The first characteristic that people look for in a leader is honesty.
Don A. Sanders
Obama Demagoguing Financial Overhaul Reform
It has become predictable sound bite from the left-wing media and I've heard the President repeat the same, that "greedy" Wall Street "privatizes gains or profits while socializing losses", that the GOP is in bed with the big banks. [Anyone who believes that losses have been socialized hasn't looked at the stock prices of the publicly-held companies in question and ignored bankruptcies during the economic tsunami ] Let's first point out if you go back to the 2008 cycle, 4 of the top 5 recipients of AIG contributions were Democrats, led by Obama and Dodd respectively, and the top 3 recipients of Freddie Mac and Fannie Mae total contributions (PAC and employees) from 1989 to 2008 were Democrats, led by Dodd and Obama (and Obama was only a national figure for the last 5 years of that period). These were the biggest recipients of TARP funds, along with the auto industry.
And while we are at it, the firm currently being charged by the SEC in a civil suit announced last week, Goldman Sachs, was the second highest total contributor to the Obama campaign, quadruple the amount given to McCain.
In fact, Bush, McCain and other Republicans attempted to reform the GSE's after their mid-2000's accounting scandal, conservatives have been arguing that the GSE's used their cheap Treasury financing and implicit government guarantees as a competitive weapon against their opposition, and most conservatives opposed TARP bailouts (including the auto companies) My principal concern was not making the banks, car makers, and AIG whole but possible liquidity problems in the financial sector and cascading failures in the global market. As far as I'm concerned, AIG and the other other recipients of TARP funds should pay any public funds back, with interest. That's not "socializing" risk or losses.
Should the federal government have intervened? In theory, no. But scapegoating bankers is disingenuous; banks have been regulated from the get-go and are among the most heavily regulated industry sectors. What about the responsibility of predatory borrowers whom took out loans they knew they could not afford? What about the secondary market, including the GSE's, which bought nontraditional mortgage loans under political pressure? What about changes as to credit rating customers or accounting rules (e.g., mark-to-market), whether derivatives were included in bankruptcy stays? Why didn't investors, credit raters, accountants or regulators question AIG's risk management of its derivatives business, which certainly affected its ability to continue as a going concern, a primary consideration for an audit opinion?
THE FACT IS THAT REGULATION FAILED. All that Obama is doing is bashing companies and adding another layer of expensive, counterproductive, ineffective regulation, no serious post-audit of why Barney Frank was willing to roll the dice with the GSE's, what did the SEC know about bank issues, etc. All we hear is the scapegoating of derivatives, while most issuers and consumers of derivatives were not implicated in the failures. We don't even see Obama make a justification of why he's moving on the banks before the GSE's, even though most banks were forced to accept TARP funding, even when it was unnecessary and unrequested.
But finally there were all these partisan innuendos by Obama in his weekend address, e.g.: "Just the other day, in fact, the Leader of the Senate Republicans and the Chair of the Republican Senate campaign committee met with two dozen top Wall Street executives to talk about how to block progress on this issue." That's unworthy of a President of the United States. Apparently in Obama's vision of reality, it's okay for him to invite health care providers, pharmaceutical companies, and medical device manufacturers, but it's less equal for Republicans to question both sides on financial overhaul. And then Obama attacked Senate Minority Leader Mitch McConnell over the $50B bank fund in the Dodd measure, which Republicans believe constitute a moral hazard. This point should be self-evident: what happened in the S&L crisis over the fact that depositors were guaranteed by the federal government? In essence, the federal government was subsidizing more speculative loans, i.e., depositors would require greater interest payments to accommodate their increased risk. Depositors are less likely to move funds if they know, regardless of what the bank does, the government has their back. A $50B (or the House's original $150B) fund in essence guarantees whatever the big banks do, there's going to be some money, over and beyond bank resources, to cover losses. If that $50B fund is not around, stakeholders would likely require more of a premium for risky behavior. (Democrats will argue that these fees are paid by the banks, not by their customers; that simply is not true: the fees become a cost of doing business.) In fact, top Democrats (including Rep. Hoyer (D-MD)) have signaled a willingness to consider dropping the fund in question.
Governor Crist: Time to Stand Down From the Senate Race
I have been supportive of Governor Crist, but a 2-point lead in a single 3-way poll is probably within statistical error. McCain, a Crist endorser, has also made it clear that his endorsement this fall will go to the GOP nominee, all but certainly Marco Rubio. I think that it is probably in Governor Crist's interest to make some face-saving announcement , e.g., "I was asked by party leadership to run for this election rather than reelection because another strong candidate had not emerged. Marco Rubio has captured the kind of support that will ensure election of a Republican senator this fall. I have decided, at this time, that my heart is in finishing the job I started in 2007 and hereby announce my intent to seek reelection as governor of the state. This decision is a win-win for the people of Florida." Moreover or alternatively, Governor Crist would be a formidable opponent to Senator Nelson in his 2012 bid for reelction.
Political Cartoon
IBD cartoonist Michael Ramirez forgot to mention the cash for their 2-year-old "clunker" in buying a new car, the male teacher's job was saved by the stimulus package, the wife just got her unemployment extended, and there are new college loan subsidies for the 26-year-old living at home.
Musical Interlude: Given Name Songs
Derek and the Dominos, "Layla"
The Beatles, "Michelle"
Barry Manilow, "Mandy" (all-time favorite)
Steve Perry, "Oh Sherrie" (all-time favorite: great pipes!)
