GO FOR THE GOLD
Re: Matthew Vadum's Financial Affirmative Action:
I agree that government meddling in the markets is a root cause of the current mess, but is it only the fault of the freako left?
I live in California, one of the epicenters of the meltdown, and I can tell you nobody was holding a gun on the developers and brokers.
And right up until the kaboom, they were all singing: "Get it built and get it sold, close the deal and get the gold!"
The brokers knew perfectly well how many of the "buyers" were bad risks-so did the buyers. So did the guys who bundled these time bombs and turned them into "derivatives" that nobody understood.
Ah, but THEY did! They understood that they would be in court for prejudice if they didn't sell, and in court for fraud if they did. The only safe path was a product that nobody really understood -- that is, being able to prove they didn't know what they were doing in the first place.
The CFO version of the Nuremberg defense -- shades of Ayn Rand!
Nobel laureate Sir V.S. Naipaul once described the welfare state as a country drawn into a conspiracy against itself. Too bad we can't get him to run the Treasury Department.
-- Martin Owens
Thanks to Matthew Vadum for daring to mention the connection between "affirmative action" and foreclosures. Just as Hillary's friend, Ms. Wright-Edelman once postulated that some are not acculturated to work, some are not acculturated to home ownership. Once, buying a home meant living in it, taking care of it and "burning the mortgage" in thirty years. Then our goal changed. It became starter homes followed by movin' on up. After that, starter homes were just too declasse. Impress your friends, start out in that mini-mansion. As for even owning your own car. Much glitzier to lease a Mercedes than own a Ford.
Blame is being placed on unscrupulous lenders, absolving mortgagee of any responsibility. I suppose there is a certain class of potential homeowner who cannot look at the net pay box on his paycheck voucher, then quickly add up his static outlays (those would be the expenses that never change -- except to upwardly spiral in inflationary times), then loosely factor in his own whimsical spending habits that are not likely to change. The Grand Total, which neither he nor the lender is apt to consider, indicates that he is not a very good risk. And as he has never made a house payment before, he probably doesn't know home ownership doesn't stop there. There are taxes and insurance and a lot of incidentals involved in just making a new home livable. He is in over his head the minute he steps in the front door
Ah, but that is OK, because there are countless dependable, nose-to-the-grindstone homeowners on year 27 of their thirty year loans who will be asked to chip in and help the hapless victim of a shyster real estate agent who misled this poor lamb. Guess who is in for a shearing? Not the guy who couldn't even keep up his house payments! It used to be called the "Chicken today, feathers tomorrow" mentality. But thanks to a government that sees to it that no one ever has to eat feathers -- even if it is a diet he fashioned for himself, that will never happen.
More and more, I recall a question I had to try to address in an ethics course long ago, "If you reward the undeserving, what do you do for the deserving?" Ask any politician of either party. And get ready for some waffling.
-- Diane Smith
In 1983 I took a course in Banking in the University of Chicago's MBA program.
The subject of redlining came up. The lecturer pointed out that there had been a lot of complaints -- but identifying redlining was simple and straightforward. One merely needs to look at default rates. If one group or area had statistically LOWER default rates than another, that was prima facie evidence of redlining. Lenders requiring better creditworthiness for a group or an area would reduce their loan failure rate. At that time, the lecturer mentioned that they had done a number of studies and had not found any redlining.
Judging from current events, I'd say that greenlining has indeed been going on; lenders irrationally lending other people's money to poor re-payment risks. How liberal of them! I wish I could find a way to avoid being the supplier of "other people's money."
-- Dan Hirsch
NOT DOING ANYTHING?
Re: John Berlau's Doing Something?:
I haven't done cartwheels since the U.S. Hockey Team won the Olympics in 1980. Today is another new day for Americans. The Bush-Reid-Pelosi combine of corruption and incompetence is over. My gratitude is to the patriots in the House of Representatives and their constituents who let them know how important this vote was. God Bless America!
-- Jack Hughes
The reasons to forgo the bailout of the financial institutions are myriad, as the excellent article by Mr. Berlau enumerated, but the numerous Democrats, and a good proportion of the Republicans, some RINO and some tried and true, voted for the objectionable and odious bill. Fortunately for the tax-paying citizens, once again the Dems took square aim at derailing Senator McCain's presidential aspirations and shot themselves in the foot. Maybe as they recover, Congress will hear the outcry of the people and reconsider putting the bailout on the backs of the voting public.
-- Ira M. Kessel
Rochester, New York
What, in God's name, does this mean? I'm neither the brightest or dimmest bulb in the chandelier but it sounds like scare-mongering to me...it's impossible for a layman to decipher.
-- David Knipe
I read that President Bush is "very disappointed" that the House has refused pass his $700 million bailout scheme.
I, and I'm sure that a great many other Republicans share my feelings, have been very disappointed with Mr. Bush since shortly after he was sworn in for his first term. Mr. Bush has failed to lead the country at every opportunity: the war in Iraq, the Iranian threat, illegal immigration, border security, energy independence, government spending,
ethics reform, and on and on.
Now he knows how the people that foolishly put him in office feel. NOW Mr. Bush wants to have a go at leadership?
Too little, too late, and too much money!
-- T.L. Jeffrey
Why the reluctance to assume $700 billion in debt?
Each of America's 138 million taxpayers would only have to assume a little over $5,000 in additional debt. Who would notice?
As for me, I welcome the spendthriftiness of our improvident betters in D.C.
U$A, USA, usa ...
-- David Govett
THE NAME GAME
Re: The Prowler's Room Service:
One has got to wonder about the Obama advisers' perplexity at their inability to get under John McCain's skin, by using his first name in the debate.
Five and a half years in the hands of North Vietnamese torturers probably render anything Barack might come up with as at worst poor entertainment to Senator McCain. Oh, but what if Barry makes fun of his ears?
-- Dan Hirsch
First, newscrater Couric's behavior toward Governor Palin and, then, with the big "O" and his minions, the self-proclaimed guardians of the dignity of all mankind, proudly and publicly engage in the most petty and sophomoric of insults. They were expecting "a flash of [the] McCain infamous temper," but forgot that he endured far worse insults at the hands of their philosophical brethren in Indochina...which, I suppose, makes it all the more sophomoric.
-- Reid Bogie
Re: Daniel Mandel's The Hero of Trafalgar at 250:
As an unapologetic fan of Lord Nelson (I have always been aggrieved that my birthday misses Trafalgar Day by one day), I would like to make two observations. The first is that Nelson was not the universal hero of his time that is often assumed today. When he was alive he was actively shunned by the English upper classes because of his disgraceful abandonment of his loyal wife and his sordid relationship with Lady Emma Hamilton and her cuckolded husband. Nelson was extremely popular with ordinary men and women in England, large crowds followed him everywhere and the account of the public reaction when he left England for the last time to command the fleet at Trafalgar is extremely touching, but he was a leper to the drawing rooms of London. The Duke of Wellington meet him during his last visit to London and thought him the most vain and silly, the biggest fool he ever meet. Young women from good families were warned not to associate with Nelson and the Hamiltons because it would destroy their social reputations forever. Nelson's own daughter Horatia refused to her dying days to accept that Emma Hamilton was her mother, although she was proud that Nelson was her father.
The second point is that when the 200th anniversary of the Battle of Trafalgar was celebrated in Britain it was scarcely mentioned that the French were the losers. It was a classic example of political correctness at its most foolish. Don't expect another Nelson when then the real one is an embarrassment to his country and his achievements are
swept under the carpet. While I certainly see the need for leaders as brave, innovative and inspiring as Lord Nelson I don't expect to see them -- Nelson was a man of his own time, he had character flaws that were serious then and would be regarded in the same light today, and, above all, our times are different. No military that produces no risk, no responsibility, mister nice guy diplomats and paper shufflers like Colin Powell is ever going to lower its standards and promote somebody as brilliantly flawed as Lord Nelson.
-- Christopher Holland
Re: John Tabin's The Great Debate Escape:
Well, well, well, we now have a preview of a McCain administration. John suspended his campaign, rode to the rescue, and what was the result? He contributed nothing to the final result of the sickening bailout, went back on his promise to work on the problem and miss the debate if no solution was in hand, returned to his Virginia office after the debate, and worked the phones -- just like the campaigning Obamamessiah! You can garb the resulting crony capitalism in a Republican fig leaf (all that's left of the Republican's flawed--but somewhat better--plan), but Republicans, apparently including Senator McCain, are going to vote for a government bailout of Wall Street that is neither conservative (unprecedented intervention into the financial system) nor libertarian (for all the obvious reasons). Senator McCain looks, well...flighty and unserious. Which, of course, he is! The crucible of financial crisis has exposed a senator of the United States at sea, lacking any real understanding of the economic problem or how to best resolve it.
You would think his "honor" politics would cause him to resist any solution emerging from the likes of a Hank Paulson or Barney Frank or Chuck Schumer, considering that these fine gentlemen were involved up to their eyeballs in the creation of the mortgage mess, but our old Navy pilot is looking for some bread crumbs somewhere marking a path forward from the economic crisis. Combined with his odd debate performance (Americans look one another in the eye, Senator), the American people have now taken the measure of our foremost war hero: a brave man promoted above his competence level when he left the House. The polls are showing this, and Senator McCain will have to overcome his failures of this past weekend if he hopes to convince enough doubters to return this race to some semblance of competitiveness. Maybe some of those nutso conservative "intellectuals" who are so eager to throw Sarah Palin overboard should turn their attention to encouraging Senator McCain to withdraw "for health reasons." At least Sarah has common sense, a governing temperament, and the ability (and interest) to learn what she does not know. Would that we could say the same for Senator McCain!
Just imagine Senator McCain looking for new "bipartisan" solutions to economic problems as this bailout creates its unintended consequences! Maybe, he'll make Barney Frank his economic czar and new BFF! That'll work! The only question in my mind is who will be Herbert Hoover in this little drama: George W. Bush for ceding economic policy to a Wall Street insider and crony capitalist, or (should he actually be elected) John McCain for increasingly peevish know nothing economic interventions? I would imagine that blanking the Presidential line on the ballot is looking a lot better to conservatives and libertarians today than it did as recently as last Thursday. Hey, I know we all shudder at the possibility of an Obama administration, but think about the long run consequences of a McCain administration based on what you saw this weekend! (Not that what we do may make much difference now...)
Moreover, I hope we are all watching the vote on the bailout. A vote for the bailout should disqualify any Republican legislator for any future leadership role in the Republican Party. Boehner and McConnell should be removed from their leadership roles after the election, and replaced by legislators that stood up for America in the face of all the pressures.
The one good thing about the bailout vote is that it will identify all the weak sisters in the stupid party. And we should also note which self-styled leaders of conservative opinion are supporting this bailout, whether reluctantly or not (yes, that would be you Rich Lowry, among others). Unfortunately, too many journals of conservative opinion are off the rails on this one.
Let me give some free advice to Senator McCain, not that he would ever take it. The government should suspend "mark to market" for securities in a temporarily illiquid market and replace it with "fair underlying economic valuation." If there truly is a general liquidity crisis, I would even accept Fed action to inject liquidity into the market (but only to kick start the economy, not to prevent a recession, which is inevitable). Provide a low tax environment that encourages capital formation. And then the government should do nothing. Allow the stock market to fall significantly (better take the hit now and position for recovery than tolerate the slow, long-lasting leakage from ever more counterproductive government interventions). Allow creative destruction. Allow Secretary Paulson's cronies to go out of business. Understand that better, more efficient capitalists will (thankfully) replace them. Oh, and never, never, never allow a Barney Frank to dabble in our financial markets ever again. The American people are looking for accountability. We should make sure that everyone in this nation understands the central role that such as Barney Frank (and his allies among "community organizers" and Wall Street crony capitalists) played in creating this economic mess. Not that the stupid party could ever conceive this, but there should be sarcastic laughter at any future economic pronouncement made by the proponents of shaky mortgages. Our message to the American people: Never Again!
-- Stephen Zierak
Kansas City, Missouri
RIGHT INTO MY TRAP
Re: Mike Roush's letter (under "He's Baa-aack") in Reader Mail's Snooty Katie:
Along with rest of the TAS community, I wish to welcome Mr. Roush back from his self-imposed exile from these pages. Our imaginations would surely just fly away if it were not for his raspberries from the sidelines.
In response to my ethnography on Liberal behavioral patterns, Mr. Roush resorts to the "so-iz-you" defense suggesting that, if I merely transposed the words "Liberal" and "Conservative" in my missive, we would "have a fair approximation of how some liberals view their counterparts." Thus, unwittingly, Mr. Roush reinforces my point that Liberals are befallen with the psychological malady of projection "where they accuse others of the very attitudes and behaviors they themselves engage."
In truth, both Conservatives and Liberals launch rude fireballs at each other -- just as Mr. Roush states. I would differ from Mr. Roush in that I find acidic comments coming from both respective mainstreams and not just from the fringes. I would also confess that many letters from my fellow Conservatives which appear in TAS do make my baby-soft skin blush. Sometimes, when I read these letters on my plantation, all I can do is shout out "mercy" and call for my man, Bob, to bring me two aspirin and something cool to drink. Between Conservatives and Liberals, however, there is a small but significant difference. Conservatives write that way because they genuinely don't like you. Liberals write that way because they think themselves the very embodiment of reason, decency, sweetness and light.
I am glad Mr. Roush thinks he has friends and acquainted ones who are Conservatives. I am even happier that "...We break bread together, we work in the community together and we discuss important issues in as civil manner." Yet, to tell you the truth, I'd be more interested in what these friends have to say about the matter. Unfortunately, Mr. Roush's testimony has that "some-of-my-best-friends-are-black" type flavor to it. It would just be nice to hear his friends' side of the story.
As far as the canard of Conservatives' belief in a vast conspiracy against them, I doubt very much Liberals all get together and hold meetings to plan battle tactics. I hardly think any Conservative does. Instead, I suggest Liberal discrimination and anger against Conservatives are attitudinal in origin. Not being a Conservative nor living as one, I am not surprised Mr. Roush thinks these stories of Liberal rejection and outrage are vastly overblown if not totally imaginary. Indeed, Liberals I know and have known rarely think they are discriminating against Conservatives. They scarcely give it a thought. Instead, they tend to believe Conservatives do not fit the "job specs" for this or that for one reason or another -- "they just are not a good fit." At the academic level, some Liberals (particularly in the social sciences but not exclusively so) will venture that Conservatives can't get past their ideology and do serious work in their field. "Wouldn't they be happier doing something else?" Rationalizations, yes. That's just the point; Liberals think they have common sense reasons for what they do. Of course, that's to the extent any thought is devoted to the matter. Most of the time, it is simply "assume, skip over it and move on to the next subject."
I don't expect a Liberal to see these things. But, as I did, if you pass from being a Liberal to being a Conservative, woe will be unto you. Outrage? I can't tell you how many times I've been on the receiving end on that one from those who believe they are only doing what any rational and decent person would do. As bad as that is, it is better than not getting a chance to speak your piece at all. You know, we Conservatives are so divisive.
-- Mike Dooley
Re: Peter Ferrara's The Economic Recovery Plan:
I want to add my commendation to Mr. Ferrara for his outstanding Sept. 24 "The Economic Recovery Plan." I am a portfolio manager at a very large international asset management firm, and am fielding numerous calls and emails from my clients concerned about the turmoil in the financial markets. When asked by clients the underlying cause of the problems I refer them to Mr. Ferrara's article in Spectator.org; I haven't seen a more concise and effective interpretation in all my hundreds of readings on the subject.
-- Paul M. DeSisto, CFA
Cedar Grove, New Jersey
Great work by Mr. Ferrara on the explanation for the problem. One wonders where Harry Reid and Nancy Pelosi have been the past two years while this went down. And Obama doesn't have to go to Washington since these same cronies have already assured him that they will not honor any McCain suggestion (at the expense of the American people). And where is Justice on this? They were quick to indict Scooter Libby over a relatively trivial detail forgotten.
-- Robert Mandraccia, MD
Fort Myers, Florida
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