September 18, 2008

Pic of the Day

Filed under: Quotes, Etc. of the Day,Taxes & Government — Tom @ 3:49 pm


Image is courtesy of NixGuy.

Certified racism-free status can be extended to Blackwell voters who go for Barr, Nader, even McKinney, or anyone other presidential candidate besides “The One” I refer to as “Mr. BOOHOO-OUCH” (Barack O-bomba Overseas HusseinObambiObama – Objectively Unfit Coddler of Haters) this time around.

Passage of the Day: From (Also, ‘Privatized Profits, Socialized Losses’)

After listing the roughly $2 trillion in bailouts ($800 billion) and money injections ($1.2 trillion) the Federal Reserve and Treasury have spent or committed to, mostly in the name of saving Wall Street, IBD puts forth outstanding punditry, parsed out pithily (bolds are mine):

Unfortunately, with the addition of taxpayer money, we’ve doubled down. Now the bet is the federal government is too big to fail. Yes, some of the government’s $2 trillion exposure to these bailouts may be recouped through asset sales, and the impaired equity might even trade again. But taxpayers are still on the hook.

We recognize that in times of financial exigency, as this clearly is, government often steps in to do what it can to stop the hemorrhaging. Politically, it may not have a choice. But we can’t forget that many, if not most, of the problems in the financial sector today are a result of government over-regulation, or misregulation, and political cronyism.

We’ve already documented how Fannie Mae and Freddie Mac were used as a jobs program for out-of-work Clinton administration officials and other Democrats, ranging from Franklin Raines to Jamie Gorelick to Jim Johnson.

And how tens of millions of dollars in political donations from those two government-sponsored enterprises distorted decision-making in Congress. This has been the problem all along.

The U.S. government regulates the private sector on behalf of taxpayers who expect competency, fairness and transparency.

But when the federal government messes up, those principles go out the window. And the lender of last resort isn’t the Fed or Treasury, as some would have it. It’s always the taxpayer.

Remember this when a Democrat-led Congress holds hearings — as House Speaker Nancy Pelosi now promises — and lambastes “the private sector” and “Bush economic policies” for these market meltdowns. Neither deserves the blame.

Also very relevant is an item that could be titled “Heads we win, tails you lose,” courtesy of my guardian angel:

Privatized profits, socialized losses

….. These financial institutions made silly mistakes, like giving mortgages to people with pathetic credit histories and offering ridiculous credit card limits to people who cannot afford them. Then the consequences are socialized to tax payers to foot the bill. Why are taxpayers held responsible for the irresponsibility of business leaders who leveraged debt with more debt?

The socialization of corporate losses does not create a climate of fiscal discipline desperately needed in global financial markets today. Additionally, why would a company like AIG want the federal government to have an 80 percent stake in its company? The government is ill-equipped to run itself, so why would one entrust billions of dollars of assets to the tentacles of government bureaucrats with a bridge loan?

No company lasts forever and it is not the government’s job to interfere with natural processes, especially when we are in the throws (sic) of corporate irresponsibility among private parties. Of course, the worse part of this current crisis is that it will result in more regulation because Americans have been conditioned to look to government to clean up everyone’s spilled milk.

One can only hope that a McCain-Palin administration would begin turning this conditioning around. There’s little doubt that Obama-Biden would double down on overregulation.

Isn’t It a Sign That You’ve (Sort of) Arrived ….

Filed under: General — Tom @ 1:31 pm

…. when a bunch of utterly pathetic, mostly profane whiners have nothing better to do than waste precious time and bandwidth — because you’re supposedly not writing about what they think you should be writing about, even when you are?

The idea wells must be very, very dry out there in the Buckeye Far-Leftosphere.

Bailout Blues, and Now AIG Too (with Car Companies in View)

OK, here’s the lineup of those taken over or otherwise “assisted” by the US government and/or the Federal Reserve:
- Freddie Mac (known around here as Fredron).
- Fannie Mae (known around here as Fanron).

Here are others who are being absorbed, apparently at fire-sale prices:
- Merrill Lynch (by Bank of America)
- Countrywide (by Bank of America; seems like ancient history, doesn’t it?)
- Bear Stearns (by Chase)

By the way, I can’t wait for the next politician who throws brickbats at the banking and financial-services industries for overconcentration, given the fact that the politician-patronized Fredron and Fanron, aka Barney’s Rubble, created the conditions for it to happen. I predict it won’t be long.

Here are those who went belly-up after pleas for assistance or for an 11th-hour buyer were waved off:
- Lehman Brothers

(If I’m missing any biggies, let me know in the comments; please don’t e-mail, as I’m still digging through those after the 10-day computer fiasco and more recent power and Internet outages.)

Now, here’s the list of those who are going to want assistance, and apparently pretty soon:
- Ford
- General Motors
- Chrysler

Apparently, John McCain’s overexposure to Mitt Romney since the primaries caused the Arizona senator to very, very wrongly change his tune on assistance to the “domestic” industry — as if Honda, Toyota, Nissan and other plants aren’t “domestic” enough (Obama has apparently favored it all along). I predicted several weeks ago that a President McCain will be an infuriating, high-maintenance project. I believe that remains true, even with Sarah Palin on board to provide outside-the-beltway sanity.

Sticking to the auto biz for a moment: How outrageous is it that Ford, which made a politically-correct but stuck-on-stupid decision for two years to ignore a boycott that cost it almost a billion dollars (under a set of very conservative assumptions), appears to be on the verge of asking the entire country for a handout?

Finally, here’s the list of business who may come to Uncle Sam for assistance if their business heads south:
- Any business that can make a case that it’s too big to fail.
- Any business that can make a case that its failure will harm the near-term electoral prospects of any candidate for president, senator, Congress, governor, or dog-catcher.

In other words, there’s potentially no end to this, which is why it must stop, preferably before the Detroit automakers get their bailout.

The most troubling member in the lists above is AIG, because no one is making what I believe is a pretty obvious connection.

I can’t help but think that if the now-disgraced Eliot Spitzer hadn’t forced out Hank Greenburg in March 2005, the insurance giant would have been able to navigate the troubled waters that arrived not very much later. Instead, the guys at the helm who replaced Greenberg appears to have been way out of their league. Nobody knew AIG inside and out like Greenberg.

Here’s a reminder of what Spitzer did, and how he did it, from the March 11 Wall Street Journal (related BizzyBlog post is here if WSJ link doesn’t work):

….. Mr. Spitzer’s recklessness with the state’s highest elected office, though, is of a piece with his consistent excesses as Attorney General from 1999 to 2006.

He routinely used the extraordinary threat of indicting entire firms, a financial death sentence, to force the dismissal of executives, such as AIG’s Maurice “Hank” Greenberg. He routinely leaked to the press emails obtained with subpoena power to build public animosity against companies and executives. In the case of Mr. Greenberg, he went on national television to accuse the AIG founder of “illegal” behavior. Within the confines of the law itself, though, he never indicted Mr. Greenberg. Nor did he apologize.

In perhaps the incident most suggestive of Mr. Spitzer’s lack of self-restraint, the then-Attorney General personally threatened John Whitehead after the former Goldman Sachs chief published an article on this page defending Mr. Greenberg. “I will be coming after you,” Mr. Spitzer said, according to Mr. Whitehead’s account. “You will pay the price. This is only the beginning, and you will pay dearly for what you have done.”

Left unsaid, but obvious, is that Greenberg wasn’t indicted because he would have kicked Spitzer’s butt in court — which is why Spitzer avoided the inside of courtrooms like a plague. In the one case I’m aware of where someone stood up to Spitzer all the way through a jury verdict, the New York Attorney General was trounced.

My quick research indicates that Greenberg had at least three successors in the past 3-1/2 years (Frank Zarb (a caretaker), Martin Sullivan, and now-deposed Robert Willumstad.

Now there’s Edward Liddy. If he could get past the bitterness, and if regulators could admit that Spitzer’s publicity-driven ouster of him was wrong, Greenberg, even in his 80s, might have been a better choice.

Who’s at the top matters. So does drift at the top, even for a few months, especially at such a large and complex entity.

Note from taxpayers to Spitzer: Thanks for nothing.

Exit question: How unfair is it to blame Spitzer, his AG imitators in other states, and his fellow travelers in Washington who treated Fredron and Fanron as their personal piggy banks, for the financial system’s mess?

Exit answer: Very, very fair.

Parting thought: It appears that if the left can’t nationalize the economy the traditional way (through brute force), they’ll accept it on a piecemeal basis, as their regulations, systemic corruption, and legal harassment take companies and industries down.

Latest Pajamas Media Column (‘Very Different Economic Times in Red vs. Blue States’) Is Up; Some Follow-ups, Including ‘Barney’s Rubble’

Filed under: Economy,Taxes & Government — Tom @ 6:12 am

It’s here.

I will post it at BizzyBlog Saturday morning (link won’t work until then) under the title “One State, Two State, Red State, Blue State.”

Because of weather, power, Internet access, and computer complications (all not completely resolved until 9 PM last night, thanks to a partially botched repair job), I wasn’t able to give Pajamas a heads-up on the topic as I normally do. I’m grateful for their acceptance of the column in spite of that.

Column previews:

  • Here is the subheadline — “If there is to be a recession, it will be blue-state thinking that brought it on.”
  • Final paragraph — “So if there is indeed a recession taking place, blame it on the blue states and blue regions, with their high-tax, high-regulation, high-giveaway environments. The lower-tax, more economically free red states and the red regions within otherwise blue states are certainly not the culprits.”
  • Nickname of the week (courtesy of the Wall Street Journal) — Thanks to Barney Frank (D-MA), who defended Freddie Mac and Fannie Mae (known around here as Fredron and Fanron) to the bitter end, and STILL wants them to live on in their bloated dysfunctional forms, the two entities are now “Barney’s Rubble.”

Related: Ed at Hot Air had a great post Tuesday explaining how Fan and Fred, courtesy of the Community Reinvestment Act (CRA; not the Community Redevelopment Act, as named there), created the housing mess, and brought themselves (and others) down. Money grafs –

It was the Bush administration that wanted to rein in the madness in the credit markets, and the Democrats who wanted to extend the Clinton policies that created the crisis we have now. After the fit hit the shan, as Michelle says, these same Democrats want to shift blame back to the administration that wanted to increase oversight and curtail risk in lending practices while reducing patronage at the giant GSEs.

The Bush administration isn’t blameless in letting this get out of hand, but clearly the origins of the disaster and the efforts to keep bad policies in place fall on the Democrats in this case.

As yours truly noted noted last week, and over 18 months ago (see end of post), it was Fan and Fred that lowered credit-score approval thresholds to absurd levels (that post also has the full list of blame-sharers). The two government-sponsored enterprises’ credit laxity, more than any other single factor, has created the awful foreclosure situation in Northeast Ohio and other locales. Team Obama and others lefties who loved Fan, Fred, and the CRA are wrongly trying to pin the primary blame on anyone but their own party and their Fanron/Fredron executive hacks.

Disgraced former Ohio Attorney General Marc “The Man” Dann’s targets should have been Fan and Fred — and (Barney) Frank.

Positivity: Dog Dials 911 When Owner Has Seizure

Filed under: Positivity — Tom @ 5:59 am

From Phoenix:

Sunday, September 14, 2008

“Man’s best friend” may not cut it for a Scottsdale dog named Buddy — a trained German shepherd who saved his owner’s life by dialing 911 when he began having a seizure, police said Sunday

On the recorded 911 call Wednesday, Buddy is heard whimpering and barking after the somewhat confused dispatcher answers the phone and repeatedly asks if the caller needs help.

“Hello, this is 911. Hello … Can you hear me? Is there somebody there you can give the phone to,” says the dispatcher, Chris Scott.

Buddy barks loudly when police arrive about three minutes after the call is placed. An officer asks Buddy’s owner, Joe Stalnaker, if he’s OK. Stalnaker coughs, and the call ends.

Scottsdale police Sgt. Mark Clark said Stalnaker spent two days in the hospital following the seizure and has recovered.

“It’s pretty incredible,” Clark said. “Even the veteran dispatchers — they haven’t heard of anything like this.”

Clark said police are dispatched whenever 911 is called, but that Stalnaker’s address was flagged in Scottsdale’s system with the fact that an assistance dog dials 911 when the owner cannot.

He said Buddy made two other 911 calls when Stalnaker was having seizures, the first last August.

He said Stalnaker’s seizures are the result of a head injury he sustained about 10 years ago during a training exercise in the U.S. military. …..

Go here for the rest of the story.