Tuesday, September 30, 2008

We have a intra conservative issue Mikey. From of all places CNN

By Jeffrey A. MironSpecial to CNN



Editor's note: Jeffrey A. Miron is senior lecturer in economics at Harvard University. A Libertarian, he was one of 166 academic economists who signed a letter to congressional leaders last week opposing the government bailout plan.

Economist Jeffrey Miron says the bailout plan presented to Congress was the wrong solution to the crisis

CAMBRIDGE, Massachusetts (CNN) -- Congress has balked at the Bush administration's proposed $700 billion bailout of Wall Street. Under this plan, the Treasury would have bought the "troubled assets" of financial institutions in an attempt to avoid economic meltdown.
This bailout was a terrible idea. Here's why.
The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk.
Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared.
This subprime lending was more than a minor relaxation of existing credit guidelines. This lending was a wholesale abandonment of reasonable lending practices in which borrowers with poor credit characteristics got mortgages they were ill-equipped to handle.
Once housing prices declined and economic conditions worsened, defaults and delinquencies soared, leaving the industry holding large amounts of severely depreciated mortgage assets.

The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government.
The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company.
Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable.
In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This "moral hazard" generates enormous distortions in an economy's allocation of its financial resources.
Thoughtful advocates of the bailout might concede this perspective, but they argue that a bailout is necessary to prevent economic collapse. According to this view, lenders are not making loans, even for worthy projects, because they cannot get capital. This view has a grain of truth; if the bailout does not occur, more bankruptcies are possible and credit conditions may worsen for a time.
Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.
Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents.
The costs of the bailout, moreover, are almost certainly being understated. The administration's claim is that many mortgage assets are merely illiquid, not truly worthless, implying taxpayers will recoup much of their $700 billion.
If these assets are worth something, however, private parties should want to buy them, and they would do so if the owners would accept fair market value. Far more likely is that current owners have brushed under the rug how little their assets are worth.
The bailout has more problems. The final legislation will probably include numerous side conditions and special dealings that reward Washington lobbyists and their clients.
Anticipation of the bailout will engender strategic behavior by Wall Street institutions as they shuffle their assets and position their balance sheets to maximize their take. The bailout will open the door to further federal meddling in financial markets.
So what should the government do? Eliminate those policies that generated the current mess. This means, at a general level, abandoning the goal of home ownership independent of ability to pay. This means, in particular, getting rid of Fannie Mae and Freddie Mac, along with policies like the Community Reinvestment Act that pressure banks into subprime lending.
The right view of the financial mess is that an enormous fraction of subprime lending should never have occurred in the first place. Someone has to pay for that. That someone should not be, and does not need to be, the U.S. taxpayer.

None of the above

Wasn't there a movie where everyone was encouraged to vote for none of the above? It appears that term limits for Congressmen might become a battle cry again. There are many in Congress from both parties who are unbeatable due to the lack of intelligence in the voters or whatever it takes to keep sending some of these bozo's back every two years for the House and six years for the Senate. Think about the ex Klan leader from West Virginia in the Senate, Bobby Byrd or old Jesse Helms when he was alive on the other side of the aisle. In the House we can go on and on all day with the game name the incompetent congressman.
Some of these guys just live to gum up the works through partisanship hate like Waxman from California or for that matter the way Tom Delay was. The current Speaker whose partisan rant made sure the bailout would go down to defeat and the former Speaker Denny Hastert are two more examples of corrupt individuals who put their personal power ahead of the good of the country.
I am back for some more brew!

The worst speaker of the house ever recently called the Republicans "unpatriotic" for not attending some of the bailout meetings, her word was "boycott", that it turns out they were not even invited to. She of the face so tight that it looks like her head is about to explode like the ones in the movie Scanners http://www.fast-rewind.com/scanners.htm has now presided over another embarrising House debacle. Heaven forbid someone question a Democrat's patriotism like when they say they are for our troops in harms way yet vote against sending them the equipment they need to protect themselves like Barry did. Let us not question his patriotism even though his spiritual mentor has screamed repeatedly "God damn America" (as an alleged Christian minister, which does go to Barry's self proclaimed Christianity, he should know better than to use the Lord's name in vain like this) and his political mentor tried to bomb the U.S. Capitol and still thinks it was a great idea. One can never question a Democrat's patriotism.

Seeing that over 90 of Madam Speaker's own disciples committed mutiny and voted against the Barney Frank - Chris Dodd bailout plan she is looking so ineffective that maybe the Democratic party should think about finding a new Speaker. She has presided over a House that has achieved virtually nothing in two years. Whatever happened to all of the things that the now majority Democrats were going to accomplish so quickly after they became the majority party? Good thing the Republicans were finally invited to some of the meetings because they were able to strip the pork that the Democrats tried to layer into the bailout. Democrats tried to include items for their favored special interest groups like ACORN, Union Bosses and banning all attempts to remove oil from shale in the US. Is there no shame? 700 Billion dollars already and they have the gall to add pork to it.

If the main stream media wasn't so far in the bag for the election of Obamamessiah we might actually get to see some of the above tidbits on the News. http://www.pajamasmedia.com/instapundit/archives2/025096.php

New Party Name

How about the Boston Tea Party? No taxation without representation of "We The People".

Third Option

There needs to be a viable third option to the current system. The democrats say, "Give us all your money and we'll take care of you cradle to grave," the republicans say, "Keep all your money, but don't call us if you need help." There has to be a middle ground and it needs to be started by someone of national stature, like someone with the last name Clinton or Schwartzenager, so it can be taken seriously. Call it the Common Sense party. Any objections to that?

Monday, September 29, 2008

Welcome

Welcome to the wonderful world of MORNING COFFEE, site for the best political commentary.  A small band of intrepid opinionists have been participating in a E-mail chain for the past several weeks.  People who do not even know each other have fought and agreed and well, had a lot of fun (with some periods of anger inter spaced).  Currently we are Conservative heavy with a Libertarian slant and only one lone Liberal.  Come on it, the water is fine, but sharks lurk.   :),

Thursday, September 25, 2008

How it all started

An unabashed liberal! Head long into socialism and proud of it!

I was discussing with the girls why I do not support Obama, or respect the Democratic party, it came down to freedom. Freedom is an absolute and is the basis for any successful person or society. To take from one to provide for another by definition, injures the freedom of, well both quite frankly. And beyond the esoteric of the argument, millions have lived in misery based on its, socialism, communism, collectivism, false prophesy. The "social justice" of the Democratic party is just socialism by another name. I will bring you Any Rand's book, Capitalism, the unknown ideal.

Your party's primary goal is to maintain the right of a woman to have an abortion. This is an absolute anathema to the teachings of the Catholic church. Both sides of this argument have their points and most meet in the middle, but when one is not sure (as to when life begins), as McCain said at Saddelback, do we not error on the side of conception? And if you have a baby, and it is yours to care for, you will take getting pregnanct more seriously. (this issue, self sufficiency vs. state assistance, as I reread your letter about the topic, is in fact the basis for most of our differing viewpoints.)

In regards to the war. Our President, with the approval of Congress, led us into a war against a country which flaunted multiple UN resolution, had previously attacked a neighbor and would not satisfy concerns regarding WMD. In the post 9-11 world, our President declared that terrorism and state sponsors of same would not be tolerated. He stated this because the next attack could be in the form of a "mushroom cloud". Our President rightly decided that the world had changed and words must be followed by deeds. Remember sanctions had been present for many years. Now, after 6 years, we have a developing democracy in the most recalcitrant, dangerous area of the world. Right now everyone is down on President Bush. I think he and his Presidency will be judged as transforming.

Lastly, you know I just started writing and all this came out so thanks for your thought provoking E-mail, as a conservative who wants to spend (for example) less money on poor children because there are less poor children, I think "social justice, collectivism" has done much harm especially to the A-A community and as Obama stated, sometimes we act "as if things have never changed". I can understand your pride in seeing an A-A candidate, but I must profess it is only the "liberal" A-A candidates which seem to make the cut. I could not understand how someone as bright as you obviously are could support such a liberal candidate, but now that you have taken the time to explain your views, I do. I will work on you.
JFG
Freedom, free markets, self reponsibility, the rule of law and a strong national defense.