Tuesday, September 30, 2008

Somebody please act like a leader!

Congress is taking a holiday. In the midst of unfinished business relating to the [insert hyperbole of choice] financial crisis of 1995-2008, those we have elected to serve our best interests feel they need a break.

Before I get into the politics of this mess, let me first comment on yesterday’s vote. Despite my conservative beliefs, I felt this rescue package needed to pass. I like the provisions the GOP added but even without those I would have voted for it. Again, we’re talking the lesser of two evils. But perhaps my economic ignorance was showing, and perhaps the general population knows more than I.

The GOP effectively killed this bill, along with 95 Democrats who joined in their dissent. As a result, the criticism has been harsh, starting with Barney Frank and his snarky comments. I’ll just note that Frank stinks of corruption and is neck deep in this financial bind, so any comment of his lacks any credibility. He is covered in the blood of failed banking institutions. I am shocked that he maintains any position of authority in this issue, he should have recused himself immediately or been asked to step aside from the negotiations. Of course, such action depends on competent House leadership. I’ll also add that 12 of Frank’s own committee members voted against the bill.

While I feel those in dissent were wrong, I must add that I was glad to see the political process actually work. GOP members said they’re offices were flooded with calls and emails speaking out against this bill, amounting to somewhere near 50 to 1 against the bill. So they voted according to the desires of their constituents. What an amazing concept! Yet, Frank and Pelosi feel it is appropriate to criticize them for it, displaying the usual Democrat paternalism that “we in Washington know better than you the voter”. That alone speaks volumes.

As for Pelosi, I’ve seen Cub Scouts demonstrate better leadership skills. She couldn’t get a third of her own party on board, and yet wants to blame the GOP for not coming along. Talk about no credibility? It is obvious to me that the top three US officials come up empty in this area. If the President, Vice President and House Speaker can’t get a majority vote on a critical bill, what should we as voters think about that? And judging by the performance of our two presidential candidates, it doesn’t look like Bush’s successor will be any better. Is it too much for a candidate to step forward and point out how ludicrous the House’s behavior really is? Is it too much to tell America that the House has failed, and ultimately failure rests with leadership? We all know it, I would just like to see that one of the candidates knows it as well, and has the guts to say it!

She rips the GOP for the crisis, effectively blaming them for all our problems, then can’t understand why no one in that party will support her. Now, shame on any Republican whose vote was determined by Pelosi’s words (mainly because anything she says should be immediately discarded with yesterday’s garbage), but on the other hand what on earth was she thinking? You have a fragile vote on the floor on a highly controversial bill and you preface the vote with partisan attacks!? I think it’s safe to say that she is probably the only person on this planet who thinks that’s an appropriate thing to do. This woman is an absolute disgrace. She is unfit for role as Speaker and I would encourage the House to hold a vote of no-confidence in her leadership. Steny Hoyer is much more suited for the job. If the Dems want to appeal to the center and move away from the radical Left, this would be a good way to start. If Obama had any guts he’d be the first to ask for it, but don’t hold your breath. For that matter, why hasn’t McCain called for her to step aside?

So when Congress returns from celebrating a religious holiday, they will face another vote. Likely, they will pass a GOP bill, despite a Democrat majority, which is fine with me. Today, the DOW was actually up which casts some doubt from WEP on whether Paulson’s and Bush’s characterization of the urgency of the matter is accurate. At any rate, it’s about time something gets done with or without leadership in the House. If Pelosi won’t step up, then maybe the Republicans should take over and pass their own bill. Regardless, I think I speak for many when I demand that someone please step up and be a leader???
Real quick, I was impressed with McCain in the debate, Obama not so much. You know it was a problem for Obama when the media says it was a “tie”. The contrast was amazing. One man had experienced the world’s many critical moments, had interacted with foreign leaders in difficult times, had helped the country overcome adversity in many ways. The other candidate read about all these things.

Obama was well-rehearsed and did a good job of regurgitating answers back to the moderator, but there was absolutely no substance. When asked a somewhat unexpected question: “In light of the financial crisis, what programs will you postpone?” Obama had no answer. But on the expected questions, he had well-prepared answers. The only problem is that I have no idea who this guy really is. There is zero substance to him and I’m beginning to wonder if his repeated “present” votes say more about him than we originally thought. Yeah, I know what he says his policies are but I get the sense that his policies are defined by polls and not principles. That’s a creepy way to govern. Here’s a question: Has he proposed or said anything grossly unpopular?

Basically, when the debate ended I felt the need to give him an “A minus” on his test paper and hand it back, not vote for him for president. I follow this stuff closely and I truly have no idea what he really stands for.

The events of the past 2 weeks have solidified my opinion that Barack Obama is not ready to be President. In the midst of a financial crisis he basically told his fellow Congressmen to call him if they needed something. This was the equivalent of voting “present”. Then he went to the gym. One thing he did not do is display leadership. In short, when America needed him he wasn’t there. The next President will step into a buzzsaw of domestic and foreign policy problems. I could list them all, but we know what the president-elect faces. Obama is not up to the task and I don’t think America can afford to let him learn on the job when he will need to be 100% on day one.

Friday, September 26, 2008

No words to describe...

If anyone else is overcome with nausea, tasting bile in the back of your throat, then you’re probably watching events unfold in Washington as I am. Do I even have to repeat my call to “vote them all out”?

I’ve tried to come up with words to describe what we’ve seen in the past week and I’m completely blank. I will welcome any suggestions. Our elected leaders make the keystone cops look like the Navy Seals. I’ve seen more seriousness and efficiency on Benny Hill reruns. This has eclipsed the point of outrage. This is downright embarrassing. The world is looking at us and saying: “these are the people you CHOSE to lead you?” America hasn’t been this humiliated since Clinton and Fellatiogate. The difference is the world isn’t laughing. Our sinking economy will drag everyone else down with it. Congress literally has the economic fate of the world in its hands and they’re performing with the efficiency of a drunken Chinese fire drill.

Let’s rehash this tragedy of errors. Yesterday, Barney Frank and Chris Dodd announce that an agreement has been met, yet somehow forgot that Congress is composed of two houses and that both are required to pass law. Minority leader Boehner quickly pointed out, “no we don’t”. Surprised by the reminder that a two-chambered Congress still exists, Frank concluded that all of this was John McCain’s fault.

He must have forgotten that two days ago Harry Reid stood before the cameras and stated that John McCain needed to step up and deliver the House GOP. So McCain suspends his campaign to return to Washington and help out, at which time Reid says they don’t need his help. This is the same man who one week ago was talking about adjourning for the fall election without solving this issue, telling voters “no one knows what to do”. He went from that position to crisis mode in a matter of days, calling for McCain to provide leadership only to again reverse his position and tell McCain to stay away. No, I’m not making any of this up.

It’s about this same time that Pelosi tells everyone that she won’t pass any legislation unless 100 House Republicans vote for it. I know, say it with me…What? For those who don’t speak politics, let me translate. This is what Pelosi said: “We have a solution to our financial crisis, the problem is that if it fails we don’t have anyone to blame. The Republicans need to vote with us to satisfy that requirement.” That’s about the time Reid added: “And John McCain needs to join them.” McCain’s role, according to the Democrats, is to accept full responsibility for any negative outcomes but stay away from Washington so you can’t take any credit for success. They have a very important national crisis to address and they want to be sure the politics of the matter is straightened out before any solution is reached. Our Founding Fathers are currently passing around the Excedrin somewhere in Heaven.

McCain gambles his entire presidential campaign to try to deliver the House GOP. Bush can’t do it. The House GOP can’t stand Bush. There is only one man who can bring them to the table, and that’s McCain. The safe thing would have been to stay away and focus on the campaign, maybe issue a joint statement with Obama about how important the matter is and that Congress needs to reach a bipartisan agreement. He could have even talked about how important the debate is. That would have been safe. But McCain did what he felt was right, even Bill Clinton agrees with that.

Just like McCain is the only one who can deliver the GOP, Obama is the only one who can deliver the Dems. He is the party leader. But he would rather hold a town-hall debate with himself in Mississippi than actually be actively involved in solving, according to him, the worst financial crisis in 70 years. The same man who refused to debate McCain nationwide this summer now says that having a debate is very important. The only way to get him to Washington at a time like this was for the President to drag him in kicking and screaming. No one else is saying it, so I will. Obama is running. He doesn’t want anything to do with this because it’s too risky. He tries to fake it by telling us that he’s spoken with Paulson almost every day. Oh gee, thanks Senator for your dedicated service to your country. Thanks for doing all you can to make sure my 401K doesn’t hit zero balance. In his own words we are facing the worst crisis in 70 years and he tackles it by making a few phone calls? How reassuring.

And speaking of negligent leadership, let’s look at Pelosi. This is the same woman who promised to “drain the swamp” in Washington, who took the gavel and vowed to end the war in Iraq. Yet when it came time to vote, her and her minions all lined up and voted to keep funding the war. Now, with the global financial market hanging by a thread she says nothing will be done without 100 Republican votes. Let me remind my readers that the Democrats control Congress. They have enough votes to pass this rescue package no matter how much the GOP objects, but they won’t do it because that would require a tiny morsel of courage. If the people of her district had any ability to conjure an original, analytical, objective thought she would be looking for a job this November. She defies the laws of physics with her ability to stand upright without a spine. She’s willing to allow our entire economy to tank because she doesn’t want to pass an unpopular bill without someone to share the blame. And this is leadership?

I have never witnessed anything like it, politics taking precedent over what’s right for the people. I have officially lost all faith in our system. I have no confidence whatsoever that our elected leaders have the ability to anything of substance. Shameful isn’t the word. This is truly indescribable. We hear the words “crisis” “critical moment” “financial collapse” and “economic emergency”. And yet, we have a House Speaker who refuses to drop the gavel on her majority power; a Senate majority leader who doesn’t know what to do, and can’t make up his mind how to do it; a Treasury Secretary literally on his knees, begging the Speaker to take action; a major presidential candidate in hiding, claiming that debate is the important thing to do; a President who lacks any credibility to twist arms; and an entire group of House Republicans who would rather see our economy crumble than violate the principle of conservative government, a principle they spent the past 8 years violating in ways that can’t be described.

The irony is that all this political bickering is based on pleasing the voters, and looking good to their constituents.

Thursday, September 25, 2008

The People's Republic of America

“We are running out of time”

This is what John McCain said yesterday when he suspended his campaign to return to Washington to do what he could to find a solution to an unprecedented financial crisis. Personally, I was glad to see it. He is a US Senator and the current party leader. Right now, he needs to be on the Hill. We’ve reached a crucial point in this matter.

I watched Bush’s speech yesterday and I saw a great deal of concern on the man’s face. I haven’t seen him like this since 9/11. He’s worried.

He’s worried mainly because conservatives like myself are in an uproar over this “bailout”. They’ve called it socialism and refuse to sign off on it. The Dems have made some objections, but these are easily rectified through compromise. Small things like restricting executive salaries and providing oversight of the treasury dept have brought most Dems on board. But the Right is proving to be a major problem. These are people with whom I usually agree, but not now.

I agree that this rescue package is much too close to socialism for my comfort. I agree that privatizing corporate losses is a fundamentally bad idea. I agree that the strain on the budget and on taxpayers is unacceptable. But unlike my fellow conservatives, I don’t see any other logical choice in the matter. Either we do this, or we face years or severe economic hardship. For me, it truly is the lesser of two evils. My fellow conservatives seem intent on choosing the greater of two evils for the sake of principle, and that’s a foolish way to govern. It would be the equivalent of Truman opting not to drop the bomb simply because America is against targeting innocent civilians. Imagine the cost of that decision.

I am profoundly disappointed that the conservatives have allowed the Left to hijack this issue by blaming Wall Street greed and deregulation. I have heard very few people say that socialist policy is what brought us here. Fannie Mae itself is based on socialist principles, and the Community Reinvestment Act is socialist legislation. One would be hard pressed to say these two things didn’t play a major role in our current crisis, but the only message that resonates is the Left’s. So far, only Newt Gingrich has called for the repeal of Sarbanes-Oxley.

Ideally, the conservative leadership would come together and sign off on this abominable rescue plan, while vowing to take immediate action to repeal the socialist policy that brought us here. Ideally, they would announce their intention to repeal Sarbanes-Oxley, repeal the CRA, and, yes, repeal Gramm-Leach Bliley. I want to hear someone talk of dismantling Fannie Mae and doing whatever it took to offload these mortgage-based assets that we’re about to buy to ensure that the government gets out of the market as soon as it’s feasible, vowing never to return. While they’re at it, why not repeal the capital gains tax and drop corporate taxes as much as possible to levels that would be competitive with China and Singapore. There are few better ways to stimulate our economy. Ideally, they would acknowledge that this is the lesser of two evils, point out that much of it occurred via our slow gravitation towards socialism, and promise efforts to turn us away from that path.

This would be ideal, but I fear it is far from reality in a Liberal-controlled Congress. Aided by their journalist faithful, the Left will use this as a reason to deceitfully blame the wrong things and exert more government control on the free market, ensuring less free enterprise and more Marxism. They will be empowered by many Americans who are content in blaming only the rich, completely unaware of the bad policy that got us here. This is how revolution occurs…a party of deceit claiming to be for the “common worker”, chastising the wealthy and private industry – blaming them for our troubles, aided by a corrupt media that refuses to properly inform the populace, triggered by an economic downturn that spurs anger and frustration with the current system. A basic knowledge of world history is all that’s needed to see what is unfolding before our very eyes…a quiet coup de’tat. America is poised to pass the most socialistic legislation in our history and follow this by electing the most socialist President in history. Our actions are being applauded by Hugo Chavez, who yesterday said “socialism is the savior of the world.” The trend is quite disturbing. I can’t help but fear that we’ve passed the point of no return and face a dramatic period of redefinition. At what point will we officially change our name to the People’s Republic of America?

Monday, September 22, 2008

Blame for the financial crisis...what's not in the news

Okay, this post will be long but there is a lot of blame to go around for the recent financial meltdown. I have researched this a lot, from both sides of the political spectrum, and I present what I consider the key components to what got us here, trying to be as impartial as possible so that people can get the truth…something the mainstream media has had much difficulty reporting. My basic conclusion is simple: It all boils down to subprime mortgages. The how and where is up to you.

In 1977, Congress passed the Community Reinvestment Act, and in 1995 this Act was significantly strengthened by Clinton to allow for more enforcement and government involvement in private lending. In 1977, only one banker testified in support of the Act, all others were adamantly opposed. The CRA mandates that each banking institution be evaluated to determine if it has met the credit needs of its entire community. This is called a bank’s CRA score. That record is taken into account when the federal gov’t considers an institution's application for deposit facilities, including mergers and acquisitions. The main objective was to increase loans to small businesses and low-income families. Naturally, this poses a difficult situation.

The primary target of the act was the process of “redlining”. This is the practice of limiting mortgages in depressed neighborhoods. Banks did this to minimize their foreclosure risk, since such properties were likely to decrease in value. The government sought to stop redlining. Later, a similar effort was aimed at similar practices in the insurance industry.

Basically, if a bank does not make the right CRA score, through lending to low-income individuals and businesses, then its growth can be restricted by the government. The CRA also opened the door for community organizations to file complaints against individual banks that they felt were not meeting the needs of the community. One of these organizations was ACORN, known for its civil rights advocacy as well as voter fraud, upper level corruption and some controversial tactics against corporations. One of our presidential candidates has a history of working closely with ACORN and I encourage readers to further research this organization.

In 1991, ACORN fought against weakening the CRA by staging a 2 day takeover of the House Banking Committee. And under intense pressure from them, Allstate agreed to negotiate and signed an agreement in 1994 for a $10 million partnership with ACORN and NationsBank for below-market mortgages to low-income homebuyers. Finally, in 1995 Clinton strengthened the CRA to what it is today. As a result (in a simple example) a local bank would not be allowed to open its new branch across town until it demonstrated that it adequately and appropriately loaned money throughout the community, including the low-income households. If these households didn’t meet proper lending requirements, the banks had to find a way or else forget about that new branch.

The subprime mortgage was born. This substantially increased the number and aggregate amount of loans to small businesses and to low- and moderate-income borrowers for home loans. At the time, the CEO of Countrywide Financial went on the record stating that to get loans approved for low-income families, "lenders have had to stretch the rules a bit." The financial risk was too much for the smaller banks, so the practice of securitization was also born. Basically, smaller banks would pool mortgages and loans together and sell them to large financial institutions, who would repackage them and sell to investors. The first public securitization of CRA loans started in 1997 by Bear Stearns. The number of CRA mortgage loans increased by 39 percent between 1993 and 1998, while other loans increased by only 17 percent.

In 1999, Congress passed the Gramm Leach Bliley Act, which effectively terminated the Glass-Steagall Act. The GLBA opened up markets among banks, security agencies and insurance companies allowing banks to provide investment and insurance services. Supporters contended that consumers could one-stop shop with their bank and the competition would result in lower prices for these services. Opponents contended that the oversight was inadequate and these institutions should be limited in the services they provided, or else risk more corruption and fraud. However, prior to GLBA, there had already been many relaxations of Glass-Steagall. For example, a few years earlier, commercial Banks were allowed to get into investment banking, and before that banks were also allowed to get into stock and insurance brokerage. Insurance underwriting was the only main operation they weren't allowed to do, something rarely done by banks even after the passage of the Act.

Crucial to the passing of this Act was an amendment made to the GLBA, stating that no merger may go ahead if any of the financial holding institutions received a "less than satisfactory [sic] rating at its most recent CRA exam", essentially meaning that any merger may only go ahead with the strict approval of the regulatory bodies responsible for the CRA. This was an issue of hot contention, and Clinton stressed that he "would veto any legislation that would scale back minority-lending requirements." In other words, if the GOP didn’t make sure low-income housing was affordable, the law would never had become law. The law passed the Senate with a 90-8-1 vote, and the House with a 362-57-15 vote.

This was considered a GOP law and has been the recent focus of much criticism from the Left. Among those who voted in favor of the GLBA: Joe Biden, Harry Reid, Chris Dodd, Dianne Feinstein, Ted Kennedy, John Kerry, Joe Leiberman, Chuck Schumer, John Edwards, Charles Rangel and, yes, Nancy Pelosi. John McCain did not vote.

One of the outcomes of GLBA is the emergence of mega-financial corporations. It paved the way for mergers, most notably CitiGroup. Most recently, it allowed Bank of America to bail out Merrill Lynch. The downside is that these corporations became very big, which is a problem if they fit the “too big to fail” description, meaning their bankruptcy would lead to economic chaos worldwide. See AIG for an example.

In 2003, Bush sought to reform the government’s role in the mortgage industry after economic advisors voiced concern for poor business practice at Fannie Mae and Freddie Mac. These 2 companies controlled over half of the nation’s mortgage market and were the lending standard that most private banks went by. Bush wanted more oversight of them by establishing a new agency in the Treasury Dept to assume supervision of them. His efforts died in Congressional committee, and were strongly opposed by the National Association of Homebuilders.

In 2005, this effort was revitalized by several in the Senate, including John McCain. They voiced concern over a recent accounting scandal at Fannie Mae which showed earnings manipulation with a $175 million discrepancy. Top executives Franklin Raines and Jamie Gorelick were implicated in the scandal, and Fannie Mae was fined $400 million for SEC violations. Investor’s Business Daily said this, "Market failure? Hardly. Once again, this crisis has government fingerprints all over it." It should be noted that Raines and Jim Johnson (another former Fannie CEO) have been a part of Barack Obama’s presidential campaign. Johnson actually headed up Obama’s vice presidential search team.

McCain argued for reform on the Senate floor in 2006. He said that a report by the Office of Federal Housing Enterprise Oversight charged that “Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives…If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.”

Supporters of Senate Bill 109 demanded more oversight and regulation at the GSEs. It would require annual audits of Fan & Fred’s affordable housing programs; create an independent regulator to oversee the safety and soundness of the housing enterprises; give the regulator the authority to “wind down” a failing GSE and protect against a taxpayer bailout; give the new regulator greater discretion in raising capital standards to protect against insolvency. The bill died in Congressional committee.

Among those arguing against it was Barney Frank (D-Mass), who said: “These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis. The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

This would not be complete without mentioning Penny Pritzger. Why her? Because she is the finance chairman of Obama’s presidential campaign and was once president of Superior Bank. This bank collapsed in 2001, the largest failure in a decade.

In February, 2008, Asian Week analyzed Superior’s failure. "The [sub-prime] financial engineering that created the Wall Street meltdown was developed by the Pritzkers and Ernst and Young, working with Merrill Lynch to sell bonds securitized by sub-prime mortgages," according to Timothy J. Anderson, a whistle-blower on financial and bank fraud, and reported by Asian Week. "The sub-prime mortgages were provided to Merrill Lynch, by a nation-wide Pritzker origination system, using Superior as the cash cow, with many millions in FDIC insured deposits."

My concern in posting this is that I believe both political parties and branches of government share the blame for this financial mess, along with crooked lenders, brokers and irresponsible borrowers. But one party in particular, and one presidential candidate, seems to claim complete innocence and the media has let them get away with it. The record supports my contention. Of course, most news outlets won’t report things accurately so I encourage people to get the facts as I did. I see the government taking a much too active role in the financial world with the CRA. This is nothing other than social engineering and it was a major player in the corporate failures. When McCain argues against this he is accused of being a “deregulator”.

Yes, the corporate world sought expansion and, as a result, complied with CRA to issue bad loans. There is a very fine line between entrepreneurship and greed. Bottom line: government policy – championed by groups like ACORN - encouraged irresponsible lending in the name of more diverse home ownership. There is no other way to put it.

Yes, the GLBA allowed for financial giants to become “too big to fail” and thus the need for government bailouts. But I have yet to see how GLBA caused this crisis and no one has made that argument. Had GLBA died, there still would have been a subprime market, driven by Fannie & Freddie. Instead of a few giant banks failing, we would have had many small banks failing. That’s what happened in the Great Depression.

The point is that, yes, we need more reform and more oversight and transparency, but I’m not convinced how helpful this will be if we continue with the mandates as laid out in the CRA. The free market works, but is destined to fail if the government becomes overly involved with social engineering. Now, we face a situation where the government must get more involved in order to prevent a global financial disaster. Our leaders must ensure the gov’t gets out of this business as soon as possible, or outright socialism draws just that much closer.

Friday, September 19, 2008

My wavering vote

The details aren’t clear but it basically boils down to two options.

One, the government buys the unsellable assets from our financial institutions by way of bulk auctions. Companies will have the option of selling their bad inventory to the government at a steep discount, the lowest bidders win. The gov’t can then sell back into the market once things have recovered, minimizing taxpayer risk. This also allows the gov’t to refinance for people who are being threatened with foreclosure, thus boosting the value of the newly purchased mortgage securities. This plan seems to be the one favored by Bernanke, Paulson and some Congressional leaders. McCain has also favored this plan.

The second has been proposed by Chuck Schumer and it basically calls for a cash infusion to struggling companies in exchange for stock. Further details aren’t available.

I have a problem with Schumer’s plan. The problem is that no matter how much money we give these companies it won’t fix the problem because the problem is the unsellable assets. We can give them a blank check, but if they can’t unload these bum mortgages it won’t matter. Eventually, either the company will fold (along with our gov’t money) or the gov’t will end up going with plan one at higher cost. I think this is a bad idea.

Plan one solves the problem with the question being at what cost? Potentially over a trillion dollars, but not definite since the gov’t can minimize the risk by selling back into the market. Plus, this allows for an easier exit out of the market. And I strongly advocate for the gov’t getting out of this mess as soon as possible. Paulson and Bernanke have done well so far, with a few exceptions. First, this plan perhaps should have come sooner before we floated Bear Stearns ($30 billion), Fan/Fred ($200 billion) and AIG ($85 billion). If they had come up with a purchase plan sooner, these bailouts may not have been necessary and the cost could have been avoided. But this is hindsight and probably unfair. At any rate, what we did for Bear Stearns and AIG is basically what Schumer wants to continue doing. It won’t work.

Also, the Fed needs to clarify their bailout rules. Wall Street got mixed messages. We helped Bear, AIG but let Lehman fail. There was no clear rhyme or reason and uncertainty is a bad thing in the market.

I read two speeches from our presidential candidates. First, McCain was impressive. After some initial waffling, he has become very assertive in the past 48 hours as the crisis grew. He now has a clear, strong plan for what he intends to do as President and what should be done short-term to help the market. It is the most impressive McCain has looked since I’ve been following politics. Obama was a stark contrast. He called for swift action after explaining what the problem is. But there were no specifics, only suggestions of what a plan should look like. Oddly enough, those suggestions were specifically addressed by McCain. Half of Obama’s speech was dedicated to assigning blame, even after he called for bipartisan action. He then said he will soon release details on his plan. Basically, he said the same thing Reid said and seemed to have no idea how to respond to this mess we're in. It was very disappointing and further reinforces my notion that this man is NOT ready for the office.

I urge my readers to look at both speeches. I've linked to them. It doesn't matter if your mind is made up or what your party affiliation is, you need to see how the two candidates handle a crisis. My vote was once solid for McCain, then up for grabs as our economy came under threat. Today, it is once again solid and the response these two men showed is what solidified it. There is no better judge of a future leader than to see how he responds to turmoil.

Bush so far has done well. He was actually criticized by Congress for not talking to the American people. In all honesty, when a crisis hits, I need to President to act and not give me a comforting hug. And Bush was acting, along with Paulson and Bernanke. Today he said there will be ample opportunity to assign blame, but action is what is needed right now. Good for him! Bush has stepped up. Yes, he holds his share of the blame and I’m sure he knows that more than anyone, but again he didn’t waffle in the face of a crisis, he took action. It was the most assertive I’ve seen him since 9/11, at a time when Congress was saying “no one knows what to do” and basically saying “we need to get the heck outta here!”

Bush stepped up as a leader, with Paulson and Bernanke as his go-to guys, and although McCain worried me at first he has now come around and is looking very Presidential. Meanwhile, Obama tells us he will have a plan real soon. Wow!

This is not my bias talking. I assure you, if the situation were reversed with Bush and McCain flaking and Obama looking assertive he would have won my vote. Period.

McCain's answer, Forbes' plan

Things are moving fast in Washington, which sounds like a contradiction in terms. Just yesterday, Harry Reid and Nancy Pelosi were talking about adjourning until the administration took over, thus leaving the financial crisis for the next president. During this indecisiveness, Congress was at each other’s throats assigning blame. Things got ugly yesterday in DC and on the campaign trail, but the truth couldn’t be more clear. In Reid’s own words, “…no one knows what to do.”

Well, that’s not necessarily true. Bernanke and Paulson do have a plan for a government bailout of the entire system and the details will soon be announced. Congress will have ultimate say, but already Pelosi and Reid, desperate for ANY idea are saying they are ready to act. Congressional Republicans aren’t quite so eager to spend the taxpayer’s future. The anticipated cost: up to $1 trillion. An amount of money that I can’t even fathom.

The plan will supposedly be the same thing John McCain is calling for, similar to what we did for the S&L crisis. The problem in the credit market is our major credit agencies have a ton of bad inventory, bad mortgages that they can’t get rid of mainly because no one wants to buy them. No one wants to buy them because no one knows what their worth. In truth, since no one wants to buy them they are essentially worth nothing. This is freezing up money and thus there is nothing available for lending, and the entire economy is threatened. So far, Obama has not said what he would do.

Bernanke and Paulson will supposedly offer a plan (echoed by McCain) that will buy these bum mortgages from these agencies and remove the dead weight, freeing up our credit market to allow the economy to steam along. Already, stock markets worldwide have jumped at the mere rumor of such a plan.

But there’s a problem. One trillion dollars is a lot of money. This plan threatens to put an amazing strain on the government budget. The Fed will likely respond as usual, by printing more money, and so inflation appears poised to jump. This means that the dollar in your pocket will be worth much less tomorrow.

I’m interested to see the details. The government is about to be a major player in the real estate market. Once the government takes over these mortgages what will they do with the homes? Essentially, the US taxpayer will own them. If home prices go up as they are expected eventually, how will the sale of these homes be handled? Who gets the money for the sale and how will it be handled? Or will these be a way for the Dems to provide cheap housing for the poor? Personally, I’d like to see the gov’t get out of the real estate market as soon as possible, return it to the free market, but we’ll see.

The conservative in me says that a big government bailout is a bad idea overall. But given my overall limited knowledge of the financial world, I tend to rely on someone who has consistently offered solid plans for our free enterprise economy: Steve Forbes. One thing I liked about Sarah Palin is that she once endorsed Forbes for President, and I think he would have made a good one. Perhaps the next GOP administration should consider him for SEC chair or Treasury Secretary. The guys knows his stuff and this is what he suggests:

1) Yes, the government should take over the bum mortgages. It will cost us but there is no other way to get the economy back on track. If we do nothing, we’re looking at very bad times ahead.

2) Return to the gold standard for our currency, basically stop providing unlimited amounts of money and set a goal for the price of gold (which is based on the value of the US dollar) at somewhere around $500

3) Suspend mark-to-market rules for long term assets. This has been a big problem. Basically, if you owe $250,000 on your mortgage and the value of your home drops because of a bad market to, say $200,000 – the bank has the power to call and demand a $50,000 payment or else lose your home. For a long-term asset this is outrageous and must stop now. Also, institutions who own these long-term assets are constantly repricing them downward, which is one reason these financial giants are suddenly going bankrupt.

4) Ban naked short selling, basically requiring stockholders to actually hold the stock before they sell it. This, in effect, would stop short selling, which has been another major player in the financial collapse. Greed is indeed alive and well in wall street and yes, people are making money off the suffering of others.

These things seem simple, except of course for the $1 trillion bailout. We’ll soon know more and I’ll continue posting if answers to my questions become evident. Either way, the next president will certainly be handcuffed in his budget. New spending and tax cuts will be hard to come by. Things like national health care and other big budget items are now unlikely without an extraordinarily heavy tax burden.

Thursday, September 18, 2008

Come on, Governor...that's too safe

I watched Sarah Palin’s interview with Sean Hannity and now have my first official criticisms of the Governor. First, I think Hannity did well. Yes, he offered a few lollipop questions but also asked some tough ones. He was cordial but not biased, and he clearly showed that his intent was to give his viewers info on the candidate, not try to trap her with ambiguous questions. It was obvious that Palin was more at ease. With Charles Gibson, she seemed to have her guard up waiting for that gotcha moment, and considering the treatment she’s had from the press I can’t blame her. It was good to see her more relaxed and ready to discuss issues.

All in all, Palin did a good job. She has a tendency to get wordy with answers but her basic ideals and principles don’t suffer as a result. She will get better at this with time. By far her strong point on policy is energy. This woman knows energy and she is clearly excited by it. We most definitely need someone like that in Washington, someone who has and will take on big oil and BOTH parties on this issue. Word of advice for you liberals, if you can put aside your partisanship for a moment and actually listen to what she has to say on energy you may be surprised at how much you agree with. For what it’s worth.

Now, the criticism…two things. First, Hannity asked her if the Republicans in Congress let the American people down. Palin gave an indirect answer that suggested she agreed with this, but danced around way too much. She said the Republicans in Congress need to work more to put government back on the side of the people, blah, blah, talking point. She didn’t give a resounding “yes” to the question. This was a mistake. The right answer is “yes” the GOP in Congress have let us down. Their behavior was unacceptable and is exactly why they were voted out in 2006. The Republicans were behaving like Democrats, and that’s not why the people voted them into Washington. I was a little disappointed she didn’t hammer on them more.

Next, Hannity asked who was to blame for the credit meltdown. She gave the standard all-too-easy answer…Wall Street corruption. Come on, Governor. That’s way too safe, and safe is not your style. You know damn well that it’s not just Wall Street at fault. It’s irresponsible homebuyers. It’s bad lending practices. It’s senior executives who doctor the books to get their colleagues big bonuses, and one of those executives headed Barack Obama’s vice presidential search committee. It’s Congress who failed to reel in these GSEs with transparency and oversight. She didn’t even mention Pelosi outright denying that Congress shared in the blame for this. It’s Congressional activity that pressured lenders to finance more mortgages for the lower class in order to have a more diverse population in home ownership. This is called social engineering and it failed. It’s the President for not being more vocal towards Congress to take action. And it’s certain members of his cabinet who failed to do their job. There’s lots of blame to share among lots of people.

Yes, some corruption on Wall Street played a role, but using them as the easy scapegoat overlooks the vastness of the problem. Social engineering may be well-intended, but it is a miserable failure and should never be visited again. She didn’t mention Bush’s attempt to reform Fannie Mae in 2003, or McCain’s co-sponsor of reform in 2005, both of which were shot down by the Dems and a few Repukes in Congress. She didn’t mention Barney Frank, chair of the Congessional Banking Committee who bogged down in this committee any legislation aimed at reforming Fannie Mae. She didn’t mention Obama as the third largest senate benefactor of Fannie Mae campaign contributions, behind only Chris Dodd and John Kerry.

Instead, it was “wall street corruption”. Very disappointing.

McCain’s campaign is missing this issue completely and falling in line with the Dems. Memo to McCain: that’s what lost the 2006 mid-term elections for the GOP. Maybe he wants to avoid criticism after Obama’s out-of-touch charge when he said the fundamentals of the economy were strong. Maybe he doesn’t want to be politically incorrect. Who knows? But McCain needs to get his act together on this issue and start giving some straight talk to Americans who desperately need to hear it. Blaming wall street, and only wall street will ensure we repeat these mistakes at a much higher cost.

Now, McCain-Palin still have my support but they are off-track on this issue big time. They need to roll up their sleeves and be much more candid. I think the voters will respond much better than they are to the usual safe scapegoating.

The economy and looking presidential

Well, the corporate giants just keep falling. All toppling from the foundation they built out of bad business and risky lending practices. Here’s a tip for all the financial geniuses at Lehman Brothers: There’s a reason why we call them risky lending practices. Here’s another tip: It’s generally a bad idea to lend money to someone who may not be able to pay it back, without doing a little groundwork to ensure that person is financially sound. I feel foolish for pointing out common sense, but as a wise professor once told me…common sense isn’t so common anymore. Kudos to Sec Paulson for passing on Lehman. Too bad he couldn’t do the same for AIG. Government bailouts of bad business sets a bad precedent. If the next President does anything, he needs to ensure others don’t follow this precedent. How about mandatory 20 years in prison for CEOs and Board of Directors of any company that must be bailed out by the gov’t?

Normally I would say these guys are getting what they deserve. Eventually the bar tab has to be paid no matter how intoxicated you may be or how many boozers are intoxicated with you. Normally I would say good riddance to the obnoxious noise that interrupted my own nice, quiet cocktail. Except now I see those intoxicated boozers are threatening my own portfolio – my nice, quiet cocktail. Now, it’s personal. And I’m not alone in my anger.

Just as Reagan said a rising tide lifts all ships, so will a sinking tide lower us all, and the tide is going out big-time. The source is evident, even to my amateur financial eyes. Basically, there was a lot of money to be made and it’s easier to make that money short-term by executing bad business strategies, in this case loaning money to people who can’t pay it back. And there were plenty of people eager to borrow money despite their inability to pay it back. You see where I’m going with this. They’ve all contributed to our sinking tide for one reason: old fashioned greed.

Greed is basically the price we pay for freedom. We could choose to live under an authoritarian government, subject only to the greed of our dictator. Instead, we chose freedom and with that comes those who abuse that freedom out of greed. The problem is their actions affect many, whether we’re talking about the decline in morality or the decline in the financial market. It’s simply the downside of a free society, the human flaw known as greed.

What bothers me is the blame game that folks are playing. For some reason, Barack Obama seems intent to blame one man for all these problems: George Bush. Nancy Pelosi actually has the marbles to claim that Congress has NO blame in the matter. How dumb does she think we are? I’m sure Obama and Pelosi have their reasons, but I think Bush had some help here. As noted in a previous post, the government blame extends for decades, even back to FDR. And both the White House and Congress had plenty of say in the matter. Even the good Senator from Chicago played a role. After my aforementioned post, it came to my attention that Obama was ranked third among his Senate colleagues in total campaign contributions from Fannie Mae. I can’t help but wonder if things like that played any role in Washington’s lack of oversight of these government-sponsored entities. Obama hasn’t said, sticking to his “Bush at fault” argument. Either way, I stand behind my assertion that Bush didn’t do this by himself, not even governmentally speaking.

And Pelosi didn’t mention that Bush proposed legislation in 2003 that would drastically reform Fan & Fred, providing more oversight and transparency. The bill was killed by Dems in Congress (with help from some Republicans). And neither one of them mentioned that McCain co-sponsored a Senate bill in 2005 once again calling for a major overhaul of these two corporations. Again, his bill died under Dem pressure. Funny how things like that are suddenly forgotten by our Dem leadership, and not remembered by the press who is supposed to actually report the news.

In general, I tend to discount anyone’s opinion of blame unless that opinion includes everyone from the irresponsible homebuyer to the incompetent, deceitful senior executives to the predatory mortgage brokers to the enabling legislators. In short, everyone in the ladder shares the blame and the folks who practice wise, low-risk financial decisions have a right to blame them since we have to share in the suffering despite our wise, low-risk endeavors. Yes, I’m sure there were many homebuyers who were suckered into a bad loan unknowingly (as hard as it is to fathom), but there were also many who knew exactly what they were doing and didn’t care. The same can be said all the way to the top. Greed is just as powerful for the lower and middle class citizen as it is for the corporate executive or the senator. In my mind, there is no difference in any of them. They’re all boozers in my eye and they’re close to cleaning out the bar so that I may not be able to enjoy my nice, quiet cocktail.

So what to do? Well, I think the best strategy is no strategy, the market will correct itself as usual. Yes, there will be some pain but this too shall pass. But, we can consider a few things for those who demand something be done. First, Obama needs to explain the campaign contributions from Fannie Mae, preferably after explaining why he didn’t take action to reform these entities. After all, he is running for president, promising “change”, in a campaign that Fannie Mae helped fund. Pardon the cynicism, but if Washington does something it should be for my benefit as a citizen and not Fan’s benefit as an “entity”. Naturally, if he’s accepting money from these people I will have some questions about whose interests he has in mind, questions that the senator has yet to answer. Then, he should probably explain the resumes of two of his leading economic advisors, one with Lehman ties and the other being the former CEO of Fannie Mae who admitted to poor accounting practices. The people have a right to know.

Once that’s done, the rest is simple. The government gets out of the business business. I have a few lessons that I live by, one of those being: If you want something screwed up really bad, turn it over to the government. When that something is half of all home mortgages then we have a big problem on our hands. No offense to those gov’t employees out there, but that’s just the way it is. All my WEP faithful on the Gulf Coast still living in FEMA trailers just echoed a resounding “yes” in agreement. I can’t think of a single government program that is done well and at an efficient price, except for military protection, and if it weren’t for our history of brilliant military minds running things I’m sure the government would find a way to screw that up too. Maybe that’s why the Dept of Defense located itself in Virginia rather than DC.

Yes, we had to bail out Fan & Fred, but once the bandages are applied they need to be kicked out into the private sector and make it clear that the bailouts stop now. The GSE experiment was tried and it failed. We still don’t know what the impact will be on our broader economy, and worldwide. Judging by the behavior of the CEOs, a GSE is just too closely related to the government, so much so that they actually behave like Congress. Let’s be clear, there is only one entity allowed to behave like Congress around here and that’s Congress. Congress is the only one who can spend money wildly without paying any attention to the actual bottom line. Just because you’re a “government sponsored enterprise” doesn’t mean you can behave like the government. Perhaps that wasn’t clarified from the get go.

Second, we must all – as in every man, woman and child – buy into the notion that we shouldn’t borrow money that we can’t afford to pay back. And the business world must buy into the notion that they shouldn’t lend out any money that the borrower can’t afford to pay back. If I sound out of line here feel free to correct me. If any lender acts irresponsibly without properly documenting the borrower’s ability to take on the debt, then that person should be subject to a rubber-hose beating by someone like myself who is trying to fund his kid’s college with the money they just lent out and lost. The same goes for the borrower. In short, if we started beating these people then maybe all this nonsense would stop.

All in all, I don’t see the world coming to an end anytime soon. The US economy goes through these natural cycles of boom followed by correction. Sometimes the correction is more painful than others, but likening it to the Great Depression is overkill, just like calling the earth’s climate cycles “global warming”. And, to be honest, a presidential candidate needs to avoid this sort of doomsday rhetoric. It looks unpresidential, and it sparks panic which is a bad thing in a shaky market. Obama is flirting with impropriety. The President must be a voice of calm and reason during hard times, not one of panic and doomsday.

I’m sure people made similar claims during the oil crisis of the 70s, or the S&L scandal, or the dot com bust of the 90s. We’ve seen many financial giants fall, such is life in a capitalist economy. Anyone remember EF Hutton? The market will stabilize and grow as it always does and people will soon calm down. The sky is not going to fall. I think at least one of our presidential candidates should step up and say this rather than devise some master plan to fix everything, refer to my general rule about the government just screwing things up. But I wouldn’t necessarily object to more or better lending standards if someone wanted to throw that one out. Going beyond this is likely unnecessary. To be fair, McCain touched on it when he said the fundamentals of the economy were still strong, and they are. The economy is still growing, exports are up, oil prices are coming down, retail sales are going up. Things are still moving forward, just slowed a bit by the buffoons in the mortgage industry. The problem is when McCain says this he gets pounded by Obama for being out of touch. I guess nowadays the Dems consider common sense to be out of touch. No surprise there. As for me, I’m taking the common sense approach of buying into a down market. That seems like a good way to make some lemonade here. Buying when prices are low is better than selling, they won’t be low forever.

Seriously, if it requires more legal oversight to keep things like this from happening then that’s what we’ll have to do. As much as I hate having the government look over the shoulder of the business world, I hate losing my kid’s college savings even more. For once, I’d like to hear one of our candidates stop sympathizing with those who behaved irresponsibly and start voicing the frustration of those of us indirectly victimized by that irresponsible behavior, which constitutes the vast majority of Americans – a rather large voting base. And I don’t want to ever hear another corporate executive complain about government red tape and restrictions. Likewise, I don’t want to hear another potential homebuyer complain that it’s too difficult for them to qualify for a mortgage - that’s the bank’s way of saying “buy a cheaper house”, not “figure out a way with different numbers”. You people brought this pain upon yourselves and, frankly, I’m tired of cleaning up your mess.

Would you rather have a rubber-hose beating?

Tuesday, September 16, 2008

McCain can't send an email?

Since we’ve been on the topic of nastiness in the campaign, I have a new example. This is for anyone out there who feels fit to complain that McCain is too negative and Obama is trying to rise above the mud on the proverbial high-road.

A recent Barack Obama campaign ad shows outdated tech devices with the announcer saying: "Things have changed in the last 26 years, but McCain hasn't," explains the announcer. "He admits he still doesn't know how to use a computer, can't send an e-mail, still doesn't understand the economy and favors $200 billion in new tax cuts for corporations, but almost nothing for the middle class.”

Yes, the ad actually attacks McCain because he “can’t” send an email. "It's extraordinary," Obama spokesman Dan Pfeiffer said, "that someone who wants to be our president and our commander in chief doesn't know how to send an e-mail."

Well, let’s correct the record. The reason why McCain doesn’t use computers is because the North Vietnamese repeatedly broke all of his fingers and both arms. As reported in Slate, Forbes and The Boston Globe, his injuries make it “painfully laborious” to use a keyboard. He mostly relies on staff for this. So it’s not a matter of “doesn’t know how to”, but more a matter of physically unable due to his prisoner of war status and injuries suffered in service of his country.

Barack Obama believes this, in part, makes him unqualified to be President. Think about that the next time you hear someone complain about the “lipstick on a pig” ad.

Monday, September 15, 2008

Obama's tax cut for America

Since Senator Obama continues to utter the words “tax cut” on the stump, I feel it is necessary to finally call him on it with some facts. Every time those words leave his mouth, it has a fingernail-chalkboard effect on me that makes me shiver. For him to call his plan a tax cut is at best disingenuous, at worst an outright fraud. Yet he continues to tell voters this somehow hoping they will buy into it at their own peril. We all like to hear “tax cut”, but it’s what’s underneath the surface that will make us cringe.

As noted in the Wall Street Journal, what he calls a tax cut is actually a massive expansion of government spending in the form of tax credits for people who pay little or no taxes to begin with. After all, you can’t cut someone’s taxes when there is nothing to cut. US Government statistics show that the bottom 40% of income earners pay no income tax, and actually receive a net payment of 3.8% when factoring in current tax credits. That means the government is giving them money that they didn’t pay into the system. This is a government expense.

The middle 20% of income earners currently pay only 4.4% of all income tax revenue. So, the overall numbers tell us that the bottom 60% of income earners pay a net 0.6% of tax revenue after factoring in tax credits for the poor. That means that the top 40% of income earners pay 99.4% of income taxes, with the top 1% paying 40% of those. Some people, Obama among them, consider this to still be unfair and feel this number should actually be higher. And that is exactly what he plans to do. When interviewed by O’Reilly, Obama said it was the “neighborly” thing to do. Obama’s plan isn’t neighborly, it’s a gunpoint mugging by the US government (interesting fact: when Obama reported his combined income of 250K, he claimed only $2,000 in charitable contributions, that’s less than 1%, I wonder how “neighborly” he would call this?)

You may have heard him say that he is going to cut taxes on 95% of Americans. Well, that’s simply not accurate. When he says tax cut, he actually means tax credit and they are two very different things. This is Obamese for government spending. Our tax rates will actually stay the same, from a percentage standpoint. The exception to this is the two top rates which will increase to 36% and 39% respectively. The “cut” comes from more credits. And as I’ve shown, the bottom 40% of people don’t pay taxes at all, and in fact receive a net plus from the government. Obama plans to give them more. Bottom line, the bottom 40 will get a check. The rest of us in that 95% will get a new tax credit. You may recall something similar happening earlier this year when Congress passed an economic stimulus package. They called it a tax rebate, not a tax cut (as Obama prefers to say). It was a government expense. Whether or not Obama’s “cut” will be a one-time deal or renewable every year is unclear. But, more importantly, our tax rates will remain the same or will increase depending on your income. McGovern once proposed something similar. He called it a “demogrant”. Call it what you want, but this is nothing more than welfare disguised as a tax cut. It’s a government handout. It’s income redistribution in the purest form…literally take from the rich and write a check to the poor.

Those of us making over 250K a year will see our taxes go up substantially, but still not enough to pay for his handouts. In fact, Obama’s own website states that his tax plan will lead to a net decrease in revenue. Simply put, this means a higher budget deficit. Obama states that he will cut spending to offset this loss but gives no specifics on what will be cut. In my honest opinion, this means one thing: massive cuts in defense spending.

All in all, Obama’s budget calls for over $1 trillion in new government spending, yet he only accounts for 20% of that in tax policies. That’s $800 billion in new spending that is not accounted for, supposedly coming from spending cuts that he doesn’t specify. The numbers just don’t add up.

But many people may not care about taxing the wealthy. There’s a problem here. US government stats show that ¾ of all tax filers in the top 1% of income earners are small business owners. They file as individuals to avoid the high, unfair corporate taxes. These people will be hit especially hard by Obama’s plan. It’s also these people who are responsible for creating 75% of all new jobs in this country. Couple this with Obama’s intent to raise the minimum wage substantially, and you have a potential disaster for America’s largest employer, the small business, which will translate to a sagging job market.

Only 6 other nations have higher income tax than we would under Obama. Those six nations have an average unemployment of 7.35%.

Obama will empower labor unions and increase the minimum wage, two things that are bad for employers. In states with similar setups, we are currently seeing economic turmoil. Whereas, the states with less stringent regulation on business like Texas, Florida and Arizona are enjoying incredible economic growth even during our sagging national economy. Read this column by Phil Gramm for the details. The point is clear, economic prosperity comes via the private sector, not from government intervention. People in Illinois, Michigan and Ohio are currently learning that lesson in a harsh way.

Obama will raise the top brackets to the highest level since Jimmy Carter, and anyone who lived through those days can tell you the price we paid as a nation. But he won’t stop there. In addition to income redistribution, Obama will also increase the capitol gains tax, will increase the social security payroll tax, and impose a permanent estate tax at 45%.

First, capitol gains. This tax has been increased twice since inception. Both times it led to a decrease in government revenue. When asked if he was aware of this, Obama replied, “Well, it’s fair.” Why? Because Obama has adopted the basic progressive policy that our tax system’s main priority is not to generate revenue, but to redistribute wealth. Again, call it what you want, but this is socialism if not all-out Marxism. And when you consider that two-thirds of all Americans own stock, suddenly his “tax cut” doesn’t look so appealing. In one swoop, Obama will effectively raise taxes on two-thirds of Americans, not to mention the impact it will have on Wall Street and our overall economy when investments drop due to punitive taxation. Wall Street is already reeling from the mortgage crisis. It simply can’t afford new taxes on investment.

Then there’s social security. Again, it’s those making over 250K that will be hit hard on this, namely the small business owners, with an increase to 16%. Combine this with the income tax hike and now these people are paying 55% in taxes. The increased payroll taxes will ultimately lead to a net return from social security of less than 0%. That’s right. These people will lose money by paying into social security. So, Obama plans to take 55% of their income, force them to pay higher wages, and force them to invest in a retirement plan that is guaranteed to be a net loss. These are America’s employers. Is this fair?

In summary, Obama plans to grant more tax credits and handouts to those who pay little or no income tax. He plans to hammer small businesses with higher taxes and unfair minimum wage requirements, taking 55% of every dollar they earn. He plans to force people to invest in a failed retirement account. He will take 45% of all estates left to one’s heirs. He plans to raise the investment tax, despite the proven failure to generate revenue and the threat it poses to Wall Street. His tax plan will raise the deficit unless he cuts spending to the bone, most likely from the military budget (when has a liberal ever cut spending elsewhere?). And he will likely have a democrat Congress ready to enact his plan with little resistance. And we haven’t even gotten into his corporate tax rates which will increase our trade deficit and lead to more outsourcing of US jobs. Simply put, he will drive us into an economic meltdown. We are near the buckling point with oil prices and the failures in the mortgage market. Combine this with Obama’s plan, which will undoubtedly lead to higher unemployment and a plunging stock market and you have a recipe for danger. Obama calls it a “tax cut” for 95% of Americans.

Friday, September 12, 2008

The Bush Doctrine?

Wow. I haven’t seen such in-depth analysis of a single interview since, well, never. The pundits and media elites are dissecting Palin’s recent interview with Charles Gibson like a group of archeologists trying to determine the eating habits of an extinct civilization from a single fossil. You can’t help but think their conclusions will lack validity. I can just see the staff of the New York Times all sitting in front of a big-screen, notepads and laptops in hand, watching the interview over and over, rewinding then watching again in slow motion desperately looking for anything that would suggest a shortfall. “Ah-ha, she twitched her nose. Did you see that, she twitched there. Clearly she has no foreign policy expertise!”

Well, I’ll save them the trouble with this simple revelation: Sarah Palin has no foreign policy expertise! There ya go. I knew that already, so did everyone in this country who supports her bid for Vice President. Sarah Palin is a Governor, a job in which foreign policy experience is neither required NOR acquired. Governor’s govern their state – all 50 of which are within the United States and not a separate national entity - which generally means they’re not meeting with heads of state or formulating comprehensive strategies for dealing with the Israeli-Palestinian conflict. If a governor is doing these things, then that governor isn’t doing his/her job. And Sarah Palin has most definitely been doing her job and doing it well.

Governors run their state. They are basically the CEO. And Sarah Palin has done a damn fine job in her state for 2 years, which means that she is the only person on either ticket who has ever actually headed-up a government as the chief executive, a simple fact that the Dems often conveniently overlook. It’s also worth noting that four of our last five presidents were governors who entered Washington with no foreign policy experience. And since I’m pointing out the obvious, I’ll go ahead and say that Palin is not running for president, another fact the Dems somehow repeatedly overlook. She looked like a Vice President, forwarding the policy as determined by the top of the ticket where the foreign policy expertise is SUPPOSED to be!

We’ve only seen a portion of the interview, but so far I feel Palin did very well. She answered Gibson’s questions without dodging or redirecting. As expected, I agreed with her views on foreign policy which basically echoed those of McCain. Interestingly enough, the MSM is in a twist over the fact that she gave standard, “canned” answers straight from the McCain camp. Well, yeah. She IS his running mate and it’s McCain, after all, who will be determining US foreign policy. You know, like the law says. I think McCain knows better than to select a running mate who disagrees with him on foreign policy issues…but that’s just my simplistic way of thinking.

Then came the point that has all the Left dancing in glee. Gibson asked her about the Bush Doctrine. I immediately thought, “huh?” As in, “what’s the Bush Doctrine?” Palin asked him to be more specific, and he didn’t, referring instead to a speech Bush gave in 2002. I thought: “Sorry, I don’t remember that speech”. And neither did Palin. So she basically gave her impression of Bush’s strategy and objectives in the war on terror. No, that’s not what Gibson meant. He was referring to the policy of preemptive strikes on global threats. Oh! In that case! Palin then answered the question appropriately, and I once again agreed with her.

This was clearly a trap door that Gibson set for her. I follow politics pretty close and I’ve never heard the term “The Bush Doctrine”. Perhaps it will show up in history books one day, but I don’t think the strategy of preemptive attacks on potential threats is known nationwide, or even throughout political circles, as the Bush Doctrine. In fact, Bush isn’t even the first president to employ this strategy. For that matter, why isn’t it called the Clinton Doctrine? I was trying to think of some obscure policy that Bush Sr. had implemented, perhaps that’s what Gibson was referring to. Nope. Somehow he’s under the impression that everybody knows what the Bush Doctrine is, certainly the Governor of Alaska should. Clearly, Palin hadn’t gotten the memo either. And, again, most of her supporters would agree.

Gibson would have been more fair to ask: “What is your opinion on Bush’s core strategy of preemptive military strikes on potential global threats?”

But that’s not what he did and he looked like an egocentric journalist trying to trip up a candidate with a vague question rather than gather information for his viewers. Just my opinion. Conservatives will feel the same way, Liberals will see it as some sort of revelation that Palin isn’t qualified (even though they had no idea what the Bush Doctrine was either), thereby further demonstrating the disconnect these people have with everyday Americans who don’t live in the urban jungles of America’s two coasts. It’s those everyday Americans who will wonder why Gibson didn’t phrase the question appropriately, instead of trying to make the Governor look bad and please his media pals.

Palin certainly didn’t lose any voters with her answers, she may have even gained a few. She did well, responding to questions with poise and clarity, even when some of those questions were tough, like whether we should honor our NATO treaty obligation (this actually was an easy question, unless you’re a liberal who believes that honoring our treaties stops whenever bullets start flying).

Indeed, this interview was tougher than anything Barack Obama has faced, even from Bill O’Reilly, whose cupcake questioning was quite a disappointment for someone who likes his hard-hitting style. And it wasn’t filled with the usual “uh”, “um”, “I mean” and “you know” that seems to pepper any answer that Obama gives to a question he didn’t anticipate. Good thing no one analyzes his interviews like they’re doing to Palin’s.

I thought Gibson did well, understanding the difficult task he faced, with the exception of the lone trap that he set for her. I like how Palin handled it, no sign of frustration even after she recognized the trap for what it was. I also like that she stuck to her guns on ANWR, even though she knew McCain didn’t agree. I took it as an early sign that national politics isn’t shaping her core beliefs. That’s always a good thing.

Can he take a punch?

This stuff bores me. Hearing the words “lipstick” and “pig” just makes me want to yawn and take a nap. Of course, the media is having a field day with it, living up to their usual standards. It kind of reminds me of the neighborhood gossip circles trying to prompt the two big kids on the block into a fistfight. I guess that’s why I was never part of those gossip circles, just doesn’t seem practical to me. Regardless, this stuff is better suited for ET and Us Weekly than CNN and Fox, yet it remains a topic of conversation for the third consecutive day.

Poor Obama. He is such a victim, isn’t he? Consistently taking the high road, refusing to resort to cheap shots, while that meanie McCain says awful things about him. The 2008 campaign is going great when he is talking about McCain’s “$5 million” remark, or the seven houses, or the hundred years in Iraq, or Palin’s “explain to me what the vice president does”. All of those things are valid issue discussions. But heaven forbid McCain actually fires back.

I guess what bothers me about all of this isn’t necessarily the mud-slinging and misrepresentation. We’ve all come to expect that in modern-day presidential politics so long as it’s fairly balanced. Granted, there is a line and sometimes folks from both parties step over it. But if the candidates get a little muddy, America simply accepts it as normal political behavior. And Americans in general adopt the notion that turnabout is always fair play.

No, what bothers me is Obama’s incessant whining, as if he is the only one in this campaign who has been unfairly attacked. It’s been 19 months and it’s been seemingly nonstop. Whenever Hillary bruised him up a bit, he immediately ran to the press, who was always there to kiss his bo-bo and give him a popsicle. And now that McCain has shown that “two can play that game”, Obama continues to look like someone who hasn’t yet found his inner manhood. Now, I don’t blame a candidate who takes a stand when things go too far. Bush lashed out when his twin daughters were brought into the mudpit; and Kerry was justifiably angry when people questioned the validity of his purple heart. But let’s be honest, those things aren’t nearly equivalent to the pig-lipstick debate, which is nothing more than a typical poke at a poor choice of words. Yet, Obama has taken deep offense to the notion that his opponent won’t allow him to misrepresent and quote out of context without a little turnabout. It seems this hurts Obama’s feelings. Come on, Senator. Be a man.

We’ve watched Sarah Palin get dragged through the muddy swamp for 2 weeks, and she has taken it with a smile. I don’t see her running to the press all misty-eyed. Granted, people complain on her behalf…again, that’s politics. They do this because it’s a bit unflattering for a candidate to whine and whimper about being attacked, especially when those attacks are fairly petty and that same candidate is just as guilty. It looks as though he can dish out but can’t take it on. It looks wimpy. In short, it looks un-presidential.

America wants a president that can take a punch. Again, for emphasis, America wants a president that can take a punch. Lord knows our current president has demonstrated that ability quite well, as did his predecessor. McCain has taken it. I’m sure he wasn’t happy about Obama twisting his “100 years in Iraq” line into some endorsement for never-ending war, yet McCain pressed on, making the obligatory mental notes to fire back when the opportunity arose. Palin has taken it, in more ways and more directions than one. She maintained composure and dignity even when her daughter was pulled into the fray. That’s tough to do. Obama acts like he wants to play full-contact, yet runs to mommy the moment someone delivers a hard blow. When Americans see Obama behave this way, do they wonder how he’ll respond to foreign leaders? If big bad McCain can rattle his cage, how will Obama fair against Putin or Ahmadinejad? Will he run to the press and yell “enough”? Because I don’t think that will have much effect on a lunatic nuke-obsessed dictator who wants to destroy Israel, or a lunatic Bolshevik driven by the nostalgic good ol’ days of the hammer and sickle. Obama has to learn how to brush this off of his shoulder and press on because America is not going to vote for a cry baby.

Personally, I’d like to see Obama talk about his “95% tax cut” a little more. Of course, Obama doesn’t want to discuss this because the more people learn about it the more they won’t like it. In truth, these distractions help him more than anything. So McCain would do himself more good if he exposed this “tax cut” as the fraud that it really is rather than take pot-shots designed to get under Obama’s skin. Indeed, we’d all be better off.

Thursday, September 11, 2008

Not that I care about world opinion, but this headline did catch my attenion:

Russians like Putin and Obama, polls find

Click here for full story.

Hmmm. I wonder if that has anything to do with Obama urging BOTH sides to exercise restraint shortly after Russian tanks blitzkrieged tiny Georgia. I'm sure that's exactly what Putin likes to hear from a US presidential candidate.

Wednesday, September 10, 2008

From the SC democrat chair...

South Carolina Democratic chairwoman Carol Fowler sharply attacked Sarah Palin today, saying John McCain had chosen a running mate " whose primary qualification seems to be that she hasn’t had an abortion.”

Yes, she DID stop that bridge!

Written by Jim DeMint, US Senator, South Carolina (as originally appeared in the Wall Street Journal)

"But, you know, when you've been taking all these earmarks when it's convenient, and then suddenly you're the champion anti-earmark person, that's not change. Come on! I mean, words mean something, you can't just make stuff up." -- Barack Obama, Sept. 6, 2008

In politics, words are cheap. What really counts are actions. Democrats and Republicans have talked about fiscal responsibility for years. In reality, both parties have a shameful record of wasting hundreds of billions of tax dollars on pork-barrel projects.

My Senate colleague Barack Obama is now attacking Gov. Sarah Palin over earmarks. Having worked with both John McCain and Mr. Obama on earmarks, and as a recovering earmarker myself, I can tell you that Mrs. Palin's leadership and record of reform stands well above that of Mr. Obama.

Let's compare.

Mrs. Palin used her veto pen to slash more local projects than any other governor in the state's history. She cut nearly 10% of Alaska's budget this year, saving state residents $268 million. This included vetoing a $30,000 van for Campfire USA and $200,000 for a tennis court irrigation system. She succinctly justified these cuts by saying they were "not a state responsibility."

Meanwhile in Washington, Mr. Obama voted for numerous wasteful earmarks last year, including: $12 million for bicycle paths, $450,000 for the International Peace Museum, $500,000 for a baseball stadium and $392,000 for a visitor's center in Louisiana.
Mrs. Palin cut Alaska's federal earmark requests in half last year, one of the strongest moves against earmarks by any governor. It took real leadership to buck Alaska's decades-long earmark addiction.

Mr. Obama delivered over $100 million in earmarks to Illinois last year and has requested nearly a billion dollars in pet projects since 2005. His running mate, Joe Biden, is still indulging in earmarks, securing over $90 million worth this year.

Mrs. Palin also killed the infamous Bridge to Nowhere in her own state. Yes, she once supported the project: But after witnessing the problems created by earmarks for her state and for the nation's budget, she did what others like me have done: She changed her position and saved taxpayers millions. Even the Alaska Democratic Party credits her with killing the bridge.
When the Senate had its chance to stop the Bridge to Nowhere and transfer the money to Katrina rebuilding, Messrs. Obama and Biden voted for the $223 million earmark, siding with the old boys' club in the Senate. And to date, they still have not publicly renounced their support for the infamous earmark.

Mrs. Palin has proven courageous by taking on big spenders in her own party. In March of this year, the Anchorage Daily News reported that, "Alaska Sen. Ted Stevens is aggravated about what he sees as Gov. Sarah Palin's antagonism toward the earmarks he uses to steer federal money to the state."

Mr. Obama had a chance to take on his party when Senate Majority Leader Harry Reid offered a sham ethics bill, which was widely criticized by watchdog groups such as Citizens Against Government Waste for shielding earmarks from pubic scrutiny. But instead of standing with taxpayers, Mr. Obama voted for the bill. Today, he claims he helped write the bill that failed to clean up Washington.

Mr. Obama has shown little restraint on earmarks until this year, when he decided to co-sponsor an earmark moratorium authored by Mr. McCain and myself. Mr. Obama is vulnerable on this issue, and he knows it. That is why he is lashing out at Mrs. Palin and trying to hide his own record.

Mrs. Palin is one of the strongest antiearmark governors in America. If more governors around the country would do what she has done, we would be much closer to fixing our nation's fiscal problems than we are.

Mrs. Palin's record here is solid and inspiring. She will help Mr. McCain shut down the congressional favor factory, and she has a record to prove it. Actions mean something. You can't just make stuff up.

Tuesday, September 09, 2008

The smears and inaccuracies continue.

Today, I read an article on MSNBC (yes, I know, I shouldn’t have been there to begin with) that portrayed Palin’s gubernatorial expense account as over the top. Keep in mind, this is the same network that headlined the upcoming January Iraq troop drawdown as “Bush to maintain troop levels until 2009”. Not exactly fair and balanced.

So, MSNBC seems to take issue with Palin’s expenses, suggesting that her family traveled an exorbitant amount on the state’s tab. The fact is that Palin has charged the state of Alaska 75% less for expenses than her predecessor. She chooses to fly coach on all government business. As Mayor of Wasilla, she took a voluntary pay cut. This year alone, she has declined over $5,000 in expense reimbursements that she was entitled to claim. Her family – much larger than the prior Governor’s – charged the state 50% less for expenses. The facts are the facts.

Other rumors worth mentioning:

She wants schools to teach creationism: I addressed this one before. Palin never advocated for this as part of the curriculum. She did say that if the topic came up in the classroom then students should be allowed to discuss it.

She attempted to ban books from the Wasilla library: Categorically false. Snopes aired this one along with a list of the supposed books that were targeted. Some of them were published after 1996, when Palin allegedly approached the library with the idea. Palin denies the claim.

She supported the Bridge to Nowhere as Governor: While campaigning for Governor she acknowledged to the town’s chamber of commerce the need for airport access and told them she supported expanding Alaska’s infrastructure “sooner rather than later”. As Governor, a cost-benefit analysis showed the project to be impractical. Congress had already removed the earmark but a portion of the money was sent to Alaska for infrastructure improvements, similar to funds that all states receive. Proponents for the bridge continued to press the issue, asking for these funds to be spent on the bridge. Palin killed the project, informing the legislature that if it were priority then the state would have to find the money within its own treasury.

She opposes contraception: Palin is on the record supporting contraception as noted during a gubernatorial debate.

She cut funding for pregnant teens: Palin implemented a funding INCREASE for pregnant teens.

She did not support funding for mentally disabled children: Palin INCREASED funding by 175% compared to the prior governor.

She was a member of the AIP: She was not. Her husband was for 7 years but changed to independent in 2002. The New York Times has already issued a retraction for this.

And then there’s this business of earmarks that we’ve heard so much recently. I feel the need to clear things up a bit. Obama and Palin have been going back and forth over who requested more earmarks for their constituents. This is a losing argument for Obama for two reasons. One, his name is on many more earmarks. Two, it’s Palin’s job to secure money for her constituents.

A state politician represents his/her state. They are responsible to the people of that state and no one else. A Governor of Alaska doesn’t care a flip about Iowa and shouldn’t, that’s why we have a federal government. Part of the job includes recovering as much of their tax money as possible and ensuring that it works for them. The Governor, state legislature and local leaders should all be pursuing money from the feds. It’s their job. That’s what I expect from my local leaders. If the Governor of Alaska implements a policy, it doesn’t affect me. Likewise, if that same Governor procures more federal money then it simply means my Governor didn’t do enough to get that money instead.

A US Senator is elected by the people of his/her state, but serves the entire country. Now, you see the contrast. A senator from Illinois is in Washington as the voice of the Illinois people but is expected to act in the best interest of the nation as a whole, thus the title “United States Senator”. There is a vast difference between this and a state official. Granted, this is the US government in its most ideal form, but that’s the general idea. A decision by a US Senator from Illinois DOES affect me even though I had no say in his election. Therefore, he is expected to act in my best interest as well.

If my Governor goes before Congress to request money my state, I see absolutely nothing wrong with that. I do expect Congress to debate the issue and decide collectively whether this request would be prudent for the American taxpayer. That’s how it’s supposed to work.

What’s not supposed to happen is earmarks from Congress, which are expenses allotted for a specific purpose and nothing else (ie, designating millions for a specific bridge instead of sending money to the state for generic roads/highways improvements, or designating money for oyster bed research as part of the Katrina relief package). The feds should give the states the money, and let local officials determine how best to spend it. Earmarking only invites corruption.

So the question is: Should a local official refuse earmarked money? What would you want YOUR local official to do? That’s easy. My mayor or Governor or state legislator had BETTER accept that money. That’s my tax dollars and if it isn’t spent in my backyard then it will be spent in someone else’s. Do we think Congress will take the refused sum and put it back in the general treasury? Let’s not forget, Congress is the one with the checkbook here. They’re the ones who need to be exercising restraint and acting in the best interest of the people as a whole. That’s why I don’t understand that it’s okay for Obama to earmark as a Senator but not okay for Palin to accept earmarks as a Governor. If your kids overspend their credit card do you blame them, or the stores who accepted their purchases? Seems pretty obvious to me.

What’s important about Palin is that she implemented fiscal responsibility at the state level. She cut taxes and balanced the budget, even to the point of a budget surplus. Pursuing federal money is part of her job and I don’t think she needs to apologize for it, nor do I think it contradicts her record as a reformer. Accepting federal earmarks hardly makes her one of the political establishment.

So this claim that Palin is phony because she accepted earmarks is pretty ridiculous. As Mayor, she acted in the best interest of the city. As Governor, she acted in the best interest of the state. So there’s no reason to believe that as VP she won’t act in the best interest of the nation as a whole, which is to stop earmarking. It may be nice for the local folks who get the money, but it’s not in the nation’s best interest. This is the basis for McCain/Palin reform and I don’t think for a second she will pursue earmarks for Alaska while she is in Washington. I may be proven wrong, but her record suggests otherwise.

Monday, September 08, 2008

Quite a stink...

I suppose this was inevitable for the past 70 years. When FDR first created the FNMA, more commonly known as Fannie Mae, we should have all noted that eventually Uncle Sam would have to pick up the tab. Or, to be more accurate, the US taxpayer would have to pick up the tab.

Here is the simplified version of what happened. First, some basics. Banks are the ones who lend people money to buy homes. This obviously requires a lot of money up front so there is a limit to what an individual bank can do and thus a limit to how many people can own a home. In addition to this, it’s difficult for a bank to offer a guaranteed interest rate for 30 years because interest rates change, and since banks depend on “income” that pays out a certain interest rate there is the danger that a bank will have to pay out more than they take in. So, to guard against this, the 30 year interest rate would have to be rather high if they offer that at all. Again, this translates into fewer mortgages. Enter Fannie Mae and her little brother Freddie Mac, established to help generate more mortgages and more home ownership.

These two companies purchase mortgages from banks in order to free up the banks to offer more mortgages, and maintain relatively low interest rates. Fan and Fred then bundle the mortgages and sell them to investors. Investors make money on interest and dividends, Fan and Fred make money on interest, the banks are able to lend more money and Joe Public is able to buy more houses…the overall economy benefits. Everyone wins, right? Wrong.

The problem is when Joe Public can’t afford to pay his house note.

This problem is magnified when Fan and Fred grow to enormous proportions and end up owning half of the country’s $12 trillion in mortgages. It is magnified even more when the housing market slumps so much that 10% of these mortgages are late or are already in the process of foreclosure. Suddenly, investors aren’t quite as interested in buying shares and bonds of the two companies. Money becomes tight. The demand for housing drops, and home prices fall. A crisis looms.

Of course, it doesn’t help when the government does things to “help” people own a home, things like loosening credit standards in order to help people buy houses they can’t afford. Now, that wasn’t the actual intent, but that’s what happened. Good intentions, bad outcome. It also doesn’t help when these companies are considered private, but come with an “implicit” guarantee of federal backup. In other words, if things are mismanaged then they have a rich Uncle Sam standing by to bail them out. And mismanage they did, often in the form of adjustable rate loans that made it easier for people to buy out-of-reach homes without understanding - or paying heed to - the potential for disaster down the road.

So Fan and Fred were set up to provide money quicker and easier for home ownership. The loose credit standards allowed more people to purchase homes. The demand for homes increased, and home prices followed. This led to riskier mortgages for people who were even less qualified from a basic credit standing. Thus, we found ourselves in a housing bubble. Simply put, people bought homes they couldn’t afford with the help of very questionable lending standards and lenders who were eager to improve their bottom line, knowing the gov’t was there just in case. Eventually, the in-over-their-head homeowner can’t pay the note. Eventually, the bubble burst. And guess who was left holding the bill?

The Bush administration had no choice in whether or not to bail these companies out. If Fan and Fred failed, the impact would have been disastrous. No one argues that. But I do argue two points. The first is whether the government has any business doing this kind of business. The second is why on earth do we not have stricter standards, more oversight and more transparency when the government does decide to practice business. It seems like that would be an advantage of public involvement in these endeavors. However, that’s not the reality and all of Washington shares the blame for it.

This problem was not created by the Bush administration, although they certainly didn’t help matters. Clinton’s treasury secretary warned of a looming crisis long before Bush took over, but nothing was done. And Congress failed to impose transparency and standards on these companies, the argument being Fan and Fred were private companies that the government has no business meddling with. That argument holds except for the fact that we as taxpayers are the ones guaranteeing the business these people do. So the way I see it Bush, Clinton and all of Congress are to blame here, and I’ll throw in every presidential administration and Congress dating back to FDR. This public/private business model doesn’t work. When things are going great, only the investors win. I don’t recall getting any dividends or profit sharing. Yet when things go bad look who has to pay up!

Not only that, but the simple presence of Uncle Sam’s safety net allows CEOs and others to practice a riskier style of business that they otherwise wouldn’t get away with in the private sector. The potential for corruption is mind-boggling. And now that the government has bailed them out of this mess, the potential for an even bigger bubble to develop in the future is evident unless something is done. Exactly what, I don’t know.

But I do know that the next administration will inherit quite a stink bomb and will have to figure out what to do with it. In my mind, it’s an either/or situation. Either make it completely public, but with full oversight and accountability, reasonable low-risk standards and public sharing of profits, or make it fully private and let the market do its thing. Either way, it’s a $6 trillion mess that lawmakers from both parties repeatedly fumbled and in doing so jeopardized our entire economy.

Friday, September 05, 2008

Something special...

There they were on stage. The Old Jedi Master and his young, promising Padawan learner. The contrast almost jumped out at you, an unlikely pair together on the unlikely task of winning an election that shouldn’t even be close. One year ago, McCain was basically told to drop out of the campaign. Guiliani was the man. Conservatives, myself included, said the old war horse didn’t have a chance. His campaign was broke, the media basically ignored him, he was carrying his own bags at the airport. At that time, Sarah Palin was just another name. Few Americans could tell you who the Governor of Alaska was. The battle-scarred born-on-the-fourth war hero and the headstrong family-centered story of the American dream, their paths couldn’t have been more different. Yet, somehow their paths came together and watching them on stage last night, I couldn’t help but feel that something special was happening, a feeling I can’t remember ever having with regards to politics. The old man was lacing up his boots for one last battle and standing beside him was the unlikeliest of rookies. The underdog story is absolutely perfect, both in narrative and in the sheer reality of it all. Who would have ever imagined that it was John McCain, someone I have criticized harshly, that would be giving me this feeling? Amazing. Simply amazing.

Last night McCain was, well, McCain. He was the man who could stumble through a speech but still manage to be effective. I don’t get it. His oratory skill pales in comparison to his opponent, yet he just has this way of keeping you focused. If it were anyone else I would turn the TV off and go about my business. But it’s hard to turn away from John McCain.

His speech was interrupted twice by anti-war protestors attempting to shout him down. The irony was not missed. Here was a guy who suffered beyond comprehension for the rights of Americans, for the freedoms that we hold so dear, and those people were abusing those rights by trying to keep him from speaking. What a shameful moment for those Americans who feel the Iraq war was wrong.

The contrast between the two candidates is evident both in style and substance. McCain looked Presidential last night. And the majority of his speech was devoted to the kitchen-table issues that all Americans are concerned about. The details that his critics demanded were there and they were simple. Lower taxes, shrinking the government, cutting spending, accountability, lowering oil prices, free market health care, increasing the child tax credit…and, more importantly, having government stand beside us and not in front of us (loved that line).

And then he spoke about education, the civil rights issue of this century as he called it. There was passion and I could see that this issue was important to him. Our schools need to stop answering to unions and educrats and start answering to parents and students. I nearly came out of my chair. I soaked up every bit of it and agreed with him 100%.

And finally, the moment that I’ve been waiting for this entire campaign arrived. McCain went after his own party. For two years we’ve heard candidates talk about the ugliness of partisanship, the importance of “reaching across the aisle”. But no one actually acted on it, until last night. I think this is the first time in recent history that a presidential candidate stood before the party that nominated him and openly criticized their actions. Good for him! Recent Republican leaders have violated the very principles that got them elected and McCain called them out on it. It’s about time. Straight talk indeed. If McCain wins this election, the GOP will look back on his words as a turning point for their party, the point where one man got them back to the basics of what made them successful to begin with. So much for all that “Bush’s third term” nonsense.

Which brings me to another point. I don’t have a problem with attacks and criticism, but I do think the criticism should at least be accurate. So far, I haven’t seen that from the Dems. Anybody who has watched McCain knows that he is anything but Bush’s stooge. This guy is one of the few Republicans who has repeatedly stood up to Bush on policy. There is a reason why McCain has had problems with his base, has had problems motivating the GOP to get behind him. There is a reason why Palin’s presence was so important in rallying the GOP base. It’s because McCain isn’t a Republican. This obvious fact alone blows the Dem’s “3rd term” argument out of the water. All of this talk about voting with Bush 90% of the time is nonsense. The vast majority of Senate votes are meaningless procedural votes like designating August as National Watermelon month. What percentage of the time has Obama voted with Bush? It’s more important to look at meaningful issues like immigration, energy and spending. That’s the percentage that matters. Of course, the press won’t ask those questions. This is what I mean when I say the Dems are misleading people on McCain’s record. Don’t even get me started on the $5 million remark, or the seven houses thing. It’s absolutely ridiculous, and I think most Americans know better. McCain is anything but a wealthy elitist out of touch with America. The accusation is beyond unfair.

Then he seemed to find a groove when he started to talk about service and his speech evolved from the ordinary to the amazing. Not just his own service, but the importance of individual service. He issued a call to action, a call to serve, to teach, to heal, to comfort, to reach out to each other without first asking about political affiliation. I was blown away. In a time when Americans are dangerously close to becoming a nation of “me”, this old guy was telling us all to think twice about that. You see, America is greatest when it’s people serve each other and John McCain knows that. He said it himself: “My country saved my life and I’ll continue to serve her as long as I draw breath so help me God”. Unbelievable.

There’s a reason why we’ve had problems with the government needing to step in and provide for the people. It’s because somewhere along the way we stopped providing for each other. We stopped paying attention to the folks who were in need and instead chose to step over them and continue our daily routine. We’re all guilty of it, folks. Democrat and Republican. John McCain gave us pause and asked us to remember what we have come so close to forgetting. The glory of America is in her spirit of giving, whether it’s giving money, or time, or help in any way…and, yes, giving our lives. There is nothing greater than serving something greater than ourselves. Wow! So many politicians have come and gone while brushing across that simple truth and often falling well short of living it. There is truly something special happening here, even the most cynical of skeptics has seen that.

This morning I am doing something I have NEVER done. I am writing a check to a Presidential campaign. I am putting a sign in my yard, a bumper sticker on my car. I might even volunteer to help any way I can. Never has a ticket inspired me that much. Never! My cynicism towards politicians was simply too deep to penetrate, and I was too young when Reagan stormed on the scene to appreciate him. Why on earth didn’t the GOP nominate this guy in 2000?

For a while, I thought there was nothing in politics that would surprise me. It seemed as though I was constantly looking through those “same as usual”-colored glasses. I was totally unprepared for what I saw last night…the image of a genuine war hero, a man who suffered immensely for his country, a man who has truly earned the right to sit on a front porch swing somewhere enjoying his retired years far from Washington…yet somehow feels that his country owes him nothing, that his debt to America has still NOT been paid, that he still has work to do for America…standing in front of us with his arms raised as high as his battered body would allow, asking his countrymen to “fight with me”. Are you kidding me? Senator, you’re damn right I’ll fight with you!!! – as soon as I wipe away a few tears. It’s hard for me to even imagine anyone out there who would say no to that.