Fear Mongering by the Media does not count.

Dean Baker: The state of the US economy is a direct result of Bush's policies | Comment is free | guardian.co.uk

This is the first time in the history of the United States that the president has sought to provoke a financial panic to get legislation passed through Congress. While this has proven to be a successful political strategy - after the House of Representatives finally passed the bank bail-out plan today - it marks yet another low point in American politics.

It was incredibly irresponsible for George Bush to tell the American people on national television that the country could be facing another Great Depression. By contrast, when we actually were in the Great Depression, President Roosevelt said: "We have nothing to fear, but fear itself."

The Media has been telling us we are already in "the second great depression." They need to absolve the Democrat "Fannie enablers" in Congress so the cause of the crisis is "Bush said boo!" and terrified Wall Street. Of course a lot of them Wall Street Fat Cats are Democrats and they do scare easy. Redeploy into T-bills!

But don't listen to Bush. The fundamentals of the economy are actually great. Until tomorrow, when they will want to blame GWB for the rise in unemployment.

That Washington "thing."

The Democrats in Congress organize “Cartels of Caring.” A “Caring” Cartel is at the very center of the Subprime mortgage mess. Its most visible members came in the form of a “big fat Fannie” and its spawn, an adrenalin addled Freddie. This Federal Grendel and his Ma effectively turned the mortgage industry into a government run cartel. Except in this story, Grendel didn’t lose his arm, home buyers and taxpayers lost theirs. It took advantage of home buyers at one end and mortgage instrument buyers at the other — and the entire US in between once the “implicit” guarantee of Freddie and Fannie finally became explicit. They socialized the risk and let speculators hugely profit.

Citizens struggling to make their mortgage payments don’t give money to politicians. Real Estate speculators do.

Cartels are always sold as being good for the public. Their purpose is to steer power and money to their members. The Democrats (but not just the Democrats) combine these two principles to produce “Cartels of Caring.” In the last few weeks we have found out how much “affordable housing” really cost. Ten years from now we will learn the cost of affordable health care — your life, perhaps, but only after your money.

Do you want them to stick their fat Fannies into your health care? In this respect, the “McCain plan” is better since it does give the patients some control. Sen. Obama constructs another “Cartel of Caring,” only this time he invites the insurance companies to join and removes power from the patients. They will construct a system of incentives to over treat the well and hasten the death of the severely ill. This system will not require a Dr. House — a brief bit of grief “consoling” will do. Twelve stages in two minutes. Because we care.

The Main stream Media is another “Cartel of Caring.” They sell themselves as the watch dogs of the American People when they are actually the Guard Dogs of the Washington establishment — and all the Cartels of Caring they create. Hence their Howling at the Moon when Sarah Palin arrived on the scene.

After the election they will want their own position shored up. They are owed that much (and self interest does dictate…)

If you want a movie that most effectively mirrors the current set up in Washington, watch Goodfellows. “Hey, Congressman, I’d like you to meet a friend of mine. Grendel’s a Good Fellow.”

It makes you want to Howl like a Beowulf.

The Vice Presidential Debate

I think Gov. Palin won the debate because the network commentators on NBC were calling it a tie.

I thought her using the word "blunder" in connection with George Bush was a bit extreme, but hey, it seems to work for everyone else. I thought she should have hit more on the failures of Congress in regards to the subprime meltdown and the lax oversight of Fannie and Freddie.

On several occasions Joe Biden said we spent more in three and one half weeks in Iraq than we have in six and a half years in Afghanistan. My guess is he was a bit off in his math (or it is really fuzzy). Three and a half months might be closer. On Health Care: Sen. Biden wants to stick the heavy Fannie of government in our Health Care while Sen. McCain prefers a defter touch.

I thought the best part of the debate was when the families got up on stage. I think I was as relieved as they were that it was over. I'm off to bed.

Update: Western Standard ran the numbers on Sen. Biden's claim.

According to the Congressional Research Service, spending on the war in Afghanistan since 2001 has been $172 Billion. Spending in Iraq is, as the Democrats repeatedly mention, a little under $10 Billion a month.

In other words, Biden's number is off by, oh, something like 2000%. Perhaps Obama's Sub-Committee ought to have held some hearings on Afghanistan after all.

Our Fat Fannie meets Fredie's nightmare.

I've argued for years that the Mortgage deduction was simply the wrong way to go about providing "affordable housing." Affordable McMansions, maybe. But at an unaffordable cost to the economy.

Instapundit.com

Yes, why not turn the mortgage interest tax-deduction into a refundable credit for a couple of years. Surely that would drastically reduce the default rate, wouldn't it?

If you make it worth no more than, say, 30 percent of the mortgage payment (which must be kept up) and cap it at, say, $2,400 a year. Then let people choose which they want to use.

But it should, in the future, apply to saving for a down payment.

Dahlia Lithwick does not know what Affirmative action is.

What Clarence Thomas might have to say about Sarah Palin. - By Dahlia Lithwick - Slate Magazine

Critics have scoffed at Thomas' tendency to view affirmative action exclusively through the narrow lens of his own life, but it's clear the "badge of inferiority" has tainted a lifetime of enormous achievement. He will never forgive America for the chances he was given, or for how small it has made him feel. I can't help but wonder what Thomas would say to vice-presidential nominee Sarah Palin, who is now suffering the same stigma of affirmative action, and who shows signs of the same blend of defensiveness and outrage that have so shaped Thomas' career.

The criteria used to choose VPs is: can they help the ticket win? That was the criteria used in the Palin pick. If McCain were spotted 10 million votes for making the choice, that would be affirmative action. And if he then "won" by losing by five million votes, of course Liberals would feel good about it -- Affirmative Action works.

The Left promotes Affirmative action by saying we owe women and minorities. But it turns out that woman and minorities now owe Liberals. Clarence Thomas should be saying "thank you" 7/24

There was no Joy in Mudville

I did not catch all of the Debate between Senators McCain and Obama but enough to have some reaction. I thought McCain did alright in a format that did not favor him (he can be quite good in the "Town Meeting" format but stiff behind a podium). Sen. Obama used Henry Kissenger's name -- several times -- while misinterpreting what the foreign policy sage had to say. This could come back to clobber him (but with so much of the Media on his side, who knows?). For the most part I thought Sen. Obama did OK.

What surprised me was the atmospherics of post debate commentary. I figured most of the folks in the broadcast news divisions are Obamaphiles and expected them to be at least moderately pleased. But there was no Joy in Mudville and since I had not seen the mighty orator strike out I wondered why. Then it occurred to me that they expected him to put McCain away -- what with the "subprime mortgage mess" -- and that he had failed to do so. They wanted to see that long ball go out of the park and drive home a few scores to likely put the game out of reach for the Republicans. Instead, Obama may have got on base with a bunt while the lead runner was picked off. McCain was still very much in the game, and may have improved his position a bit.

At Panamas Media Jennifer Rubin asksWho Won the Debate?

And second, the McCain camp will be under the gun to make the most of their material. Some possibilities are already evident. Will the embarrassing stumble over the name on Obama’s bracelet be key? Will the Henry Kissinger misquote come back to haunt him?

I suspect it may be something far more serious. John McCain’s shining moments came in large part when discussing Mahmoud Ahmadinejad.

She goes on to quote several of McCain's answers about the threat from the Islamic Republic. I also thought it was probably the high point of the debate for McCain.

For Obama the high point was tying the invasion of Iraq to McCain. It is, after all, an unpopular war but seems largely behind us now. And it is better to win wars than to lose them, a point Sen. Obama seems to disagree with.

Cartels of Caring

What we now see in our financial system is what I call "Deregulatory Collapse." That's when years of heaping new regulations on old builds a rickety structure that is about to topple over. At that point a half hearted process of deregulation begins -- and then the process of deregulation is held responsible when the collapse occurs. It is a bit like blaming lung cancer on the "chemotherapy" the patient undergoes rather than thirty years of smoking cigarettes.

The Democrats blaming deregulation in this case is a mighty stretch, especially since the Bush administration tried to extend regulation to an obese Fannie and a hyperactive Freddie. But according to Congressional Democrats and their Main Stream Media coconspirators, it was the rearranging of the regulatory deck chairs on the financial titanic that caused the current inundation. And the ship officers were congressmen who were not properly consulted by the stewards.

At the Belmont Club Richard Fernandez asks:

Who you gonna call? Who you gonna believe? Bailout anyone? A crisis creates an incredible opportunity to play partisan politics. ‘Want me out of the way? Buy me off.’

We are not going to solve our "financial meltdown" problem without recognizing what the problem is.

Central to our problem is Washington’s propensity to organize producer Cartels. Cartels exist to benefit the “partners” but are presented to outsiders as a public good. Because cartels distort market signals, purely private cartels normally collapse or are supplanted by new players in a fairly short time frame. To endure, Cartels need the participation of Government — and, of course, the political establishment. It is the participation of the ruling elite that enables a cartel to withstand market forces and act as a parasite on the larger society for an extended period. Of course when the crisis comes, it’s an eight or nine point — not a four point — shake to the foundation of society.

Cartels are hard to attack because everyone wants one of their own. They appeal to people’s need for “control.” A professional organization can cut down on “unruly” competition, protect the more inept or unlucky practitioners and gain favors from government. A Union can act as a Cartel for labor. In the long run, as Cartels spread, the cartels will even impoverish many of its own members as Society itself becomes poorer. Of course, by that time the insiders are wedded to the system.

Since most folks in a position of influence hope to profit from a cartel, they are sympathetic to blaming the free market, and will ignore the existence of a Cartel at the center of the problem. OPEC, an openly declared Cartel, raises prices? It’s the fault of the oil companies (which are part of the over all “energy international” cartel, to be sure). When Politicians stop oil companies from building a refinery, are they standing up to Big Oil? Or increasing the value of their old refineries and limiting competition?

Of course our Cartels in the US are never presented as such, and are indeed illegal without deep government involvement — which is convenient for our politicians. We have an Education Cartel that requires massive infusions of resources to produce scant positive results — which disappear as soon as our attention wanders (the resources remain, of course, and need increasing).

Fannie and Freddy were part of our Real Estate industry Cartel, along with much of our congress and much of the Federal Bureaucracy. Every twenty years or so it requires huge infusions of money to keep it staggering forward.

The solution here is to demand an end to the Cartel in return for the bailout, and a return of any money the government “clears” from the rescue effort direct to the exploited taxpayer — do not allow it to be recycled into the Cartel.

Most of all, we need to educate voters on what government organized cartels are, and how they are parasitic on society even as they are sold as being symbiotic. But first, we need to recognize them ourselves. They often are, as Adam Smith might say, Government organized conspiracies against the Public Interest — and we all hope to profit from one.

By the way, Health Care is another example of a Government organized Cartel in the US — though not yet fully emerged and “rationalized.” Once it is, it will create incentives to intensely treat well people and speed the death of the severely ill.