Missile defense likely to continue in Obama administration

Obama transition adviser undermined Fannie Mae oversight as lobbyist

Sound familiar?  It approximates Obama’s response when people pointed out that the man he picked to lead his VP search team was one of the greedy executives he’d been demonizing on the campaign trail:

I would have to hire the vetter to vet the vetters. I mean at some point, we just asked people to do their assignments. Jim Johnson has a very discrete task, as does Eric Holder, and that is simply to gather up information about potential vice presidential candidates. They’re performing that job well. It’s a volunteer, unpaid position. … So these aren’t folks who are working for me, they’re not people who I have assigned to a particular job in a future administration.

That statement no longer applies, apparently.  Donilon has already begun working in some capacity for the transition, which is the core of Obama’s coming administration. The volunteerism of former Fannie Mae executives and power players seems remarkable, until one recalls that Obama took money hand over fist from Fannie/Freddie sources — over $30,000 per year while in the Senate, far outstripping anyone else in Congress.

How interesting that Obama keeps selecting lobbyists for his transition team after spending most of his time over the past year issuing populist pap vilifying them.  Among Fannie Mae’s culprits, Donilon occupies a special place, having successfully blocked regulators who tried to correct the corruption at the GSE as well as having misled board members to the extent of the fraud.  He should be the target of an investigation, not an adviser to an incoming administration — and his inclusion on Obama’s team exposes Obama’s talk of “change” as a fraud in itself.

• Compensation packages for lobbyists have doubled in the past six months as firms scramble to hire Democrats.
• A senior official of the Chinese Ministry of National Defense told the Financial Times the world shouldn’t be surprised if China builds an aircraft carrier.
• General Electric’s Jeffrey Immelt says he plans on buying more media assets after GE borrowed $5 billion from the Federal Reserve’s new commercial-paper facility earlier this month.
• The Iraqi cabinet on Sunday approved a bilateral agreement allowing U.S. troops to remain in the country for three more years.
• Before his election, Barack Obama wrote a series of letters to federal employees promising more funding and “new power to bureaucrats.”

Sanford: Don’t bail me out, bro!

Community bankers tell me that they are now at a competitive disadvantage for being careful about who to lend to, because others that were less disciplined will get a federal bailout. This is also true for states. Those that have been fiscally responsible will pay for or lose out to the big spenders. California increased spending 95% over the past 10 years (federal spending went up 71% over the same period). To bail out California now seems unfair to fiscally prudent states.

Sanford expresses some curiosity at how an institution with at least $10 trillion in debt can suddenly afford to start writing checks with twelve digits to the left of a decimal point.  In fact, Sanford calculates the current national debt somewhat north of $50 trillion, as he counts the liabilities of Medicare and Social Security, while the government conveniently continues its bookkeeping amnesia on those liabilities.  Who bails out the Chief Bail-Outer?

At a certain point — and we have probably passed it already — not even the taxpayers can do it.  We’re entering the realm of imaginary numbers, a place where the bill has gone so high that no one can credibly calculate how to repay it.  And these same taxpayers just elected an administration and a Congress that wants to create even more entitlements, making the crisis even worse, rather than finding ways to extricate the American government from the financial trap set over the last few decades.

The only reason for federal intervention at all was to recover the damage created by the initial government distortion of the lending markets by providing some value to the mortgage-backed securities issued by Congressional mandate.  That was what infected the financial markets and turned a cyclical recession into a potential global meltdown.  TARP would have provided limits to government intervention, had Paulson stuck to that plan — but Paulson now won’t use any of the money to undo the MBS damage.  Instead, he’s buying bank assets and touching off a bailout free-for-all.

Why?  After two weeks of literally begging for TARP, Paulson has supposedly suddenly discovered it wouldn’t work.  Why should we trust Paulson with a single dime of money after that?

Inhofe has the right idea.  We need to cut off the money spigot now.  As Sanford notes, it’s only producing long-term debt when we haven’t figured out how to pay off the loans we’ve already taken.

Obama picks presidential assassin’s lawyer as White House counsel

Besides defending Clinton through the impeachment process, an effort that Craig lost, who else had the benefit of Craig’s counsel?

• Elian Gonzalez’s father - Craig represented the father who demanded the return of his son after his estranged wife died trying to take Elian to freedom.  Most people saw this as a thinly-veiled publicity stunt from Fidel Castro, attempting to embarrass the US.  The dispute got resolved when Janet Reno ordered an armed assault on the house where Elian’s family in the US provided him a home.
• John Hinckley, Jr - Craig presented and won the insanity defense that allows Ronald Reagan’s would-be assassin to spend weekends with his family now.
• Kofi Annan - The former Secretary-General of the UN hired Craig to defend his interests in the Volcker Commission probe of the Oil-for-Food scandal, which put billions of dollars into Saddam Hussein’s pockets while providing cash for Annan’s son, his deputies, and some allege Annan himself.
• Pedro Gonzalez Pinzon - A Panamanian legislator wanted for murdering an American soldier in 1992.  The Dallas Morning News demanded that Obama force Craig to drop the case during the campaign, but no report of whether he did is easily available.

I doubt that any President has selected the defender of a presidential assassin as White House Counsel before now. Does anyone want to guess how long that takes to become a Trivial Pursuit question?

Given Craig’s dubious client list, especially Gonzalez Pinzon as an apparent active client, this selection is a disgrace.  The last person we need in the White House is an attorney who represented assassins, Castro and his goons, corrupt UN executives, and a suspected killer of an American soldier.  Those are the people the White House should focus on stopping, not embracing.

Update: I’m not saying that people should not have defense counsel when charged with a crime; that’s an absurd response to this post.  What I’m saying is that Craig is an absurd choice for White House counsel on the basis of the kinds of cases he himself pursued.  No one forced him to take Hinckley, Gonzalez Pinzon, Annan, or Gonzalez/Castro as clients.  Like most attorneys looking to boost their practice, Craig undoubtedly competed hard for their business.

Was Craig the only attorney available for this gig?  No.  Could Barack Obama find someone qualified who wasn’t currently representing a man suspected of murdering an American soldier or who represented a presidential assassin?  If not, then Obama’s more incompetent than anyone figured.

The bailout oxymoron

George Orwell, please call your office –stat.  Today’s Washington Post report on the proposed auto bailout bill has the humorous oxymoron of taxpayer protection embedded in loans to an industry whose entire market capitalization comes to less than a third of the loan itself.  If that sounds like a Fannie Mae loan program, it should come as no surprise, since the same people who brought you the financial collapse are pushing this monstrosity as well:

A measure to speed $25 billion in emergency aid to the nation’s automakers will include provisions designed to protect taxpayers, congressional Democrats said yesterday, including a ban on bonuses for employees who make more than $200,000 a year and a government oversight board with power to veto corporate decisions.

The bill, which is expected to be unveiled today on Capitol Hill, also would bar the automakers from paying dividends to shareholders for as long as the firms owe the government money, Rep. Barney Frank (D-Mass.) said on CBS’s “Face the Nation” yesterday.

Despite strong opposition from congressional Republicans and President Bush, Democrats plan to press ahead with legislation aimed at staving off the collapse of the auto industry when Congress convenes this week for its final session of Bush’s presidency. …

Both measures would carve cash for Detroit out of the $700 billion financial rescue program Congress created last month to shore up the U.S. banking system. The White House opposes using the money for that purpose and has urged lawmakers instead to modify an existing $25 billion loan program to help the automakers retool factories to produce more fuel-efficient vehicles.

The amount of money Congress wants to spend on bailout loans could buy Detroit’s Big Three, and perhaps have enough left over for a German automaker or two.  The value of the stock in these companies amounts to $7 billion combined:

As of the close of business on Friday the market cap for General Motors was about $1.9 billion, Ford about 4.3 billion….Chrysler is privately held but it’s a safe bet that their FMV is less than $2 billion…probably a LOT less….so for approximately a lousy $7 billion….a rounding error for the federal budget…the government could simply BUY the entire U.S. auto “industry” — actually, of course, it’s just the U.S. nameplate manufacturers, but that’s another story — for what amounts to a pittance.

Of course, one reason Congress seems so intent on investing in these automakers is that they run their businesses much like Congress runs the federal government:

The numbers are literally absurd….Ford has $160 billion in debt!….with NEGATIVE book value of equity….GM has about $60 billion in debt…and a HUGE negative net worth on a book basis of $56 billion!….Essentially, the market is valuing the companies — well above their (negative) book values — but at what amounts to scrap value!…so $50 billion more from forced tax exactions should be thrown at them?….and that’s NOT absurd?

Now, let’s look again at the oxymoron of “taxpayer protections” regarding loans to companies who already cannot repay their debt, and whose debt far outweighs their value.  That sounds more like a Fannie Mae security than a solid bet on taxpayer money.  Putting aside the obvious fact that the government has no business intervening in the collapse of a poorly-run private enterprise, the loans will only prolong the agony of collapse.  If $160 billion in credit for Ford couldn’t correct their problems, an additional $8 billion will hardly turn the auto manufacturer into a stable powerhouse, or even keep them above water.

And who’s pushing this bill?  Barney Frank, the same genius who assured us that Fannie Mae was solvent and that further regulation wouldn’t be needed.

The real taxpayer protections need to be placed on Congress, not the automakers.  Representatives who engineered the collapse of the GSEs have no business plotting any more government interventions.

There is no doubt U.S. auto manufacturers are in real trouble. Each company posted large losses in the third quarter, with General Motors and Ford reporting losses between $2 billion and $3 billion. But while all auto manufacturers have suffered a downturn in sales, Toyota still managed to come out in the black this past quarter. The problem is not an inherently troubled industry. The problem is that Detroit’s automakers are trapped in a business model designed for another era. Union contracts force the Big Three to pay their workers an average of $30 more per hour than competitors like Toyota. The Big Three have to keep 15,710 independent dealerships happy nationwide, compared to only 4,000 for all their Japanese competitors. Finally, the Big Three are saddled with billions in annual “legacy costs” that go to more than 800,000 retirees and pay for enormous amounts of facilities they will probably never use again.

The policy question facing Washington is how best to facilitate the changes Detroit must make to survive. The left wants to run everything through Congress. Speaker Nancy Pelosi (D-CA) wants to choose what types of cars the automakers can build and craft a centralized plan to “assure the long-term viability of the industry.” Frank wants a “very tough oversight board” that could “veto ventures” new management wants to pursue. Detroit will never go through the necessary changes with Congress in charge. The types of changes needed will be painful and unpopular, and it is difficult to imagine politicians allowing them, never mind insisting on them.

There is an alternative. And it’s right there in the U.S. Constitution: bankruptcy. Since the founding of our country, the bankruptcy process has been an essential part of the nation’s commercial fabric. Bankruptcy is not the end of the road; it is, rather, a new beginning. The reorga­nization process provides unique flexibility to unlock the fundamentally sound productive capa­bilities of a faltering business by freeing it of many obstacles to success, such as unviable contracts, crushing debt and poor management. Reorganiza­tion is the right tonic for businesses like the Big Three that need to adjust quickly to new economic realities but are, at their cores, sound, productive and potentially profitable.

The fight over how the Big Three should be reformed will be an early test for the incoming liberal majority. The auto industry is hardly the only sector of the economy that is facing difficult choices. How Washington deals with Detroit will set a precedent for other businesses. As Sen. Richard Shelby (R-AL) told “Meet the Press” this weekend: “This is just a beginning of corporate welfare in a big, big way.”

Video: Michael Steele wants to be the “loyal opposition”

Steele hits the nail on the head with his warning about communications. The Republicans need to have someone who relentlessly offers positive alternatives along with rational opposition to the Democratic agenda. It’s not about being nice, but about positioning the GOP as the grown-ups while the Democratic Congress and Obama administration write one check after another.

Republicans need someone with national name recognition who can do all of that as well as reorganize the RNC, modernize its communications, and find effective candidates for Congress.  The chair has to be ubiquitous, appearing everywhere and every day, making himself heard on every single issue.  Only a few people already have that kind of personality, and Steele is already busily proving that he qualifies.

From World Net Daily, By  Walter E. Williams

Many politicians and pundits claim that the credit crunch and high mortgage foreclosure rate is an example of market failure and want government to step in to bail out creditors and borrowers at the expense of taxpayers who prudently managed their affairs. These financial problems are not market failures but government failure. The Community Reinvestment Act of 1977 is a federal law that intimidated lenders into offering credit throughout their entire market and discouraged them from restricting their credit services to low-risk markets, a practice sometimes called redlining. The Federal Reserve Bank, keeping interest rates artificially low, gave buyers and builders incentive to buy and build, thereby producing the housing bubble. Lenders were willing to make creative interest-only loans, often high-risk "no doc" and "liar loans," to allow people to buy more housing than they could afford. Of course, with the expectation that housing prices will continue to rise, it was no problem for lenders and borrowers – but housing prices began to fall, leaving some people with negative home equity and banks in trouble.

The credit crunch and foreclosure problems are failures of government policy. In fact, what we see now is a market correction to foolhardy government policy. Congress' move to bailout lenders and borrowers who made poor decisions will simply create incentives for people to make unwise decisions in the future. English philosopher Herbert Spencer said, "The ultimate result of shielding men from the effects of folly is to fill the world with fools."

     What “foolhardy government policy” was Williams referring to? The CRA, which “intimidated lenders” into offering credit to more people and specifically “discourages them from restricting their credit services to low-risk markets, a practice sometimes called redlining.”

     Thomas J. DiLorenzo of the Von Mises Institute called CRA “extortion” on banks in an April 30 article. That story explained that CRA was created during the Carter administration and in order to comply with the regulation mortgage securitization “exploded during the 1990s as a result of government regulation.” Securitization bundling was an attempt to diversify risks from loans made to high-risk borrowers.

     CRA regulation was also strengthened under President Bill Clinton in the 1990s, according to Terry Jones of IBD. His article called the subprime mortgage crisis “inevitable” after Clinton’s changes.

No the side that has been doing all of the hating since election day in the troubled parts of our nation have been militant activists radicals, who happen to be mostly white, mostly godless, and nearly completely all choose to engage in homosexual behavior.

It is the radical activists roaming the streets, pushing elderly women to the ground, staging obnoxious protests outside places of worship, and in some cases interfering in the midst of worship services that have expressed all of the hatred seen since election day. They have even taken to harassing people on their way to or from the church door and their car.

But these haters are ignorant and as such, many Christians, Mormons, Catholics, and Jews have shown compassion upon them.

How are they ignorant?

For one they don't seem to understand the validity of Constitutional authority, Constitutional law, and Constitutional rule. They are running around ginning up the pathetic gatherings of theirs to "override" Prop 8. They don't seem to understand that the court is under the authority of the Constitution in the state of California. They don't seem to understand that if some Kangaroo judge attempts to hijack the resounding will of the people, having now passed in two landslide victories--even when outspent on the matter 6 to 1, they will have anarchy on hand. Given that to shred the explicit language of a state's sovereign constitution is to suspend all law, and all authority found in the law.