The Conservative Reader

Art Smith March 31st, 2008

What a day. I’m sorry, but politically, not one that I’m proud of:

1) Alphonso Jackson resigns as HUD secretary (effective April 18). Few doubt there is something to allegations of favoritism. See my previous posting on the temptations of power.

2) Henry Paulson presents a plan to overhaul the Fed that is not well received. Criticisms run all over the map. My criticism remains simple: the Government cannot save everyone from their mistakes. This looks like the beginning of the end of free markets to me. I need to review the content before I make any more detailed assessments, however, you should watch your wallet and your Constitution. It’s perhaps positive that Paulson recognizes that this kind of change cannot happen quickly, but the scope of change recommended is so broad it really makes me nervous… my dear wife reacted this way: “The Government is taking over business”. If only I could tell her she doesn’t understand…

3) The most impressive attack against Barack Obama today is that he bowls like a sissy. And you’d think you’d only see this kind of thing on a slow news day.

4) Hillary is still on the hunt. Even after being caught lying, even though her campaign is out of money, even though one of the first costs she cut on her campaign was health coverage, even though her party leaders are pressuring her to end her campaign, she keeps going and going… I think if she declared she was a Satan-worshiper, was having an affair with Tim Russert, confessed to pulling the trigger on the gun that killed Vince Foster and spiked Ted Kennedy’s drink the night of Chappaquiddick, the only fallout would be a report that membership in Church’s of Satan was up 12%.

5) The only person predicting that Republicans might keep the White House is Howard Dean.

6) President Bush continues his efforts to visit every location on Earth outside the United States as part of his “Staying Out Of The Way Tour“. It has got to be more than obvious that he is stepping aside in hopes of providing adequate room for John McCain to hold appropriate press attention, and to keep the press’ attention off of Bush’s problems. Some say he wants to leave a Foreign Policy legacy, I think he may be just as happy leaving no legacy at this point.

My highlight for the day: The Mets beat the Marlins on a strong showing by Johan Santana.

Looking forward to a better tomorrow!

Hat Tips to Memeorandum, MSNBC, WSJ.

Update: Edit.

Tags: Alphonso Jackson, Barack Obama, Federal Reserve, Henry Paulson, Hillary Clinton, Howard Dean, HUD, John McCain, Marlins, Mets, President Bush, Republicans

• 2008 Presidential Election , Barack Obama , Baseball , Democratic Party , Federal Reserve , George W. Bush , Hillary Clinton , John McCain , Republican Party
• Comments(0)

Art Smith March 30th, 2008

This had been a disconcerting election year so far, and certainly we still have a long road ahead, but the state of the Democratic Party, and the latest Gallup Poll, are giving me reason to smile today.

Democrats really don’t know what they want any longer.  They’ve found themselves stuck with either a chronic liar, or worse yet, a huge unknown.

Hillary has now found herself in the position where many party leaders are finding it difficult to back her up on her “misstatement” about running from sniper fire while visiting Bosnia as First Lady (Peggy Noonan has a great assessment of Clinton’s current political state of affairs).  It’s interesting to watch the party suddenly stare in shell-shocked disbelief.

And although Obama is ahead of Clinton in the polls and in delegate counts (and likely Super Delegate support),  he still suffers from multiple issues that will dog him through the rest of this campaign:

• His relationship with his former pastor
• His lack of any meaningful legislative work
• His lack of foreign policy experience
• His apparent lack of patriatism
• The fact that most people really don’t know anything about him

And, at a time when many Republicans have given up any hope of retaining the Presidency, Gallup shows McCain ahead of Obama (not by a lot, but ahead nonetheless).

Democrats continue to have moral failure after moral failure. after moral failure.  It seems like Democrats can’t stay out of personal trouble (or at least, have a hard time keeping it a secret).

Even in Iowa, the Democrats in the General Assembly are at odds with the Democratic Governor (David Yepson in the Des Moines Register today rightly says that Governor Culver’s stand against unions on this topic will serve him well into the next election).

Meanwhile, the worst thing I’ve heard about McCain lately is that he has bad teeth.  I don’t know what I would have done wthout that critical alert.
Joe Lieberman is apparently supporting McCain.

But finally, Hillary is running out of cash.  And now is being discussed as a possible Governor for New York to try to clear up the mess after the moral failings of Spitzer and Paterson.  Something about that idea just doesn’t make sense to me.  I’m more favorable to the Giuliani idea.

This is what happens when Democrats are in power.  It would be entertaining if it didn’t have a real on people’s lives and our freedoms.

Hat tips to Memeorandum and DavidL at Bitsblog.

Tags: Barack Obama, Bosnia, David Paterson, delegates, Democrats, Eliot Spitzer, Gallup, Governor Culver, Hillary Clinton, Iowa General Assembly, Joe Lieberman, John McCain, Peggy Noonan, Presidential Election, Republicans, Rudolf Giuliani, sniper fire, Solid Platform, The Conservative Reader

• 2008 Presidential Election , Barack Obama , Chet Culver , Democratic Party , Des Moines Register , Eliot Spitzer , Hillary Clinton , Iowa General Assembly , Joe Lieberman , John McCain , Labor Unions , Rudy Giuliani
• Comments(0)

Art Smith March 29th, 2008

Let Friday, early news about a plan to broadly expand the power of the Federal Reserve was released.  Evidently the plan will be formally announced in a speech by Treasury Secretary Paulson.

I’m a bit out of breath.

McGehee was the first I saw to make mention that something like this was seriously in the works.  He expressed some concern which I share.

Seeing some more details of the plan (in the Des Moines Register Saturday morning) gave me reason to sit back and think.  The plan calls for 3 regulators, essentially eliminates any distinction between banks and thrifts, and would make the Fed the “primary regulator of market stability”, overseeing all segments of the financial services industry.

And the Democrats love it.  That should make us feel better.

I hate to pass judgment on this plan before I’ve seen more details, but on the face of it, my sitting back and thinking still left a sour taste in my mouth.  I am dreadfully afraid that this is the beginning of the downfall of our free market system.

I think we get very worried about the downward volatility of  our investment markets.  And these efforts seem to be geared toward addressing that issue.  As it stands, the fact that there are controls in place to stop trading on the major exchanges when downward spirals hit is already a concern (although an understandable action due to the use of computers to both manage the market AND automate investment decisions).  The concern I have is that with more regulation will come more stability (what is stated as part of the goal, actually), which is not necessarily good.  Although (as I’ve said before) I’m not a Market expert, it seems to me that the Market needs to be able to exert appropriate pressures without controls in order to provide real value and ensure that trading activity and results are fair and the result of real business success or failure.  The idea that business failure should not have consequences is wrong.  The idea that business success should not have rewards is equally wrong.  Both of these extremes, unfortunately, end up being impacted by “stabilizing” the Market.

If the Fed can constrain itself to dealing with factors that are inappropriately impacting the Economy and Markets, that would be great, but doubtful.  More likely the Fed will attempt to control the  Markets and unduly influence price, performance, results, success, and with all that we will have a dramatically timid Market go forward.

We’ve got to get out of this mentality that there can’t be losers.  We are becoming more and more ineffective on the international scene, and these changes will just perpetuate that issue.

I know I said a few days ago that I could support Obama’s plan to strengthen the power of the Fed.  I was wrong.  I should have known better.

I’m also interested in knowing, with this set of changes, what becomes of the role of the SEC?   It might not change, but I wouldn’t count on it.

I’m afraid this looks like an idea that just going to take us on a trip to becoming second rate.  I think we’re better than this.

I’m interested in your opinion on this too, so please share your thoughts.

Tags: Banks, Des Moines Register, Economy, Federal Reserve, Financial Services, Free Markets, Henry Paulson, International Markets, Market Stability, Market Volatility, SEC, Thrifts

• Economy , Federal Reserve , International Markets , Markets
• Comments(0)

Art Smith March 28th, 2008

I will direct your attention to Sister Toldjah and a story she is relating regarding changes at a church in Toronto.  I don’t think any additional comment is necessary on my part… Sister’s got it covered.

Tags: Faith

• Faith
• Comments(0)

Art Smith March 27th, 2008

Today we got to see some of the substance of Barack Obama’s plan for solving the current economic crisis.  Both Reuters and the Wall Street Journal have good write-ups.

Obama’s approach includes:

• More power to the Federal Reserve over non-bank investment firms that borrow from the central bank
• A ‘financial oversight commission”
• $30 billion in aid for financially stressed borrowers
• A $1,000 tax credit for all working families
• Eliminate the income tax.  But only if you are retired and making less then $50,000 a year
• $10 billion for refinancing home loans or to help see a house

He also made some noise about raising the capital gains tax.  There’s a nice surprise.

We can agree with the first two items.  Except the second item sounds an awful lot like part of the role of the Federal Reserve, so perhaps it’s a bit redundant.

But clearly there is a need to put some amount of accountability on investment firms that borrow from the central bank, and it makes sense for the Fed to have broadened powers in this area.

The rest is just throwing money at a problem that by its nature requires discipline and accountability.  Obama’s comment:

“If we can extend a hand to banks on Wall Street when they get into trouble, we can extend a hand to Americans who are struggling through no fault of their own.”

is fine if you agree that banks should be able to get help when they falter and fail.  We don’t.  The more that is done to prop up poor decisions on Wall Street and on Main Street, the less self-reliant our country will be.  It is unthinkable that there would be entitlements provided to big business, but that’s where we’re headed, and we already have that problem on the lower income levels of individuals, but the realm of entitlement continues to rise more and more each year as everyone wants a piece of the pie.  Before too long, we’re all just pouring in money and taking it back out… the only ones benefiting are the IRS and lawyers.

Politicians, especially on the Left, tend to find that they can best build a strong base by promising money to voters, or promising to use money to solve our ills.  This is almost always shortsighted and intended to one end… building a sustainable power base.  Promises of money for the unemployed, low income or those that are retired, or promises of bail-outs to those that make bad choices, is like giving a gambler more money after he’s lost his home, his family and his life.  It’s just digging a deeper hole until the walls of earth start caving in on you.  It’s not truly sustainable.  And it’s never in the best interest of the country or those that directly benefit.  But people have become convinced that a society dependent on the government for all of its needs is a good way to survive.

Thankfully, though McCain has not taken a compelling position or proposed a substantive direction on this topic, said he was:

“committed to considering any and all proposals” to help homeowners but that he opposed a “multibillion-dollar bailout for big banks and speculators.”

We do like the idea of better accountability to the Fed on the part of investment firms.  Despite the source, let’s see if that  idea can be tied to an overall package makes sense, meets appropriate needs and yet does not put the wait of bad choices on the taxpayers.

Tags: Accountability, Barack Obama, Democrats, Economy, entitlements, Federal Reserver, Investment Firms, IRS, John McCain, lawyers, Presidential Election, Republicans, Tax

• 2008 Presidential Election , Barack Obama , Democrats , Economy , John McCain , Markets , TAXES
• Comments(0)

DJ Durant March 26th, 2008

I’m not so old to remember the days when the baseball season began in April.  When I was a kid, I used to look forward to Opening Day so much I couldn’t sleep the night before.  I still look forward to it, but that was back when “juice” was something you got out of a carton in fridge; when pitchers could throw inside and not be tossed, when the Braves were perennial doormats, and the Cubs, well nothing has changed for the Cubs.

Back in the Good Ol’ Days, the Reds opened the season at Riverfront Stadium.  In April.  No other team opened before them.  Now, the Red Sox and the A’s open in Japan.  The Braves and the Nationals will play Sunday night and there’s a risk of snow. Can someone give me a logical reason for this?  Does Commissioner Selig really think it’s promoting the game of baseball in Japan?  Perhaps I’m wrong, but it seems we have no problem attracting Japanese talent.  Why?  Because we pay their stars a lot more money!

It appears the Commish has little or no respect for tradition.  Like so much of life, tradition requires standards of excellence.  So does respect.  If players had respect for tradition, perhaps they wouldn’t be so prone to “juicing”.  Souvenirs would be gratefully handed over to the Baseball Hall of Fame, instead of being auctioned to the highest bidder.  And if a batter was brushed back, he would accept it as part of the game and realize that it was a time-honored tradition.  Come to think of it, I don’t ever recall Tim Foli or Mark Belanger being brushed back because they were home run threats, yet again, if they played between 1995 and 2007, both would be hitting 25 to 35 home runs a year and about 100 points higher.

The game of baseball deserves better.  It deserves a better commissioner.  Pete Ueberroth, where have you gone?  It deserves players that not only had skill, but class.  Clemente?  Aaron?  Concepcion?  Fisk?  Don’t get me wrong, there are plenty of skilled players today with class, but they’re not the ones that get the attention.  Garrett Anderson?  Maddux?  Glavine?  You know where I’m going with this…

Don’t get me wrong, I appreciate other sports.  But nothing is like Opening Day for me, and the game of baseball, the most cerebral and strategic of sports, is truly America’s Pastime.  Maybe I’m too nostalgic, but I wistfully yearn for times gone by, when tradition meant something.

Play ball!

Tags: Baseball, Opening Day, Selig, tradition

• Baseball
• Comments(0)

Art Smith March 26th, 2008

In a prior article, I had addressed concerns regarding Iowa Senate File 413, a bill to provide for Fair Share agreements in collective bargaining negotiations for public employees.  I had understood this was the bill that was planned on being debated Monday of this week.  As it turns out, this bill was assigned to committee at the end of the 2007 session period, and has not been brought to the floor of the Senate yet this year. 

The bill that was actually being considered was House File 2645.  Fair Share is NOT part of this bill, but part of the confusion I experienced was due to some statements made by Representative Christopher Rants (R-Sioux City) who interpreted some of the amendments put on the table by Democrats as being attempts to open the door to Fair Share.

That said, my comments about SF 413 continue to stand.

HF 2645 has been interesting nontheless.  It appears to open collective bargaining to a larger set of issues and constrains further the local school districts’ ability to discipline teachers.  The changes are pretty substantive around the text of the Public Employee Collective Bargaining part of the Iowa Code, as well as Teacher Contracts and Discipline.  Many local school districts and local governments are opposed to the bill due to percieved increased costs and loss of control.  The most surprising climax to this episode occured this week when Governor Culver announced that without further consideration and public comment on the bill, he was likely to veto it.  This caught me off guard due to the fact the Democratic legislature has been rushing this bill through and the Governor is also a Democrat, but I will give Culver credit for recognizing the fact this bill does not have broad support around the state, deserves a meaningful public airing, and could backfire on Democrats in November.

The House has brought the bill back for reconsideration.  We’ll see how the rest of this week goes.

I do apologize for the errors in my prior posting.

Tags: Blogging, Christopher Rants, Collective Bargaining, Democrats, Errors, Fair Share, General Assembly, Governor Chet Culver, Iowa, Iowa Code, November Elections, Teachers, Unions, Veto

• Chet Culver , Democratic Party , Iowa General Assembly , Iowa Politics , Labor Unions
• Comments(0)

Art Smith March 25th, 2008

Well, Hillary appears to be attempting to make EVERYONE happy.

More government money to rescue folks who simply bought more house than they could afford. According to a Wall Street Journal story Tuesday, Hillary proposes:

• Freezing Forclosures for 90 days
• Freezing Interest-rate Resets on Sub-primes for 5 years
• Establish a $30 billion fund so states and cities can buy foreclosed properties
• Expand the Mortgage Revenue Bond Program (provides below market interest rates for first-time home buyers) by $10 billion

Thanks so much. I’ve heard a number of people call this, appropriately, “cost-shifting”. That means one group of people (those of us who are careful to buy what we can afford) are going to take

on the burden of supporting the expenses created by others (those who buy whatever they can finagle whether they can afford it or not). I’ve got another name for it: communism.

Interestingly enough, Obama expressed concerns about some of Clinton’s recommendations, especially:

… a new nonpartisan housing panel led by economists such as former Treasury Secretary Robert Rubin and former Federal Reserve chairmen Alan Greenspan and Paul Volcker.

The Obama campaign on Monday said Sen. Obama called for a similar foreclosure summit a year ago. Austan Goolsbee, one of Sen. Obama’s top economic advisers, warned against a committee led by Mr. Greenspan and Mr. Rubin, a former Citigroup Inc. chairman, saying it would heavily favor the financial community.

Sounds like Obama thinks Clinton is being too conservative. Hillary’s just not liberal enough. Nice. I suspect that’s a bunch of FUD, and the real story is she’s being more than liberal enough. It’s also no coincidence that Pennsylvania (site of the next primary) has been especially hard hit by the current mortgage crisis.

Capitalism and open market disciplines cannot support a class of people who are allowed to get a mortgage that they really cannot afford and then avoid the consequences of their poor decisions. Granted, mortgage companies have an obligation to protect their (their investors’) interests by primarily ensuring they lend the money to those that can truly afford it (with some level of risk), but then they also have a responsibility to protect those same interests by taking appropriate and timely action when borrowers refuse to meet their obligations.  Furthermore, much of this problem could be solved through better education, whether through our schools, or through the credit industry itself.  Based on the improvements in public education in the last 30 years, I vote for the credit industry to take this one.

Lenders can, and often do, go to great lengths to give borrowers ample opportunity to correct their situations… you don’t get foreclosed upon because you are late on a payment. Foreclosures are costly and typically end in some amount of loss to the lender so it’s not in the lender’s best interest to foreclose. And frankly, investors only experience so much loss themselves before the rest of us are impacted by rising ARM rates, increased closing costs on new mortgages, and increased rates on any new loans. These impacts are purely due to the cost of business.

Some practices need to be monitored and regulated by the government… I’ll give you that.  Lenders that take advantage of people and truly engage in “predatory” lending should be held accountable, as long as regulations and laws are clear and concise on what “predatory” means.

However, the items suggested by Clinton have the effect of snow-balling this whole problem. It presumes that homeowners deserve to own their homes even if they can’t afford it. This is wrong. We all, individuals, businesses and government need to buy what we can afford to own, and nothing more. The government must not create another gravy train that just continues to place greater individual and corporate dependence on the government.

Let the market discipline the businesses and consumers so that they can become even more self-sufficient later. Stop buying votes with communist cost-shifting solutions.

Hat tip to DCS (a coworker).

Tags: Alan Greenspan, ARM, Austan Goolsbee, Banks, Barack Obama, borrows, Communism, Cost-shifting, Democratic Party, Economy, Hillary Clinton, Housing, interest rates, Lenders, Liberalism, Mortgage Crisis, Paul Volcker, Pennsylvania, Presidential Election, Robert Rubin

• 2008 Presidential Election , Banks , Barack Obama , Business , Democratic Party , Economy , Federal Reserve , Hillary Clinton , Markets , Mortgages , Recession
• Comments(1)

DJ Durant March 25th, 2008

Ah, my first contribution to the Conservative Reader.  I hope my effort is worthy of this site.  I hope I can remember my training from last night.  I hope I don’t come off sounding like a fool, or worse yet, like a pompas ass, but then again, how would anyone know the difference.

In the March 17, 2008 edition of Fortune, Geoff Colvin described a situation that is rearing it’s ugly head and that no one wants to talk about.  The subject was Medicare and in the opinion of many, including Alan Greenspan, this one issue will do more to negatively impact the American economy than the current credit crisis, than the war in Iraq, than $100 a barrel oil, than the trade or budget deficits.  The estimate:  regardless of who the next President is, Medicare Part A will go cash-flow negative, “and it’s downhill from there”.  In fact, it was suggested that by 2070, Medicare, Medicaid and Social Security “will consume the entire federal budget”.  Yikes!

We can examine how we got there, but that’s not likely to be very helpful.  We can blame FDR, LBJ, GWB, and any other initials you can think of for this mess.  The issue, as I see it, is more fundamental than that.  It’s a question of personal responsibility.  Somewhere along the line, our populace has become conditioned to accept the notion that they aren’t responsible for anything!  Retirement?  Not my responsibility, that’s what Social Security and corporate pensions are for.  Personal health?  Why do I need to diet and exercise?  Jobs moving to Mexico?  Blame it on illegal immigration!  (How that makes any logical sense is another subject altogether.)

Here are some simple facts.  We have a fiscal budget deficit in this country that should be corrected.  Social security, as we know it, must change in order to become anything other than just another income redistribution process.  Either mandatory retirement ages must increase, contributions must increase (taxes), or payouts must decrease.  Is it any wonder no politician wants to touch this?  Now, Mr. Colvin tells us Medicare is a “$34 Trillion Problem”.  Someone please explain to me how taxes are NOT going to increase!

The federal goverment is the only entity I know of that can operate in La-La Land.  Every other organization must either have revenues greater than expenses, otherwise it’s insolvent.  Which politician is willing to cut federal expenditures (never mind which ones) in order to keep taxation the same and balance the budget?  Which politician is willing to get rid of Medicare, or Social Security and begin to retrain the masses that it’s not government’s responsiblity to take care of them?  Didn’t anyone learn from the collapse of the Soviet Union?

So of the three candidates that remain standing, none of them are willing to give us the bad news.  I wonder when our next President will come forth with the announcement.  Or will he/she keep pretending?  Or will the solution be to increase taxes on the rich, thereby stifling investment and creating yet another recession?  God, give us a leader!  Give us someone with the chutzpah to tell it like it is!  I fogot, no one with that level of courage would ever be elected, and isn’t that the sad truth?

Tags: budget deficit, Colvin, Greenspan, Medicare, TAXES

• TAXES , society
• Comments(3)

Art Smith March 24th, 2008

This morning brought news of a refinement of the JPMorgan/Bear Stearns deal. Evidently, Bear Stearns stockholders aren’t happy about the $2/share deal, and want something better. Wouldn’t we all.

What will be interesting is whether the Fed accepts the deal or not. I favored the original deal, but the new deal appears to put a fairer price on the stock, which was trading pre-market at about $9.15.

The Feds don’t want this to appear to be a stockholder bailout. I don’t think $10/share will make that appearance (at less than 1/3 the price of the stock prior to the original deal announcement). However, if a fair price is doable by JPMorgan, one has to wonder if the Fed needs to provide further guarantees to support the deal. I remain convinced the market should be able to handle itself and discipline itself without the Fed committing taxpayer dollars to prop up failing businesses.

A nice outcome would be the deal goes through and the Fed backs out. We can only hope.

Tags: Bear Stearns, Federal Reserve, JPMorgan, New Deal, Stock market

• Federal Reserve , Markets
• Comments(0)