed and Treasury to suck in bad assets and players to help solve the current financial mess. Although this entirely Socialist Democrat-led government can turn on you (most Wall Streeters idiotically contributed to Obama rather than McCain to make sure they kept getting invited to the best parties--and have paid dearly for it already), the govies are so deep into it with JPM that I think they and their wily leader, Jamie Dimon, are probably going to be okay. BTW, common dividends are getting cut, but prefereds should be safe and level as they are senior to the common.

PSA should likewise be okay. They are actually a REIT controlling a huge number of storage facilities both in the US and abroad. Now, if you think about it, as millions of families are thrown out of their homes, where will they go? To apartments, smaller homes, etc., with the lowest rents possible as they try to recover. They will have excess stuff they need to store somewhere. Where? PSA facilities, that's where. It seems a little unsettling to bet on this company. It provides a useful service in the best of times as people move up or relocate. But it's clearly a downside play as well for the most part. So why not?

Closed-End Stock Fund. Final holding is the Zweig Total Return Fund (ZTR) which is another closed-end fund whose goal is income and preservation of capital. It's not very highly rated for total return and I'm a bit down in it. But the shares are cheap, the yield historically has been a stable 10% taxable, and like the Blackstone fund above, the income arrives monthly, not quarterly (as in most stocks) or semi-annually, as in most bonds. So I can pull some of this every month to support my currently subdued spending habits.


That's it for now. This is not the totality of the shrinking Wonker family empire. But it's the unsheltered part--which, oddly, is partly sheltered anyway by the munis.

If you want to take a shot at any of these, be my guest, although I'm not making recommendations, since your situation is undoubtedly different from mine. But BTW, you can currently pick up CTL and JPM-I a hell of a lot cheaper than I did right now, FWIW.

I'll provide additional updates. But right now the market is opening, and I need to get back involved in the horror show before the shorts and the hedgies help themselves to more of my dwindling, but not entirely ineffective, capital holdings. Or, come to think of it, before the Obama administration does.

Saturday, March 07, 2009

Obamanation: March 7, 2009

I could blather on in my usual fashion about how the smart set hid the facts during last fall's campaign and cluelessly bestowed upon us an avowed socialist as President. But it's taken just a few weeks for Wall Street and American business to get the picture.

Obama's budget is actively hostile to the defense industry, the military, the pharmaceutical and healthcare business, tobacco (of course), coal miners, and--for that matter--the entire American populace which will have to bear the increased costs of his unbelievably stupid and wrongheaded (but highly fashionable) "cap and trade" carbon scam. Hey, who knew?

But why get going on this when cartoonist Michael Ramirez nails it all in one colorful doodle:

One picture is indeed worth 1000 words.

Thursday, March 05, 2009

The Democrats' Economic Stimulus Plan: How It Will Work

Over on the Knox News blog, the commentator denounces several Republicans, including Tennessee's own Senator Lamar Alexander, for refusing to follow John McCain's amendment and voting for the Democrats' pork barrel spending plans.

One commentator takes the cake for his keen insight, proving that the rubes are actually hip to DC flimflam. Let's turn it over to him:

How the New Stimulus Plan Will Work

Three contractors are bidding to fix a broken fence at the White House. One is from Chicago , another is from Tennessee, and the third is from Minnesota.

All three go with a White House official to examine the fence. The Minnesota contractor takes out a tape measure and does some measuring, then works some figures with a pencil. "Well," he says, "I figure the job will run about $900: $400 for materials, $400 for my crew and $100 profit for me."

The Tennessee contractor also does some measuring and figuring, then says, "I can do this job for $700: $300 for materials, $300 for my crew and $100 profit for me."

The Chicago contractor doesn't measure or figure, but leans over to the White House official and whispers, "$2,700."

The official, incredulous, says, "You didn't even measure like the other guys! How did you come up with such a high figure?"

The Chicago contractor whispers back, "$1000 for me, $1000 for you, and we hire the guy from Tennessee to fix the fence."

"Done!" replies the government official.

And that, my friends, is how the new stimulus plan will work.

Wednesday, March 04, 2009

Condescension Central and Rush Limbaugh

And many of us are hoping that all those in power fail, because those in power have a grating habit of being annoyingly self-righteous, hopelessly corrupt, resolutely incompetent and completely apathetic about the freedoms that they have sworn to protect.

--David Harsanyi, ReasonOnline

Great quote above, hat tip to Instapundit for the ref. We've been preaching this, more or less, for years, particularly when it involves self-righteous demagogues like Al Gore, whose idiotic blatherings will indirectly wreck our already weakened economy yet.

The rest of Harsanyi's piece, however, is devoted to the focused Obamanation attack on Rush Limbaugh who wants Obama and his radical socialist agenda to fail. Well, after 8 years of 24/7 the Democrat and media slander that almost entirely disabled the second Bush II term, it's interesting to see the Dems flinch at the first sign of principled opposition out there. Somehow, the attitude of this administration is already beginning to resemble that of Castro's undesignated heir-apparent, Hugo Chavez.

Stay tuned.

Monday, March 02, 2009

Slumdog America

I was taken by a short piece written by Jim Cramer and posted today on, his financial website portal. Jim, for those who don't know about him, is the notoriously manic host of "Mad Money" on CNBC, a show where he puts both his entertainment skills and his not inconsiderable skills as a former hedge fund manager to use in order to teach investors about what's going on in this confusing stock market environment. That he also uses the show to shamelessly pitch his books and products doesn't bother me because he provides a lot of useful information, contrary to his detractors.

The piece I cite is an interesting, short retrospective on the serious second thoughts the New York cognoscenti are having about "their" new President, Barack Obama--a phenomenon echoed in a Wall Street Journal op ed this past weekend. (Subscription content, can't provide a link.) Let Jim tell it in this excerpt:
I felt it when someone whispered in my ear before the Van Morrison concert that I was right and we elected a Leninist. I felt it at brunch on Sunday, and I felt it as I watched Slumdog Millionaire Sunday afternoon. I felt it when I tried to go to sleep on Sunday night.

I felt the prices, the screen, the action, the sense of a vortex down that can't be stopped, of stocks going worthless, of savings being tattered, of equities without bottom, but this time in slow motion, not like 1987, when Karen Cramer [Cramer's wife] predicted a crash and we were all in cash at my hedge fund.

No, I felt the total lack of control that we are all feeling now, the "It is out of my hands," the "Where is the authority?" the "Wow, it is amateur hour at our darkest moment."

Cramer (who almost certainly voted for Obama, BTW), almost inadvertently touches on a couple of major points here, even though he's actually focused on the fear factor. It's this secondary info that caught my eye.

First of all, the observation that "we" elected a "Leninist." First of all, "we" did not. At least I didn't. I knew Obama was a Leninist at heart, or at least a Gramscian because of the company he kept. Like patrons Bill "The Patriot" Ayers and his spouse, Bernadine "Let's Blow Up the US Capitol" Dohrn. And because of his main line of work prior to getting into politics--he was a "community activist." Which is Marxist slight-of-hand for "communist organizer." Anyone who read what little unbiased biographical material there was on Obama could have known this.

But the folks in New York City and Cal-ee-for-ni-a were to focused on "making history" to notice this. A little dumpster-diving, a la Sarah Palin would have helped bring this to light. But that would have impaired the feelgood drive to "make history" so the NYCentric media never bothered to bring it to light.

Second observation: "It is amateur hour at our darkest moment." Once again, well, YEAH. All we heard during the 2008 campaign was how utterly inexperienced Alaska Governor Sarah Palin was, and how dangerous it would be to have such an amateur playing backup to the obviously aging John McCain were we to elect him as president. I pointed out to anyone who would listen that Obama had LESS experience, and zero executive experience--unlike Governor Palin--and yet they were comfortable having him in the TOP SLOT. All I got was blank stares. (Logic has never been the strong suit of folks who vote for Democrats.)

The new President is now making my point for me.

Don't get me wrong. We are currently in such economic trouble that I actually wish Obama every success. Somebody needs to get serious and take decisive action here. Unfortunately, thus far, the amateur who actually became president is not showing signs of promise. First of all, as I genuinely feared, he hasn't been in DC long enough to have the political clout to control the clowns that now run the House and Senate, particularly Speaker of the House Nancy Pelosi, the wealthy San Francisco Dem with a chip on her shoulder who wants to tax America to death and redistribute everyone's income except hers.

But making matters worse, Obama, in spite of exuding the charm and charisma which has the Ivy League types swooning in the aisles a la Adlai Stevenson, has just put out a budget that places socialism front and center even as the economy is failing. Yep, loads of new taxes, punishment for energy companies, utilities, pharmaceutical companies, and indeed, anyone who makes money, or at least used to. And oh, yeah, "cap and trade," guaranteed to put us all in the poor house and already repudiated in Europe as too expensive although the press never reports this either.

And more global warming crap, even as DC digs out of an early March blizzard, generated by a much colder than usual winter pattern here. This is the equivalent of the Republicans laying the Smoot-Hawley tariff bill on an already staggering post-1929 American economy, effectively finishing it off. But the Dems are clueless. Nothing, including a crashing economy, is going to prevent them from taxing and spending and subordinating all of us to their socialist ideology.

Of course, all these idiots could care less, as their disastrous steps will, predictably, increase clamoring for MORE government control of everything which is precisely what these leftists want anyway. It's a sad state of affairs.

But like I said at the beginning, I didn't vote for Obama. So I'm going to sit back and watch the fun for now--fun at least except for my fast-fading retirement portfolio which the Dems are happily trashing along with everyone else's.

At any rate, none of this stuff is my fault because I wasn't ever persuaded by the anti-Bush propaganda to switch sides. I knew the dangerous game the Dems were playing--discredit the sitting president by slandering him at every opportunity the better to make their own guy look like the Messiah.

But the Messiah has thus far flopped rather spectacularly. The market averages are now down to mid 1990s levels and falling fast. It's not an exaggeration to say that all the Boomer retirement money made since then has, in the last few months and particularly in February, been completely vaporized.

And so NOW the cognoscenti in New York are wringing their hands about Obama and the Dems. Well, this is what they SAID they wanted--to make history. And now they are. The guy they donated a ton of money to so he'd win the election is now going to tax the rest of their money away and ruin the financial institutions to boot by pushing the confiscatory policies of Nancy Pelosi. And THEY were the ones who elected Obamanation. Not me.

Who the hell did they think they were electing, Ronald Reagan? They voted for a guy who chums around with the Weathermen, America's original terrorists, and the corrupt machine politicians of Chicago. Why are the cognoscenti now wide-eyed with wonder at what they got for their "history making" votes?

The schadenfreude I'm indulging in here would be far more delicious, alas, were my life savings not going up in almost literal smoke even as I type this entry. It's a fine mess we've got ourselves in now.