Archive for November 24th, 2008

November 24, 2008

Don’t blame greed

There are two kinds of intellectual experts: (a) overeducated fools, and (b) experts who agree with me. From category (b), Professor Lawrence H. White explains the financial meltdown:

Those who fault “deregulation,” “unfettered capitalism,” or “greed” would do well to look instead at flawed institutions and misguided policies.
The expansion in risky mortgages to underqualified borrowers was encouraged by the federal government. The growth of “creative” nonprime lending followed Congress’s strengthening of the Community Reinvestment Act, the Federal Housing Administration’s loosening of down-payment standards, and the Department of Housing and Urban Development’s pressuring lenders to extend mortgages to borrowers who previously would not have qualified.
Meanwhile, Freddie Mac and Fannie Mae grew to own or guarantee about half of the United States’ $12 trillion mortgage market. Congressional leaders pointedly refused to moderate the moral hazard problem of implicit guarantees or otherwise rein in their hyperexpansion, instead pushing them to promote “affordable housing” through expanded purchases of nonprime loans to low income applicants.
The credit that fueled these risky mortgages was provided by the cheap money policy of the Federal Reserve. Following the 2001 recession, Fed chairman Alan Greenspan slashed the federal funds rate from 6.25 to 1.75 percent. It was reduced further in 2002 and 2003, reaching a record low of 1 percent in mid-2003 – where it stayed for a year. This set off what economist Steve Hanke called “the mother of all liquidity cycles and yet another massive demand bubble.”

His full Cato Institute briefing paper is online in PDF format.

(Cross-posted at AmSpecBlog.)

November 24, 2008

The only issue that matters

Mona Charen covering last week’s National Review Institute conference:

The most important battle, Yuval Levin of the Ethics and Public Policy Center argued, will be health care. If health care is successfully nationalized in America, the case for a smaller and less bureaucratic state becomes immeasurably more difficult. Throughout the developed world, in countries that have adopted socialized medicine, every call to limit the size and scope of government is instantly caricatured as an attempt to take medicine away from the weak and sick. People become awfully attached to “free” medical care even though it is emphatically not free (it is supported through higher taxes), even though it requires waiting periods for care (even in cases of cancer and other serious illnesses), and even though it deprives people of the latest technology (the city of Pittsburgh has more MRI scanners than the entire nation of Canada).

Philip Klein said the same thing in July:

[T]he worst possible thing that could happen for conservatives during an Obama administration, would be for him to create a government-run health-care system. . . .
Both in terms of the sheer cost, as well as the psychological impact of putting the state in control of our life and death decisions, this would represent the final defeat for advocates of limited government, because if history is a guide, such reforms will never be undone.

This was why Republican support for Medicare Part D was such a gutless and self-defeating move. Twisting arms to secure passage, Tom DeLay sought to buy off senior citizens in an election year by pushing through the largest entitlement expansion since LBJ. But Republicans can never outbid Democrats on entitlements, and the attempt to do so undermines the GOP’s credibility on the size-of-government argument.

Now, when Obama starts pushing for nationalized health care, Republicans will have both diminished numbers and diminished credibility in their opposition.

November 24, 2008

Holiday Books: The Great Depression

Only 31 shopping days until Christmas!

With Barack Obama trying to push grandiose economic “stimulus” boondoggles as the solution to the financial crisis, what better time to study the disastrous results of Franklin Delano Roosevelt’s New Deal?

The 2008 Holiday Book Sale continues with these three great titles: Amity Shlae’s highly praised The Forgotten Man: A New History of the Great Depression, Burt Folsom’s New Deal or Raw Deal? How FDR’s Economic Legacy Has Damaged America, and (thanks to Greg Ransom at PrestoPundit for the recommendation) Jim Powell’s FDR’s Folly: How Roosevelt and His New Deal Prolonged the Great Depression.

These books will make great gifts for your Democratic friends — so they can have a depressing Christmas — and with, you get discount pricing with delivery anywhere in the country. Why wait? ORDER NOW!

11/23: Blacklisted by History
11/22: Mises & Hayek
11/21: White Guilty by Shelby Steele

November 24, 2008

Sid is back!

Wherever the Wicked Witch goes, can her flying monkeys be far behind?

Late last week, as stories swirled around Sen. Hillary Rodham Clinton’s possible jump to the job of Secretary of State, another longtime Clinton aide’s name began to crop up: former journalist and Clinton back-room consigliere, Sidney Blumenthal.
Should Clinton accept the Secretary of State job, Blumenthal, it is believed, will move to Foggy Bottom as a counsel to the secretary, a post that will not require Senate confirmation, but will require an extensive security and background check.
According to Obama transition team sources, Clinton aides presented them with a list of potential senior staff for the Secretary of State office, and Blumenthal’s name — without a title or role described — was on it.

Hope! Change! Sidney Blumenthal! Don’t you know there’s got to be some Obama volunteers who walked precincts for him in New Hampshire who are now about to blow a gasket over Hillary getting a Cabinet post — and bringing her evil minions with her?

November 24, 2008

Future Ex-Democrats

From my latest American Spectator column:

Bill Clinton, in my mind, had two great accomplishments as president: He signed the Welfare Reform Act of 1996 and he made me an ex-Democrat. While my conversion is probably an extreme example of the phenomenon, I’m one of millions whom Clinton drove out of the party.
There was a reason, after all, that the Obama campaign pushed so hard to register first-time voters this year — the Clinton years produced so many “once burned, twice shy” voters who now wouldn’t vote for any Democrat under any circumstance.
Obama gained his margin of victory in large measure by enlisting the support of the disengaged, the disaffected and those too young to know better. Voters under 30 — who weren’t yet in high school when Bill Clinton was elected — went for Obama by a 2-to-1 margin. Many of these young Obama supporters will be among the first to feel the shock of discovering how wide is the chasm that separates their Hope from any Change that Obama can actually accomplish.
Already, their disillusionment is beginning, the Internet rumbling with discontent as Obama staffs his administration with Washington insiders, Clinton cronies and even, perhaps, Hillary Clinton herself. Many more will be disheartened to discover that there is no magic in Obama’s economic plan, a patchwork of warmed-over Keynesian “pump-priming” claptrap as stale as the memory of Hubert Humphrey.

Please read the whole thing. And don’t stop thinkin’ about tomorrow.

November 24, 2008

John Ziegler vs. his critics

Got a note from John Ziegler in response to my post about Nate Silver’s interview with him, thanking me “for being one of the VERY few even on our side you ‘got it’ and defended me.” There has been a tendency among conservatives to ignore this kind of distortion by the Netroots, but Silver’s objections were so ridiculous as to demand a response.

Ziegler has compiled his own response to his critics.

November 24, 2008

Neil Cavuto vs. Ben Stein

The lovely Dagan McDowell also gets in on it: