Bailout Fails, Fallout Flies, Blame Game Begins…Empire Ends?

Most economists, regardless of political persuasion, warned that the so-called bailout up for a vote this afternoon was absolutely necessary to prevent a severe contraction of the credit markets and, therefore, the American economy.

The bailout was voted down, and the stock market immediately sank by record numbers. The bailout would have cost $700,000,000,000; the losses on Wall Street that followed its defeat total over $1,000,000,000,000. The fallout from this vote will take months to play out.

What has brought us so suddenly to the brink of a recession and, potentially, a depression?

The easy answer: greed…too much easy money from too many overly enthusiastic investors being lent with too little regulation to too many unqualified borrowers.

The fault lies not simply with one party (though the Republicans were in charge for the last eight years) or one official (though Alan Greenspan continued to lower interest rates well beyond what was necessary or prudent), but with millions of us. We went along for the ride as a careening global economy pumped trillions of dollars into our economy; we took out home equity loans, bought homes we couldn’t afford, ran up our credit cards, looked the other way as government grew at an unprecedented rate, and turned a deaf ear to those who warned of impending crisis.

When the housing bubble burst, the easy money dried up, foreclosures skyrocketed, the value of homes plummeted, and major players in the financial industry slid into insolvency, so that now many businesses can’t find money to meet payrolls, prospective homeowners can’t find money to buy houses, governments can’t find money to pay pensions or fix infrastructure, car buyers can’t find money to buy cars, and so on.

As lending slows, economic growth slows. As economic growth slows, lenders are more reluctant to lend. A vicious cycle ensues.

So today, with all the dire warnings circulating, who was it that defeated the bailout? By and large, it was House Republicans—the same House Republicans who’ve been primarily responsible for spending the nation into a massive federal debt, who supported a $10,000,000,000.-a-month Iraq War, who supported deregulation of the financial industry and sat silently as the Federal Reserve Bank lowered interest rates to irresponsibly low levels.

House minority leader John Boehner today blamed Speaker of the House Nancy Pelosi for the defeat of the bailout after she gave an inappropriately partisan speech just before the vote, alienating key Republican Congresspeople.

Pelosi’s timing couldn’t have been worse. But for House Republicans, who bear a substantial share of the blame for the current crisis, to scuttle the bailout over hurt feelings is indefensible. There are solid ideological reasons for opposing the bailout; fear of constituents’ reactions or anger at a snippy Speaker aren’t reasons at all.

It’s worth noting that the Bush administration inhereted a budget surplus and a healthy, if somewhat overly exuberant, economy. Not only has that budget surplus been squandered, but we now face the largest budget deficits in history and the largest national debt in history.

So here we are, in dire need of an influx of liquidity into the credit markets as we face the retirement of the baby boomers, a crumbling infrastructure, a military stretched to the breaking point, a Gulf Coast devastated by Katrina and Ike, a trade deficit of record proportions, that pesky national debt, and stiff economic and geopolitical competition from the Chinese, to whom we owe hundreds of millions of dollars.

Democrats aren’t blameless in this financial crisis, but President Bush and the Republicans in Congress can’t escape the fact that, as Harry Truman said, “The buck stops here.”

Only now, it might be more accurate to say, “The buck shrinks here.”

And so does the American empire.

Newsprism

Mama Metonymya—”Wall Street/Main Street” Metaphor Hackneyed to Death

The metaphorical distinction between Wall Street and Main Street has been employed by every talking head and talk host on every network in the country, by most of the politicians, and by half the print journalists during discussion of the current fiscal crisis.

From this day forward, any use of the metaphor will be considered hackneyed—proof that every cliche has a silver lining.

Newsprism

Guest Column: “A Large Pile of Fiscal Manure”

The following spot-on analysis of the Big Government approach to the financial meltdown comes courtesy of Michael Sherry, a former federal bank examiner and friend of Newsprism.

Not only is it spot-on, it was written on March 31…nearly six months ago. Uncanny.

FISCAL MANURE

A super government agency to regulate the financial industry? Now that’s corruption the big banks would love. The regulation industry, well greased by bank lobbyists, fully approved both the safety and soundness of market losers like the stated salary loan and 125% equity deals, long before the falling out we are facing. For every examiner who tries hard to do good work, there will be other examiners or senior staff members there to leverage and sway reporting in their own best interest. The same is true of legislators.

Let’s expose the regulators for what they are…ORIGINATORS of the mess, all with the blessing of the most dishonest and money grubbing people, called congressmen and senators in our government in DC.  Every legislator in the House and Senate should feel ashamed, yet all too often, they are busy making their cash and grafting their way to a job after they get out of office.  They all seem to get great consulting fees and jobs, and speaking fees from the companies they helped.  This is wrong and nobody really seems to care.

The system will only survive if those  who participated in the financial wrongdoing, both in industry and in government, suffer monetary penalties. Yet today, they are given virtual immunity.  The penalties they’re likely to suffer are minute compared to the profit that is made on the back of the honest consumer, who as usual is asked to carry the burden.

At least there are some people that see this for exactly what it is, and it is a large pile of fiscal manure.

Michael Jay Sherry is a Chicago-based consumer regulatory compliance consultant and former Federal Reserve Bank examiner.

Presidential Race Breaking For Obama as McCain Stumbles

When McCain and Obama met with George Bush during this week’s frantic lurch towards the left in DC, the sputtering McCain campaign might have been dealt a death blow.

The financial crisis further discredits a Bush administration already infamous for its incompetence while at the same time shining a spotlight on the close ties between Bush and McCain. Add to that McCain’s questionable choice of runningmate, yesterday’s transparent ”suspension” of his campaign, and his dodgy stance on the scheduled debate, and things start looking good for Obama.

The scare the financial crisis has put into the voters naturally favors Democrats in a year in which Republican failures have reached Hooverian proportions.

A prediction: in November, our prediction of an Obama victory seven and a half months ago will prove correct, Democrats will consolidate their hold on both houses, and the sharpest turn to the left since Roosevelt will begin.

How ironic: the conservatives who most loathe socialism have made a hefty dose of it all but impossible to avoid.

Newsprism

“Hacktivism” Isn’t Activism—Just Vandalism

Last week, Sarah Palin’s email account at yahoo.com was violated by a hacker, leading to a deluge of press reports about the incident and hacking in general.

Bill O’Reilly responded with his usual reserve and humility, demanding long jail terms for the “criminals” responsible, including any news organizations that published the content of Palin’s emails.

In response to O’Reilly’s absolutism and judgementalism, another hacker or team of hackers violated www.billoreilly.com, going so far as to release the passwords of hundreds of O’Reilly.com’s users.

While some hackers may have good intentions, their actions are by and large little more than adolescent pranks. Calling this kind of vandalism “hacktivism”—as if it were a form of activism—gives too much credit to a new generation of vandals. Moreover, it’s one thing to damage someone’s mailbox with a baseball bat; it’s quite another to release the private details of someone’s email account to the world, or to publish passwords that could leave hundreds of people’s bank accounts vulnerable.

Some cyberpunks at Wikileaks.com are actually proud of publishing the “names, email addresses, passwords, and home town of 20 (O’Reilly.com) subscribers.” They should have their own private information published, preferably at a site like O’Reilly.com that has a thousand times their audience.

At zdnet.com, blogger Dancho Danchev claims that “Hacking is supposed to be about intellectual exploration”; in another entry, Danchev suggests that “Wikileak’s vision of a little less secrecy, and a little bit more transparency, ultimately better serves the world…” What a crock. Hacking is more like playing a video game than an intellectual exploration, and private emails and passwords are intended to be secret, not transparent.

Welcome to the Wild, Wild Web.

Newsprism

Conservative Leader George Will All but Endorses Obama

George Will has written a shocking column in which he questions the suitability of both candidates for the presidency.

Barack Obama, Will rightly notes, lacks the experience for the job, while John McCain lacks the temperament.

In a less-than-subtle conclusion, Will writes,

It is arguable that, because of his inexperience, Obama is not ready for the presidency. It is arguable that McCain, because of his boiling moralism and bottomless reservoir of certitudes, is not suited to the presidency. Unreadiness can be corrected, although perhaps at great cost, by experience. Can a dismaying temperament be fixed?

Voters seem to be reaching a similar conclusion, for whatever reasons, as Obama has regained a substantial lead in the polls.

Considering the financial, military, environmental, energy and geopolitical messes the next president will inherit, we can only hope that God Himself will enter the race with Superman as His runningmate. 

Newsprism

Tina Fey Rips Sarah Palin on the Bush Doctrine—but the Joke is on Liberal Hypocrites

Tina Fey’s impersonation of Sarah Palin on last night’s Saturday Night Live was spot on, and the humor in the show’s opening sketch focused as much on Hillary Clinton’s monomania as on Palin’s inexperience.

The idea that Sarah Palin “doesn’t know what (the Bush Doctrine) is,” however, reveals a glaring degree of hypocrisy among liberal commentators.

For years now we’ve heard liberals rightly condemn the Bush administration for its repeated waffling on the rationale behind our invasion of Iraq. Are we there to protect ourselves from WMD? To create a presence in and stabilize the Middle East? To free the people of Iraq? To counter Iranian hegemony in the region? To spread democracy across the globe?

The so-called Bush Doctrine has had at least four iterations since the invasion, as Charles Krauthammer made clear immediately after the interview with Charles Gibson in which Palin (gasp!) hesitated and asked for clarification when asked her position on that Doctrine. Liberal commentators jumped on Palin’s hesitation as if a split second of thought were clearcut evidence of absolute ignorance. Ditto her question to Gibson about the Bush Doctrine: “In what respect, Charlie?”

Palin’s question, far from demonstrating ignorance, showed that, unlike Gibson, she understood the ambiguity of the question. Which Bush Doctrine are we talking about?

The joke here isn’t on Sarah Palin; it’s on liberal hypocrites like the Queen of Catty Maureen Dowd who decry as “sexist” overly harsh criticism of female Democrats, yet jump on Mrs. Palin at every chance.

Newsprism

Reflective Writers Offer Sage Advice to Counter Bloviating Broadcasters

Two of the best political pundits in the country—both of whom, not coincidentally, work in the print media—are offering sage advice to the left and the right today.

From Peggy Noonan, advice to the Obama campaign in wake of the Palin fiasco, including this:

Here was the central liberal mistake: They used the atom bomb just a few days in. They used it so brutally, and yet so ineptly, in a way so oblivious to the true contours of the field, that the radiation blew back over their own lines. They used it without preliminary diplomatic talks, multilateral meetings or Security Council debate. They just went boom. And it boomeranged. The atom bomb was personal and sexual perfidy, backwoods knuckle-draggin’ ma and pa saying, Tell the neighbors the baby’s ours. Then the ritual abuse of the 17-year-old girl. Then the rest of it—bad mother, religious weirdo… All of this was unacceptable to normal Americans. They experienced it as the town gossip spreading rumor and slander before the new neighbor even got to put down her bags. It offended the American sense of fairness. And—it still lives!—gallantry. Most crucially, the snobbery of it, the meanness of it, reminded the entire country, for the first time in a decade, what it is they don’t like about the left. Really, America had forgotten. Mr. Obama’s friends reminded them. Unforgettably.

From David Brooks, advice to conservatives in general, including this:

Over the past 30 years, there has been a tide of research in many fields, all underlining one old truth — that we are intensely social creatures…What emerges is not a picture of self-creating individuals gloriously free from one another, but of autonomous creatures deeply interconnected with one another….You don’t have to go back to Edmund Burke and Adam Smith (though it helps) to find conservatives who understood that people are socially embedded creatures and that government has a role (though not a dominant one) in nurturing the institutions in which they are embedded. That language of community, institutions and social fabric has been lost, and now we hear only distant echoes — when social conservatives talk about family bonds or when John McCain talks at a forum about national service. If Republicans are going to fully modernize, they’re probably going to have to follow the route the British Conservatives have already trod and project a conservatism that emphasizes society as well as individuals, security as well as freedom, a social revival and not just an economic one and the community as opposed to the state.

Both Brooks and Noonan understand that liberalism and conservatism both suffer from the “help” of shallow, arrogant, self-serving elements.

For liberals, the problem is the liberal media, where too many journalists whose main qualifications are superficial—an attractive face, a pleasing voice, the ability to exude self-righteousness and certainty—ruthlessly attack any rising conservative figure based on the flimsiest of pretenses. To this crowd, the ends justify the means: conservatism is evil, so any way of countering conservatives is justified. Keith Olbermann is the latest and most virulent example.

For conservatives, the problem is the caricature of conservatism forwarded by the likes of Rush Limbaugh and Sean Hannity, two college dropouts whose contempt for higher education speaks volumes. They and their ilk confuse individualism with a “philosophy” of self-absorption, one so depraved that even the potential human catastrophe of global climate change is nothing but a political football to be punted around for their own profit and aggrandizement. Limbaugh goes so far as to ridicule any effort at frugality in the face of the nation’s greatest threat: dependence on foreign oil.

The left is hamstrung by sanctimonious media elites who’ve lost touch with the average American; the right, by sanctimonious media populists who profit by pandering to the ignorant and reactionary.

If only the American people paid more attention to thoughtful, reflective, informed columnists like Noonan and Brooks rather than the amoral showbiz narcissists who populate cable news and talk radio.

Newsprism

Should Georgia Libertarians Vote for Favorite Son Bob Barr?

Libertarian voters in Georgia have a difficult decision to make in November: should they vote for former Georgia congressman Bob Barr, the Libertarian candidate for president?

With the race tightening, and with Barack Obama putting the usually deep red state of Georgia in play, a substantial number of libertarian votes for Barr, the vast majority of which would otherwise be cast for John McCain, could conceivably put Obama in the White House.

McCain, while relatively liberal for a Republican, is surely far more conservative than Obama. In fact, with his sketchy but leftist legislative record, it’s reasonable to conclude that an Obama presidency would serve to significantly enlarge the role of government in our private lives. The scope of government programs Obama has proposed would inevitably lead to rising taxes.

Is a vote for Barr in Georgia tantamount to a vote for Obama?

Newsprism

Will Flag Flap Fly or Flop?

Conservative media are reporting today that supporters of John McCain “rescued” 12,000 miniature flags discarded after Barack Obama’s convention speech in Denver and used them in a rally in Colorado Springs today. Boy Scouts and veterans reportedly handled the flags and distributed them at the rally.

“Operation Flag Rescue” is, as of 5:00 pm, the lead story at www.FoxNews.com, and the story is prominently displayed on the cable news network’s crawl. “Dems Trash US Flags at DNC Convention” is the lead story at www.WorldNetDaily.com.

The Obama camp claims the flags were purloined and stored until today in a cynical attempt to discredit the Democratic candidate’s patriotism. Similar attempts have been made after Obama failed to wear a flag lapel pin and failed to put his hand over his heart during the playing of the National Anthem.

Two predictions:

1. This will be remembered as one of the most ridiculous campaign stunts of this presidential election cycle.

2. It will succeed among the lapel pin/hand-over-heart crowd.

Newsprism

Beyond Bias—Sarah Palin Rises to the Occasion as Liberal Journalists Sink to New Lows

Thirty or forty years ago, the liberal bias so pervasive in the American press was relatively mild and counterbalanced by a strong, principled minority led by the likes of William Buckley. Liberals and conservatives fought their ideological battles with honor, and at the end of the day they laid down their arms and socialized, much like the Union and Confederate soldiers who sang, drank, and played baseball together between hostilities during the Civil War.

With the growth of cable news, talk radio, and the Internet, American journalism has become increasingly adversarial. Ethical standards have plummeted. Such are the vagaries of decentralized decision making in an era marked by proliferating media and a broader erosion of civility in our culture.

If liberal bias once predominated, we’ve moved well beyond bias, even beyond contentiousness, to a journalism more akin to professional wrestling than its older iterations.

Nowhere was that more apparent than in the treatment of Sarah Palin’s daughter this week. If Rush Limbaugh’s brand of sneering Machiavellianism took political commentary beyond mere bias, a new generation of cable news anchors, radio hosts, and bloggers have descended even further into a clownish, contemptuous, contrived confrontationalism that blurs the line between journalism and (sports) entertainment.

Worse yet, even the old guard has been increasingly sucked into a downward ethical spiral. Lately, the New York Times’ Frank Rich and Maureen Dowd have peppered their columns with the kind of churlish sniping usually reserved for us amateurs in the blogosphere.

Peggy Noonan puts it like this:

The old combatants were old school gentlemen, Eric Sevareid and Walter Cronkite; the new combatants are half-crazy cable anchors, the lower lurkers of the Internet, and the anonymous posters on the comment thread on the radical website.

Crazy cable news anchor Keith Olbermann, who derides Rush Limbaugh as a “comedian” and regularly lambasts Bill O’Reilly as his “Worst Person in the World,” leads the way into perdition at MSNBC, which has been drifting to the left ever since Tucker Carlson departed and Olbermann took over in prime time. (We’ve moved it four positions to the left at Newsprism.com.) DailyKos stooped lower than anyone, suggesting that Palin’s infant son Trig was actually born to her teenaged daughter. (The post has since been removed.)

The broadcast networks, CNN, and print outlets includingThe New York Times all used Palin’s daughter as fodder in an ugly ideological barrage that Gerard Baker describes as a ”frenzied orgy of chauvinist condescension and gutter-crawling journalistic intrusion…” The degree of defensiveness displayed by news executives in response to Republican protests at least suggests a sense of guilt, if not shame.

Conservatives shouldn’t be too quick to judge, either. Sean Hannity consistently lives up to the label once applied by Bill Moyers: “vile.” WorldNetDaily makes Hannity look classy, running unfounded accusations that Obama had gay sex and did methamphetamines. Then there’s FoxNews, which has inexplicably returned Geraldo Rivera to mainstream journalism. (Who’s next—Jerry Springer? If he can draw an audience, why not?)

Sarah Palin handled the attacks on her family brilliantly. She fired back at the liberal media with both force and good humor, and with her traditional principles and small town authenticity, she rejuvenated a conservative movement that has been floundering on K Street. As David Brooks writes, “(Palin) embodies the spirit of the moment: impatient, fed up, tough-minded, but ironical. Even in attack, she projected the cheerfulness of someone confident about the future.” Sounds like Ronald Reagan to me.

Pat Buchanan adds, “The war the right lives for, against the people the right truly loathes — the liberal media elite who savagely ‘Bork’ every true conservative who gets on the path to national power — has been reignited.” A double win: the base is energized with optimism while its most powerful enemy takes a firm public spanking.

Even the Mafia has a hands-off policy when it comes to family; many a journalist could take a lesson in ethics from La Cosa Nostra.

Newsprism