This subscription-only Wall Street Journal editorial from last week got most of the story right, but missed a couple of points:

….. we finally have a threat that really does bear watching — namely, a potential credit crunch precipitated by the housing downturn and rising default rates. As Federal Reserve Chairman Ben Bernanke noted in his Senate testimony this week, the economic damage from the real-estate slide has so far been contained to housing. But in addition to the pain that homebuilders have experienced, banks and mortgage brokers are increasingly feeling the pinch, especially in the sub-prime sector. And in a perverse sort of populism, lawmakers are making noises about reducing access to credit for the riskiest borrowers, which would only exacerbate the crunch and could help take the economy down into recession.

The delinquency rate on sub-prime mortgages, now above 10%, is near record levels…..

….. This accumulation of bad loans represents a crack in the foundations of the recovery. Typically, a housing downturn and the credit problems that accompany it are a result of underlying economic weakness, rather than their cause. The economy slows, people lose their jobs and are forced to sell under duress lest they default. The distressed selling drives prices down. But in this case, it may work the other way around.

The Fed’s remarkably easy monetary policy helped goose house prices over several years. In turn, a large number of first-time buyers took advantage of low mortgage rates, especially on adjustable-rate loans, to stretch their buying power in the hopes of leveraging their way up the home-buying ladder. But someone finally blew the dog whistle in late 2005, and the buying dried up.

Now the housing market is flat to down across most of the country and loans with adjustable rates are adjusting upward. So even with unemployment low and the economy still humming, marginal buyers can suddenly find themselves forced to sell. And if they had little equity to begin with, they may not have much money left after they sell — if they can sell at all. If they can’t, they fall behind on their payments and the banks have to book the loans as delinquent.

….. The unknown is how far the credit contagion will spread. While rising, overall delinquency rates are still fairly low. But if banks continue to be hit by defaults, it may constrain their lending in other areas. Credit spreads, which have remained remarkably narrow, could widen. Meanwhile, Congress’s newfound preoccupation with “predatory lending” could, if it leads to changes in the law or in tough lending standards, increase the credit squeeze currently beginning to be felt. Decreasing consumer access to credit would in turn cast a pall over consumer spending and add another drag on the economy.

We aren’t joining the partisans at certain newspapers who have predicted recession each of the last four years. The labor market remains healthy, the consumer resilient, business investment robust and equity markets buoyant. But this certainly is no time for Congress to add to the risks of a credit crunch by committing such policy blunders as raising taxes, imposing trade barriers or punishing foreign investment in the U.S.

The Journal’s editorial is fine as far as it goes. But it forgot to mention the role the behemoths of loan securitization, namely government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac, played in all of this:

• Those two GSEs lowered the credit scores and relaxing related documentation standards for “conventional” and sub-prime mortgages to the point where clearly unqualified borrowers were getting “conventional” treatment and borrowers who barely had a pulse credit-wise were getting sub-prime applications approved. A contact of mine in the lending industry told me in mid-2005 that the threshold for conventional approval was lowered from a credit score of about 670 to about 630, and for sub-primes dropped from about 630 to 590.
• Lenders aren’t blameless, because they “should” have been evaluating borrowers to prevent the most obvious train wrecks in-waiting from happening — independent of whether the relaxed “Fan and Fred” models said that these borrowers could afford the loans being offered. There’s precious little evidence that much of this happened.
• And, of course, borrowers themselves deserve a substantial share of the blame for not understanding what they were getting into.

I agree that at the moment the possible credit crunch in mortgage lending probably won’t lead to a recession; the non-housing economy is growing at over 4%. But the hardships many borrowers are enduring could have been prevented, and should have been.

From Daniel Drezner, referring to a New York Times article (HT Instapundit), the economy is tanking:

Shortages of basic foods have been sporadic since the government strengthened price controls in 2003 after a debilitating strike by oil workers. But in recent weeks, the scarcity of items like meat and chicken have led to a panicked reaction by federal authorities as they try to understand how such shortages could develop in a seemingly flourishing economy.

Entering a supermarket here is a bizarre experience.

….. “There seems to be a basic misunderstanding in … (the) … government of what is driving scarcity and inflation …..”

“There are competent people in the government who know that … (the government) … needs to lower spending ….. to defeat these problems. ….. But there are few people in positions of power who are willing to risk telling him what he needs to hear.”

OK, you’ve probably figured out that it’s not the US. But I’ll betcha you didn’t figure the subject of the article to be Venezuela, and that the “him” referred to is Hugo Chavez. Props to the Times for covering the story — though it concentrated a lot of its energy on the government’s oh-so-predictable attempts to punish merchants violating price controls instead of the inherent ugliness of the controls themselves. The lack of other prominent coverage is disgraceful, and yet another sign that to the Formerly Mainstream Media, the enemy of their enemy, George Bush, gets a pass.

Considering what was said and who said it, it deserved a lot more prominence (HT TechMeme):

AUSTIN - Apple Inc. CEO Steve Jobs lambasted teacher unions Friday, claiming no amount of technology in the classroom would improve public schools until principals could fire bad teachers.

Jobs compared schools to businesses with principals serving as CEOs.

“What kind of person could you get to run a small business if you told them that when they came in they couldn’t get rid of people that they thought weren’t any good?” he asked to loud applause during an education reform conference.

“Not really great ones because if you’re really smart you go, ‘I can’t win.’”

In a rare joint appearance, Jobs shared the stage with competitor Michael Dell, founder and CEO of Dell Inc. Both spoke to the gathering about the potential for bringing technological advances to classrooms.

“I believe that what is wrong with our schools in this nation is that they have become unionized in the worst possible way,” Jobs said.

“This unionization and lifetime employment of K-12 teachers is off-the-charts crazy.”

….. Earlier in the panel discussion, Jobs told the crowd about his vision for textbook-free schools in the future. Textbooks would be replaced with a free, online information source that was constantly updated by experts, much like the online encyclopedia Wikipedia.

Because his outspoken views clearly won’t exactly endear Jobs to the education and textbook industries, both of which have had the default sympathies of the Formerly Mainstream Media for decades, you might even call his outburst courageous. Two other words describe what he said: Absolutely right.

One has to wonder how a horrifying crime like this one in France (HT Instapundit) goes virtually unnoticed, while fluff like this sucks up so much of the available oxygen.

After reading this Investors Business Daily editorial (HT Atlas Shrugs) about this multiple-murder incident that I blogged about the day after it happened, I have to wonder why law enforcement is so afraid of stating the obvious, why the Formerly Mainstream Media that covers these incidents dances around the obvious, and how many other ticking time bombs “inspired” by a warped religious fanaticism we have walking around.

Chicago’s first violation of its 2006 ordinance banning the sale of the duck-liver delicacy known as foie gras in the city has been issued — against a hot-dog restaurant (HT Second City Cop, who presumably didn’t serve the citation).

Let the howling begin (HT Instapundit):

Organic farming ‘no better for the environment’
Published: 19 February 2007

Organic food may be no better for the environment than conventional produce and in some cases is contributing more to global warming than intensive agriculture, according to a government report.

The first comprehensive study of the environmental impact of food production found there was “insufficient evidence” to say organic produce has fewer ecological side-effects than other farming methods.

The 200-page document will reignite the debate surrounding Britain’s £1.6bn organic food industry which experienced a 30 per cent growth in sales last year.

David Miliband, the Environment Secretary, drew a furious response from growers last month when he suggested organic food was a “lifestyle choice” with no conclusive evidence it was nutritionally superior.

Sir David King, the Government’s chief scientist, also told The Independent he agreed that organic food was no safer than chemically-treated food.

The report for the Department for Environment, Food and Rural Affairs found “many” organic products had lower ecological impacts than conventional methods using fertilisers and pesticides. But academics at the Manchester Business School (MBS), who conducted the study, said that was counterbalanced by other organic foods - such as milk, tomatoes and chicken - which are significantly less energy efficient and can be more polluting than intensively-farmed equivalents.

Ken Green, professor of environmental management at MBS, who co-wrote the report, said: “You cannot say that all organic food is better for the environment than all food grown conventionally. If you look carefully at the amount of energy required to produce these foods you get a complicated picture. In some cases, the carbon footprint for organics is larger.”

The study did not take into account factors such as the increased biodiversity created by organic farming or the improved landscape.

It seems to me that you’re starting to reach if you have to resort to the two arguments just mentioned.

The article goes on to name a few specific examples of how organic farming is, relatively speaking, a resource hog. Here’s just one:

Milk
* Requires 80 per cent more land to produce per unit than conventional milk.
* Produces nearly 20 per cent more carbon dioxide and almost double the amount of other by-products that can lead to acidification of soil and pollution of water courses.

I suspect that SOB resident experts Andy (Andy’s Angle) and Paul (Newshound) will be weighing in on this one shortly. Until then, my two cents is simply a reaction that the organic industry’s attempt to wrap itself in Mother Nature while assaulting food processors and large-scale farmers as a sort of “Big, Bad Food” equivalent of Big Oil, Big Tobacco, etc. has always been more than a little off-putting. It will be progress if reports like the one just mentioned chasten “Big Organics” (and their customers, in certain cases) into telling us that they’re only expressing a personal preference, and cause them to hold back a bit on the holier-than-thous. I’m not optimistic.

From Miami:

MIAMI (AP) - A premature baby that doctors say spent less time in the womb than any other surviving infant is to be released from a Florida hospital Tuesday.

Amillia Sonja Taylor was just 9 1/2 inches long and weighed less than 10 ounces when she was born Oct. 24. She was delivered 21 weeks and six days after conception. Full-term births come after 37 to 40 weeks.

“We weren’t too optimistic,” Dr. William Smalling said Monday. “But she proved us all wrong.”

Neonatologists who cared for Amillia say she is the first baby known to survive after a gestation period of fewer than 23 weeks. A database run by the University of Iowa’s Department of Pediatrics lists seven babies born at 23 weeks between 1994 and 2003.

Amillia has experienced respiratory problems, a very mild brain hemorrhage and some digestive problems, but none of the health concerns are expected to pose long-term problems, her doctors said.

“We can deal with lungs and things like that but, of course, the brain is the most important,” Dr. Paul Fassbach said Monday. “But her prognosis is excellent.”

Amillia has been in an incubator since birth and has been receiving oxygen. She will continue getting a small amount of oxygen, and her breathing will be monitored once she leaves Baptist Children’s Hospital. She now is between 25 and 26 inches long and weighs 4 1/2 pounds.

“She’s going to be in a normal crib, she’s going to have normal feedings, she’s taking all her feedings from a bottle,” Smalling said.

Amillia is the first child for Eddie and Sonja Taylor of Homestead. She was conceived by in vitro fertilization, which made it possible to pinpoint her exact time in the womb, and was delivered by Caesarean section.