Pretzel Logic: Bailed Out Banks to Buy Toxic Assets

It makes sense in the the brave new world of Obamanation I guess:

US banks that have received government aid, including Citigroup, Goldman Sachs, Morgan Stanley and JPMorgan Chase, are considering buying toxic assets to be sold by rivals under the Treasury’s $1,000bn (£680bn) plan to revive the financial system.

The plans proved controversial, with critics charging that the government’s public-private partnership - which provide generous loans to investors - are intended to help banks sell, rather than acquire, troubled securities and loans.

I get it, the banks who had to be bailed out because they possessed toxic assets are now going to but more toxic assets that got us to the point we are now at where we keep pumping money into their coffers. This is approved by the government that forced banks to give loans that resulted in the toxic assets in the first place. Makes sense.

Rep. Spencer Bachus sums it up thusly:

Mr Bachus added it would mark ”a new level of absurdity” if financial institutions were ”colluding to swap assets at inflated prices using taxpayers’ dollars.”

It's a shell game all right. The toxic assets are still, in fact, toxic and no amount of selling, buying or trading will change that fact.

So how does the esteemed Obama economic team expect this to work?

Officials want banks to sell risky assets in order to cleanse their balance sheets and attract new investments from private investors, limiting the need for the further government funds.

Many experts think it is essential to take these assets from leveraged institutions such as banks that are responsible for the lion’s share of lending, into the hands of unleveraged financial institutions such as traditional asset managers, where they will have much less impact on the flow of credit to the economy.

So the "risky assets" will be sold to unleveraged firms and that's expected to fix the system how? They're still out there and still bad but just in someone elses hands now.

We should have let them all fail and whoever was left standing would be the winner. The Obama administration is rewarding firms filled with cronies by helping them weather this hurricane while banks and other firms who played by the rules and didn't dabble in toxic assets are getting screwed. Just like that percentage of the US population who bought above their heads and now can't pay for it are rewarded.

Until taxes are cut on business allowing them to hire again and employ people, this issue will never be resolved and we'll continue to throw bad policy after bad paper.

The amateur hour continues apace.

Update: More here. The taxpayer had better be ready to bend over repeatedly.

Delaware Senator's Blame Placing a Bit Suspect

Senator Edward Kaufman (D-DE) is on the warpath. The junior senator from the First State wants those who were responsible for the mortgage meltdown and other assorted crashes that neutered the economy to be investigated and jailed if judged guilty. Here's what the good senator had to say:

The Wall Street collapse that precipitated today's economic crisis has many causes, from regulatory failures to recklessness and greed. But before Congress begins to write new rules, we must investigate any crimes that may have been committed, whether by local mortgage brokers or the biggest banks.

Hmmm...mortgage brokers, banks...someone is missing in this list and I can't quite put my finger on who it is. Give me a second or two while we read on and are treated to the stunning intellectual brilliance of Sen. Kaufman:

Let's enforce the laws that were on the books and throw those who broke them in jail.

Good idea and I just remembered who the senator forgot: His fellow senators and congressmen. Chris Dodd, Charles Rangel, Barney Frank, they all were responsible for this mess but the senator neglected to mention them. It must have been an oversight on his part. Okay, what about Franklin Raines, Jamie Gorelick and the rest of the crew who took huge bonuses while simultaneously cooking the books. That's fraud and those laws were on the books so let's throw them in jail as the esteemed senator recommends.

I am not prejudging anyone. We may well find that only a few cases involved outright criminal behavior. And we must take care that our anger does not cloud our judgment.

Nor am I prejudging anyone, Senator. I say we investigate them all starting with Raines and work our way around to "Friend of Angelo" Chris Dodd.

Mortgage brokers may have fraudulently solicited mortgages or engaged in predatory practices.

But, but didn't the government encourage the practice by relaxing regulations? Did not Democrats call the entire idea of auditing Fannie Mae and Freddie Mac an act of racism? Didn't President Bush and Sen. McCain sound the alert on the crisis that was building at both Freddie and Fannie in 2005 when Raines and Gorelick were cooking the books and accepting huge checks?

As the housing bubble burst, banks may have failed to disclose material information as they went from supposedly profitable to insolvent, leaving investors holding the bag.

They probably would have remained solvent had they not given sweetheart loans to congressman who sit on committee's that regulate them. Chris Dodd pops into mind as one who received such a loan.

Attorney General Eric Holder has emphasized that federal law-enforcement officials can understand exactly what happened and investigate the people and firms involved only by "drilling down" into the records of complicated financial transactions. Right now, the resources to do so are not there.

I say we do indeed investigate the people and firms and "drill down" into the records. Let's start with Countrywide and look at who exactly qualified as a "friend of Angelo". They shouldn't be that complicated when it comes to a certain US Senator from the great state of Connecticut. But where to get the resources?

We must dramatically increase the number and training of FBI agents investigating these crimes. Our bill authorizes $155 million a year for the Justice Department to hire fraud prosecutors and investigators in 2010 and 2011. It also provides $65 million a year for 190 additional FBI special agents and more than 200 professionals to fight white-collar crime.

Awesome! All that for only $155 million? Anytime I see a new spending bill that asks for millions instead of billions or trillions it's cause for celebration. I just hope we have $155 million left. If not we can just ask the next three or four Obama nominees to pay up on their past taxes and we'll cover that cost.

Prosecuting bad people won't put an end to all bad behavior. But it will make people in the board rooms, on the trading desks, and in the mortgage industry think twice before they look the other way, put greed over fiduciary duty, or deal from the bottom of the deck. At the end of the day, this is a test of whether we have one justice system in this country or two.

Or three when the House and Senate are added in. But of course, Dodd, Rangel, Geithner and the myriad other Obama cronies are not greedy, just mistake prone evidently.

This is not about vengeance or politics. For our economy to work for all Americans, investors must have confidence in the honesty and transparency of our financial markets. Our economy will flourish only when Americans again trust that everyone is accountable to the law.

Of course it's not about vengeance or politics, heavens no. I mean, Obama is above the fray and his attacks on Rush, Cramer and Santelli are not about vengeance and politics either.

It's true, "our economy will flourish only when Americans again trust that everyone is accountable to the law". that includes members of the House and Senate Mr. Kaufman.

Signing An Entire Generation Away

Barack Obama today signed the single largest bill ever and one that by many accounts will accomplish very little. Claudia Rosett notes that he has broken yet another of his campaign promises:

Today, Obama returned to Denver, and with elaborate ceremony signed the $787 billion “stimulus” bill passed last Friday by Congress, which runs to more than 1,070 pages. That left fewer than 96 hours between passage and signing (thus also violating his promise about posting legislation for five days on the internet before signing, to allow for transparency and comment).

When did Obama even find time to skim this monster bill? Let alone go through it “line by line?”

Obama enjoyed an intervening weekend heavy on R&R. Carbon-emissions-notwithstanding (personally I don’t care how much carbon he emits, but Obama wants all the rest of us to sacrifice on this front), on Friday Obama flew with his family and entourage to Chicago, where he helicoptered in from the airport, to spend time at his Chicago mansion and — as The New York Times put it — see a few friends and “reconnect to the rest of the country.”

Today marks the day that we as a country sentenced our grandchildren to a life of paying for our collective sins. we spent when we didn't have it and allowed a government to pass legislation that allowed encouraged business to run roughshod over the populace. But we citizens didn't exactly curb ourselves and we now face the result.

The problem I have is that we suffer no consequences; Barney Frank and Chris Dodd colluded with Fannie Mae and Countrywide respectfully allowing them to grant loans that should have been denied. Business doesn't suffer because they've gotten a bailout but we the people get essentially nothing from this bill unless you are a lobbyist or a union member.

The correct action should have been to do nothing or at the very most a stimulus package based on tax cuts and basic spending. Call it our penitence for irresponsible behavior. Anyone with kids knows that they learn a hell of alot more responsibility when they have to suffer then when they get exactly what they wanted when they performed the bad behavior in the first place.

American government and it's citizens needed to be grounded or at the very least been issued a timeout; instead we were rewarded for our bad behavior big time.

The Top Ten News Stories of 2008

It's been a weird year to say the least. One in which history was made on several fronts while issues that were paramount twelve months ago have gone by the wayside.

Here's my list of top stories.

10. The Mumbai Terror Attacks
A small group of Islamic zealots attacked a train station, a Jewish center (where they tortured the Jews) and two hotels and held one of India's most important cities hostage for days. This incident showed once again how a small group of motivated Muslim terrorists can attain maximum news coverage and kill the maximum amount of people including women and children to attain their goals. The repercussions have yet to be completely felt as India and Pakistan are in a hostile mode still.

9. The Irrelevance of Environmentalism/Global Warming Hysteria
Last year at this time, the global warming alarmist's were looking as if they were going to win; they had a huge majority of people convinced that the Earth is getting warmer and it is either the fault of the human race as a whole or the US in particular. Then gasoline hit $4.00 per gallon and every one's sense of environmentalism was tossed to the side of the road. "Drill baby drill" became the rallying cry. Add to that the record low temps experienced in Southern California, Las Vegas and parts of Europe and the words of Al Gore seem to have lost much of their urgency. Global warming has been disproved to all except the worshippers at the altar of Gaia.

8. The Mortgage Meltdown
A recession was already in the offing but the financial crisis got infinitely deeper when many established firms were rocked by a sudden drop in housing prices and foreclosures. Government sponsored entities Fannie Mae and Freddie Mac were shown to have been the main contributors along with inane government policies implemented by the likes of Barney Frank and Chris Dodd. Because of their policies, corporations that were big players for a hundred years suddenly ceased existing.

7. Obama Beats Hillary
He started in Iowa and gained traction before crossing the finish line on vapors. Fueled by enormous donations and former Clinton cronies who bailed on Hillary when they saw the wind blowing in Obama's direction, BHO delivered several knock-out blows. His campaign used the race card expertly and that card trumped the sexism card in the end. Amazingly, the media dropped the candidate they've been shilling for since 2004--Hillary--and instead used the same tactics against her that they've been using against Republicans for decades. The schadenfreude was awesome to say the least.

6. Government Bails Out Businesses
President Bush gave the finger to the free market system and bailed out Fannie Mae and Freddie Mac, Banks and AIG. American auto manufacturers were also given assistance (except Ford) without even providing a clear plan to solvency and sustainability. We, the American taxpayer, became the owners of some of the biggest firms on the planet.

5. Natural Disasters
As in most years, nature will make us remember who's boss. Hurricanes in Texas, Cyclones in Myanmar and earthquakes in other areas such as China killed tens of thousands. While Hurricane Ike caused massive damage to the Texas Gulf Coast, the people of that area managed to pick themselves up and dust themselves off without free handouts from FEMA, concerts played for their benefit or any of the things that were afforded to those who suffered in the aftermath of Katrina.

4. The Downfall of Many (Democrat) Politicians
Rod Blagojevich, Charles Rangel, Wayne Bryant, Vincent Fumo, Chris Dodd, Eliot Spitzer...They all had bad years ethics-wise. The Blago scandal will play out well into 2009 and Obama and Rahm Emanuel will get drawn deeper into it due to the amateurish way they've dealt with their first scandal. It seemed like it was only Republicans getting indicted for corruption (and we had our share), but this year was the year of the Democrat perp walk. Look for more as we move into the new year.

3. Sarah Palin Enters the Political Landscape
Like a meteor or someone with more staying power? That's yet to be decided but Governor Palin electrified the conservative base and turned a landslide Obama victory into just a win. She energized crowds and was credited by Sen. Chambliss with putting him over the top in Georgia. No one has had to weather the withering negative media attention directed at her on issues not even related to politics: her daughters pregnancy, insane, formerly respected members of the media calling into question whether or not her child was actually her child, members of that same group of heathens questioning (and then cowardly deleting his post) whether her pre-natal care contributed to her son Trig's Down Syndrome and myriad other biased attacks. While Obama was not even vetted on the most basic issues, Palin was subjected to a media enema on a daily basis and smiled the entire time.

2. Obama Wins Presidential Election
America is not racist. Who knew? Well, many of us did but it took a man from Chicago's machine politics to prove it. BHO bested the Clintons and whooped an outwitted McCain in the general election while maintaining an above the fray approach thanks to a compliant media. Interestingly, once Obama won he realized that he would be insane to govern from the far-left like he promised the barking moonbats on the left and has nominated a fairly center-left cabinet. The liberals are still insane over this, a fact that makes me very happy.

1. The US Wins the War in Iraq
To the consternation of liberals (and the media) the world over, the American military turned around a certain loss into a rousing victory. The defeat that liberals wanted so badly was in their grasp and President Bush, John McCain and a General named Petraeus constructed a strategy that led to a coalition government with a mandate and the eradication of Baathism in Mesopotamia. Plus, it was the central fight in the greater War on terror and we made a serious statement to al-Qaeda. Our boys and girls did it with skill, brains and guts and should be commended. Note that this barely makes any of the top ten news stories of this year on any major news site. It only goes to prove the bias if you ask me; where else but in America circa 2008 can a nation win a war that was considered lost and it not be the top news story of that year?

Sen. Chris Dodd Gives America the Finger

Connecticut Democrat Sen. Chris Dodd has more chutzpah than anyone else in the US government. That is one amazing statement I know, yet Dodd has managed to retain his position in spite of bearing the largest burden of anyone for the current financial mess we find ourselves in:

Sen. Christopher Dodd, chairman of the Senate Committee on Banking, Housing and Urban Affairs, suggested on CBS’ “Face the Nation” that Rick Wagoner, the chief executive of GM, “has to move on.”

Where does Dodd get the temerity to make such a proposition in light of his own incompetence and scandal? Dodd is in charge of the committee that could have kept us from entering the current credit crisis. He’s the same man who is in charge of regulating Fannie Mae and Freddie Mac, and is No. 1 on their list of donations.

When Congress approved $25 billion to bail out Fannie Mae and Freddie Mac, Dodd denied rumors these firms were in financial crisis. He called the firms “fundamentally strong,” said they were “in good shape” and to “suggest they are in major trouble is not accurate.”

Dodd also received preferential loans from Countrywide Mortgage Bank, and then said he wasn’t aware that he was getting a “special” deal. How is that possible?

Good question, I would suspect the answer is that Connecticut voters are among the most uninformed voters in the nation or the most stupid. I'm guessing the real answer lies somewhere in between. Note that when Dodd was given a forum in front of the American people as a whole, he registered zero interest among the electorate.

Now Dodd wants the federal government to bail out each and every failing business in the US and tell the executives of those firms how to run their businesses or worse, to "move on". The man has balls the size of Groton and a morality meter that never works. Yet he is among the elder statesmen of Congress and will continue to be re-elected every six years.

Release the documents, Senator Dodd. Allow the American people to see how much of a screw up you are and a liar to boot. We bought these bad debts and failing companies, not you. We are funding the largest nationalization of goods and services in history, not you. Release every applicable document that sheds light on the who, why, where and when of every company we now own as a nation including the mother lode and your the companies that donated money to you more than anyone else: Fannie Mae and Freddie Mac.

H/T: Glenn Reynolds.

The Henry Waxman Coverup

The two biggest players in the mortgage meltdown--Fannie Mae and Freddie Mac--are getting some preferred treatment from California Democratic Representative Henry Waxman. A report into the mortgage collapse lays a great deal of responsibility at the feet of Freddie and Fannie:

But previously undisclosed internal documents that are now in Mr. Waxman's possession and that we've seen tell a different story. Memos and emails at the highest levels of Fannie and Freddie management in 2004 and 2005 paint a picture of two companies that saw their market share eroded by such products as option-ARMs and interest-only mortgages. The two companies were prepared to walk ever further out on the risk curve to maintain their market position.

The companies understood the risks they were running. But squeezed between the need to meet affordable-housing goals set by HUD and the desire to sustain their growth and profits, they took the leap anyway. As a result, by the middle of this year, the two companies were responsible for some $1.6 trillion worth of subprime credit of one form or another. The answer to Mr. Waxman's question about their role in the crisis, in other words, is that they were central players, if not the central players, in the creation of the housing boom and the credit bust. Mr. Waxman released some of these documents Tuesday but kept others under wraps.

In early 2004, Freddie's executive team was engaged in a heated debate over whether to start acquiring "stated income, stated assets" mortgages. And in April of that year, David Andrukonis, the head of risk management, wrote to his colleagues, "This is not an affordable product, as I understand it, but a product necessary to recapture [market] share. . . . In 1990 we called this product 'dangerous' and eliminated it from the marketplace." Freddie went ahead anyway.

And what is Waxman doing to help this bunch of liberals run wild? The single weirdest-looking dude in Congress is keeping the documents from the public and protecting not only men like Franklin Raines but his fellow members of Congress like Barney Frank and Chris Dodd who are neck-deep in this. Congressional Democrats made it a goal to get people into housing not only because of their liberal ideology but because they knew it would help them politically through donations and in the case of Dodd, personally by getting reduced interest rate loans.

Monday Evening News and Notes

An all-around nice day for the 1st of December in the Northeast. Here's some interesting tidbits from around the Net:

China is in the midst of economic problems. How big and how will it effect us and the world?

Community Organizers filed a complaint against the three largest Wall Street rating firms for "charging that their inflated ratings on subprime mortgage bonds disproportionately caused financial harm to African American and Latino home buyers across the country." Let's see if I have this right; Congress forced companies to offer subprime mortgages and even accused those who questioned the practice racists. Now, these firms are being sued because they were part of the process? Makes sense...Bawney Fwank, call you office, pwonto.

Thank you, Barack. Gov. Napolitano's replacement will mean a Republican will be guv in Arizona. Maybe we can think about shutting the border down since Napolitano was loathe to do it.

Plax does the perp walk. Nice career you used to have, dude.

Heartbreak: Rosie O'Donnell's show axed after one episode. See you, scrub.

Alex Witt(less) is shocked, shocked that terrorism would continue in the world now that Barack Obama, the Savior Of All Mankind has been elected. Wake up, dingbat.

Update: Sarah Palin is one hell of a public speaker. The media and dems harp on how great a speech-giver Obama is, Palin is right up there:

Congress to US Carmakers: Sink or Swim

With trillions already tabbed for banks and insurance giant AIG, the US automotive industry is being pushed to the side and not getting a seat at the tax money trough:

WASHINGTON, Nov 13 (Reuters) - A senior Democratic senator raised doubts on Thursday that an attempt to bail out U.S. automakers had enough support to clear Congress this year.

As Republicans amplified their concerns about a bailout, Senate Banking Committee Chairman Christopher Dodd raised the biggest red flag for fellow Democrats trying to craft a $25 billion rescue and pass it during a post-election session set to start next week.

"Right now, I don't think there are the votes," Dodd of Connecticut told reporters about prospects in the Senate. "I want to be careful of bringing up a proposition that might fail," he said.

I guess Dodd doesn't have any special friends at GM or Ford like he did at Countrywide but I digress.

Anyway, we have to draw the line somewhere and that somewhere is evidently the Big Three.

Detroit has been turning out an inferior product for decades now with a few exceptions. The Japanese, South Koreans and Germans have been designing and building better, sleeker and more efficient vehicles while GM, Ford and Chrysler have been regurgitating the same old same old for twenty years.

Add to that the inflated salaries paid to those assembling the cars in the US and you have the recipe for lower profits and lower sales. The average UAW worker makes somewhere between $30 and $40 per hour, but not said is that an extra $30 goes on top of that in benefits costs. Those benefits checks fund the pension plan, health care and, of course, help to line the pockets of UAW bigwigs and Democrat politicians. In other words, through greed and poor planning, the US auto makers have such huge payrolls that they've not been able to capitalize on the greatest advantage they have; no tariffs. The tariff savings are used up in payroll costs and not seen by the consumer who, when given the option of buying a Buick or an equally priced Toyota will almost always go with the higher-quality Japanese brand.

President Bush opened up the flood gates by pushing for the bailout bill and is now trying to keep the money from flowing out using a single sand bag and a small pump with a garden hose. It's not going to be that easy as Congress has instant access to trillions of dollars that they didn't have before and the spending will make earmarks look like pocket change. Bush has made a mockery of free market economics and by passing the bailout bill has paved the way for Obama t institute more socialist economic policies that will see spending balloon to the states and cities who are screaming "help!".

It's about time we took a breather and looked at what we have wrought. My guess is that Bush will long regret pushing for the bailout plan and going against a century of American thinking whereby companies that are not solid are than doomed to failure.

Thursday News

Some interesting stories from around the web:

This would qualify as unfortunate.

Navy 1, environmentalist whackos 0. SCOTUS overturns the Ninth Circuit again.

Great moments in cable news: MSNBC eats crow in Palin story.

Russia has Europe deeply concerned.

When $750 billion is really $5-trillion. Yeah, I sure didn't see that coming.

Dems Will Hold Hearing on Meltdown After Election

Hope and change.

Rep. Henry Waxman has decided that yes, it is in the best interest of Americans to find out why friends of Obama were getting fat, dumb and happy at our expense. Just not until after the election:

Democrats are giving Republicans the hearing they’ve been demanding to dig into the failures of Fannie Mae and Freddie Mac, but it won’t happen until after the election.

House Oversight and Government Reform Chairman Henry Waxman (D-Calif.) Monday announced that he will hold a hearing into the collapse of the mortgage giants on Nov. 20, and plans to call several of the firms’ ex-CEOs, including Fannie Mae's Franklin Raines.

...“It seems highly suspicious that Chairman Waxman has delayed this particular hearing - which doubtless will focus on the desperate need for reform and Fannie and Freddy, and the equally desperate efforts by Democratic leaders to block those reforms,” said Michael Steel, spokesman for House Minority Leader John Boehner (R-Ohio).

The Center for Responsive Politics found that Sen. Barack Obama (D-Ill.) the Democratic presidential nominee, has received more money since 1989 from Fannie Mae than any lawmaker except for Senate Banking Committee Chairman Chris Dodd (D-Conn.).

McCain has got to hit them hard on this but probably won't. The leading presidential candidate is neck high in bed with two GSE's that led directly to the taxpayers forking over $700-billion and Waxman is playing politics to the extreme.

Welcome to the next four years, folks.

The Continuing Economic Ripple Effect

We've only seen the beginning of the problems we'll face going forward into the great unknown future that the mortgage meltdown has led us to. Today investors are happy and the market is currently up 450 points, tomorrow, who knows?

This cataclysm is just starting and the future is more unknown than at any time in 70-years. The blowback is coming in ways we've not even had the opportunity to appreciate.

Every action has a reaction and this event is like a stone thrown into a pond, the initial turmoil from the rock hitting the serene water shook things up but the radiating ripples could develop into a tsunami if the conditions are right. The initial explosion saw great American companies like Lehman Brother, Merrill Lynch and Wachovia go poof in a matter of days. The expanding ripples will reveal further, deeper problems.

One thing I've not read much about is the impact this will have on major pension plans including trade unions. Teachers, electricians and Teamsters will get their quarterly statements in the near future and will see exactly what the meltdown did to them. They await the bad news but have no idea of the actual impact unless they've opted to follow it daily via Internet. The unions did fight to get help in the bailout package but failed to win that battle putting them on the defensive against their own members.

Furthermore, hypothetically, say a union laborer is planning on retirement next year, his pension benefits have been pooled with other LIUNA members and that money was invested in a wide range of corporations across the spectrum. Will that money be there next year for him when he is eligible to collect? Chances are that union pensions will take a severe beating over the next few years. Or perhaps he sees the economic problems and continues to work instead of retiring, He'll be another person that needs employment or is working in a spot which a younger employee would have filled but now cannot because it's not vacant. Add to that the inherent corruption in every union and it's a recipe for disaster with more than a few union benefits execs doing the perp walk.

Think of the chaos that will ensue if major unions like the NEA, United Federation of Teachers, Teamsters, the International Union of Operating Engineers, the AFL-CIO (who has billions tied up in real estate and mortgages--link in PDF) and SEIU cannot meet their pension requirements. An Obama administration will bail them out, that's a given but what if McCain wins? Either way, we're talking a severe hit to the economy.

McClatchy 100% in Tank For Obama

The McClatchy news organization brings us this unabashedly biased piece explaining that it was not the government-backed Fannie and Freddie that led us to our current crisis but private firms and in fact, capitalism and greed. A taste:

As the economy worsens and Election Day approaches, a conservative campaign that blames the global financial crisis on a government push to make housing more affordable to lower-class Americans has taken off on talk radio and e-mail.

Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems.

Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis.

It goes on in unconvincing fashion for paragraph after paragraph. But wait, here's the real bias:

"I don't remember a clarion call that said Fannie and Freddie are a disaster. Loaning to minorities and risky folks is a disaster," said Neil Cavuto of Fox News.

Well Neil, what about this:

Sen. John McCain's 2006 demand for regulatory action on Fannie Mae and Freddie Mac could have prevented current financial crisis, as HUMAN EVENTS learned from the letter shown in full text below.

McCain's letter -- signed by nineteen other senators -- said that it was "...vitally important that Congress take the necessary steps to ensure that [Fannie Mae and Freddie Mac]...operate in a safe and sound manner.[and]..More importantly, Congress must ensure that the American taxpayer is protected in the event that either...should fail."

In other words, McCain did issue a clarion call along with others in the GOP and it was not heeded. Just because it was a commentator on FOX that made the statement, McClatchy felt it showed we are hypocrites, liars or worse.

Along these same lines, ACORN is in the midst of being exposed as the Democratic shill they've always been.

Tuesday Evening Notes and News

On the road again...

Here's some news from around the Internet:

Are theaters playing fast and loose with tickets for the conservative, Michael Moore-bashing An American Carol?

Here's the SNL skit eviscerating Pelosi, Soros, Bush and Frank plus those who got subprime loans. It was taken down by NBC, put back up, taken down and now it's up again. No bias here, just everyone move along...:


Sarah Palin continues to hammer Obama on William Ayers forcing him to respond and go on defense. Old Baba Wawa is not at all happy about this. Pitbull in lipstick, baby!

Yeah, that bailout solved all our problems, didn't it?

Is Tony Rezko about to speak and give Obama serious agita?

Rep. Christopher Shays Calls Congress Out

The financial meltdown begins and ends with three entities, the Democrats in the US Congress, Fannie Mae and Freddie Mac. Rep. Christopher Shays (R-CT) asks that investigations begin forthwith and will certainly be rebuffed. The Dems know full-well that the hearing would show that they were in Freddie and Fannie's pockets and with elections only a month away, there's no way in hell Waxman allows this to proceed.



Exit questions: Is Henry Waxman the single oddest looking dude to ever serve in Congress and will America ever get the good sense to vote those responsible out?

Hat tip: Allahpundit

O'Reilly Pummels Barney Frank

It's about damn time. Barney Frank was the number one Representative out there in 2003 saying that Fannie and Freddie were just fine, nothing to see there. O'Reilly took him to task and Frank was a stumbling, lying fool by the end:


Update: Shocka! Barney Frank's boyfriend was a heavy at Fannie and it looks like the Congressman has some explaining to do about some funny business.

Bailout Bill Passes House

Nothing like some sweet, savory pork to get the Dems to go along. Well, that and the game changing, guiding hand of The Messiah:

Some Democrats are touting calls from Sen. Barack Obama (D-Ill.) as an explanation for why they are switching their votes to support the financial recovery package the House will consider Friday.

The announcements by at least seven Democrats that said Obama had helped sway them suggest the bill could pass without significant additional Republican support.

The Democrats — most of them freshmen — held a press conference during the floor debate on the $700 billion Wall Street bailout to announce that they were switching their “no” votes to yes.

So, just like that we've nationalized damn near an entire industry.

What have we done?

Update: McCain has been about as bad on this issue as he was on immigration. He's lost a good many Conservatives he managed to gain back with his shameful stand on the bailout bill. He had the chance to pound the Dems repeatedly and say "no, we will not go against the basics of free market economics" but he chose to punt.

The NRCC has a new ad--What Just Happened:



We, as Conservatives have hurt ourselves badly. Perhaps the current brand of Conservative lite will be seen for what it is: Democrat lite.

Debate Review. Update: Biden a Slacker?

I tend to be on the side that says Palin did good but not great. She stuck to her talking points entirely too much when she had some great opportunities to hammer Biden hard.

In the first minute of the debate answering the lead-off question, Biden said this with regard to the current financial quagmire:

I think it's neither the best or worst of Washington, but it's evidence of the fact that the economic policies of the last eight years have been the worst economic policies we've ever had. As a consequence, you've seen what's happened on Wall Street.

If you need any more proof positive of how bad the economic theories have been, this excessive deregulation, the failure to oversee what was going on, letting Wall Street run wild, I don't think you needed any more evidence than what you see now.

So the Congress has been put -- Democrats and Republicans have been put in a very difficult spot. But Barack Obama laid out four basic criteria for any kind of rescue plan here.

He, first of all, said there has to be oversight. We're not going to write any check to anybody unless there's oversight for the -- of the secretary of Treasury.

Palin should have said something to this effect: How can Senator Obama be trusted to lay out any plans to get us through this when he took the second most money from Fannie Mae behind only another Democrat; Senator Dodd? Your own party, Senator Biden, said in 2003 that Fannie and Freddie were in good shape while Senator McCain was prescient enough to see this disaster brewing back in 2005 and earlier.

A response like that would have put Biden on the defensive immediately and got the country paying attention more deeply than they did. I was a lost opportunity.

Second she mainly stuck to talking points and canned responses, which was to be expected but c'mon, let's interject something besides McCain talking points. Another lost opportunity was when Biden said this:

Here's what the president said when we said no. He insisted on elections on the West Bank, when I said, and others said, and Barack Obama said, "Big mistake. Hamas will win. You'll legitimize them." What happened? Hamas won.

When we kicked -- along with France, we kicked Hezbollah out of Lebanon, I said and Barack said, "Move NATO forces in there. Fill the vacuum, because if you don't know -- if you don't, Hezbollah will control it."

Now what's happened? Hezbollah is a legitimate part of the government in the country immediately to the north of Israel.

This is pure and utter BS and Biden knows it. A group that became Hezbollah attacked the Marine barracks in Beirut in 1983 with backing from Iran. They grew stronger throughout the 1990's and have become the dominant party in Lebanon. When exactly did we kick them out and when exactly did Biden or Obama say to "move NATO forces in there"? Whe they were kicked out, where exactly did Hezbollah go to? Also, I'd like to see one example of Obama's prescience on Hamas winning in "the West Bank" or even Biden mentioning it. The fact that Hamas rules in Gaza and Fatah still controls the West Bank must have escaped Biden. Charles fact checks the hell out of Biden on this one and the proof of his out and out lie is damning. These were such bald-faced lies that it should have been whacked out of the damn park by Palin if she had more insight into the events that shape the world. More on this at Wizbang!

Biden looked old and wasn't especially sharp. He talked like a politician and was good for a lie here and a senior moment there, about what one expects from the Delaware Senator.

Don't get me wrong now, Palin won it but did she do enough to convert Independents? I don't really believe so.

Update: A ratings bonanza! I would bet many who watched say "you betcha" and liked what Palin had to say. We'll see in the next few days.

Update: Joe Biden only lied fourteen times last night. For Biden, that's a slacker effort.

Why Do The Democrats Hate Europe?

The Democrats have been keen on pointing out that Pres. Bush in particular and the GOP as a whole are just not nuanced and continental enough for Europeans who are sick of our "cowboy" mentality.

Explain to me why they would allow Europe to suffer while they took a day off in the midst of the biggest financial crisis in decades:

France heaped pressure on Gordon Brown last night by floating an ambitious plan for a €300 billion (£237 billion) bailout fund to rescue crippled banks across Europe.

As the world held its breath on the fate of America’s $700 billion bank bailout plan, President Sarkozy was seeking the backing of European leaders for his own lifeboat.

Nancy Pelosi shut down the House for Rosh Hoshanna--the Jewish new year celebration--while Europe was left floundering. If the House had been in session on Tuesday, perhaps the world markets would have been calmed somewhat and the Irish banks would not have had to take the actions they did, further worsening the crisis for the continent and the EU.

Pelosi's inaction has left our allies and business partners with a feeling of hopelessness simply because she wants to play politics with this issue. When a crisis of this magnitude erupts, it shouldn't matter if it's election day, Ramadan, New Years Day or Christmas, the House should have stayed in session to assuage the tension felt globally. But then, Pelosi shut down the House in August to go on a book tour while average Americans were struggling mightily with high gas prices so we shouldn't be too surprised.

Pelosi's inaction may have worsened this crisis more than we'll know because she decided to act...should we say, unilaterally like a cowboy?

Dems Fiddled While Fannie Burned A Hole in Our Wallets

It's time to break out the hammer. It's time we hold the Democrats accountable for their actions (or inaction as the case may be). Nancy Pelosi and her fellow Dems are screaming that the GOP is making the current bailout discussion a political issue and hampering the debate and the patchwork fix they are trying to implement. Newsflash for the Speaker: It is a political issue and you made it one.

The WSJ breaks it down from a hearing called in 2003 about the problems at Fannie and Freddie and the effect it could have if they weren't addressed. The GOP was prescient, the Dems were not only wrong but wrong because they were in bed with the two GSE's that were central to the economic quagmire we now find ourselves in.

Let's start with Rep. Barney Frank (D-MA) who was quite cozy with these two firms:

Rep. Frank: Let me ask [George] Gould and [Franklin] Raines on behalf of Freddie Mac and Fannie Mae, do you feel that over the past years you have been substantially under-regulated?

Mr. Raines?

Mr. Raines: No, sir.

Mr. Frank: Mr. Gould?

Mr. Gould: No, sir. . . .

Mr. Frank: OK. Then I am not entirely sure why we are here. . . .

Rep. Frank: I believe there has been more alarm raised about potential unsafety and unsoundness than, in fact, exists.

Or this from the blowhard from Massachussetts:

Rep. Frank: I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . .

And who did the Speaker choose to argue that it was the GOP who was responsible for this mess and that it has become politicized? Rep. Frank of course. Pure chutzpah.

But what of our distinguished Senators? How about the man who took more money from Fannie than any other Senator?

Sen. Christopher Dodd (D., Conn.): I, just briefly will say, Mr. Chairman, obviously, like most of us here, this is one of the great success stories of all time. And we don't want to lose sight of that and [what] has been pointed out by all of our witnesses here, obviously, the 70% of Americans who own their own homes today, in no small measure, due because of the work that's been done here. And that shouldn't be lost in this debate and discussion. . . .

And "thank you Senator Dodd" said Fannie Mae, "the check is in the mail."

Read it all, it's devastating.

The GOP is staring into the abyss and have been handed this issue with a bow on it. Use it from now until the election and even after. Pound them on it mercilessly, buy ad time during the World Series and the debates. Play the video that has them saying these words, words we should be using against them whenever and wherever possible. If an interviewer asks about abortion, steer the answer back around to the donks failings on Fannie and Freddie. Otherwise, we lose the offensive and most-likely more than a few seats in the House and Senate.

Take the video below and make it into three or four ads that will saturate the markets in battleground states. Let Gov. Palin put Sen, Biden on the defensive by defending his fellow Dems tonight. I want to see Sen. McCain asking Sen. Obama why Fannie chose to give so much money to him as well and to ask it live during the next debate. The gloves have to come off and we need to drag them into the octagon and not stop until November 4th.

George Soros Helping Dems Craft Bailout Legislation

As if the GOP were not indignant enough about the Pelosi speech and the crappy bailout bill pushed by Paulson and Pres. Bush, now the Dems bring in the man Republicans hate more than anyone to help craft revised legislation:

The billionaire financier George Soros, a major Democratic financial backer, is floating his own rescue plan among Democratic lawmakers who are uncertain what to do in the wake of a surprise defeat of a proposed $700 billion rescue package proposed by Treasury Secretary Henry Paulson.

Soros has outlined his plan in an opinion editorial in the Financial Times and circulated a concept paper among decision-makers.

But wait, it gets better (or worse):

...Soros has also contacted Sen. Barack Obama’s (D-Ill.) presidential campaign to share his views on the financial crisis and the best way to solve it.

Great. The Dems have to listen to this guy because he supplies them with a ton of cash but his policies as spelled out in the piece will not save the banking industry or appease Wall Street. As Robert Shaprio noted in the final paragraph:

He said that if the government bought stock in troubled firms, a problem would arise regarding how Uncle Sam would be represented as a shareholder.

“How does the government vote the shares?” he asked. “It puts them in a potential conflict of interest. Regulatory interests may hurt the bottom line.”

It leads us back to the problem many Conservatives have and that is that government has no right owning businesses. That was the main misgiving with the Paulson plan. Soros wants nationalization because he supports socialism and wants to see America move in that direction like Europe has. The Democrats are amenable to his ideas on the subject.

If the government owns stock and simultaneously regulates companies in which it has a stake, isn't it like the fox guarding the hen house?

I'm sure House Republicans will not approve a Soros-backed plan but the fact that he is advising Obama is what really raises my hackles. The GOP is pushing a revised option that includes business tax cuts and would be pro-growth while helping shore up banks and lending firms.