Get Real

Well, here comes another defense of the indefensible. No. Not from me. It is the subject, the target of my post.

I wish I could remember when I first found the limits, the real limits of ideology. Was it difficult? Since I did it so long ago, it probably wasn’t that deeply ingrained. I imagine that it has something in common with an addiction. The longer you indulge the harder it is to make the break. Of no consequence to my readers, today is my 188th day without a cigarette after just short of 50 years as a smoker.

[Dear Reader, Although I'm beginning this post with a rational, clear-eyed assessment of John McCain, the real meat is what follows that. I strongly recommend not giving up just because everyone is, or should be, sick of hearing about little Johnny's ignorance of economics and other frailties.]

John McCain

Lets begin with this wild, liberal assessment of McCain: “Conservatives who insist that electing McCain is crucial usually start, and increasingly end, by saying he would make excellent judicial selections. But the more one sees of his impulsive, intensely personal reactions to people and events, the less confidence one has that he would select judges by calm reflection and clear principles, having neither patience nor aptitude for either.

“It is arguable that, because of his inexperience, Obama is not ready for the presidency. It is arguable that McCain, because of his boiling moralism and bottomless reservoir of certitudes, is not suited to the presidency. Unreadiness can be corrected, although perhaps at great cost, by experience. Can a dismaying temperament be fixed?”

Who said such terrible things about our beloved hothead? This came after a short list of incidences that put McCain’s temper, temperament and judgment in question. Again, what flaming liberal said such things? George Will.

George Will is one of five major, serious, conservative pundits who have decided that John McCain is unsuited for the presidency. These are conservatives who know him. These are conservatives who fear the choices Obama would make for appointment to the Court. These are conservatives who fear the consequences of electing someone with such a childish temper and temperament even more.

The misgivings about McCain by George and his cohorts are not partisan. Am I partisan? It’s very possible but the concerns of George and the others are some of my concerns. Is it any wonder that adding more of my concerns to theirs puts me in a position of opposition to little Johnny? Call me partisan but call McCain what he is.

John McCain is an ideologue. Is that a political slam? He has glorified in being one. That doesn’t keep him from being willing to bail out corporations. It doesn’t keep him from stealing the rhetoric of populism. It does shape his response to the current financial crisis.

Since he has supported every attempt at deregulation for low these many years, he couldn’t blame his entire raison d’être. He needed another target for his blame. His advisers found it. It is Wall Street greed. And, he will fix it.

To be fair, McCain has been talking about the need for regulation these last few days. However, he continues to beat the drum for deregulation. You can depend on the guy who votes against his own bills. Is he plugged in to a 60-cycle outlet? He keeps getting in his own way. It might be best for the rest of us to stay out of his way.

He ignores the fact that deregulation opened the way for that greed. Indeed, that is the very intent and purpose of getting rid of regulation or ignoring it. Does he really not understand the connection? It is a permanent umbilical cord. Without greed there is no need for regulation. Greed is what makes regulation necessary. Those who stand against regulation are standing for greed. It really is as simple as that. Nothing more. Nothing less.

A couple of days ago McCain claimed he had come out with a detailed plan for dealing with the crisis and blasted Obama for not doing so. I don’t have too much faith in anyone’s ability to come up overnight with a detailed plan for a financial disaster with which we have no experience. What are the chances such a plan could even spell out the scope of the problem? Isn’t this the same guy who brags that he doesn’t understand economics? At least he doesn’t let ignorance of economics slow him down.

Never fear. With an ideology to do all of the heavy lifting it is as easy as finding the Iraq-Pakistan border. I wonder how much detail his plan involves as it is based on blaming the greed of those terrible Wall Street ogres that have kept his wife’s private jet fueled. I would have thought it would be very difficult to legislate salaries and other compensation for executives of financial institutions. Maybe I’m wrong.

I haven’t been able to see those details he brags about. Have you? I understand he insists on severe limits for those golden parachutes. After all his advisor, Carly Fiorina, only got $45 million for driving down Hewlett-Packard’s stock a little over 60 percent and leaving a mess they are still trying to clean up. $45 million divided by how many people who lost their jobs . . . ? She’s the one who said neither McCain, Palin, Obama nor Biden could run H-P. I think she left one name off that list.

This rant against excessive pay for executives . . . isn’t that going to make Cindy feel she is the target? Do they have marriage counselors in Arizona?

Paulson Has No Clothes Plan

Everyone is talking about Sec. Paulson’s rescue plan. Really? Just what plan is that? Is it hidden somewhere in those three pages he sent to Congress?

News Flash! There is no plan.

At least there is no plan to address the problems of the economy. The three pages basically demand that the Secretary be totally unregulated. He is not to be answerable to any court or agency of government. He is to be given total control of upwards of $700 billions, or however much he wants.

In order to maximize the possibility of getting that, he demanded that Congress agree within five days. That was awfully considerate of him. He didn’t want a little matter like the possible collapse of our entire economy to inconvience the politicians by cutting into their campaigns for re-election.

If someone on Main Street defaults on their home mortgage they are kicked out. The home is taken away from them. What would be the analog for Wall Street? If those investors lose their posterior gluteus maximuses, they would have their investments taken away and be kicked out on that lovely street. Seems eminently fair to me. Maybe I mean eminently balanced.

The crisis is based on the falling value of assets based on mortgages. The ‘plan’ fails to address that minor detail. The economy cannot revive without the recovery of real estate values. Hello? Is anyone home?

Another problem is the availability, or lack thereof, of credit now. I heard a talking head say that many banks were requiring a credit score of 720 to make an automobile loan. It was estimated that, if that were the case, American automobile manufacturers would sell six million fewer cars in a year. That industry is already reeling. There is no way it could sustain such a hit.

Not for better but for worse, this is a consumer-driven economy based on debt. The addiction cannot be ignored. We must feed the beast with at least some more credit. The ‘plan’ doesn’t address consumer credit at a time when many banks are refusing to make loans to other banks. How they expect to remain in business without making loans is a mystery.

Here’s just a bit to chew on while we consider our domestic situation further. Many of the investors that the $700 billion is expected to save are foreign corporations and governments. While American taxpayers are being required to shoulder an unbelievable additional debt, foreign governments are refusing to contribute a farthing, a pfennig or a franc.

We might react viscerally and say to hell with all of those Wall Street investors. That certainly came to my mind. The problem is that some significant part of those investments are IRAs, savings for college funds and other funds that many average, middle class citizens are depending on. We could remind them that capitalism, the free market, the invisible hand all require risk. They were just losers. The invisible hand just killed their hopes and dreams. It may even have cost them their sustenance and subsistence.

I can’t be that harsh. Yet, I want those players, those gamblers, those speculators to be wiped out. They are the ones who are responsible for the instability of the markets. They are the ones who dreamed of making a fortune without contributing anything. Well, they did actually contribute something. They gave us this mess.

How one separates out the wheat from the chaff, the investors who believed in the system from those who gamed the system I don’t know. If it can be done, it should be done. A three page ‘plan’ is a joke.

Actually, let’s take a closer look at the Secretary. Back in June or July he was saying the fundamentals of the economy were strong and that the little hitch in the economy would be a thing of the past by the end of the year. This yo-yo that so many are calling the smartest man in Washington was the man with his hand on the throttle for over two years. He played a major role in creating the present crisis by doing nothing, possibly because he knows nothing.

The Secretary should lead the way for the thousands of other culprits who need several years in prison for what they have done to our nation, its reputation, its economy, indeed, even its security.

Security? Yes. The present situation saps tremendous financial resources that come into play internationally, both in real and psychological ways. The perception of us by other governments could weaken their willingness to assist us or join with us in various endeavors. It may embolden enemies. One can’t discount the possibility that our present predicament may have factored into North Korea’s decision to kick out nuclear inspectors yesterday.

These perverts have done untold damage to our nation. Are they to be rewarded by having their investments protected? I think it meet and proper that these firms should find out if the market has any takers. I don’t mean takers to cherry pick and leave the dross for the taxpayer. If their are none, the government should simply take the assets and charge all senior executives with felonies. Some effort should be made to protect the innocent small investor. This could be modeled on the FDIC.

Isn’t the Secretary of the Treasury a part of the administration? Then why did an administration spokesman yesterday claim that they had a ‘plan’ in hand for several months? Now Paulson demands that Congress accede to his planless plan in five days. Are they absolute fools? Do they think the Congress and the public are absolute fools? Are they right?

A Suggestion

It would be helpful if people would call their Representative’s and Senator’s offices to encourage them to act on this suggestion.

Bankruptcy courts handle about a million families each year. These courts are permitted to restructure the various debts and instruments brought before them. They are not, however, allowed to modify the terms of a home mortgage. Why the difference? It is because the mortgage industry has been paying bribes for decades to enjoy that little exemption.

Allowing the courts to restructure mortgages would allow a goodly number of people to keep their homes. So? Well, think it out. There is a glut of homes on the market and many, many more on the way. This drives down the prices. This keeps those investment instruments worthless.

The solution is to reduce the inventory of homes on the market to keep the prices from falling further, or even to begin raising them. For each family in bankruptcy court that doesn’t have to lose their home, the market has one less unit to put downward pressure on prices.

It has the added benefit of making mortgage companies a bit more reluctant to make a loan that they consider likely to end up being restructured in bankruptcy court.

As I pled above, call your Representative’s and Senator’s office. Given the turmoil and consequent attention to the subject of real estate prices, it might be possible to overcome the effect of all those bribes.

It’s just one way to get real.

Tagged as: congress, dodd, economy, fed, mccain, obama, paulson, senate, wall street