A deal is a deal

Look, can we get over all this gnashing of teeth and tearing of hair about the bonuses at AIG? It is not productive and threatens our economic recovery.

Yes, it stinks that AIG is paying out $165 million in bonuses to the boys (and girls?) whose activities brought their company not only to its knees, but into government ownership (80 percent). Barney Frank screams his outrage. President Obama says it is about values.

Okay. But a key value in business is keeping your word. An important business activity is signing contracts, and then honoring them. A deal is a deal.

Or nobody will do business with you.

There may be a whole slew of good reasons why those bonuses should be paid. There are many reasons why it may hurt to do so. Read the letter from AIG CEO Edward M. Liddy to Treasury Secretary Timothy F. Geithner (read it here). He didn't like it either.

But the bottom line is that contracts need to be honored.

Now that the government owns most of AIG, the last thing it should do is destroy the company. But that will be the result if government runs the business like government, instead of like a business.

Thank god for Brooks

A voice of reason, more conservative than liberal, more rational than either.

David Brooks has hit it just right. Read it here.

Central Oregon's pride

"LOS ANGELES (AP) — A former Oregon congressman has pleaded not guilty in Los Angeles to money laundering and tax charges relating to an investment scheme that allegedly cost investors more than $10 million.

Wes Cooley, who represented Oregon's 2nd Congressional District for one term in the 1990s, entered his plea Monday in federal court. (Cooley, a Reagan Republican, lied about his service in Vietnam.)

An indictment filed in January alleges the 76-year-old Cooley and two other men lured victims into purchasing unregistered stock in Bidbay.com Inc. by telling them the company would be acquired by eBay for $20 per share.

In 2002 alone, Cooley allegedly took more than $1.1 million in investor cash and laundered it to conceal the fraud scheme.

Richard A. Moss, Cooley's attorney, declined to comment on the charges."

Limbaugh the fascist

Destroyer.
Divider.
Fascist.

Rush Limbaugh is vile, a lying, bigoted pompous ass of a man who would destroy hope for political gain.

Listening to him is reminiscent of public speeches of Brown Shirts in Germany after WW I. Look it up.

He is also the current leader of the Republican Party.

In a speech given this last Saturday, February 28, 2009, to the Conservative Political Action Conference, he spewed his peculiar form of right wing bile sweetened with false patriotism and misinformation (transcript here). It is the same brew first concocted by Gingrich and Rove and fed to conservative talk show hosts via a long handled spoon and web blogs.

Individuals will thrive, said Limbaugh, "if certain things are just removed from their path like onerous taxes, regulations and too much government." That is exactly what happened, Rush, you broke government oversight and now we have a mortgage crisis, a banking crisis, the highest unemployment in a generation, because guys like you (how is your drug problem coming along, by the way?) succeeded in that little superstition.

Rush says conservatives believe in "...Liberty, Freedom. [Applause] And the pursuit of happiness. [Applause] Those of you watching at home may wonder why this is being applauded. We conservatives think all three are under assault."

Right again, they have been under assault for 30 years, but by conservatives like Limbaugh who believe in spying on civilians, government intervention on the deathbed and any other bed occupied by people they don't like, and welfare for Big Corporate donors.

As for happiness, most of the country understands they aren't happier than they were 8 years ago, and they know who is responsible.

"..the bigotry that we're all charged with, just so you across the United States of America know, and you'll see demonstrated here as the afternoon goes on, doesn't exist on our side," said Limbaugh.

Strange he should bring this up. Actually, Limbaugh is quite the bigot, which is why he probably doesn't recognize it. Which is why he featured "Barak the Magic Negro," on his radio show. (See more here). It was spread most ominously by a candidate for Republican national Chairman Chip Saltsman.

"... take a look at all the constituency groups that for 50 years have been depending on the Democrat Party to improve their lives. And you tell me if you find any. They're still complaining, still griping about the same problems. Their problems don't get fixed by government. And those lives have been poisoned," says Limbaugh.

Um, Rush? Have you checked in with who is sitting in the Oval Office? Ya think that would have happened 50 years ago? What a stupid, stupid thing to say. Only such a bloated, self important fool could so blindly make a statement like that.

Then Limbaugh displays a stunningly ignorant profile of history when he asks, "How did the United States of America become the world's lone super power, the world's economic engine, the most prosperous opportunity for an advanced lifestyle that humanity has ever known? How did this happen?"

I don't know Rush, it has been a long 240 plus years. Probably quite a few "hows" in that time. Some good, some bad, some great, some accidental. Rather than ask, why don't you answer the question?

And then, with a false flourish, he accuses with a question: "And why pray tell does the President of the United States want to destroy it?" And the evidence? None. He makes a statement without saying it, the cowardly technique of O'Reilly, Hannity and the rest of the angry hate mongers of the right.

Rush, it was you and Cheney and that little guy from Texas who damn near succeeded in destroying this nation. The mess our President is trying to fix was the result of your policies, not his.

Now we learn that suspension of the First Amendment, bombing of apartment houses right here in the U.S., spying on civilians were all considered. They entertained the most flagrant abuses of power ever conceived in this nation, violations against what it means to be America. That is the legacy of Rush, Cheney and Rove.

There is more. The gasbag goes on and on and on, and the right wingers applaud, even when he makes jokes that God wants to be Rush Limbaugh. What a sick, sorry sight, what a terrible thing to have happened to real conservatives. Real conservatives need to speak up, and throw these idiots to the wolves.

Beware the knives

Liberals have their knives out for fat cat bankers. They should put them away and take a deep breath.

The fact is, there are very few people capable of running banks, large or small, and most of them already are. There is no benefit to turning banks over to bureaucrats, or destroying them and the value of stock often owned by pensions, state retirement accounts, and people who worked hard their whole life.

There are many causes to the credit crisis, and banks are certainly at the center of the storm. That does not mean that individual bankers or banks are villains. Much of the blame goes to Phil Graham and a lot of misguided Democrats who changed the rules and allowed banks to invest in riskier enterprises and give loans to people who did not deserve them.

A whole generation forgot the lesson of the Great Depression and lived beyond their means. We are all at fault, and it doesn't help to point fingers at who might be more at fault than others.

So what to do now? Hidden beneath the headlines is the fact that many "risky" banks are actually making money. They look bad on paper because the value of the assets they hold is unknown. Since the markets have frozen up, it is hard to value property, but the regulators are forcing a "mark to market" strategy that is forcing banks to revalue property at low, low levels.

Because of this, banks are flirting with capitalization ratios that make it appear they are in worse shape than they are, if the same assets were valued over a longer term.

The banks need time, and we all need some sort of confidence in our real estate markets, which requires banks to be able to lend.

First, according to many, we need to pull our banks back from the brink. The best way to do this is to follow the advice of commentator Jim Cramer and implement the same kind of program of "forbearance" that saved the S&L situation of the 1980s. Once there is a market for real estate, the banks can mark the value of their assets in prudent ways, or dispose of them. Until then, the exercise is not only futile, but damaging.

Secondly, the government needs to provide guaranteed home refinancing for everybody at 4%. This will start the process of reducing inventory overhang, and doesn't punish those who bought wisely.

But the current mob mentality of the left, to cut off the heads of bankers and destroy the banks they lead, is horrifically irresponsible. It is the banking system that government should reform, not banks. That is done with laws, not seizure. Once prudent rules are back in place, and the market stabilizes, we want bankers running our banks, and we need our banks to succeed.

Or else the crisis is just beginning, and will be made worse by the Left's lack of understanding and disdain for money.

Republicans out to destroy hope

It is outrageous that Republicans are willing to harm the country for political gain.

"Republican aides said they would seize on every instance of potential abuse as a way of stirring public doubt about the bill." (Read full story here).

One of the major challenges facing the country is a loss of confidence. It deeply affects markets, and behavior of our citizens, of consumers. And yet, Republicans are willing to do whatever they can to further destroy confidence in efforts to jump start the economy.

"Fearing fear itself." We have a two party system. Challenges to the status quo are good, debate is good.

But voters repudiated cheap shots designed only to destroy, rejected right wing return to the politics of fear. Republicans now praying that the country and its citizens become worse off so they can claim "I told you so," and do better in the next election should think about the risks more clearly.

It is possible that every one of those who tried to destroy, instead of come together and build, will lose their pulpit. Let's start with Rep. Eric Cantor of Virginia, and Michael Steele, the Republican national chairman. These gentlemen deserve some close attention.

The left doesn't get it

Okay, it is not like we have to "prove" the left doesn't like money and doesn't understand it. By now that should be common knowledge. But egregious examples still need to be highlighted.

Today's New York Times (read it here) calls for adding money to the stimulus bill to build 1.5 million units of affordable housing. This will house poor people and create jobs, according to the Times.

Ladies and gentlemen: is there anybody out there who doesn't know this crisis was sparked by overbuilding? That the markets are flooded with housing? That there are empty houses and apartments and condos all over this nation? That building more units makes the problem worse, not better?

The same issue of the Times has a couple of good articles on the stimulus plan and the politics. But today's editorial makes it so blindingly obvious that the left will never cease doing the wrong things for all the right reasons.

Democrats and economic ignorance

It is time to clamber through the charred landscape left us after the presidency of Dick Cheney and George Bush. The republic survived, though in far worse shape than when those ignorant ideologues seized power. Long live the republic.

But the dangers are ever present and never past, and now they come in the form of tired liberals of shallow knowledge of economics like Nancy Pelosi, or Ted Kulongoski. They come in the form of pay back schemes from left-leaning power centers like the unions, who believe that since they put Obama in power, they should now get theirs.

These need to be resisted. And there is hope. See this column by conservative writer David Brooks of the New York Times.

People, you have to know how good it feels to be in the center, shooting at both left and right. Of course, both sides are firing back, so being in the middle means you have to dodge twice as fast. But it's good to swing the gun around in a new direction.

Back to the topic: The Democrats under Pelosi played politics with the stimulus bill, in exactly the same way that Cheney/Bush played politics with legislation following 9/11. They loaded it with ideological non-sequiters. Paybacks and pay-offs. They took advantage of their position and the situation.

Cheney / Bush did it under the guise of external threat and patriotism. Pelosi and ilk are doing it under the cover of economic crisis. It is the same thing, from a different direction. It is politics as usual.

And it is no more honest, and no more fair or right or proper or effective, pick an adjective. A stimulus plan is needed. More than a half million people lost their jobs last month. Unemployment is over 7 percent. It hits 10 percent and we have social unrest.

And those people without jobs need health insurance. They need extended unemployment benefits. They do not need family planning advice. They do not need more grass seed on the National Mall. We do not need to spend the $100 million (over 10 years) on 150 new state troopers (absolutely no value added to Oregon) that Kulongoski ramrodded a couple of years ago.

Instead, how about widening the bridge over Squaw Creek (sorry) in Sisters, Oregon? How about a power generation plant near Madras, Oregon using wind, solar, and natural gas? How about every Oregonian come up with a project that (1) would put men and women to work and (2) would be a long term investment in Oregon.

Pork is not investment. Protectionism is a failed economic strategy. Stronger unions can destroy the productivity needed for us to work our way out of this economic crevasse that we all slid into together thinking that we could borrow money to buy things we didn't need and couldn't afford.

The illusion that government can fix this without our paying the bill is false. The bill on the government bailout will still need be paid.

Unfortunately, it will be paid by our children, my twin girls, and your children, by a reduction in their standard of living. Added to that bill will be our medicare and our social security and the war in Iraq.

It is a crushing burden, actually, and I am a little ashamed about it. We could have done so much better for them. We should have done so much better. But what is done is done, and the goal now is to start the process of recovery and not make it worse.

Ignorance of economics in hard times

The AP posted a story today that Oregon auto dealers wanted the state to prohibit car sales on Sunday. Huh?

The story (read it here) never really analyzed how this would help dealers. AP is not known for getting too far below the surface. But one may assume that the argument is that unless car dealers can cut costs, more of them will go out of business.

This is not economics, it is ignorance. Like the French imposing a 35 hour work week years ago to boost employment. It only seems like a good idea for about 10 minutes.

Basically the dealerships are saying that they want to cut labor costs. Which means that sales and service people will have less income, and therefore less money to spend. Which may do an individual dealership some good, but does nothing for the general population, which would have fewer options when to buy a car.

It is not the job of the state to introduce inefficiencies into the marketplace to support less productive dealers. If there are too many dealers to support the current level of sales, then the less efficient dealerships should close.

In the long run, this will lead to higher wages, more options for the buying public and a stronger industry.

There will be many such "emergency" measures proposed by various interest groups during these hard times. Most should be ignored. The state needs to provide a safety net so that the most disadvantaged can find new opportunities. But proping up failed business models is the wrong solution for the wrong problem.

America works

It's a wonderful thing.

We Americans have voted for a black man, repudiated the divisive fear used by the right-wing (read it here) to seize and maintain power for the last decade, and shown the world that revolution can be made in peace.

Sarah Palin and the ignorance she represents is still a threat to our children. The left, with its hubris that the laws of economics can be suspended for all the right reasons, is still a threat to our children.

But for now the right wing of Bill O'Reilly and Rush and Lars and the xenophobes and jingoists and the hatemongers are banished, after damaging our economy and the country and destroying many lives. In its greed it finally ate its own heart. It will be back, because anger never dies, and it will exploit, because the thirst for power is never sated.

But for now, the greatness that is America has again confounded the world. The "market place of ideas" that Jefferson championed has triumphed. Change has come.

There will be mistakes and missteps and false starts. But for those of us who felt that America had misplaced its values, this is a great day.