Financial Reform: Of Torches And Pitchforks

Edward Harrison of creditwritedowns.com weighs in on the Goldman case, but can't quite bring himself to commit to the view that this is all just for show and will do nothing but continue the lie that is America and the farce of extend and pretend in particular which government has modeled for decades, and the consumer, business and the banking system have dutifully imitated in their turn. Abandon hope all ye who enter here: Everything Obama says comes with an expiration date. The following excerpts come from here:As I left for the conference, I chatted with a friend who is far from the financial sector. Her take puts this debate into perspective. The issues are pretty easy to understand:We have had an economic crisis the likes of which we haven’t seen since the Great Depression. People are still losing their jobs and homes as a direct result of the boom and bust caused by the financial sector. Yet, we have bailed the banks out with taxpayer money and the bankers act like they never needed the bailout, didn’t cause the crisis or some other ridiculous argument of that ilk. In fact, they are rewarding themselves with huge bonuses while everyone else is still in a world of hurt.Forget about whether these arguments make any sense. They don’t. The only thing ordinary Americans need to know is that these people are paying themselves obscene amounts of money while everyone else is suffering despite the fact that we bailed them out of the crisis they caused. That’s the pitchfork thesis in a nutshell.  All of the other stuff is a sideshow. Johnson confirmed that this is exactly what people have been telling him in his book signings all across America. To my mind, this is what the Goldman fraud case is all about. Do you think the political payoff would be as high for going after JPMorgan Chase? Goldman is the vampire squid in mainstream America’s eyes and the Feds know this. That is why they have been targeted.

A Nation Of Laws . . . A Refuge Of Liberty

Sarah Palin In The News

Back in January I wrote that "In my department, this move removes Sarah Palin from my list of serious candidates for president in 2012. It wouldn't matter what news organization she joined, either. One does not pursue statesmanship by lowering oneself in this way. And perhaps that's what she is trying to tell everyone: that she's packing it in."

Someone who knows her well, Fred Malek, recently came to a similar conclusion about Palin here.

h/t Allahpundit

A Simple Illustration Of Why Healthcare Is Not A Right

Because, quite simply, it's a contract. And if the provider doesn't agree to make a contract with you, no healthcare is provided. As in this case of yet another doctor who puts up a warning notice to his patients:

“If you voted for Obamacare, be aware these doors will close before it goes into effect.” The note is signed Joseph M. Scherzer M.D. and includes the following addendum: “****Unless Congress or the Courts repeal the BILL.”

People who insist that healthcare is a right would enslave another human being to make him or her provide it. If they really mean it then they ought to take intellectually promising children away from their mothers and fathers at an early age and raise and educate them to this end, just as Plato discussed long ago.

Funny how it's the Democrat Party which is so enthusiastic for a new form of slavery. Didn't they have something to do with it the last time? That went well.

The Daily Caller has the story and a picture here.

I Said, "Hey Bartender!"

"Last year alone, the State Department sent taxpayers tabs totaling nearly $300,000 for alcoholic beverages — about twice as much compared to the previous year, according to an analysis of spending records by The Washington Times."

Read all about it, here.

Asset Value Lies Are S.O.P. In Banking

Karl Denninger has a new post here reflecting on a recent entry at Institutional Risk Analytics on "Events of Default" which shines the light on approximately $500 billion in private collateralized debt obligations which continue to be carried by the banks at par value but which are in fact nearly worthless:

It's called legalized accounting fraud, and I've been hollering about it for three years. As the loss severities have continued to climb and the impact accelerate[s] into other areas of securitized debt, the so-called "regulators" have scrambled to find new corners of the carpet to allow the banksters to hide the truth under.

A culture built on lies cannot endure.

The Bailouts Still Do Not Add Up

Ritholtz gets it right on the bailouts, bringing up what others would still like us to forget. Notice the little problem of toxic assets he includes on his list of six things which today's happy talkers ignore. Those non-performing assets remain spread all over the place like so much pig manure, stinking up the springtime air. It's the huge problem which STILL remains unresolved, even though the public and Congress were fervently pitched the story that TARP was necessary and designed to address it, until a couple of weeks later when it wasn't. The old bait and switch. These bastards should all hang for it, starting with George Bush and Henry Paulson, and every member of Congress who voted for it.

The following appeared here, with supporting links:

- The Big Picture - http://www.ritholtz.com/blog -

An Improved Version of Bailout Math

By Barry Ritholtz

April 13, 2010

The New York Times one ups the Wall Street Journal, taking a more philosophical — and broader — look at the Treasury’s Bailout Math.

It is still incomplete, but a significant improvement. Recall yesterday we criticized the WSJ’s wide approach (Light At the End of the Bailout Tunnel) as so much happy talk.

The Times' Andrew Ross Sorkin followed our advice. In addition to a snarkier tone (Uncle Sam down $89 billion? “It’s enough to make us all feel rich, isn’t it?”) his article included the following bullet points:

• Probable losses from American International Group = $48 billion

• Losses from Fannie Mae and Freddie Mac = about $320 billion

• The Federal Reserve virtually interest-free loans to Wall Street = $1 trillion dollars

• Moral Hazard: Numbers don’t help avoid another financial mess in the future

• Last, its about right and wrong.

It's a more skeptical improvement over other less critical takes on the success of the Bailouts. Still, Sorkin’s piece is also incomplete, leaving out:

• Depleted FDIC reserves;

• FASB 157 suspension allowed banks to hide losses

• Bad loans on bank balance sheets

• General Motors & Chrysler Bailouts

• Ongoing Foreclosures and Housing Problems

• Highly concentrated banking sector/lack of competition

I believe the best we can honestly say about the bailouts (without any spin or bias) is that, so far, the worst case scenarios have not played out, and that the return on investment is in the top quartile of expectations. Further, we still do not know what the final costs will look like, given a variety of factors such as housing, economy, etc. Also, we have no idea what the longstanding repercussions and moral hazard will end up doing in the future. Lastly, we have created a less competitive banking system, and allowed banks to fabricate their balance sheets.

But other than that Mrs. Lincoln . . .

Born To Serv . . . ility

The Answer: "Bo Has Papers"

The Question: "What's the difference between Obama and his dog, Bo?"

h/t Jimmy Kimmel

The Original Birthers: ModernGhana.Com

The Original Birthers: The Nigerian Observer

The Original Birthers: The Botswana Sunday Standard

The Original Birthers: NPR.ORG Refers To Obama As "Kenyan-Born"

Tiger Woods and Barack Obama, Compared

"I THINK IT IS REMARKABLE THAT WITHIN A WEEK OF TIGER WOODS CRASHING HIS ESCALADE, THE PRESS FOUND EVERY WOMAN WITH WHOM TIGER HAS HAD AN AFFAIR IN THE LAST FEW YEARS, WITH PHOTOS, TEXT MESSAGES, RECORDED PHONE CALLS, ETC.

AND, THEY NOT ONLY KNOW THE CAUSE OF THE FAMILY FIGHT, BUT THEY EVEN KNOW IT WAS A WEDGE FROM HIS GOLF BAG THAT HIS WIFE USED TO BREAK OUT THE WINDOWS IN THE ESCALADE. NOT ONLY THAT, THEY KNOW WHICH WEDGE!

AND EACH AND EVERY DAY, THEY GIVE AMERICA MORE UPDATES ON HIS SEX-REHAB STAY, HIS WIFE’S PLANS FOR DIVORCE, AND HIS PLANS TO RETURN TO THE PRO-GOLF CIRCUIT.

OBAMA HAS BEEN IN OFFICE FOR OVER A YEAR NOW, AND THIS SAME PRESS STILL CANNOT LOCATE OBAMA'S OFFICIAL BIRTH CERTIFICATE, OR ANY OF HIS PAPERS WHILE IN COLLEGE, OR HOW HE PAID FOR A HARVARD EDUCATION, OR WHICH COUNTRY ISSUED HIS VISA TO TRAVEL TO PAKISTAN IN THE 1980'S AS BARRY SOETORO. EVEN MICHELLE OBAMA’S PRINCETON THESIS ON RACISM. IT JUST CAN’T BE FOUND.

YET THE PUBLIC STILL TRUSTS THAT SAME PRESS TO GIVE THEM . . .

THE WHOLE TRUTH . . . TRULY REMARKABLE!"

h/t Scott

Facts Are Stupid Things

as in this from The Wall Street Journal:

At the end of 2009, nearly eight million households, or 15% of those with mortgages, were behind on mortgage payments or in the foreclosure process;

when compared with this from The New York Times:

Why So Glum? Numbers Point to a Recovery: . . . Firms have begun to hire and consumer spending seems to be accelerating.

At a median home price of $165,000, eight million mortgages going belly up represent assets of $1.32 trillion of an undercapitalized, indeed, insolvent banking system whose insured deposits total something in the neighborhood of $4.6 trillion but whose cash on hand is presently $1.2958 trillion, nearly the equivalent of those troubled assets.

How the banks have managed to increase their cash so dramatically from the less than $300 billion on hand just two years ago is another question. Are they counting increases to the base money supply provided by the Federal Reserve in the wake of the financial meltdown, which went from $800 billion to over $2 trillion? Almost overnight? Talk about monopoly money.

With over 700 banks on the FDIC "troubled" list and the FDIC openly stating it expects bank failures over the next few years to cost $100 billion on top of last year's $30 billion, does any of this sound like a reason to be happy? Like the worst is over?

I don't think so.

The Inflammatory Rhetoric Of The Left

The story appeared here:

New Jersey Gov. Chris Christie isn't laughing about a teachers union's memo that hints of his death.

The memo is the latest salvo in a war of words between Christie and the union over wage and benefits concessions.

The Record of Bergen County obtained the Bergen County Education Association memo that includes a closing prayer:

"Dear Lord this year you have taken away my favorite actor, Patrick Swayze, my favorite actress, Farrah Fawcett, my favorite singer, Michael Jackson, and my favorite salesman, Billy Mays. I just wanted to let you know that Chris Christie is my favorite governor."

The Bungler Resurrects Mutually Assured Destruction

So says J.E. Dyer, here:

Russian leaders have repeatedly rejected America’s offers to cooperate and share technology for strategic missile defenses. They have remained determined instead to hold American and allied populations at risk as the guarantee of Russian security. With the New START treaty, they have prevailed on that point, placing America’s missile-defense program under limitations both implicit and explicit. Obama is effectively returning us to the MAD regime.

Obama Allocates A Drop In The Bucket For A Critical $100 Billion Problem

So says Alex Kingsbury, here:

But while it may have been a technical wonder at the time of construction, the nation's power grid has become dangerously antiquated over the past few decades. If technology in the home is racing ahead at broadband speed, the power grid is stuck back in the days of rotary-dial phones. According to industry statistics, the dog food industry spends more on research and development than the electrical sector does. Aging technology means more frequent blackouts, a greater vulnerability to computer hackers, and, perhaps most insidious, colossal inefficiency. As part of the economic stimulus package, the Obama administration has pledged $3.4 billion toward "smart grid" technology—the next generation of infrastructure, meant to stabilize the grid in the event of a failure, incorporate green technology, and vastly improve efficiency. But those billions are a drop in the bucket toward bringing the entire national grid into the 21st century, which could take decades and cost upwards of $100 billion, some experts estimate.

Meanwhile the nearly $800 billion stimulus package gets spent preserving government sector votes, I mean jobs.

"Obamalateral Disarmament"

Investors.com weighs in with an opinion piece here on Obama's dangerous weakening of America's nuclear deterrent, saying:

There used to be a policy called mutual assured destruction, or MAD, by which war among the superpowers would be deterred by the ability of each to survive and still devastate each other.

This new policy is just plain mad, without the deterrence, making conflict likelier.

Obama's Liberal Death Wish On Display In New Nuke Policy

Religious doctrines such as "resist not evil" endanger the lives of countless innocents when presidents recklessly apply them as government policy, as Obama has just done in forswearing the right of the U.S. to use nuclear weapons in self-defense. It represents a failure to fulfill his constitutional duty as commander in chief. And in doing so, he has more certainly veered off into combining church and state than George Bush or Ronald Reagan ever dreamed of doing, another injury, in this case to the establishment clause.

Obama is a menace who must be stopped before he gets us all killed.

Ralph Peters in "The Bad Nukes Myth," which appeared here, has this to say about Obama's crazy policy revolution:

Idealism has devolved into madness.

The left has never been willing to accept that deterrence works. In the left's world-view, hostile foreign actors aren't the problem. We are. If we disarm, surely they will . . .

Follow the link to read the rest.

Commies On Parade

A ten minute Commie Blaster production, right here.

The Latest Load Of BS From John McCain Is A Steaming Pile

Reported in Newsweek, April 3:

"I never considered myself a maverick," he told me. "I consider myself a person who serves the people of Arizona to the best of his abilities." Yet here was Palin, urging her fans four times in 15 minutes to send McCain the Maverick back to Washington.

And now Sarah Palin is a first class chump who cannot be taken seriously by anyone except a fanatic.

Obama Has Violated The Public Trust

Norm Coleman recites a veritable litany of grievances against what Obama has done since taking office, in an article posted here at Politico, with healthcare reform taking center stage:

[Americans] are justifiably angry at the massive bait-and-switch on health care reform, the most important public policy debate in our lifetime. Obama has violated their trust, especially devastating with the long list of challenges we need unity to tackle, like jobs, energy and the deficit.

Health care is an emotional issue for everyone. In my years in government I learned that the deeper an issue, the more carefully leaders have to listen; and the greater the need for consensus-building rather than using raw political power.

Reading the rest is time well spent.

Doctors Own Their Minds, Labor, Years Of Study, And Their Skills, Not Obama

The following appeared here:

April 6, 2010

Dr. Galt Goes On Strike

By Investor's Business Daily

On Strike: A Florida doctor has told patients who voted for Barack Obama that they should seek care elsewhere. His is a noble one-man fight against the soft tyranny of the federal takeover of the health care sector.

The message taped to the entrance of Dr. Jack Cassell's practice is clear: "If you voted for Obama, seek urologic care elsewhere. Changes to your health care begin right now, not in four years."

Cassell is not refusing to treat patients, according to an Orlando Sentinel story. In his words, "that would be unethical." He's simply asking those who helped the Democratic leadership inflict its health care overhaul on the country to find another physician because the regime that's been created threatens his ability to do good.

"If they read the sign and turn the other way," he says, "so be it."

The Orlando-area urologist sees a "real problem" in ObamaCare, believes it "fatally compromises my ability or any doctor's ability to uphold the Hippocratic Oath" and "can't believe that more people aren't standing up."

He adds: "I think all the doctors in the United States need to take a stand on this, because pretty soon it's going to be too late."

In return for expressing his opposition to a government gone too far, Cassell has been labeled a racist by the man who represents him in Congress, Rep. Alan Grayson, the apparently daft Democrat who has said Republicans want sick Americans to "die quickly."

Grayson is filing a complaint against his constituent, a scare tactic that tells every doctor who might follow Cassell's lead that he or she will be met by government intimidation.

The point that Grayson and other critics of Cassell are missing - ignorantly or willingly - is that the doctor is peacefully protesting a government that will dictate how he practices medicine.

Cassell seems to understand that unless partisan ambition to turn all health care into a government program is stopped, Washington will eventually treat him and other doctors as vassals of the state.

They will no longer be the owners of their minds and their labor, their years of study and the development of their skills. All those instead will be owned by their masters on the Potomac.

Because Cassell is still taking patients, he's not gone fully Galt. But if he did, he wouldn't be alone: 45% of doctors in our IBD/TIPP poll (a result since duplicated by at least one other poll) said they'd consider leaving their practices if a federal health care takeover passed.

While even a brief doctors' strike might cause some immediate harm, the long-term benefits would be worth the pain if they brought the right kind of change.

I'll Bet You Didn't Know Kentucky Repealed ObamaCare in 2003

I didn't know either. It took about ten years.

The article appeared here:

www.nationalreview.com

STEPHEN SPRUIELL

APRIL 5, 2010

Bluegrass Bummer

Does Kentucky’s experience with health-insurance overregulation hold lessons for repealing Obamacare?

In the mid-1990s, Kentucky was one of eight state governments that boldly went where the rest of the country refused to go: The commonwealth imposed Clintoncare’s restrictions on its insurance companies, even though Clintoncare had been vanquished from the national stage. In Kentucky and the other seven states, insurance premiums skyrocketed, healthy people stopped buying insurance, and insurance companies exited the market in droves. Only three of the eight were able to untangle themselves from the harmful provisions; only one, Kentucky, was able to pull off a full repeal.

Trey Grayson was elected Kentucky secretary of state in 2003, the year before Gov. Ernie Fletcher was able to finalize the repeal — you’ll note it took ten years to accomplish. Grayson, who is currently running for the Republican nomination to replace Jim Bunning in the U.S. Senate, says that those pushing to repeal Obamacare can take a few lessons from the Kentucky experience. “On the one hand it gives you some hope, because in Kentucky we were able to gradually repeal the elements that were driving up the number of uninsured, that were increasing premiums at a rate higher than the national average, that were driving insurance companies out of the state,” Grayson says. “But unfortunately it took ten years, caused rates to be higher, hurt our economy and hurt our state government from a revenue standpoint. So a lot of damage was done.”

In 1994, Democratic governor Brereton Jones strong-armed a version of Clintoncare through the Democratic-controlled state legislature over the reservations of Republicans and some conservative Democrats. Much like Obamacare, Kentucky’s House Bill 250 forbade insurance companies to deny coverage or charge higher rates based on pre-existing conditions, thus negating the point of insurance — which, properly understood, involves paying premiums to hedge against risk. Under Kentucky’s laws, as under Obamacare, you could wait until you got sick to buy coverage and still obtain it at the same rates as everyone else. (Obamacare includes a requirement that healthy people have insurance, which its proponents say will prevent the premium hikes and insurance-company flight that Kentucky experienced. But the penalty for evading this requirement is relatively small; its constitutionality is suspect; and it might not even be enforceable.)

The problem with such regulations is that healthy people make the rational decision to drop their coverage and wait until they get sick to renew it. As healthy people stop paying into the risk pool, premiums for those who remain skyrocket. If insurance companies are forbidden from increasing premiums to keep up with costs, they leave town or close down. Unsurprisingly, average premiums in Kentucky increased between 36 and 165 percent in the wake of the reforms. Within four years, over 40 insurance companies had stopped offering individual insurance coverage. The two remaining providers, Anthem Blue Cross/Blue Shield and a state-run plan called Kentucky Kare, teetered on the brink of insolvency (Kentucky Kare went under in 1999).

By the late 1990s, Grayson says, “If you said House Bill 250, it was a four-letter word.”

In 1998, the Kentucky legislature, still controlled by Democrats, started repairing the damage by passing a reform package that modified the insurance requirements but didn’t repeal them. In 1999, party switches gave Republicans control of the state senate, and the legislature repealed most of the harmful provisions. Finally, in 2003, Kentucky elected a Republican governor for the first time since 1967, and one of his first acts was to sign a moratorium on new insurance mandates. These reforms slowed the rise of premiums and started bringing insurance companies back to the state.

“What was interesting,” Grayson notes, “is that the repeals were done in a bipartisan manner. Democrats, many of whom voted for House Bill 250, saw the negative impact.” Rising premiums and fleeing insurance companies gave opponents of the bill a compelling story to tell. “When we had evidence, we used it,” Grayson says. “That was what convinced Kentucky voters.” The bill’s opponents armed themselves with facts, and the case against House Bill 250 grew too overwhelming to resist.

This is the first lesson proponents of repeal should take from Kentucky: Construct a narrative around all of the bill’s negative consequences. “So, for example, we’ve already had John Deere and Verizon and some other companies take charges for the next quarter,” Grayson says. “As we learn about businesses choosing to drop insurance or delay expansion plans or whatever they have to do to avoid this, I think we have to take those real-life consequences and tell the public.”

The second lesson, he says, “is that you don’t have to do a full repeal right off the bat. If you can start getting rid of some of the bad elements, try that.” Repealing the most unpopular parts of the bill — new taxes on investment, on income, on medical devices — can pave the way for repealing the spending provisions: “If those taxes have to be repealed or phased out,” Grayson says, “then you start to have a financial concern: How you are going to pay for all this stuff as the subsidies are phased in?”

Liberals are much more influential in Washington than in Kentucky’s statehouse in Frankfort: When the big problems with Obamacare start surfacing, they will push, not for repealing the bill, but for nationalizing even more of the health-care industry. They will call for a stronger penalty for not purchasing insurance or, if the Supreme Court invalidates that provision, they might push for a “public option” to offer a taxpayer-subsidized alternative to the private insurance companies they have broken. When the public option doesn’t work (and we know it won’t, thanks to another failed state experiment in Maine), liberals will argue that the only way to fix the broken system is to make the government the “single payer” for all medical costs.

Opponents of Obamacare must be prepared to make the opposite case, starting with this election cycle. The strongest lesson from Kentucky is that the longer Obamacare stays on the books, the more damage it will inflict on the economy. Conservative candidates such as Grayson can and should run on this issue. Health-care reform “is clearly on the minds of voters,” he says — it’s the second thing people want to talk to him about, after the University of Kentucky’s performance in the NCAA tournament — “and most folks I talk to are not real pleased. I think voters want us to do something about it — hopefully before the damage gets done.”

— Stephen Spruiell is an NRO staff reporter.

Michelle Obama Said Barack's Home Country is Kenya

"When we took our trip to Africa and visited his home country in Kenya we took a public HIV test."

The video is here, dating to January 2, 2009.

What's your "home" country?

On "Regime"

"Never in my life have I seen a regime like this, governing against the will of the people, purposely."

--Rush Limbaugh, Friday, April 2, 2010

"I've never seen language like this in the American press referring to an elected representative government, elected in a totally fair, democratic, American election -- we will have another one in November, we'll have another one for president in a couple years -- fair, free, and wonderful democracy we have in this country…. We know that word, 'regime.' It was used by George Bush, 'regime change.' You go to war with regimes. Regimes are tyrannies. They're juntas. They're military coups. The use of the word 'regime' in American political parlance is unacceptable, and someone should tell the walrus to stop using it. I never heard the word 'regime,' before, have you? I don't even think Joe McCarthy ever called this government a 'regime.'"

-- Chris Matthews, Friday, April 2, 2010, MSNBC

"Seventy-five days into the Bush regime and I'm a wreck."

-- Maureen Dowd, April 4, 2001, New York Times

Marshall Wittmann was "a Health and Human Services deputy assistant secretary in the first Bush regime."

-- Howard Kurtz, January 22, 2001, The Washington Post

"In George Bush's regime, only one million jobs had been created…"

--Democratic Rep. Joe Sestak, January 8, 2010, MSNBC

In 2006 when "the Bush regime was still in power."

-- Ed Schultz, August 21, 2009, MSNBC

"The middle class has not fared quite as well under [the] Bush regime."

-- Steve McMahon, October 8, 2007, MSNBC

"The people of Iraq and Afghanistan that have been tragically harmed by the Bush regime."

-- Cindy Sheehan, August 10, 2007, MSNBC

I'll "take apart the Bush regime."

-- Ralph Nader to Chris Matthews, July 7, 2004, on his "Hardball" program, MSNBC

"Reverend Sharpton, what do you make of this letter and this panoply of the left condemning the Bush regime?"

--Chris Matthews, June 14, 2002

h/t Byron York

The Densest Element Yet Has Been Discovered

It's called Pelosium:

A major research institution has just announced the discovery of the densest element yet known to science. The new element has been named Pelosium. Pelosium has one neutron, 12 assistant neutrons, 75 deputy neutrons, and 224 assistant deputy neutrons, giving it an atomic mass of 311.

These particles are held together by dark forces called morons, which are surrounded by vast quantities of lepton-like particles called peons.

The symbol of Pelosium is PU.

Pelosium's mass actually increases over time, as morons randomly interact with various elements in the atmosphere and become assistant deputy neutrons within the Pelosium molecule, leading to the formation of isodopes.

This characteristic of moron-promotion leads some scientists to believe that Pelosium is formed whenever morons reach a certain quantity in concentration. This hypothetical quantity is referred to as Critical Morass.

When catalyzed with money, Pelosium activates CNNadnausium, an element that radiates orders of magnitude more energy, albeit as incoherent noise, since it has half as many peons but twice as many morons as Pelosium.

h/t Theo

Equal Division of Unequal Earnings

The title summarizes one inspiration for this blog's existence, which dates to last September, and illustrates what is more and more becoming the open description from Democrats of their own, and Obama's, political philosophy: equal division of unequal earnings.

Many in the center and on the right have shrunk from calling Obama a communist out of fear of being labeled McCarthyites, despite the fact that with the fall of the Soviet Union it has become clear that the senator from Wisconsin underestimated the depth of pro-Soviet penetration of the U.S. government at the time. The task has been left to our court jesters instead.

Even our most unsympathetic critics on the right today shrink from calling Obama a communist because Obama's mentor, Saul Alinsky, would not identify himself as such, even though that duck walked and quacked like one. We remind our contemporaries, however, that it was at Antioch that the followers of The Way were first called Christians. It was an outsider's estimation, and later an accusation, not a term of self-identification. So it is here.

It is not necessary to link communists to a no-longer extant political entity for them to be such now anymore than it was then, in the Victorian age. Communists already existed in the popular British imagination of the time because they existed in fact, long before the philosophy found political expression in a national government in Russia.

That Democrats today, like Max Baucus, Howard Dean, and Barack Obama readily and openly identify with communist ideas should make the blood boil in every American patriot's heart. These ideas mean death to our way of life, and death to us who hold to the immemorial rights of Englishmen in America. Not a dime's worth of difference between the two political parties? More than ten times the difference, and a world: "Idler or bungler or both he is willing to fork over his penny and pocket your shilling."

In "Obamacare Was Mainly Aimed At Redistributing Wealth," which appeared here, Byron York points out:

It hasn't attracted much notice, but recently some prominent advocates of Obamacare have spoken more frankly than ever before about why they supported a national health care makeover. It wasn't just about making insurance more affordable. It wasn't just about bending the cost curve. It wasn't just about cutting the federal deficit. It was about redistributing wealth.

Health reform is "an income shift," Democratic Sen. Max Baucus said on March 25. "It is a shift, a leveling, to help lower income, middle income Americans." ...

At about the same time, Howard Dean, the former Democratic National Committee chairman and presidential candidate, said the health bill was needed to correct economic inequities. "The question is, in a democracy, what is the right balance between those at the top ... and those at the bottom?" Dean said during an appearance on CNBC. "When it gets out of whack, as it did in the 1920s, and it has now, you need to do some redistribution. This is a form of redistribution."

You'll want to read the rest, at the link.

The Dodd Bill Makes Moral Hazard Government Policy

An Opinion from The Washington Examiner

Run against Wall Street

By: Michael Barone

Senior Political Analyst

04/01/10

Senate Banking Committee Chairman Christopher Dodd, after spending some time negotiating with committee Republicans Bob Corker and Richard Shelby, has decided to advance major financial regulation legislation without bipartisan support. Democratic spin doctors will try to portray the fight over this legislation as a battle between Republicans favoring lax regulation of Wall Street and Democrats favoring tough regulation.

But is the Dodd bill really tough legislation, particularly in its treatment of the major financial entities? My American Enterprise Institute colleague Peter Wallison argues that it is not, because it gives Too Big To Fail status to the big entities—Citigroup and JPMorgan Chase, Goldman Sachs and Morgan Stanley. This is done by setting up a resolution process for a failing firm which protects creditors more than ordinary bankruptcy proceedings would. Wallison writes:

“From the perspective of its effect on the economy, it does not matter what happens to the company, or to its shareholders and management. The only thing that matters in a government resolution of a failing company is what happens to the creditors--because it's the creditors that will provide the funds preferentially and at favorable rates to large companies rather than small ones.

"In this respect, the Dodd bill does it again--it signals to creditors that they will get a better deal if they lend to the big regulated firms rather than their smaller competitors, and it does this by making it possible for creditors to be fully paid when a too-big-to-fail financial firm is liquidated, even though this would not happen in bankruptcy. There are a number of ways that this can be done, including through a simple merger with a healthy firm. As a prescription for moral hazard, this can hardly be surpassed. The creditors will line up to provide cheap money to the too-big-to-fail firms the Fed will be regulating.”

Wallison is not alone in taking this view. Clive Crook, writing in National Journal seems to agree:

“You do not deal with ‘too big to fail’ by keeping a list of systemically significant institutions: By itself, that makes things worse. You do not deal with it by promising to let most failing financial firms, including those on your list, go bankrupt: Nobody will believe that promise. You deal with it by combining early FDIC-like resolution for all financial firms, banks and nonbanks alike, with stricter and smarter requirements on their capital, liquidity, and leverage.”

Libertarian economist Arnold Kling suggests an even tougher approach, though he doesn’t say how to put it into effect: break up the big banks.

I think as a matter of both policy and politics, Republicans ought to oppose the Dodd bill’s provisions that effectively grant Too Big To Fail status to a handful of financial institutions (and perhaps to other companies, Wallison has argued). They should oppose giving preferred status to the very largest firms as compared to smaller competitors. They should be prepared to argue that the Democratic bill gives vast advantages to firms whose employees have gotten huge compensation (and who, as it happens, tend to give more money to Democrats than Republicans). The cry should be, no favor to the big Wall Street fat cats. Mainstream media is unlikely to transmit this message but, as we have seen in the health care debate, messages can get through without them.