Monthly Archives: September 2008

book banning and other misadventures

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For those of you who are unaware, I recently got into a huge blog-fight with a friend of mine on her blog. Her post, entitled “Ban Books…..yeah….fu** you!!!” was essentially an expletive-laced, rant about how backwards and dangerous Sarah Palin is for ‘banning’ books from her local library. She concludes, in a moment of exasperation, “What century is this crazy as* bi*ch living in?”

Being the good friend that I am, I thought some illumination was necessary. I proceeded to explain to her that:

What’s wrong with certain books being banned by library staff anyway? Surely even YOU would ban certain books if you were a librarian… for example, I doubt you would get a hustler subscription for your local library…

Librarians MAKE EDITORIAL SELECTIONS TO THEIR BOOK CATALOG ALL THE TIME. That’s why you have any given book in your library is BECAUSE of a conscious choice to PUT IT THERE.

This obviously was not convincing enough for her as she proceeded to say:

What the hell do you mean? Please tell me which power enumerated in the Constitution of the US or in Alaska’s laws give that idiot that right to ban books… I’d love to see Sarah Palin even begin to comprehend a casebook, lmao!!! She can’t handle children’s books in the local library, without getting offended. What a simple minded fool.

Banning books, wanting to teach a non science like creationism in schools, knowing nothing about how the constitution or goverment works, time and time again showing that she thinks she can be the arbiter of values for people who have the right to choose those things for themselves, I consider that i huge fuc**ng issue.

But I guess that’s why I’m a libertarian Joel, I believe in freedom, and people’s right to choose for themselves, and not have some half wit poorly educated blow hard tell me what I can or can’t do.

I’m sure you are getting the picture here; my logic didn’t make a dent. But, being the good friend I am, I concluded I just hadn’t explained it clearly enough:

libraries are not protected by the first amendment you IDOT. People are. Go ahead… explain to me how the constitution prohibits taxpayers from voicing their opinions about how their tax dollars are spent… LIBRARIES do not have first amendment rights!!!!!

Freedom of expression isn’t at issue here. Local communities can decide what they want in their library and what they DON’T want. Why is Palin unable to voice her opinion about what is in her community’s libraries??? Why should HER OPINION about this be stifled? You want to talk about stifling… let’s talk about the assumption SHE CAN’T GIVE HER INPUT. This is Orwellian doublespeak here.

[T]his whole thing is basically an argument that non-religious people are better-suited to decide what we should be learning at our local library than religious people. This is al basically just an attack on Christians and christian beliefs…

This was about as much as I could take. After a few more exchanges of (mostly) personal attacks, I felt my time would be better spent on other things).

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its the regulations, stupid.

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I’ve been hearing more and more about how de-regulation is the root problem of the mortgage mess. Democrats have been making it the focal-point of their latest policy push to exercise greater government oversight on yet another sector of our economy. The latest instance of this mantra came from a blog my constitutional law instructor writes for titled “essentially contested America”. HERE is the basic argument:

The problem with unregulated capitalism is that greed (so sorry profitability) will always find ways to game the economic system. Had the mortgage market been regulated this crisis might have been averted. In financial markets, one either pays now (with regulations) or pays later with massive bailouts. Which is preferable?

Due to technical problems on THAT blog… I thought I would just post my response here…

(*start response*)

I find your ‘matter-of-fact’ conclusion that the problem with this crisis was this vague, amorphous concept of ‘Capitalism-gone-awry’ to be highly unpersuasive. Furthermore, your syllogism of “we must pay now or pay later” is simply a naked assertion, not a matter of fact. There is no inherent reason why this must be the case.

In fact, I would suggest that REGULATION (bad regulation, but regulation nonetheless) is at the root of this financial mess we are in. No rational market actor would make loans to people who couldn’t pay them back. You wouldn’t, I wouldn’t… so then one must ask… WHY would banks agree to these mortgages in the first place? Well, CONGRESS by by encouraging F&F to BUY UP sub-prime mortgages FROM banks in the name of “affordable housing” (i.e. REGULATING those institutions) … created a situation in where Regulatory Perversion of the market lead to bad business decisions. To quote the latest Investor’s Business Daily article:

Despite warnings from GOP members of Congress in 1992, Clinton pushed extensive changes to the rules requiring lenders to make questionable loans.

Lenders who refused would find themselves castigated publicly as racists. As noted this week in an IBD editorial, no fewer than four federal bank regulators scrutinized financial firms’ books to make sure they were in compliance.

Failure to comply meant your bank might not be allowed to expand lending, add new branches or merge with other companies. Banks were given a so-called “CRA rating” that graded how diverse their lending portfolio was…

“We have to use every means at our disposal to end discrimination and to end it as quickly as possible,” Clinton’s comptroller of the currency, Eugene Ludwig, told the Senate Banking Committee in 1993…

In the name of diversity [Dictated by Congress' REGULATIONS-- my aside there], banks began making huge numbers of loans that they previously would not have. They opened branches in poor areas to lift their CRA ratings.

Meanwhile, Congress gave Fannie and Freddie the go-ahead to finance it all by buying loans from banks, then repackaging and securitizing them for resale on the open market.

I call what congress did “REGULATING”… and BUT FOR this “regulation”, this crisis could have been averted. Market actors were not making these risky decisions before government “oversight” so I think it is reasonable to assume that I’m not opposed to regulation itself… (perhaps greater capital requirements could have helped without billions of dollars of “oversight”) but if you are going to go making such broad claims about the failure of the “Market” (as if the personal failures of Franklin Reins or Jamie Gorellic backdating financial statements to meet bonus goals was a “market problem” as opposed to a personal one)… at least back that up with facts instead of blanket assertions.

I think one only needs to look at Congress’ current refusal to DEMAND investigations into the leadership at F&F (as they so QUICKLY did with the ENRON scandal) to conclude that they are trying to cover their own a**es in this mess… which should lend even greater credibility to the conclusions of the IBD article. This crisis was a problem of the Washington Elite trying to use F&F as welfare offices… providing houses to people who couldn’t pay for them… putting their own people in leadership positions at both institutions, using them as campaign slush funds, and then conveniently letting them off the hook when things went bad — using the “market” as a scapegoat for their own stupid policies.

for more interesting stories try:

The financial crisis… and its causes.

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Ok. WOW. Hot Air.com just posted a SCATHING piece on Democrat’s indifference to regulatory oversight of Fannie and Freddie Mae — oversight the Bush administration championed and which was denounced as unnecessary by Democrats.

Here is an excerpt from a New York Times article five years ago:

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago…

The new agency would have the authority… to set one of the two capital-reserve requirements for the companies… and it would determine whether the two are adequately managing the risks of their ballooning portfolios.

Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.

Thank you; Barney Frank, Melvin Watt, and the rest of the Congressional Democrats. But this isn’t the end of the story. Not ONLY did Democrats stonewall regulatory reform of both institutions, but they also enacted legislation which created greater risk to both instiutiion’s portfolios.

The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but “predatory.”

Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the ’90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.

What can we say, then? Basically, Democrats concerned about creating “affordable housing” — in other words, using quazi-government institutions to essentially provide well-fare to low income families in the form of below-market loans– created a pyramid-scheme where by increased home-buyers caused housing inflation–which allowed for the sub-prime loans to work–which caused more people to get subprime loans… which crashed the financial system when housing prices hit a market limit. In other words, ‘concerned liberals’ under the guise of providing low-income loans created a monster–a financial system built around loans that were never designed to be repaid.

Look where “good intentios” gets us… well, it gets us with the most expensive taxpayer bailout in US History. And we keep electing these jokers. It’s just a matter of time before Medicare, Medicade, and Social Security meet the same fate, Folks… let’s not let “concerned” democrats ruin our economy again.

No Oil for Blood

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Yup… Senate Dems just do wonders for the prospects of American companies:

One would have thought that leading Democratic senators who claim to be interested in finding other sources of funding to replace American dollars in Iraq, in helping Iraq spend its own money on its own people, and in lowering the price of gasoline for American citizens, would have been all for it. Instead, Senators Chuck Schumer, John Kerry, and Claire McCaskill wrote a letter to Secretary of State Rice asking her “to persuade the GOI [Government of Iraq] to refrain from signing contracts with multinational oil companies until a hydrocarbon law is in effect in Iraq.” The Bush administration wisely refused to do so, but the resulting media hooraw in Iraq led to the cancellation of the contracts, and helps to explain why Iraq is doing oil deals instead with China.