Holman Jenkins of the Wall Street Journal wrote an article yesterday entitled "The Ugly AIG Post-Mortem". Yesterday I briefly touched on my disdain for the fact that Goldman Sach was made whole on their AIG swap transactions. (Doesn't anyone remember how, months ago, how the Obama Administration played hard ball with the auto company creditors, settling for pennies on the dollar, while providing their lower-standing union cronies equity stakes?) Jenkins doesn't explicitly bring up the Obama Administration's obsession with financial institution executive pay ex post facto, but he makes his contempt known for the johnny-come-lately national media finally questioning why Goldman Sachs and other creditors were made whole on collateral calls (triggered by credit rating drops on AIG), given the fact that the government was already standing behind AIG. He criticizes TARP Inspector General Neil Barofsky's half-hearted scapegoating, mostly at the expense of credit rating agencies and correctly argues that the attention paid to the swaps is penny-wise, pound-foolish in comparison to the underlying mortgage securities themselves. He notes the real story of the bailout is that the federal government itself is responsible for the crisis because of its scalable intervention in the credit marketplace; the correct policy response is not to increase intervention, but to scale back the federal government's involvement. (This sage advice is falling on deaf ears among Democratic progressives, as they push for "more and more money", increasing scope of FHA loans, federal coverage of student loans, etc. And this doesn't include scope creep elsewhere in the federal budget, e.g., increasing the eligibility of Medicaid, SCHIP, etc.)
No, Moody's and S&P are not the cause of this policy failure—yet Mr. Barofsky's half-articulated choice to focus on them is profound. For the role the agencies have come to play in our financial system amounts to a direct, if feckless and weak, attempt to contain the incentives that flow from the government's guaranteeing of so many kinds of private liabilities, from the pension system and bank deposits to housing loans and student loans.
The rating agencies' role as gatekeepers to these guarantees is, and was, corrupting, but the solution surely is to pare back the guarantees themselves. Overreliance on rating agencies, with their "inherently conflicted business model," was ultimately a product of too much government interference in the allocation of credit in the first place.
Obama's Approval Numbers
PollingNumbers.com notes that Mitt Romney, a leading contender for the 2012 GOP nomination, still about 10 points down from Obama. Given the fact that Romney has essentially faded from public view since he withdrew from the race to last year's nomination, I don't think that Obama should be all that confident. The below Poll of Polls shows disapproval at over 40% of the American electorate--not even a full year into his first term.
Now, to some extent, that's to be expected; we are experiencing the longest recession in decades and still-climbing unemployment numbers. We must not underestimate Obama's considerable charisma and personal charm and his ability to distance himself from his own unpopular policies, and it's unlikely that the recession will span beyond his term in office (and I have no doubt if and when it does, Obama will somehow try to claim credit for ending it--in particular, allege it was a result of his so-called stimulus bill). I think, unlike Bush, Obama is more sensitive to his steep drop in approval numbers and will attempt to window-dress a concern for conservative issues like the deficit and reach out to the GOP in symbolic, but not substantive ways.
I've already written some posts discussing how I would approach the 2012 election. As much as I admire John McCain, he was absolutely the wrong candidate for the Republicans to be running when the economic tsunami hit; whereas his judgment is prescient when it comes to matters of military and defense policy, he misplayed his vice presidential pick, the unilateral suspension of his campaign was impulsive and easily and predictably fended off by Congressional Democrats, and he missed a golden opportunity to identify with the public backlash against the Bush-Democrat alliance on TARP legislation. The reason I'm mentioning this is not to bash John McCain, whom I deeply respect, but basically to set the stage for a winning campaign in 2012.
What the Republicans are going to have to do is to present themselves as pragmatic in nature, willing to deliver on what Obama has promised but failed to deliver: real bipartisanship. I want to see more of a focus of bipartisanship and a positive, constructive agenda and less of a red-meat/negative ad campaign, which turns off moderates and independents. Second, I want the Republicans to focus like a laser beam on a pro-business growth message, frugal but administratively competent government, shared sacrifice, a plan to pay off the massive deficit and shore up the dollar, and a willingness to tackle big issues like entitlement funding and rainy day reserves head-on. Third, we need to stop rerunning the election of 1980 and foster a more inclusive campaign; we already know where the majority of Republicans stand on traditional moral values and the right to protect one's family. Finally, Republicans cannot mount an effective campaign where the opposition outspends it several dollars to every one dollar like in the last election.
I think Mitt Romney is the logical front-runner for Republicans heading into 2012 election under the framework I just outlined (although Huckabee could make his own case based on his more extensive gubernatorial experience); Romney not only has extensive private-sector executive experience and is fully literate on economic issues, but he has shown an ability to draw political support in blue states. He also "looks the part" of a Presidential candidate.
What Romney has to avoid in 2012 is the more polarizing campaign style which did not work in 2008 (and in fact resulted in a loose alliance of McCain and Huckabee supporters against him). He can anticipate that his potential rivals for the nomination are going to try to use the Massachusetts health care program passed while he was governor against him, tapping into conservative anger against Democratic health care "reform". He needs to compare and contrast his approach versus the national Democrats' and address the red ink issue.
As for Obama, a double-digit lead against Romney can hardly be comforting; Pollingnumbers.com also reports that the incumbent's net support among independents has largely collapsed. I think what Romney needs to do in attacking Obama is to criticize his administrative inexperience, his legislative priorities in a weak economy, his indecisiveness (e.g., Afghanistan), his tendency to announce decisions before ironing out key details (e.g., the Gitmo closing), and his weak performance jawboning his own Congressional leadership (e.g., earmarks in the omnibudget bill, a flexibility in considering a public option trigger on health care reform, etc.)
Now, to some extent, that's to be expected; we are experiencing the longest recession in decades and still-climbing unemployment numbers. We must not underestimate Obama's considerable charisma and personal charm and his ability to distance himself from his own unpopular policies, and it's unlikely that the recession will span beyond his term in office (and I have no doubt if and when it does, Obama will somehow try to claim credit for ending it--in particular, allege it was a result of his so-called stimulus bill). I think, unlike Bush, Obama is more sensitive to his steep drop in approval numbers and will attempt to window-dress a concern for conservative issues like the deficit and reach out to the GOP in symbolic, but not substantive ways.
I've already written some posts discussing how I would approach the 2012 election. As much as I admire John McCain, he was absolutely the wrong candidate for the Republicans to be running when the economic tsunami hit; whereas his judgment is prescient when it comes to matters of military and defense policy, he misplayed his vice presidential pick, the unilateral suspension of his campaign was impulsive and easily and predictably fended off by Congressional Democrats, and he missed a golden opportunity to identify with the public backlash against the Bush-Democrat alliance on TARP legislation. The reason I'm mentioning this is not to bash John McCain, whom I deeply respect, but basically to set the stage for a winning campaign in 2012.
What the Republicans are going to have to do is to present themselves as pragmatic in nature, willing to deliver on what Obama has promised but failed to deliver: real bipartisanship. I want to see more of a focus of bipartisanship and a positive, constructive agenda and less of a red-meat/negative ad campaign, which turns off moderates and independents. Second, I want the Republicans to focus like a laser beam on a pro-business growth message, frugal but administratively competent government, shared sacrifice, a plan to pay off the massive deficit and shore up the dollar, and a willingness to tackle big issues like entitlement funding and rainy day reserves head-on. Third, we need to stop rerunning the election of 1980 and foster a more inclusive campaign; we already know where the majority of Republicans stand on traditional moral values and the right to protect one's family. Finally, Republicans cannot mount an effective campaign where the opposition outspends it several dollars to every one dollar like in the last election.
I think Mitt Romney is the logical front-runner for Republicans heading into 2012 election under the framework I just outlined (although Huckabee could make his own case based on his more extensive gubernatorial experience); Romney not only has extensive private-sector executive experience and is fully literate on economic issues, but he has shown an ability to draw political support in blue states. He also "looks the part" of a Presidential candidate.
What Romney has to avoid in 2012 is the more polarizing campaign style which did not work in 2008 (and in fact resulted in a loose alliance of McCain and Huckabee supporters against him). He can anticipate that his potential rivals for the nomination are going to try to use the Massachusetts health care program passed while he was governor against him, tapping into conservative anger against Democratic health care "reform". He needs to compare and contrast his approach versus the national Democrats' and address the red ink issue.
As for Obama, a double-digit lead against Romney can hardly be comforting; Pollingnumbers.com also reports that the incumbent's net support among independents has largely collapsed. I think what Romney needs to do in attacking Obama is to criticize his administrative inexperience, his legislative priorities in a weak economy, his indecisiveness (e.g., Afghanistan), his tendency to announce decisions before ironing out key details (e.g., the Gitmo closing), and his weak performance jawboning his own Congressional leadership (e.g., earmarks in the omnibudget bill, a flexibility in considering a public option trigger on health care reform, etc.)
State | Pollster | Updated | Date | Approve | Disapprove |
X | X | X | 47.6% | 46.0% | |
Democracy Corps | 11/24 | 11/12-16/09 | 50 | 44 | |
Gallup Daily Tracking | 11/23 | 11/20-22/09 | 49 | 44 | |
Rasmussen Reports | 11/23 | 11/21-11/23 | 45 | 54 | |
Fox | 11/19 | 11/17-18/09 | 46 | 46 | |
Quinnipiac University | 11/19 | 11/9-16/09 | 48 | 42 |
Courtesy of pollingnumbers.com
Political Cartoon
Scott Stantis reminds us that there are real-life consequences to not responding in a timely fashion to an enemy's changes in tactics. When Obama noted that he would pursue the "real war" in Afghanistan and attacked Bush's static pre-surge Iraq strategy for chewing up American casualties, who would have ever guessed that we would be repeating the same scenario in Afghanistan, where Obama seems more interested in scoring diplomatic points and placating his progressive flank than in listening to his own handpicked military expert. Rumor has it he'll approve a scaled-down version of the recommended troop surge. Mr. President, stop playing gameswith the lives of American troops; if our military strategy requires a strong ground presence, make sure that you send in enough soldiers to get the job done.
Scott Stantis reminds us that there are real-life consequences to not responding in a timely fashion to an enemy's changes in tactics. When Obama noted that he would pursue the "real war" in Afghanistan and attacked Bush's static pre-surge Iraq strategy for chewing up American casualties, who would have ever guessed that we would be repeating the same scenario in Afghanistan, where Obama seems more interested in scoring diplomatic points and placating his progressive flank than in listening to his own handpicked military expert. Rumor has it he'll approve a scaled-down version of the recommended troop surge. Mr. President, stop playing gameswith the lives of American troops; if our military strategy requires a strong ground presence, make sure that you send in enough soldiers to get the job done.
Christmas Musical Interlude: Faith Hill's "Where Are You, Christmas?
I mention in my recent Bee Gees selection one of their other songs, "First of May". The leading verses and chorus are:
When I was small, and christmas trees were tall,
We used to love while others used to play.
Don’t ask me why, but time has passed us by,
Some one else moved in from far away.
(chorus)
Now we are tall, and christmas trees are small,
And you don’t ask the time of day.
But you and i, our love will never die,
But guess we’ll cry come first of may.
There's an endearing wistfulness of those lyrics which brings back the sheer magic and joy of youth and Christmastime. I remember singing Christmas carols with my younger siblings in the car as my folks drove from Otis AFB to the Fall River area for family visits. I remember the pungent smell of Christmas trees (alas, my folks later made the more cost-effective decision of durable, safer artificial trees). My folks did everything they could, given an enlisted man's pay, to give us the Christmases they never had (my mom talks of the gift of one doll growing up during the later days of the Depression and war years). I used to love the annual television specials (including the longstanding Bing Crosby and Andy Williams family celebrations).
Something changed as I soon found myself, especially after leaving academia, getting caught up in work and heavy business travel, immersed in things like database and software upgrades when application users were off the system (e.g., on company holidays). To me in particular, it was Christmas 1998. I was then commuting from Chicago to a gig in the Baltimore suburbs; with my new boss' approval, I arranged to schedule a brief holiday visit home, flying home from BWI to San Antonio through Atlanta; when I got into Atlanta, I found my flight to San Antonio was canceled due to weather conditions and had to stay at an airport hotel until the next morning. Sure, there was holiday music blaring through airport loudspeakers and the obligatory Santa hats or beards worn by fellow passengers--but it suddenly hit me that I had not played a single CD or LP in my considerable holiday collection at all that season nor seen any of my beloved seasonal movies and specials. Where were you, Christmas? Somehow the magic of the season had been lost in the daily grind of a bachelor without any kids.
As a Christian, of course, I know the "reason for the season", and that never went away. But we are also celebrating hope and the promise of a better future for our children, true gifts from God. Faith Hill's song from a 2000 movie remaking a classic Dr. Seuss story and holiday cartoon special speaks to me. I licensed a copy of the song and often put it on an auto-repeat cycle. Great song and performance by a gifted vocalist...
"Where Are You Christmas"
Where are you Christmas
Why can't I find you
Why have you gone away
Where is the laughter
You used to bring me
Why can't I hear music play
My world is changing
I'm rearranging
Does that mean Christmas changes too?
Where are you Christmas
Do you remember
The one you used to know
I'm not the same one
See what the time's done
Is that why you have let me go
Christmas is here
Everywhere, oh
Christmas is here
If you care, oh
If there is love in your heart and your mind
You will feel like Christmas all the time
I feel you Christmas
I know I've found you
You never fade away
The joy of Christmas
Stays here inside us
Fills each and every heart with love
Where are you Christmas
Fill your heart with love
