Archive for September, 2008

“I have a bracelet too.”

Saturday, September 27th, 2008

Barack Obama is the most accomplished liar I have seen since Bill Clinton, maybe even better than Bill Clinton. John McCain, on the other hand, is one of the worst liars I have ever seen in public life. This is not a criticism of Obama or praise for McCain. Being a smooth liar is arguably a desirable quality in a President. It certainly didn’t hurt FDR or Thomas Jefferson. As an old college debater myself with a 99% winning record, I had to wince at McCain’s performance more than once.

The problem is that I, and by extrapolation everybody else, have no idea who Barack Obama really is. Nobody has any doubt about who John McCain really is. I believe that the gulf between the reality of Obama and the public image of Obama is enormous, a yawning chasm the size of the Grand Canyon, whereas for McCain it is practically nonexistent. What you see is what you get, and has been for many decades. Maybe I’m wrong. Who knows? Maybe Obama is actually a decent, honest, idealistic guy who rose to the top of Chicago politics through sheer excellence of character and ability. But I doubt it. This guy is a smooth-talking equivocator. I can’t stand him. He enrages me. I despise him. I think McCain, and the Clintons, feel the same way. They can’t believe this guy is getting away with it, but of course he is.

As far as the debate went, Obama is a vastly more skillful debater than McCain. The only reason it was pretty much a draw is because Obama was saddled with a weaker case to defend. When talking about the current financial crisis, the single most important issue of the moment, they both managed to expel large quantities of verbiage containing not a single speck of meaning. McCain scored a few points on earmarks but neglected to mention the fact that he, John McCain, has never requested any earmarks for Arizona. As an old debater I found this inexplicable.

In general I thought that Obama eked out a slight victory on points during the economic babble. McCain doesn’t care about economics. He believes that the federal government should stay out of economics as much as possible. I agree with him, but of course he can’t say that as a candidate for President, especially now. The economic hypocrisies demanded of a Presidential politician are a real problem for McCain, but are a piece of cake for Obama.

When they got onto foreign policy, all of a sudden McCain seemed to come alive. He was direct, he was speaking straight from the heart and from experience, he looked like someone who knew what he was talking about, and who knew what to do about it. He recited numerous, hard to pronounce, names of foreign leaders of obscure states. Obama was professorily articulate, like someone who had studied the subject, but had never actually dealt with it. But he didn’t make any mistakes, and he came across as acceptably competent. I would give the win to McCain, but Obama didn’t embarrass himself, which is really all he had to do.

For me, the key moment of the debate occurred after McCain had related a heart-rending anecdote about being given a bracelet by the mother of a soldier who had been killed in Iraq, which McCain swore to wear “with honor”. When it was Obama’s turn, he began by saying, “I have a bracelet too.” Obama supporters probably didn’t even notice that, or if they did, it didn’t matter. For me, it was the clincher.

Overall I think that people who prefer McCain, like me, still do, and people who prefer Obama, also still do. Which means that Obama wins, since he’s ahead supposedly. I doubt that he’s really ahead. The polls always say the Democrat is going to win, and he never does. And then there’s the Bradley effect. I just hope and pray there are enough white racist Democrats left in the country to keep this dangerous demagogue out of the White House.

Holy Mary and the Financial Meltdown

Wednesday, September 24th, 2008

Here’s an email exchange between me and my cousin Andy about McCain’s lame reaction to the financial meltdown, which I had already been forced to concede was lame, just because it really was lame. The excerpts from my email are in italics. Andy’s responses follow them. Severe irony warning.

Yup, that was pretty lame on McCain’s part, calling for the Cox decapitation, accusing him of betraying the public trust, with no evidence offered whatsoever. Fortunately Sarah Palin will be there to steady him when he has one of these fits as President. It’s just that he is so passionate about combating evil in the world, that he sometimes gets a little carried away.

Absolutely. It just demonstrates his wisdom in choosing a down-to-earth, steady-as-she-goes running mate to help strike a balance between his moral passion and actual fact. The efficacy of small-town common sense, without any distracting knowledge of high finance or foreign policy.

This whole financial meltdown deal is really weird. This thing that keeps being repeated is that these complicated financial derivatives are so complex that nobody on Wall Street understands them. Really? Wow! I heard today somewhere, for example, that some of the things they did was to bundle the principle and the interest and the balloon payment of a home loan, all into different packages that were bought and sold separately. And that is just the bare beginnings of the kinds of shenanigans they have been up to.

Not to be overly pedantic, but I think you meant the bundling of “principal” along with all the other goodies in those arcane incomprehensible financial pinatas. But maybe not. It probably works either way.

So McCain is right to be so righteously angry about it all, but that’s no excuse. I would like to know what his prescriptions are for this deal? I’d like to know Obama’s, or anybody’s. I have no idea whether or not Paulson is doing the right thing, nor does anyone else, I gather. It’s like the derivatives, too complex for the mind of puny humans to comprehend.

I fail to see that it’s up to either McCain or Obama to come up with a detailed prescription. Some things you have to leave to the guys in charge, who at least have access to all the discernible facts and conceivably know more or less what they’re doing.

Looks to me like sort of a hail-Mary pass, but sometimes when it’s fourth down and goal to go and you’re behind and the clock is running out that’s the only alternative. And occasionally you actually connect.

Holy Mary, Mother of God, pray for us now and at the hour of our death. Amen.

Crisis, Regulation, Free Markets, and the Campaign

Thursday, September 18th, 2008

OK, I admit it, much as I hate to. The current financial crisis is a result of a lack of governmental oversight and regulation. I hate to admit it because it is a given, as far as I’m concerned, that the government in no way has the requisite knowledge, wisdom, experience, or motivation, to make good decisions about the financial marketplace. And yet, obviously, neither does the management of Bear Stearns, Lehman Brothers, Fannie Mae, Freddie Mac, Merrill Lynch, or AIG. And the thing is, if it is up to the government (i.e. the taxpayer) to come to the rescue when it all goes South, which it necessarily is, then clearly it must also be up to the government to see to it that this never happens.

The investment banks and hedge funds were investing in packages of home mortgages, turned into complicated bundles passed from hand to hand, growing ever more complicated as they traversed up the chain. And they were doing it at a leveraged ratio of 30 to 1. In other words, they were gambling on weird financial instruments that nobody really understood, by borrowing 97% of the cost of their investments. Fannie Mae and Freddie Mac were leveraging at a ratio of 60 to 1, i.e., they were borrowing 98.3% of the value of their investments. This was being done based on the belief that real estate only goes up and never comes down, and is therefore risk-free. Investment bank and hedge fund managers have walked away from this debacle with billions of dollars in their pockets, while the taxpayers, living and as yet unborn, are left holding the bag. Risk free indeed.

In my margin account with my stock broker, I am legally not allowed to buy stock on margin past a ratio of 4 to 1. In other words, I can only borrow 75% of the value of the stock. The thing about leverage is, when whatever you are investing in is going up, leverage makes you rich quick. The problem is, when your investment is going down, leverage makes you poor just as quick. And when the value of your investment sinks below what you have borrowed, you have to come up with the cash. The real estate bubble, as all bubbles from tulips to internet companies eventually do, has popped.

Even though the underlying basis of this crisis is just the home mortgages that are in default because some home loans were authorized that shouldn’t have been, and even though that still only represents a relatively small percentage of home mortages, nevertheless we have a crisis because the great financial houses on Wall Street leveraged these loans way beyond any rational level. If they had been leveraged at 4 to 1, and the value of home mortgages dropped 25%, they would still be OK. But when you are leveraged at 97% or 98%, then your investments can’t drop at all or you are in big trouble. You can’t meet the margin calls. It’s 1929 all over again.

A major component of the problem is the fact that Fannie Mae and Freddie Mac, and the investment bankers, were making very generous donations to various Congressional Representatives’ and Senators’ campaign funds. The number one recipient of these contributions was, coincidentally, the Democratic Chairman of the Senate Banking Committee, Christopher Dodd, who also got a sweetheart deal from Countrywide, America’s largest home lender, for his own home mortgage. The number two recipient of the largesse of Fannie and Freddie was (hold onto your hats) a freshman Senator named Barack Obama. He got more money from these guys than any other member of the Senate except for the Chairman of the Banking Committee. How do you suppose that happened?

On the other hand, in 2005, three years ago, Senator John McCain introduced a bill in the Senate called the Federal Housing Enterprise Regulatory Reform Act of 2005, which would have placed the exact restraints on Fannie Mae and Freddie Mac that might have prevented this crisis. What happened to the bill? It was killed by Chris Dodd’s committee.

This is all a little bit too complex to be the subject of a TV campaign ad, so Obama blames George Bush, and therefore John McCain, because, as everybody knows, they are one and the same, and McCain blusters about promising to go after the greedy Wall Street bankers. Oversimplifications R Us.

But the real truth is, in this economic crisis, McCain is the prescient reformer, and Obama is the sold-out enabler.