Debate Tonight

I'm looking forward to the VP Debate tonight. Random thoughts:

Hopefully Senator Biden's plane lands safely, without being forced down by enemy fire.

Great choice for moderator tonight, Gwen Ifill is committed ideologically and financially to an Obama win. She violated journalism ethics by failing to disclose to the Commission on Presidential Debates that she has a book coming out on inauguration day titled "The Breakthrough: Politics and Race in the Age of Obama." She's probably studying Charlie Gibson right now to learn how to look at Palin with contempt after every answer.

Joe Biden should be a formidable debater. After all, he received academic distinction in college, was the "outstanding student in political science," "graduated with three degrees," "went to law school on a full scholarship - the only one in [his] class to have a full academic scholarship," won an international moot court competition, and finished in the top 1/2 of his law school class. Oh wait, I forgot, he made up every one of those claims.

Palin should be debating Obama and let Biden debate McCain. That way we'd get the debate between the inexperienced candidates out of the way first.

The Blame Game

Obama says the financial crisis is like a house fire - we need to put it out before worrying about who started it. McCain has taken the same position. They are both wrong. Right now, the arsonist is grabbing the fire hoses.

It is important to know why this crisis has happened so we can fix it. The Democrats pushed Fannie Mae and Freddie Mac to make risky loans to people with poor credit. Knowing that risky investments have a higher reward than safer investments and that they were protected by the guarantee of a bailout should things go badly, Fannie and Freddie made a lot of bad loans. President Bush and other Republicans, including Senator McCain, pushed for more regulation of Fannie and Freddie's lending practices, knowing the taxpayer could be on the hook for the loans. Democrats opposed them, afraid that regulation would harm the greater social good of "affordable housing." It didn't hurt that Fannie and Freddie showered them (Obama was a top recipient) with millions in campaign contributions. Now the Democrats have the gall to blame Republicans and the media is letting them get away with it.

Although the Federal Reserve bears some blame for keeping interest rates too low, a disaster of this magnitude doesn't happen without Fannie and Freddie and the Democrats who decided they knew how to loan money better than bankers.

A couple good articles: NRO, Thomas Sowell.

Why We Disagree

Why is it that conservatives and liberals have a hard time agreeing on anything? Clearly there is something very different about the way we see the world. Thomas Sowell's book A Conflict of Visions - Idealogical Origins of Political Struggles attempts to describe these two very different worldviews. Sowell is a conservative economist and while most of his books promote conservatism, I think he's even handed in this book. Here's his take, I'm interested to see if you guys agree or disagree.

Sowell's argument is that the basic difference is that conservatives ("constrained vision") see human nature as unchanging and fundamentally selfish while liberals ("unconstrained vision") see human nature as something that can be changed and improved. These opposing visions then have very different ideas about how society and government should function.

Conservatives then believe society is constantly evolving as people, using limited resources and limited reason, establish ways to correctly harnesses man's true nature. Limited government with checks and balances is seen as an ideal system, as politicians and the elite are not exempt from man's basic, selfish nature. Capitalism recognizes the role of incentives in behavior and rewards self interested people for creating goods and services that help others. Justice requires procedural fairness but not results-based fairness.

Liberals on the other hand, think that people can be brought closer to their potential by instituting wiser and more moral policies. They believe that people can be conditioned to do the right thing for the right reason, rather than out of self interest. While conservatives seek the best trade off using limited resources, liberals seek an equitable solution. The elite, with their superior wisdom and morals, should guide the masses toward a more perfect society. Even if there is procedural fairness, there can't be justice is there is too much inequality.

Most people are not all the way in either camp, but does this sound about right?

If Kids Could Vote...

Cracked.com wonders what campaign ads would look like if kids were allowed to vote.

Obamanomics Part II

I didn't watch the debate last night and I neglected to record it, but from what I've read, Obama spent a lot of time criticizing Bush's economic policies. Obama said "We have to recognize that this is a final verdict on eight years of failed economic policies promoted by George Bush, supported by Senator McCain." I was unaware that President Bush's economic policies had failed. Taking a look back at the last 8 years, I'm trying to find the high unemployment rates and high inflation that one would associate with failed economic policies and I can't find them. Unemployment has been 4-6% throughout the last 8 years, numbers within the range of what economists consider "full employment." Yes, we have a financial crisis and are currently experiencing slow growth (not a recession), but overall, the economy over the last 8 years has been strong. This is impressive, considering the recession Bush inherited, 9/11 and the Iraq War. I will fault President Bush for his spending but Obama would spend far more.

Obama blames the financial mess on Bush for corporate tax breaks and insufficient regulation. Just how did corporate tax breaks lead to the sub-prime meltdown? And what's wrong with corporate tax breaks? It's not like fat cat CEOs pay the corporate taxes, they are passed down to us through higher prices and lower salaries. Low taxes on corporations stimulates growth. Higher taxes does the opposite. Bush and McCain pushed for more regulation on Fannie Mae and Freddie Mac and but were opposed by Democrats. Obama, who received the second most campaign contributions from Fannie and Freddie in the Senate, did nothing to help.

Bush's tax cuts, which lowered everyone's taxes, are somehow portrayed as being bad for the middle class. In fact, even though their tax rates are lower, more of the tax burden has been shifted to the rich. After the tax cut, the top 20% went from paying 81% to paying 85% of taxes, The bottom 40% went from 0% to -4% (they now receive a net subsidy).

Obama's economic policies of protectionism, higher taxes on income and capital gains, anti-business labor-union rules, and massive entitlements are already on full display Europe. Obama's proposed taxes on the rich would be the second highest in the developed world, higher than Denmark and Sweden. These economic policies have already failed under Carter and in Europe and they are sure to fail again, but at least we would be more "equal" in our misery.

KOL to the Rescue

Can the Kings of Leon solve our dependence on foreign oil? Overthinkingit.com notes that rock music quality (as judged by songs on Rolling Stone magazine's 500 Greatest Songs of All Time) is directly correlated with US Oil Production (although they had to take out Alaska to make the numbers work). We need more rock, people!

While this analysis is a great example of the old maxim that correlation doesn't prove causation (take note, Al Gore), I find the list of the greatest rock songs ridiculous. According to rock music snobs, the vast majority of great rock songs were written in the 60's and 70's. Granted, the 80's was a weak decade for rock, but the last two decades have produced rock that has rocked as much as the rock from the golden age of rock. Nirvana, Rage Against the Machine, Radiohead, the White Stripes? To quote Norm McDonald: "Ridiculous. Completely ridiculous. Can you believe these characters? Way out of line. Way out of line... You know what hurts the most is the lack of respect."

Hat tip Freakonomics.

What a Mess

Congress is right to question the Treasury Department's proposed $700 billion bailout. However, politicians are obstructing the bill for very different reasons. Liberals see a golden opportunity to socialize a large part of our financial system and will dig in their heels in order to increase government control and limit the free market. Conservatives are concerned at the size of the government's investment, they wonder if it will work, and they fear increased regulation will do long term damage to the economy.

Most people seem to agree that something needs to be done to stabilize our banks and avoid a massive pull back of credit that would trigger a recession. Why bail them out for their poor lending decisions? For one, ignore the "Wall Street vs. Main Street" rhetoric. Wall Street includes your retirement portfolio. It includes your chances to get a loan and your company's need for investment to fuel growth. In addition, the government bears much responsibility for the sub-prime meltdown. Beginning in the Clinton Administration, banks were pressured and cajoled into giving mortages to people who were being "discriminated against" for their poor credit. To encourage this irresponsible lending, the government backed these loans. This divorced the bankers from the risk of these loans and they went a little crazy (and they made a lot of money). Other people got in, issuing the loans and then packaging and selling them. Add super low interest rates and you get a huge problem. And I'm not a politician so I can say this: the borrowers who aren't paying back their loans bear a good chunk of blame too.

Normally, Republicans are for deregulation, which is allowing Democrats to dominate the narrative of this crisis, claiming that Republican deregulation caused the problems. Their solution? You guessed it, mega-regulation. In fact, the opposite is true in this case. Recognizing that government, not free markets, was screwing up Fannie Mae and Freddie Mac, Republicans, including President Bush, pushed for more regulation. The recognized that if the government was on the hook if the loans went bad, they shouldn't have risky portfolios. Unfortunately, powerful Democrats stood in their way, including the four senators receiving the most campaign cash from Fannie and Freddie - Chris Dodd, John Kerry, Barack Obama, and Hillary Clinton. The Democrats and the media are now working overtime to rewrite history.

So what to do? Keep in mind, this isn't a give-away. The taxpayers get something for their money, and as the economy recovers, they could actually make money on this deal. Maybe. The government helped cause the problem, they should help solve it. As the Congress and the President work out a compromise, it would be nice if they considered these thoughts from Donald Luskin at NRO:

Even if you grant that this really is a 'crisis,' and that it justifies an extraordinary intervention, there can be no doubt that the $700 billion authority being sought for the purchase of distressed mortgage-related securities is far too great an amount. Of the $1.26 trillion in non-prime mortgages — that is, 'sub-prime' and 'Alt-A' mortgages — $743 billion is already either owned or guaranteed by Fannie Mae and Freddie Mac, companies that were shored up by a government rescue earlier this month. That leaves $521 billion, which means the Treasury’s $700 billion would be more than enough to buy them all. And that’s even if the Treasury paid full value. In fact, the Treasury will get a steep discount, considering that many of the mortgages in question are in delinquency or default. Does the Treasury really have to buy every single non-prime mortgage — even the healthy ones — twice over?

And if the Treasury’s authority were scaled down to something more in proportion to the size of the asset market it claims to address — say $350 billion — must that authority be granted all those dollars at once? Couldn’t we start with $100 billion and see how it goes, and go back later for more if necessary?

Kings of Leon

The new Kings of Leon album, "Only By the Night," came out today. I've already listened to it about 5 times in my car and I love it. It's quite a departure from their previous three albums. There are no "Four Kicks" or "Red Morning Light" type songs. The whole album goes along at a slower, more deliberate pace. KOL sounds grown up. I miss the hoarse, random yelps and would like a few more up-tempo songs, but the album is great. Here's a live performance of "Use Someone" (I'm not as crazy about their single, so I didn't post their first music video).

They are coming to Chicago on Reformation Day, can't wait.

Congratulations Matt and Erin

I'm an uncle! Sarah's sister Erin gave birth to Willem Alexander Dunmore on Thursday. Erin and her husband Matt live in Chattanooga, TN. Matt is a photographer - you can see more pics on his photo blog.

The Leftist and the Moderate

Obama is working hard to paint McCain as Bush II. This is laughable as everyone knows that McCain is a moderate Republican who has gone against his party more times than I can count. If he is Bush II, then why did John Kerry ask him to be his running mate and why did Joe Biden say he would be honored to be McCain's running mate and that the country would be better off with McCain as president? The fact is, McCain is the most moderate presidential nominee in a long time.

If McCain's moderate voting record makes him Bush II, then what does Obama's voting record make him? The National Journal ranked him the most liberal senator in Washington for 2007, based on 99 key Senate votes. Joe Biden was ranked third. Get this: Bernie Sanders (I-Vt), the first admitted socialist to be elected to the Senate, is ranked fifth. Obama talks a good game, but he is far, far to the left of the average American.