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No Accounting for Goldman

They've got friends in high places. Dousing global warming. Send your own daughters to war. Plus more.

10.17.08

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GOLDMAN'S TRAVAILS

Re: Matthew Vadum's Goldman Sachs Government:

Nice article by Mr. Vadum. I would add the Enron melt-down, when Clinton Treasury Secretary Robert Rubin asked Bush Treasury Undersecretary Peter Fisher in 2001 to pressure the NRSROs (Nationally Recognized Statistical Rating Organization, e.g. Fitch, Standard & Poor's, Moody's) not to downgrade Enron's credit rating after it was clear that the company had cooked the books by keeping debt off its balance sheet. More recently Citigroup, where Mr. Rubin sits on the Board of Directors, has been such an economic disaster that even the billions of dollars of capital provided by Singapore and Dubai have not been enough to fix its problems. Naturally, Mr. Rubin claims that he was not involved in the massively leveraged Structured Investment Vehicles that Citigroup created and kept off its balance sheet, and later led to its near-demise. You'd think such talented fellow would have learned the first time the danger of off-balance sheet financing.

Another instance of Goldman self-dealing was the September "rescue" of American International Group (AIG) by the Paulson Treasury. During the weekend meeting of government agency officials where the intervention was planned the only nongovernmental attendee was Goldman Sachs. Not surprising, given Goldman's $20 billion exposure to AIG debt.

As a final example of Goldman incompetence belying its reputation for brilliance look no further than Trenton, where Governor Corzine, a former Goldman chairman and supposed finance whiz, and despite his 17% increase in the state sales tax, is presiding over a multi-billion dollar state budget deficit. The governor's slavish obedience to his masters in the public employee unions has led to a complete breakdown in spending discipline. This coupled with his near total disregard for the taxpayer has the Garden State experiencing an exodus of talent and business that shows no sign of ending.

-- Paul M. DeSisto, CFA
Cedar Grove, New Jersey

OUR PROBLEM

Re: Mark Hyman's Obama's Farrakhan Problem:

Barack Obama has no Farrakhan problem. Why? Because virtually no one ever mentions his associations with the leader of the Nation Of Islam.

Louis Farrahkan is arguably the most powerful man in what is left of the black civil rights movement. He is also totally anti-semitic, anti-white and anti-American. He preaches segregation and black supremacy. He has close allies in Rev. Jeremiah Wright and Father Phleger and collaborates, from time to time, with Al Sharpton, Jessie Jackson and Barack Obama. He is also a self-proclaimed practicing Muslim, though other Islamic organizations dispute the legitimacy of the Nation of Islam. Barack Obama was a principle organizer of and participant in the "Million Man March" with Farrahkan and Sharpton. When Obama went to Washington, he took two members of the Nation oF Islam with him to work on his staff. And, despite the public radicalism of Minister Farrahkan, Barack Obama seems to have no desire to disassociate himself from the Minister's ideology.

Now, why is there so much reluctance on the part of the American media and American politicians to comment on people like Louis Farrahkan and Jeremiah Wright? Fear. White America is terrified of being labeled as racist. Farrakhan, Wright, Phleger all preach hate, racial intolerance, segregation and anti-Americanism. Yet few stand up and say that this is dangerous. If John McCain had close ties to David Duke, the KKK or the Aryan Brotherhood, we would have been inundated with exposes. Yet Barack Obama's ties with America-hating radicals is almost completely ignored. And, if the MSM is to be believed, a man, closely allied to men who publicly advocate the destruction of the United States of America, is about to be elected to be the leader of that very country.

This is not about race, this is about philosophy. Why would anyone elect a man who associates with people who advocate the destruction of a nation to lead that nation? Can any of us conceive of a Presidential cabinet composed of people with the names Ayers, Wright, Farrakhan and Phleger? People have to remember that when they elect someone to public office, they are also electing his philosophies and giving his associates access to the highest levels of our Government. It is therefor wise to educate yourself as to the candidates closest associates. This is something that has not been done in this election.

Barack Obama does not have a Farrahkan problem, the people of the United States do.

-- M. Tobias

Still Looking

Re: Philip Klein's Searching for Obama's 95 Percent;

I like you pressing the Obama Campain to define their terms with precision. Another good question to press the Obama campaign on is: Will this $1,000 per couple be a one-time event or will it be an annual event?

Please write a followup article with any more concise information that you are able to pry out of them.

-- Paul Ringstrom

"If Barack Obama can effectively claim that his plan cuts taxes on 95 percent of Americans, then the term 'tax cut' has no meaning."
 
Actually, it does, but not in a way Democrats could ever admit to.
 
How? Given that the corporate income tax operates as a sales tax, and that the half of Social Security and Medicare tax alleged to be paid by employers is simply passed on to consumers, there's no one in America, however poor they may be, who doesn't pay tax. A rebate, then, could fairly be construed as a tax reduction for something approaching that 95%.
 
Of course, to get to that point the Democrats would have to admit that both taxes are simply frauds perpetrated upon a credulous public.

-- Tom Kratman

The mantra that one often hears about taxing the wealthy is that they can afford to pay the tax. Be sure, I'm not wealthy by any means. My wife and I receive pension benefits from our former employers and we receive Social Security, a portion of which is taxed, thanks to Al Gore and Bill Clinton.

I would like to ask the liberals that continue to make the argument about paying higher taxes why those on the liberal side continue to take all the deductions allowed by the tax code. Why don't Democrats such as John Kerry (who reportadly paid at a rate of 12% the year he ran for President), Obama and others that believe the rich should pay more taxes simply refuse to take advantage of the tax regarding deductions. They are not required by law to take deductions, are they? Shouldn't they just pay at the tax rate for their bracket as a show of good will about their position of the rich paying more?

-- Glenn Richardson
Hendersonville, North Carolina

I enjoyed your article on trying to pin down the Obama campaign on the 95% tax "cut." It is funny how nebulous their clarifications are! In Axelrod’s reply where he stated: "The mechanism for it has to do with deferring part of the withholding taxes, but you should talk to our budget folks on that." It sounds to me like they are changing withholding tables, but you would still be responsible for the full withholding tax liability at the end of the year. You may see more money in your pocket after you cash your check, but you still have to pay that "deferred" tax liability.

-- Larry F.

I would like to know how the Bush tax cuts will figure in Obama's plan. I understand he would allow the tax cuts to expire, This would be a tax increase for many of us. So then he will give me a $500.00 tax cut from the 2000 tax rate. Yippee!
 
McCain plans to keep the Bush tax cuts intact if the Dems will let him. I think this is  a no brainer for me.

-- Ron Byrd

COOL IT

Re: Paul Chesser's Green Journalism:

Click on the internet "Petition on Global Warming" and "Manhattan Resolution" to read the 31,000 names signatories to those two documents; they are all professionals with 9,000 PhD's among them. They refute resolutely any "proof" of antropogenic global warming -- and they for sure are not "skeptics," "contrarians," or any other name the globaloney warming proponents call us. Dr. Hansen in his younger years predicted catastophic global cooling, descrbing how new glaciers will crush the New York skyscrapers to dust (see Newsweek of April, 1975). He proposed using war planes to sow carbon black over the poles to increase solar energy absorption and so prevent the coming assault by those new glaciers. Mr. Chesser should consult these two documents, and then inquire as to the politics of those proponents of global warming -- far, far left I would bet.

-- Marc Jeric
Las Vegas

LAISSEZ-FAIRE-LEFT

Re: R. Emmett Tyrrell, Jr.'s Democrat Deregulators:

Concerning Fannie Mae and Freddie Mac, Mr. Tyrrell writes: "Curiously, the Democrats have not suffered the consequences of their "deregulation" of the mortgage market. Instead, they have hung the "deregulation" canard on McCain." Mr. Tyrrell goes on to paint Senator McCain as a frustrated champion of oversight and regulation for these two GSEs. Who thwarted these attempts? Why, "democrat deregulators, " of course.

These are the times in which Democrats and Republicans, with the help of their apologists, are writing revisionist history concerning their connections to Fannie, Freddie and the current economic crisis. Mr. Tyrrell is part of this effort on behalf of Senator McCain.

I will leave it to anyone so inclined to research John McCain's role the 2005 and 2006 efforts at regulation. However, I offer two observations. Concerning 2005, Darryl Levings and Dave Helling write, "Democrats contend McCain actually waited a year to sign on to the 2005 legislation, did little work on it and did not bother to vote last year to tighten the Federal Housing Administration's mortgage lending practices." (Kansas City Star, October 16, 2008) It is easy enough to verify this and it hardly paints a portrait of herculean and heroic efforts at regulation. McCain signed a letter in 2006, along with eighteen other senators, calling for greater regulation of Fannie and Freddie. Then, he proceeded to hire more than a dozen current and former lobbyists for Fannie and Freddie to work on his campaign. The job of these lobbyists? To stop regulation.

But, to get mired down in these details is to overlook the all important big picture. Since Ronald Reagan it has been the mantra of Republicans and conservatives that government is always the problem and never the solution. This being the case, government regulation and oversight are, by definition, bad -- something to be eliminated. Add to this philosophy, Mr. Bush's vision of an "ownership society" in which every American family would own a house and a stock portfolio. Grease the process with incredible liquidity provided by the Fed under Mr. Greenspan's stewardship and the stage was set for the current crisis. I remind you that this occurred while Republicans controlled both the executive and the legislative branches of our federal

government. A final point: While Fannie and Freddie contributed to the crisis by creating "toxic securities," the bulk of these securities are the work of unregulated hedge funds. Republicans have fiercely resisted any effort to imposed government oversight on hedge funds and they rewarded the managers of these fund by taxing them at the capital gains rate instead of the ordinary income tax rate.

-- Mike Roush

PROBLEMS OF HIS OWN

Re: Nicole Russell's Filibuster-Proof Franken:

I hate to disagree with pundits, but I think that Norm Coleman's problems have little to do with his stand on Iraq, Hollywood money being funneled to Franken or Franken's ads. I think it is much simpler than that. Coleman's constituents were against the Wall Street Bailout 20-1. He ignored them and voted for that legislation. I think he is now paying the price for that vote. In fact, several other Republican incumbents should also be worried. It is always a good idea to remember who one works for. Especially in an election year.

-- Michael Tobias

SOCIAL GUINEA PIGS

Re: George Nemayr's Sleepwalking Toward Cultural Revolution:

I can tell you this. My daughters will NEVER register for the draft! I don't give a damn what that piece of crap Obama says or does. This is coming from an active duty Major in the Air Force. My daughters will not become cannon fodder to satisfy some social experiment.

-- Robert A. Maxey, MD
Major, USAF

SHOCK: CORPORATIONS CARE ABOUT MONEY

Re: Peter Ferrara's Obama's Health Care Lies:

Likely nearly all of the health care commentaries published from the right side the political spectrum, this also is highly speculative, theoretical and devoid of worst-case scenarios. The author has obviously never been both chronically ill and unemployed.

Although now self-employed, I have been both and have seen up-close and personal the ruinous cost of and suffering the world's most expensive health care system can inflict on those it locks out for "pre-existing conditions."

The perpetuation of employment-based health insurance in an age when jobs are famously off-shored is the key issue in this election, and to hypothesize about capitalistic incentives like a government $5,000 down payment on a $12,000 health insurance policy -- if you are not disqualified by your pre-existing conditions -- simply reflects an ivory-tower, out-of-touch ignorance of reality.

Yes, in theory the for-profit health insurance industry can be more equitable for the chronically ill (which includes almost all of us over age 65) than it is. Then please tell us why it hasn't become so already, through the beneficent spirit of competition in the free market, in all the decades that policy makers and theorists have been arguing about it every four years?

The obvious and inescapable truth is that the corporate bottom line comes first, before individual patient welfare. It has to -- the stockholders would be justified in firing the board of directors, as in any other sector, if it were not so.

-- Jim Dickinson
Wickenburg, Arizona

At last…The first explanation I have heard about what the $5,000 credit means to different people.

Sounds bites are too short. I am an avid watcher of Fox News and have never heard this. Thank you, Peter Ferrara and American Spectator.

-- Jancey

THEIR FINEST HOUR

Re: Mike Showalter's letter (under "Poor Everybody") in Reader Mail's Did You Ever Have to Make up Your Mind?

It was Carter who said he was going whip Kennedy's you know what. One Carter campaign staffer said it was "The highpoint of the entire 1980 Carter campaign."

-- Michael Skaggs
Murray, Kentucky

AFFIRMATION

Re: Reid Collins's It Can't Be Done:

Reid Collins is right. It is the triumph of soft (socialist) expectations.

-- David Bartlett

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