Publish and be wrong Oct 9th 2008 From The Economist print edition
One group of researchers thinks headline-grabbing scientific reports are the most likely to turn out to be wrong IN ECONOMIC theory the winner’s curse refers to the idea that someone who places the winning bid in an auction may have paid too much. Consider, for example, bids to develop an oil field. Most of the offers are likely to cluster around the true value of the resource, so the highest bidder probably paid too much.
The same thing may be happening in scientific publishing, according to a new analysis. With so many scientific papers chasing so few pages in the most prestigious journals, the winners could be the ones most likely to oversell themselves—to trumpet dramatic or important results that later turn out to be false. This would produce a distorted picture of scientific knowledge, with less dramatic (but more accurate) results either relegated to obscure journals or left unpublished.
In Public Library of Science (PloS) Medicine, an online journal, John Ioannidis, an epidemiologist at Ioannina School of Medicine, Greece, and his colleagues, suggest that a variety of economic conditions, such as oligopolies, artificial scarcities and the winner’s curse, may have analogies in scientific publishing.
Dr Ioannidis made a splash three years ago by arguing, quite convincingly, that most published scientific research is wrong. Now, along with Neal Young of the National Institutes of Health in Maryland and Omar Al-Ubaydli, an economist at George Mason University in Fairfax, Virginia, he suggests why.
It starts with the nuts and bolts of scientific publishing. Hundreds of thousands of scientific researchers are hired, promoted and funded according not only to how much work they produce, but also to where it gets published. For many, the ultimate accolade is to appear in a journal like Nature or Science. Such publications boast that they are very selective, turning down the vast majority of papers that are submitted to them.
Picking winners The assumption is that, as a result, such journals publish only the best scientific work. But Dr Ioannidis and his colleagues argue that the reputations of the journals are pumped up by an artificial scarcity of the kind that keeps diamonds expensive. And such a scarcity, they suggest, can make it more likely that the leading journals will publish dramatic, but what may ultimately turn out to be incorrect, research.
Dr Ioannidis based his earlier argument about incorrect research partly on a study of 49 papers in leading journals that had been cited by more than 1,000 other scientists. They were, in other words, well-regarded research. But he found that, within only a few years, almost a third of the papers had been refuted by other studies. For the idea of the winner’s curse to hold, papers published in less-well-known journals should be more reliable; but that has not yet been established.
The group’s more general argument is that scientific research is so difficult—the sample sizes must be big and the analysis rigorous—that most research may end up being wrong. And the “hotter” the field, the greater the competition is and the more likely it is that published research in top journals could be wrong.
There also seems to be a bias towards publishing positive results. For instance, a study earlier this year found that among the studies submitted to America’s Food and Drug Administration about the effectiveness of antidepressants, almost all of those with positive results were published, whereas very few of those with negative results were. But negative results are potentially just as informative as positive results, if not as exciting.
The researchers are not suggesting fraud, just that the way scientific publishing works makes it more likely that incorrect findings end up in print. They suggest that, as the marginal cost of publishing a lot more material is minimal on the internet, all research that meets a certain quality threshold should be published online. Preference might even be given to studies that show negative results or those with the highest quality of study methods and interpretation, regardless of the results.
It seems likely that the danger of a winner’s curse does exist in scientific publishing. Yet it may also be that editors and referees are aware of this risk, and succeed in counteracting it. Even if they do not, with a world awash in new science the prestigious journals provide an informed filter. The question for Dr Ioannidis is that now his latest work has been accepted by a journal, is that reason to doubt it?
Going through all the above point by point is gonna get in the way of painting the house today, and though the wife doesn't do data dumps, she does have methods of expressing her displeasure that are more immediate, so excuse me for not wading through all the above.
A couple points, however. The synopsis and original piece point out problems with data mining that remain undiscussed. We do get to point out problems with law enforcement techniques and discuss them, right? Examination of issues and intelligent discussion thereof is more likely to lead to a resolution than blind adherence to the party line, so pardon me if I don't stand mute lest I be blamed for the next smoking hole.
Speaking of which, the smoking hole or unfettered access damn the constitutional issues dichotomy strikes me as a false one. I've little doubt that there is an intersection at which security imperatives and founding principles can both be serviced. Citing one extreme to excuse the other does a great job of representing the margins, but does little to find the ground where the hole is avoided and the Constitution isn't shredded.
Finally, as I've pointed out several times, the powers we're discussing are ones mullahs can only dream about. You can't imagine these capabilities being misused? You can't imagine someone with autocratic leanings winning an election, defining people who own guns and discuss politics on a militant martial arts web site to be security threats, and using the power of collection and collation to build a case against those who, quite coincidently, of course, don't agree with his politics? The potential for misuse here is enormous, and there have been enough utterly unprincipled politicians in Washington over the years to make examination of the implications of this growing ability prudent.
Off to the roller. Anyone want to learn how to paint cedar siding?
I dunno, I haven't read the entire 352 page report so I can't state categorically that the shorter piece is accurate, but assuming it is, any embedded editorial lies in the long piece and not the synopsis.
**Here is the first clue: "Datamining doesn't work well" Work well as compared to what? Here is your task, find the terrorists hidden amongst 300 million people in the US before they kill innocents your are sworn to protect.**
Your original point was that the the original piece was an editorial. I replied that it appeared to be an accurate synopsis of a much longer report. Rather than responding to the distinction, you are demanding that I defend the 352 pages I've already stated I didn't read. If you think there are false statements in the synopsis or the report, by all means point them out; I'm certainly not claiming it's truth brought down from on high. But, before this piece, I've seen very little empirical study regarding the efficacy of data-mining, and hence when a comprehensive report is published I feel it's worth sharing.
As to your second point, I have no problem with the government narrowly collating information about suspected terrorists so long as they abide by the laws and principles that make this country worth living in in the first place.
**What laws and principles are you alleging that have been violated? How many mass casualty attacks need to take place before you factor that into your quality of life estimates?**
Dude, I merely posted an interesting piece. If you need a list of laws sundry governmental organizations have violated, get on google and have at it. "Ruby Ridge" might be a good initial search term. If our esteemed global moderator doesn't want pieces posted unless all tangents are also fully addressed he can say so. It appears your argument is that we must behave like autocrats lest lotsa people die. My response, to which you didn't speak, is that doing so makes us what we battle.
Unfortunately I suspect the ability to collect and collate data is growing far more quickly than is the case law that would help make sure it's applied in a constitutional matter. I don't think there is any reason to assume the federal government would handle vast amounts of personal data any better than it's handled the banking crisis, ethanol and other farm subsidies, second amendment interpretation, or any number of other items on an endless list.
**Give me a better option.**
I get a lot of grief from members of political parties because I refuse to claim an affiliation. "You can't effect change without belonging to a party within which you can work to achieve that change," seems to be the headset. Balderdash say I. There are principles that can be fought for without affiliation, and indeed I think both major parties have so prostituted themselves that there is value in sitting on the side and yelling at both to pay attention to the founding principles of this country.
Similarly, I'm not much swayed by arguments that say "provide a technique better than the ballpeen hammer or STFU." Even if the hammer is the only tool, I think there is value in making sure it is used as little as possible, stowed sooner rather than later, and that the principles that make us different from our enemy are kept in mind as any tool is wielded.
BTW, if dousing rods were the best means known for finding water, would you be arguing that we should all be walking around with forked sticks?
Banging on peoples feet with a ballpeen hammer may be a really swell way of eliciting information, but I think doing so would turn us into what we are fighting. I expect some mullahs dream of a system that lets them track in minute detail a person's adherence to the one true faith; it scares me that we appear to be developing such a system as it has the potential of turning us into the thing we like least.
**Why do the same emotional arguments that are scoffed at when applied to guns are then embraced wholeheartedly when applied to government? Information technology, like firearms are just tools. It's the user of the tool that brings the element of morality to the equation. A scalpel is just a tool, it can save lives in the hands of medical professionals or be used by killers and rapists to commit crimes. Bemoaning newer, sharper scalpels because the potential for misuse doesn't allow for a realistic examination of violent crime and potential solutions to the problem.**
Exactly. And here arrives an empiric examination of a new tool's utility, and we are supposed to dismiss it out of hand because it doesn't concur with your conclusions. If the tool works without rending asunder our founding principles, by all means use it. But not even being allowed to measure and discuss a tool's appropriate use because it offends your sensibilities is silly. Our government is predicated on principles of checks and balances. My guess is that data mining capabilities are progressing at a faster rate than the checks against misuse are. You don't have to be a flaming ACLU member to express the hope that our shiny new tools don't do more harm than good.
I dunno, I haven't read the entire 352 page report so I can't state categorically that the shorter piece is accurate, but assuming it is, any embedded editorial lies in the long piece and not the synopsis.
As to your second point, I have no problem with the government narrowly collating information about suspected terrorists so long as they abide by the laws and principles that make this country worth living in in the first place. Unfortunately I suspect the ability to collect and collate data is growing far more quickly than is the case law that would help make sure it's applied in a constitutional matter. I don't think there is any reason to assume the federal government would handle vast amounts of personal data any better than it's handled the banking crisis, ethanol and other farm subsidies, second amendment interpretation, or any number of other items on an endless list.
Banging on peoples feet with a ballpeen hammer may be a really swell way of eliciting information, but I think doing so would turn us into what we are fighting. I expect some mullahs dream of a system that lets them track in minute detail a person's adherence to the one true faith; it scares me that we appear to be developing such a system as it has the potential of turning us into the thing we like least.
The Authoritarian Radicals: Barack Obama, Bill Ayers and the Chicago Annenberg Challenge
Stephen F. Diamond Santa Clara University - School of Law
September 1, 2008
Abstract: The Chicago Annenberg Challenge was a $160 million dollar reform effort in the Chicago public school system led by, among others, Barack Obama and Bill Ayers. An analysis of the Challenge suggests that an authoritarian form of politics shared by Ayers and Obama was a critical part of the reform effort. This form of authoritarian radicalism has its roots in the American New Left and Black Power movements. The paper contrasts the authoritarian and anti-union approach of the Challenge with a democratic alternative.
Not sure what the man has to do with the way his foundation is handled. I note "ActivistCash.com" lists the following:
Funding To Activist Groups Total Donated Time Frame World Wildlife Fund $78,333.00 1993 – 2000 Sierra Club $77,500.00 1999 – 2001 Environmental Defense $66,666.00 1993 – 1994 Natural Resources Defense Council $15,000.00 2002 – 2002 American Oceans Campaign $5,050.00 1999 – 2000
I've noted a lot of left-leaning PBS programming was funded by Annenberg, I believe it donates to the Brady campaign and understands it funds Fact Check, which looks to me like it has a left leaning take on things, particularly where the 2nd amendment is involved.
As for what Ayers and Obama did with the Annenberg money, near as I can tell the answer is not much, beyond handing money to their cronies. I've not been able to find any sources that argue the money did anything to improve Chicago's abysmal school system, though there is evidence the money funded means of incorporating social activism into curriculums.
Seeing as Walter Annenberg died in 2002 at the age of 94, I suspect he hasn't been deeply involved in things of late.
The most extensive government report to date on whether terrorists can be identified through data mining has yielded an important conclusion: It doesn't really work. A National Research Council report, years in the making and scheduled to be released Tuesday, concludes that automated identification of terrorists through data mining or any other mechanism "is neither feasible as an objective nor desirable as a goal of technology development efforts." Inevitable false positives will result in "ordinary, law-abiding citizens and businesses" being incorrectly flagged as suspects.
The whopping 352-page report, called "Protecting Individual Privacy in the Struggle Against Terrorists," amounts to at least a partial repudiation of the Defense Department's controversial data-mining program called Total Information Awareness, which was limited by Congress in 2003.
But the ambition of the report's authors is far broader than just revisiting the problems of the TIA program and its successors. Instead, they aim to produce a scholarly evaluation of the current technologies that exist for data mining, their effectiveness, and how government agencies should use them to limit false positives--of the sort that can result in situations like heavily-armed SWAT teams raiding someone's home and shooting their dogs based on the false belief that they were part of a drug ring.
The report was written by a committee whose members include William Perry, a professor at Stanford University; Charles Vest, the former president of MIT; W. Earl Boebert, a retired senior scientist at Sandia National Laboratories; Cynthia Dwork of Microsoft Research; R. Gil Kerlikowske, Seattle's police chief; and Daryl Pregibon, a research scientist at Google. They admit that far more Americans live their lives online, using everything from VoIP phones to Facebook to RFID tags in automobiles, than a decade ago, and the databases created by those activities are tempting targets for federal agencies. And they draw a distinction between subject-based data mining (starting with one individual and looking for connections) compared with pattern-based data mining (looking for anomalous activities that could show illegal activities).
But the authors conclude the type of data mining that government bureaucrats would like to do--perhaps inspired by watching too many episodes of the Fox series 24--can't work. "If it were possible to automatically find the digital tracks of terrorists and automatically monitor only the communications of terrorists, public policy choices in this domain would be much simpler. But it is not possible to do so."
A summary of the recommendations:
* U.S. government agencies should be required to follow a systematic process to evaluate the effectiveness, lawfulness, and consistency with U.S. values of every information-based program, whether classified or unclassified, for detecting and countering terrorists before it can be deployed, and periodically thereafter. * Periodically after a program has been operationally deployed, and in particular before a program enters a new phase in its life cycle, policy makers should (carefully review) the program before allowing it to continue operations or to proceed to the next phase.
* To protect the privacy of innocent people, the research and development of any information-based counterterrorism program should be conducted with synthetic population data... At all stages of a phased deployment, data about individuals should be rigorously subjected to the full safeguards of the framework.
* Any information-based counterterrorism program of the U.S. government should be subjected to robust, independent oversight of the operations of that program, a part of which would entail a practice of using the same data mining technologies to "mine the miners and track the trackers."
* Counterterrorism programs should provide meaningful redress to any individuals inappropriately harmed by their operation.
* The U.S. government should periodically review the nation's laws, policies, and procedures that protect individuals' private information for relevance and effectiveness in light of changing technologies and circumstances. In particular, Congress should re-examine existing law to consider how privacy should be protected in the context of information-based programs (e.g., data mining) for counterterrorism.
By itself, of course, this is merely a report with non-binding recommendations that Congress and the executive branch could ignore. But NRC reports are not radical treatises written by an advocacy group; they tend to represent a working consensus of technologists and lawyers.
The great encryption debate of the 1990s was one example. The NRC's so-called CRISIS report on encryption in 1996 concluded export controls--that treated software like Web browsers and PGP as munitions--were a failure and should be relaxed. That eventually happened two years later.
Interesting video, linked below, about the perverse incentives embodied in the bailout.
What You Need to Know About the Bailout (and Why You Should Be Really Worried)
Nick Gillespie | October 8, 2008, 9:05am
George Mason University economist and author Russell Roberts, who blogs at the always interesting Cafe Hayek, sat down with reason.tv to talk about the nation's shakey economy and the government's bailout plan. Watch this six-minute interview to learn where the problems came from, why the bailout won't address them, and what sort of hurt we're in for over the next several weeks, months, and years. "The real cost of this," warns Roberts, "is that we have said to people, 'Risk taking is not as risky as it used to be.' That's a mistake. It's a horrible mistake and it will lead to a lower standard of living down the road because investment will be more cavalier and less prudent."
In recent days, Barack Obama’s campaign has intensified its attacks on John McCain’s proposal for reform of our health-insurance system. Based on a spate of recent radio and television ads, and on the line Joe Biden took in last week’s vice-presidential debate, McCain should expect some sharp attacks against his bold proposal in this tonight’s debate. He should be ready to respond, because the attacks are either false or grossly distorted, and his plan deserves to be defended and touted.
The McCain plan begins by addressing the fundamental health-care concern of the middle class: that insurance is too expensive, too rigid, and too insecure. Rising premiums are pushing down take-home wages, the choice of insurance plans is made by the company and not by the family, and leaving a job means losing coverage in uncertain times. The solution, McCain argues, is to put more control in the hands of families rather than holding them hostage to their employers’ plans.
Today, most Americans have only as many insurance options as their employer provides — which is usually one, take it or leave it. This is largely a function of bad government policy. Federal law says that if your employer buys your insurance, the money he spends (which is taken out of your wages) is not counted as part of your income, and so is not taxed. But if you buy your insurance yourself, you do pay taxes on the money you use. For six decades, this has provided an enormous incentive to opt for employer-provided health insurance and has kept a real market for individually purchased coverage from developing. This is an enormous disadvantage for those who don’t have the option of employer-based coverage or who have needs that aren’t met by their employer-based plans.
The McCain plan begins by erasing the distinction between employer-provided and individually purchased health insurance. It replaces the existing tax deduction with a tax credit of $2,500 per person (or $5,000 per family) offered to everyone, regardless of whether their employer offers health coverage.
If you now get insurance from work and want to continue to do so, what your employer pays for your coverage will now count as income, but the credit will more than cover your additional taxes — you keep your coverage, and even end up with a little more money in your pocket at tax time. If you now get insurance from work but would rather choose a different plan — or if are dropped from your current coverage — the wages your employer now takes out for insurance would become regular cash wages, and together with the new tax credit will let you buy the insurance you want independently. Again, you end up with more options and more money at the end of the day. If you don’t have insurance today, or are getting it on your own, the tax credit will help you better afford it. In every case, you end up with more money, more options, and more control over your own health insurance.
Meanwhile, the McCain plan also seeks to vastly increase options and reduce costs by allowing competition in the insurance industry across state lines, which would allow many who are now uninsured to get private coverage. It would help protect vulnerable patients with preexisting conditions by expanding risk pools and by providing subsidies for private coverage for those with low incomes.
The Obama campaign’s attacks on the plan have been astoundingly dishonest. In last week’s debate, Sen. Biden claimed McCain’s plan would raise taxes on middle-class families, when every independent assessment has shown it would lower their tax burden. He argued it was tantamount to what has sent Wall Street into a tailspin — but the more accurate analogy to the mess in our housing market is the Obama health-care plan, which would have the government compete with private insurers and distort the market by confusing politics with economics just as Fannie Mae and Freddie Mac have done.
Indeed, the Obama campaign’s increasingly fervent attacks serve mostly to take attention away from the details of their own health-care proposals, which would price private insurers out of business, subsidize a government-run alternative, levy a heavy new tax on employment, and misspend many hundreds of billions of dollars just as we are entering difficult economic times.
Long-term, Obama’s plan amounts to putting the whole country on Medicare, which would reduce the quality of care, empower bureaucrats over doctors and patients, and, quite possibly, bankrupt the federal government. McCain’s plan envisions instead a competitive market for health insurance, which would give patients more options and more control, leave taxpayers with more money in their pockets, and ensure our thriving biomedical research industry an opportunity to keep developing new treatments and technology.
The McCain plan deserves a defender and champion this week, and John McCain should finally step up and become one in tonight’s debate.
1) Have a fiscal policy that creates immense deficits in good times and bad, burdening America's posterity with staggering burdens of repaying the debt.
2) Eliminate regulation of Wall Street and/or fail to enforce the regulations that already exist, instead trusting Wall Street and other money managers and speculators to manage other people's money with few or no regulations and little oversight.
3) Have an energy policy that disallows producing our own energy and instead requires that we buy energy from abroad, thus making our oil prices highly volatile and creating large balance of payments deficits, lowering the value of the dollar and thus making the problem get progressively worse.
4) Have Congress mandate that banks and other financial entities lend money to persons they know in advance to have poor credit ratings or none at all.
5) Allow investment banks, insurers, and banks to bet their entire net worth and then some on the premise that borrowers known to be improvident will in fact repay those loans.
6) Allow the creation of large betting pools called "hedge funds" that can move markets and control the outcome of trading, thus taking a forum for savings and retirement for families and making it into a rigged casino game that exists primarily to fleece suckers like ordinary working men and women.
7) Have laws that protect corporate officers from being sued for misconduct but at the same time punish lawyers in the private sector who ferret out such misconduct and try to make accountable the people responsible for shareholder and investor losses. If one of those lawyers gets particularly aggressive in protecting stockholders, put him in prison.
Appoint as head of the United States Treasury Department a man whose whole life was spent on Wall Street, who became fantastically rich through his peddling of junk bonds at his firm while the firm later sold short those same sorts of bonds.
9) Scare Americans into putting up $750 billion of their hard earned money to bail out the billionaires and their friends who created the market for loans to poor credit risks (The "subprime" market) and the unbelievably large side bets on those loans, promising that such a bailout would save the retirement savings of Americans, then allow the immense hedge funds to make the market crater immediately afterwards.
10) Propose to save the situation by surtaxing the oil industry, which is owned by our fellow Americans, mostly in their retirement plans, thus penalizing Americans for investing in companies that efficiently and legally produce an indispensable product.
11) Insist that the free market requires that banks and insurers with friends of the Secretary of the Treasury be saved but allow other entities not so fortunate to fail, thus creating total uncertainty and terror among financial institutions, and demolishing all of the confidence built up in financial circles since the days of FDR.
12) Then have the Republican candidate say he would keep on the job the Treasury Secretary who facilitated the crisis, failed to protect the nation from the crisis, got the taxpayers to pony up to save his Wall Street buddies, and have the Democratic candidate, as noted, say he would save the day by taxing the stockholders of energy companies.
I'd be surprised if the NSA didn't have similar capabilities, albeit one that are supposed to be focused outside our shores, and I'd guess that all this data creates such a cacophony that most "mining" ends up in the sluice chute. With that said, the thing that scares the bejesus out of me is that the infrastructure is likely being assembled that will allow everyone's electronic and even biometric traces to be collated and analyzed. Think a government could get into quite a bit of mischief with that kind of power.
Government spies could scan every call, text and email Ministers are considering a £12 billion plan to monitor the e-mail, telephone and internet browsing records of every person in Britain.
By Nick Allen Last Updated: 11:47PM BST 05 Oct 2008 Comments 122 | Comment on this article
The huge eavesdropping programme would involve the creation of a mammoth central computer database to store hundreds of billions of individual pieces of communications traffic. Supporters say it would become one of the security services' most comprehensive tools in the fight against terrorism but critics described it as "sinister".
MI5 currently has to apply to the Home Secretary for warrants to intercept specific email and website traffic but, under the new plan, internet and mobile phone networks could be monitored live by GCHQ, the Government listening post.
The Home Office said no decision had been taken but security officials claim live monitoring is necessary to pick up terrorist plots.
It would allow them to capture records like chat room discussions on password-protected Islamic extremist websites.
The annual number of phone calls and other electronic communications in the UK is predicted to nearly double from 230 billion in 2006 to 450 billion by 2016. Last year 57 billion text messages, or 1,800 a second, were sent. That rose from one billion in 1999.
The number of broadband internet connections rose from 330,000 in 2001 to 18 million last year. Three billion e-mails are sent every day, or 35,000 every second. One of the spurs for a central database is a concern over how that electronic communications data is currently stored by hundreds of different internet service providers and private telephone companies.
Records may only be held for limited periods of time and are then lost which makes it impossible for police and the security services to establishing historical links, or so-called "friendship trees", between terrorists.
If all communications information was centrally stored then links could be made between terrorist cells and other sympathisers could be identified. The telephone and internet companies are currently required to give records of calls or internet use to law enforcement agencies if a senior officer authorises that it is needed for an inquiry.
Last year there were more than half a million such requests.
The cost of monitoring everything, and keeping it on a central database, has been estimated at £12 billion and would dwarf the proposed cost of the identity cards programme. Critics also claim it would be virtually impossible to keep such a vast system secure and free from abuse by law enforcement agencies.
Shadow home secretary Dominic Grieve said: "It would mark a substantial shift in the powers of the state to obtain information on individuals.
"Given the Government's poor record on protecting data, and seeing how significant an increase in power this would be, we need to have a national debate and the Government would have to justify its need."
The Information Commissioner, Richard Thomas, has already called for a public debate about Government proposals for the state to retain people's internet and phone records. A spokesman for the commissioner said: "He warned that it is likely that such a scheme would be a step too far for the British way of life. Proposals that threaten such intrusion into people's lives must be properly debated."
Richard Clayton, a security expert at Cambridge University, said the proposal would mean installing thousands of probes in telephone and computer networks which would re-route data to the central database.
Both sides are getting caught up in the debate, when they agree that something needs to be done. Does it matter if your reason for leaving the oil economy behind is because it has a destabilizing result in our national security, or because it is polluting the air? Most people seem to think it needs to happen. We are stuck on the definition of why... its sort of silly don't you think?
Another dichotomy, eh? My argument is that free inquiry should proceed without the constraints two-dimensional continuums impose, so excuse me if I'm not gracious about another one. Nor am I inclined to be gracious about "climate change," as climate change is the norm, rather than some sort of breathless exception. Though it may seem like a small point, these sorts of misnomers and misconnotations have made rational discussion about environmental issues more difficult than it needs to be.
With that said, it again boils down to a benefit cost analysis. It would it be nice to erase humankind's' entire environmental foot print, but that will never happen so arguments that contain that implicit premise strike me as fruitless. Research and argument that seeks to maximize the human benefit and minimize the environmental impact strike me as tactics more likely to bear fruit.
Global warming, and its denial are nothing but a way to dodge the issue. Believers and deniers are just opposite sides of the same coin. Both are not talking about the real problems.
I'm not much a fan of that dichotomy. To my mind there are those who are interested in peer reviewed, replicable science steeped in the traditions of free inquiry, and those who want to stampede to a monolithic conclusion and shove aside all who fail to embrace their singular pursuit. Think deniers v. believers is a relativistic straw man meant to imply that free inquiry and unquestioned belief are part of a continuum, either end of which is equally unpalatable. I'd argue that there is nothing wrong with free inquiry, and everything wrong with monolithic unarguable belief.
As GM points out, no one is arguing for mercury tainted waters or smog. What I like about the skeptical environmentalist's approach is that it's based on a benefit cost analysis approach that I think is most likely to succeed over the long term.
Lomborg: Well, it means that I'll vote to the center-left, which probably in the U.S. would be extreme left. I support a strong welfare state. I support a strong redistribution from taxes. I think it's important that we have a somewhat egalitarian society.
I'm trying to recapture much of what the left stood for-when we believed in progress, when we believed that scientific understanding could lead us ahead and not just rely on tradition. I think that's the original sort of background for the left. Unfortunately, I find that a fair amount of the left has turned towards a romanticized view of the world.
reason: All of the economic evidence that is being presented here at the Copenhagen Consensus Conference suggests that trade liberalization, a policy that the left does not like, is a very good idea.
Lomborg: Yeah, that's certainly not a universally shared left-wing viewpoint. In the U.S. election, Barack Obama is less interested in free trade, or at least more vocally against it, than John McCain. In this case, it seems that the evidence is just simply against them.
A lot of left-wing parties, many social democratic parties or labor parties around Europe, would support free trade. They will have some caveats, and I understand why, though I think not all of those caveats are good. But the main point here is to say if you want to do a lot of good, you should realize that if the Doha Development Round trade negotiations were successfully concluded, you could probably imagine making the world about $3 trillion per year richer-about three times the size of the economy of India every year. And five-sixths of that $3 trillion would go to the developing world. Wouldn't that be worth following up on?
reason: You're strongly against proposals to cut greenhouse gases with carbon taxes or by capping carbon dioxide emissions and letting companies trade emissions permits, yes?
Lomborg: No. A $2 per ton carbon tax is probably a reasonable thing to do. Cap and trade that would be the equivalent of that would be virtually as good. I would say I'm against cap and trade, as I'm against carbon taxes, when they're excessive. But that's a little bit like saying I'm against speed limits. I'm against a speed limit of five miles an hour, but I'm not against a speed limit, for instance, of 100 miles an hour and possibly even lower. It's about finding the right speed limit.
reason: In Cool It, your main proposal to address climate change seems to be to spend $25 billion a year to develop new low-carbon energy sources. Recent economic research seems to show that government funding of research and development for this kind of applied research has not been very successful. For example, in the 1970s the U.S. government planned to spend $40 billion on developing synthetic fuels. Instead, we created the world's largest public works project, the Synfuels facility up in North Dakota. It was going to turn coal into natural gas and liquid fuels. The price of energy dropped, and the plant was sold eventually to a local utility for three cents on the dollar.
Every U.S. president since 1970 except Reagan has come up with a new car initiative of some sort, to give money to the Department of Energy to spend on research to create more fuel-efficient and alternatively fueled cars. There have been no real results after literally billions of dollars spent.
Lomborg: One important point I make is that if you're going to get technologies that are going to work 20 or 50 years from now, you can't expect private companies to do it. It's very hard to recoup most of the investment, because what you're going to be inventing is ideas that will later be used by others that'll then invent ideas that eventually will lead to something you can patent and actually recoup money from.
Most estimates show that you can only recoup about one-third of what is invested in basic science R&D. That is the standard argument for why you want public research and development. It's a little bit like in the medical sector where you have blue sky research; you have people figuring out what different things you can sell and then later on you have companies take that to market. It's incredibly important that governments do not go in and say, "We believe that you can have synfuels." I'm not even sure what synfuels is.
reason: Turning coal into natural gas or oil.
Lomborg: That's probably a very, very bad idea for so many different reasons, but primarily because, why on Earth would governments be good at making that sort of call? What governments should do is not focus on the production side but focus on getting lots and lots of people doing research.
The way I envision it is that you should have a lot of X Prizes: low-cost prizes that spur individual researchers to come up with slightly better technologies in a lot of different areas-for instance, solar cells. How can you improve this a little bit? How can you, for instance, make it water-tight? How you can make it wrap around so that it's more flexible? The Gates Foundation, I think, did a good job in actually asking researchers to sit down and say what are the 46 things we'd like to see proffers on, and then have people spend money on researchers, not on actual production but researchers to do these kinds of things. Ninety percent of these are going to be dead ends, but that doesn't matter, because they're very cheap and what matters is that we get the last 10 percent.
reason: Let me push you a little further on that. The Organization for Economic Cooperation and Development did a report in 2003 where economists looked at differential returns to research and development, specifically defense, private, and then public-sector research and development. To their surprise, they could not find that public-sector or defense R&D expenditures had any effect whatsoever on economic growth. In fact, government R&D spending seemed to produce a crowding-out phenomenon and may actually have slowed economic growth.
Lomborg: Your argument could be, well, if we know we almost always do it wrong, why do it time and again? I would say that depends a little bit on the way you think that it's possible to frame the debate. If no matter what you do you end up down the same track, yeah, maybe we shouldn't do it. But I was at the Copenhagen Consensus presentation by [McGill University economist] Christopher Green, who is saying that a big low-carbon energy R&D push is the only thing that will even enable us to be able to fix climate change in the medium and long term.
It takes some effort to get the politicians to understand that $25 billion of research and development doesn't mean that we should build one big factory to do something you like in a district where you need some votes. Instead it means getting a lot of researchers to do R&D.
We have good theoretical arguments why this might work. It might also be that it doesn't work. We'll have to see where the experts rank it.
reason: I listened to Green's presentation, and I read his perspective paper. To me he basically made a plea to economists to start thinking about how one can create ways to direct research without political interference. He was saying we don't know how to do that yet.
Lomborg: I would tend to disagree a little bit because we've done this for 50 years in the medical sector. We have lots and lots of people doing medical research, and I don't know whether there's good evidence whether that's paid off, but it seems to me that we've had quite a number of breakthroughs that came from public money that we wouldn't have had otherwise. These breakthroughs later on led to more or less obvious investments from private companies to make useful products. We would want something on a similar scale for low-carbon energy research.
It's very important to get people to realize that if we're going to fix climate change, we need to invest in a lot of cheap researchers having smart ideas rather than big projects that make the politicians feel comfortable when they cut the ribbon and say, "See, now we've done something about global warming."
reason: Has the Copenhagen Consensus had an effect on public policy? I know the Danish prime minister mentioned that his government shifted development aid to AIDS medicines in developing countries.
Lomborg: I was told by some of the people at the [U.S.] National Security Council that one of the reasons why President Bush gave $1.2 billion to malaria was because of the Copenhagen Consensus result.
Of course, it's always going to be very hard to say what specific outcome was caused by this list. I would argue that the much stronger benefit of the Copenhagen Consensus is that it pushes policy makers and philanthropists way before anything is ever decided. When the first committee meets in the bowels of a big organization to talk about what should be our next big push, somebody's going to have more likelihood of saying, "Why are we talking about No. 17 instead of No. 3 on the list of Copenhagen Consensus priorities?"
reason: The Copenhagen Consensus process does not take into account institutional factors, as far as I can tell. Why is that? After all, most of the problems of the world are the result of flaws in institutions.
Lomborg: It's very clear that money is not the only thing that works or that changes things in the world.
reason: For example, the development economist William Easterly points out that the West has spent $2.3 trillion on development aid for the last 50 years with virtually nothing to show for it.
Lomborg: Yeah. I tend to disagree with the "virtually nothing" claim, but it's very clear that it has been nowhere near as spectacular as many people would have hoped.
The main point is that one thing shouldn't necessarily be the opponent of another thing. The Copenhagen Consensus is one idea. It's only one of many good ideas that are going to bring the world forward, but I think it's an important part of that discussion. Clearly, with regard to the money that we spend, we at least want to think about how we can spend well. This is also one of the reasons why, for instance, corruption is no longer on the Copenhagen Consensus list. Yes, it's incredibly important, but there are no good solutions that the West can come up with and make sure that they implement in the Third World.
I'm perfectly aware that you should also engage people in thinking about institutional change or the setup of the international system, but what we focus on is, given where we are right now, what can you do with a little extra money? What can you marginally do? It's not the only relevant question in the world, but I would argue it's not an unimportant one.
reason: What's the next project?
Lomborg: We have a lot of projects. I'm doing Copenhagen Consensus for individual countries: for Ghana, for Zambia, for Chile, possibly for Peru, possibly for Mali. And then we're thinking of doing something towards the next climate conference in 2009 in Copenhagen. Maybe we should just do a Copenhagen Consensus for climate, where we get some of the world's top climate economists together and say, "There's a bunch of different packages on the table, what do you think?" And perhaps have some of the negotiators play around with what works best, so that we spend our money well, or better.
We're also thinking of doing one for the world's total environment-air pollution, clean drinking water, all the other things. There is a tendency right now in which global warming has subsumed all other environmental issues. While global warming is definitely an important environmental issue, there's a problem if it takes all of the time to the exclusion of everything else.
Bjorn Lomborg on the priorities that should come before global warming
Ronald Bailey | October 2008 Print Edition
Where in the world can we do the most good? That is the basic question addressed by the Copenhagen Consensus Center, a think tank founded six years ago by the Danish statistician Bjorn Lomborg. To answer the question, the center periodically convenes panels of leading economists, who weigh and prioritize the solutions experts have proposed to the world's biggest problems.
Lomborg, a boyish 43-year-old, first burst onto the intellectual scene in 2001 with his best-selling book The Skeptical Environmentalist: Measuring the Real State of the World. There the former Greenpeace member argued persuasively that most of the planetary doom scenarios imagined by ideological environmentalists were contradicted by the available ecological and economic data. The book provoked a furious green backlash, the low point of which was a 2003 ruling by the Danish Committees on Scientific Dishonesty that "the publication of the work under consideration is deemed to fall within the concept of scientific dishonesty." Lomborg was vindicated later that year when the Danish Ministry of Science, Technology and Innovation overturned the ruling, calling it "completely void of argumentation."
Lomborg's international reputation had already taken off by then, the odd activist cream pie to the face notwithstanding. In 2001 the World Economic Forum nominated him as one of the Global Leaders for Tomorrow; in 2004 Time named him one of the world's 100 most influential people; in 2005 Foreign Policy ranked him as the world's 14th most influential intellectual; and this year The Guardian dubbed him one of "50 people who could save the planet."
Saving the planet became a specific job description six years ago, when Lomborg was appointed director of the Danish National Environmental Assessment Institute, a group whose explicit aim is to "get the most environment for the money." In 2004, under Lomborg's guidance, the institute convened the first Copenhagen Consensus conference, in which eight leading economists, including four Nobel laureates, were asked to allocate a theoretical $50 billion to solve the world's biggest problems. The panel was presented with 30 proposals from other researchers for ranking and evaluation. The top four priorities left standing at the end of the conference were: controlling HIV/AIDS, providing micronutrients to children, liberalizing trade, and rolling back malaria. Addressing climate change ranked near the bottom. This infuriated many environmentalists, but overall the meeting garnered favorable attention around the world.
In 2007, following with the Copenhagen Consensus theme of sensible policy prioritization, Lomborg published Cool It: The Skeptical Environmentalist's Guide to Global Warming, in which he acknowledged that man-made global warming is a problem but challenged the notion that it is the biggest threat to human well-being. Instead of draconian and poverty-inducing cuts in greenhouse gas emissions, Lomborg argued, rich countries could more effectively tackle the problem through massive research and development into low-carbon energy technologies.
In May 2008, Lomborg convened the second Copenhagen Consensus Center conference. This time eight leading economists, including five Nobelists, considered how to allocate a theoretical $75 billion during the next four years to solve 10 of the world's largest problems. Would it be better, for example, to provide efficient stoves to poor people who are exposed to indoor cooking smoke, or supply middle-aged people in developing countries with cheap pills combining aspirin and cholesterol-reducing statins to prevent heart attacks? The panel's top four solutions: providing vitamin A and zinc supplements to poor children, liberalizing trade, fortifying salt and staple foods with the micronutrients iodine and iron, and expanding childhood immunization. Cutting greenhouse gases came in at the bottom, although another approach to global warming—R&D spending on low-carbon energy technologies—was a mid-list priority.
Ronald Bailey, reason's science correspondent, interviewed Lomborg in a gilt-edged room at the Moltkes Palace in Copenhagen during a lunch break at the 2008 Copenhagen Consensus Conference.
reason: How did you come up with the idea of the Copenhagen Consensus?
Bjorn Lomborg: It really started with my discussion of global warming. The advantages of doing the Kyoto Protocol are fairly small, but the cost of doing Kyoto for just one year is about what it would cost to give clean drinking water and sanitation to everyone.
We did some searches. I was sure somebody had done global priority setting before. We do it implicitly by the way we spend money, but apparently nobody's ever thought about it formally.
reason: What's been the reaction to the Copenhagen Consensus process around the world?
Lomborg: Most people who have no sort of preconceived notions about one thing or another think it's eminently sensible. They're a bit like, "You're telling me people didn't do this before?" But as soon as you get people participating in the public debate about this and that issue, it's incredibly hard for them to disassociate themselves from where their problem and especially their solution came on the list. I think most of the arguments against the Copenhagen Consensus boil down to "my area should also have been high on the priorities list," or "we should do all things" and implicitly therefore also my area.
I gave a presentation to Congress last year, and a congressman-I'll not mention his name or his affiliation-told me, "Bjorn, I understand why you're focusing on prioritization, because Denmark is a small country and you can't do all things." But honestly, even though America is vastly larger and you have done incredible amounts of good, you are also constrained by a bunch of restrictions. You have not fixed all the problems in the world in the last 50 years, and it seems reasonable to assume that you won't in the next 10 years. So for all societies, we have to ask ourselves, "What do we want to spend our money on?" If we spend it on something that does only a little good, it could be to the detriment of things that could've done even more good.
reason: Have the experts put things low on the list that you would've liked to see ranked higher?
Lomborg: These are some of the smartest people on the planet. I think of myself more as an intellectual entrepreneur bringing them all together and making sure they hear all the good arguments for and against and then make their informed decisions. I can conceivably imagine that I would end up disagreeing with them at some point, but these are really smart people and I'll probably defer to their judgment.
About half the proposals are kind of obvious. Yes, it's good to do malaria. Yes, it's good to do HIV/AIDS. But I think most of them are impressive because we don't usually think of them. One of the great examples from this session is heart medicine for the Third World. When we think about the Third World, we think about malnourished black children with incredibly distended bellies who we see with flies all over them. We think about malaria and AIDS, those kinds of problems. Those are important, but the death toll from malaria, TB, and HIV, even in the most stricken countries, is still less than the death toll from heart disease. And we have very cheap aspirins, statins, for dealing with heart disease that work very well. Spending $200 million a year could probably save about 300,000 people dying each year in the developing world, causing a benefit of $25 for every dollar spent.
Now, that's not a sexy proposal. It's not one that you usually hear, but isn't it something we ought to hear? The Copenhagen Consensus is not just about what's fashionable. It's not just about what looks good on TV. It's also about making sure we reveal lots of hidden, reclusive, not very publicized issues that we should also be listening to. Perhaps it's about being a little more rational.
One more thing that actually surprised me this time was air pollution. One environmental problem in the Third World that I've been harping on for some time is indoor air pollution. More than a million people die-maybe two and a half million each year. If we improve stoves, it will do some good; it'll probably get $3 back from the dollar. That's respectable, but it's a lot less than what I thought.
The essential thing is that this is a process that doesn't just make it easier for you to confirm your preconceived notions, but it gives you an opportunity to see what some of the best experts on all these issues come up with.
reason: Are there any things you've changed your mind about since you wrote The Skeptical Environmentalist?
Lomborg: I think the main point of that book was to challenge our notion that everything is going down the drain, and I don't see any reason to revise that. We are in general moving in the right direction, and it's important to say mankind solves a lot of problems. We also create new problems in the process of solving old problems, but typically they're smaller than the old ones we fix, which is why we move ahead on virtually all material indicators. My second point with the book was to say this means we need to start prioritizing; we need to be smart about the kinds of problems that we worry about.
People in the U.S. will worry about pesticides, which kill probably about 20 people a year, but care very little about particulate air pollution, which kills 110,000 people in the U.S. every year. We could probably do something dramatic about particulates at a much lower cost than the pesticides. It's much more about getting those orders of magnitude right, and that's, of course, what the Copenhagen Consensus is about.
I did, just like pretty much everyone else, predict that raw materials would go down in price pretty much indefinitely. They're clearly not right now. I think our long-run expectation is still that they will go down. But it was much easier to make that argument in the '90s than it is in the 2000s. So clearly we all become more knowledgeable, but I think the main point of the book was to say, in general, things are moving in the right direction. That message obviously still stands.
reason: You experienced some heartburn about that book when you were formally accused of scientific dishonesty. How did you react to that charge?
Lomborg: At first I was a little stunned, but I also thought it was going to be a fair process. I thought, yeah, it's a little ridiculous, but we'll take that to the committee and show that they are wrong. The lead guy who brought this in front of the committee explicitly said in his first paragraph of his first letter to the committee that he did this for political reasons. So there was never any doubt of what the motive was. I imagined that this was going to be somewhat of a walk in the park: He would come up with arguments, and I would counter them. The committee would go through all this in a fair and impartial way and find that you could have reasoned differences of opinion, but clearly this was nothing to do with scientific dishonesty. I certainly made very clear where I got my references from and what I based my arguments on.
Instead, the committee came out with what can only be described as an incredibly poorly argued, very obviously tainted point. The committee essentially summarized a critique that was commissioned by Scientific American, by four people, three of whom I criticized in my book. Not surprisingly, they were not particularly favorable towards my book. The committee summarized my answer to those critiques in one and a half lines of the document, about 10 words, and then went on to talk about how unreasonable it was that I was unwilling to accept all of their charges. To them that only underscored the point that I was probably being scientifically dishonest because I was unable to admit to my errors.
Unfortunately, I could only appeal the legality of the decision. I did so to the ministry, and they took a year for their lawyers to go through it. Fortunately, one of the main points of the Danish administrative law is that a decision has to be well argued. That doesn't seem like an unreasonable requirement, but that was the main thing that the ministry struck it down on. They said that the committee actually had no argument whatsoever for making their judgment, and that was why the original decision was annulled.
I'm still surprised by the number of people who will reference the first part, that I was condemned for scientific dishonesty, and ignore the fact that it was later overturned on the fact that there was absolutely no evidence. If anything, it seems to indicate that there was a strong wish without any good arguments to indict me.
reason: When I interviewed you before The Skeptical Environmentalist came out, you were describing yourself as a man of the left.
“If your neighbor’s house is burning, you’re not going to spend a whole lot of time saying, ‘Well, that guy was always irresponsible, he always left the stove on, he always was smoking in bed’ … There will be time to punish those who set this fire, but now is the moment for us to come together and put the fire out.”
So says Sen. Barack Obama (D-Ill.) about the Great Financial Crisis. And he’s right. But once the fire is out, I want to learn a lot more about what happened at Fannie Mae and Freddie Mac.
We know that in May 2006, the Office of Federal Housing Enterprise Oversight released a report detailing extensive fraud at Fannie Mae under Franklin Raines, the former Clinton White House budget chief who ran Fannie from 1999 to 2004.
We know that many lawmakers ignored signs of trouble at Fannie and Freddie before that. In a 2004 video now playing on YouTube, California Democratic Rep. Maxine Waters lit into a regulator, saying, “We do not have a crisis at Freddie Mac, and in particular at Fannie Mae under the outstanding leadership of Mr. Frank Raines.”
We know that in 2005, some lawmakers tried hard, but unsuccessfully, to impose discipline on Fannie and Freddie. “If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole,” said Sen. John McCain (R-Ariz.), a co-sponsor of the Federal Housing Enterprise Regulatory Reform Act of 2005.
And we know that Fannie and Freddie, with significant support on the Hill, stiff-armed all who questioned them. And as they did, they took more and more risks.
Last week, Federal Housing Finance Agency director James Lockhart testified before the Senate Banking Committee.
He told the panel that in 2006 and 2007, Fannie Mae and Freddie Mac ignored “repeated warnings about credit risk.” In those years, Lockhart said, Fannie and Freddie “bought or guaranteed many more low-documentation, low-verification and non-standard [adjustable-rate] mortgages than they had in the past.”
In the first half of 2007, Lockhart continued, 33 percent of Fannie’s and Freddie’s new business was in funky mortgages — compared to 14 percent in 2005.
That suggests that executives from Fannie and Freddie — and mind you, these were the people who came after Franklin Raines — became more brazen even as they faced harsh assessments from regulators and calls for reform from lawmakers.
And then, it all went to hell. “The capacity to raise capital to absorb further losses without Treasury Department support vanished,” Lockhart testified.
As we come to terms with all this, some lawmakers are facing up to what has happened.
Criticized for his role in that 2004 hearing, Alabama Democratic Rep. Artur Davis released an extraordinary statement to Fox News.
“Like a lot of my Democratic colleagues, I was too slow to appreciate the recklessness of Fannie Mae and Freddie Mac,” Davis said. “I defended their efforts to encourage affordable homeownership, when in retrospect I should have heeded the concerns raised by their regulator in 2004. Frankly, I wish my Democratic colleagues would admit that when it comes to Fannie and Freddie, we were wrong.”
Now, that is a stand-up thing to say.
Davis also sent some blame Republicans’ way, which is surely deserved.
After the fire is put out, there’s going to be a lot more of it.
York is a White House correspondent for National Review. His column appears in The Hill each week. E-mail: firstname.lastname@example.org
How the Democrats created the meltdown on Wall Street
Oct. 2, 2008
Bloomberg , THE JERUSALEM POST
The financial crisis of the past year has provided a number of surprising twists and turns, and from Bear Stearns Cos. to American International Group Inc., ambiguity has been a big part of the story.
Why did Bear Stearns fail, and how does that relate to AIG?
It all seems so complex.
But really, it isn't. Enough cards on this table have been turned over so that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally.
Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street's efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools. In addition, they held an enormous portfolio of mortgages themselves.
In the times that Fannie and Freddie couldn't make the market, they became the market. Over the years, it added up to an enormous obligation. As of last June, Fannie alone owned or guaranteed more than $388 billion in high-risk mortgage investments. Their large presence created an environment within which even mortgage-backed securities assembled by others could find a ready home.
The problem was that the trillions of dollars in play were only low-risk investments if real estate prices continued to rise. Once they began to fall, the entire house of cards came down with them.
Take away Fannie and Freddie, or regulate them more wisely, and it's hard to imagine how these highly liquid markets would ever have emerged. This whole mess would never have happened.
It is easy to identify the historical turning point that marked the beginning of the end.
Back in 2005, Fannie and Freddie were, after years of dominating Washington, on the ropes. They were enmeshed in accounting scandals that led to turnover at the top. At one telling moment in late 2004, captured in an article by my American Enterprise Institute colleague Peter Wallison, the Securities and Exchange Commission's chief accountant told disgraced Fannie Mae chief Franklin Raines that Fannie's position on the relevant accounting issue was not even "on the page" of allowable interpretations.
Then legislative momentum emerged for an attempt to create a "world-class regulator" that would oversee the pair more like banks, imposing strict requirements on their ability to take excessive risks. Politicians who previously had associated themselves proudly with the two accounting miscreants were less eager to be associated with them. The time was ripe.
The clear gravity of the situation pushed the legislation forward. Some might say the current mess couldn't be foreseen, yet in 2005 Fed chairman Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie "continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest-rate risk aversion, they potentially create ever-growing potential systemic risk down the road," he said. "We are placing the total financial system of the future at a substantial risk."
What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.
If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed.
But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.
That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: "It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing."
Mounds of materials
Now that the collapse has occurred, the roadblock built by Senate Democrats in 2005 is unforgivable. Many who opposed the bill doubtlessly did so for honorable reasons. Fannie and Freddie provided mounds of materials defending their practices. Perhaps some found their propaganda convincing.
But we now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years.
Throughout his political career, Obama has gotten more than $125,000 in campaign contributions from employees and political action committees of Fannie Mae and Freddie Mac, second only to Dodd, the Senate Banking Committee chairman, who received more than $165,000.
Clinton, the 12th-ranked recipient of Fannie and Freddie PAC and employee contributions, has received more than $75,000 from the two enterprises and their employees. The private profit found its way back to the senators who killed the fix.
There has been a lot of talk about who is to blame for this crisis. A look back at the story of 2005 makes the answer pretty clear.
Oh, and there is one little footnote to the story that's worth keeping in mind while Democrats point fingers between now and November 4: Senator John McCain was one of the three cosponsors of S.190, the bill that would have averted this mess.
Kevin Hassett, director of economic-policy studies at the American Enterprise Institute, is a Bloomberg News columnist. He is an adviser to Republican Sen. John McCain of Arizona in the 2008 presidential election. The opinions expressed are his own.
This article can also be read at http://www.jpost.com /servlet/Satellite?cid=1222017442844&pagename=JPost%2FJPArticle%2FShowFull
Obama’s Friends at Fannie Mae by Lynn Woolley (more by this author) Posted 10/01/2008 ET
To be sure, the nation’s current financial mess is a bipartisan disaster -- but how curious it was to hear Barack Obama at the first debate claim that he sounded warnings two years ago. Perhaps he did, but some us of would like to hear more about the warnings and the letter he says he wrote to the Secretary of the Treasury urging a meeting of all “stakeholders.”
After all, many of Sen. Obama’s friends, advisors and fellow Democrats have direct connections to the quasi-governmental agency at the center all this -- the Federal National Mortgage Association, better known as Fannie Mae.
Back in 2004, Fannie was embroiled in an accounting scandal and in October of that year, the House conducted hearings. According to the Wall Street Journal, the staunchest defenders of Fannie were members of the Congressional Black Caucus. By a strange coincidence, the Fannie Mae Foundation was making annual contributions to the Caucus. And get this – Maxine Waters (D-CA) “cooed all over Mr. Raines” and Clay Lacy (D-MO) “played the race card by calling the hearings a ‘political lynching’ of Mr. Raines.”
That would be Franklin Raines, an African American who stepped down as chairman and CEO of Fannie Mae on December 21, 2004. This followed an investigation by the Office of Federal Housing Enterprise Oversight (OFHEO) and the Securities and Exchange Commission (SEC) that accused Fannie of cooking the books so that its officers could “earn” big bonuses. Two years ago, the OFHEO filed suit against Raines to try to recover the $50 million in payments that were made to him based on the faulty accounting. He settled for a small fine that was paid by Fannie’s insurance company.
Connection to Sen. Obama: Both Raines and Obama insist there is no connection, but he is likely a behind-the-scenes advisor. The Washington Post has reported that Raines had “taken calls from Barack Obama’s presidential campaign seeking his advice on mortgage and housing policy matters” and that Raines is a member of Obama’s “political circle.” Obama did not request a correction until after a McCain ad quoted the paper.
Next is J. Timothy Howard, who resigned along with Raines and who was Fannie’s Chief Financial Officer. In that position, he was a key figure in shaping the company’s books to make it seem that Fannie had reached goals that would lead to executive bonuses. Howard was part of the Raines settlement. His connection to Barack Obama: Murky at best but likely since Howard is tied to Raines.
It’s interesting to note that by 2006, both Raines and Howard were being investigated by both the OFHEO and the SEC, by then headed by Christopher Cox, whom Sen. McCain now wants to see fired.
Then there is Jamie Gorelick, a Harvard lawyer who always seems to turn up in interesting places. You’ll remember her as a member of the 9/11 Commission and the criticism of her related to a “wall” that may have limited the ability of agencies to cooperate against terrorism. Turns out that she was Vice Chairman of Fannie Mae from 1997 until 2003 -- smack in the middle of the accounting scandal. On March 25, 2002, Business Week quoted her as saying about the agency, “We believe we are managed safely.” Gorelick was among those who received large bonuses.
Her connection to Obama: None that we know of other than her association with the Democratic Party.
Next is Jim Johnson, a Democratic figure dating back to the Carter years. He was CEO of Fannie Mae from 1991 until 1998 (preceding Raines) and was a subject of the OFHEO investigation. The investigation showed that Fannie had substantially underreported Johnson’s compensation, listing it as $6 million when it was really some $21 million.
Johnson is a strong Obama supporter who was tapped to head up the vice-presidential selection committee. He had to drop out when it was disclosed that he received a sweetheart loan from Countrywide Financial, as had Mr. Raines.
We should also mention former Clinton Commerce Secretary William Daley who served as a Fannie Mae board member collecting stock options and director’s fees and whose son Bill Jr. was a Fannie Mae lobbyist from 2002 until 2005. His connection to Obama: The Politico reports that he is serving as an advisor for the senator and he has been mentioned as a potential Treasury Secretary in an Obama administration.
Of course, Sen. Obama himself is second on the list of campaign contributions from Fannie Mae since 1989. Regardless of what he may have stated at the debate, the Washington Post editorialized on September 19, 2008, “In 2006, [McCain] pushed for stronger regulation of Fannie Mae and Freddie Mac while Mr. Obama was strangely silent.” Perhaps his $126,000 in contributions kept him that way.
Obama now claims to champion “Main Street” by fighting against so-called golden parachutes for CEO’s. That’s something he should know about since so many of his friends and advisors have hands-on experience with creating them.
Mr. Woolley is a Texas-based talk show host heard on KVCE AM 1160 weeknights at 8 p.m. Visit him at www.BeLogical.com.
I couldn't source the piece Rachel posted, and the white font made it hard to read about half, but with that said, seeing how evil businessmen are cited the source of the woes I guess it was written by a evening TV drama script writer or their ilk.
Here's another take:
How The Fed, Media And Academia Aided And Abetted Lending Debacle
By STEVEN MALANGA | Posted Wednesday, October 01, 2008 4:30 PM PT
In the early 1990s, I attended a conference designed to teach journalists the tools of an emerging field known as computer-assisted investigative reporting. One of the hottest sessions explained how journalists could replicate stories that other papers had done locally using computer tools, including one especially popular project to determine if banks in your community were discriminating against minority borrowers in making mortgages.
One newspaper, the Atlanta Journal-Constitution, had won a Pulitzer Prize for its computer-assisted series on the subject, and others, including the Washington Post and Detroit Free Press, had also weighed in with their own analyses based on government loan data. Everyone sounded keen to learn if their local banks were guilty, too.
Although academic researchers leveled substantial criticisms against these newspaper efforts (namely, that they relied on incomplete data and did not take into account lower savings rates, higher debt levels and higher loan default rates for many minority borrowers), bank lending to minority borrowers still became an enormous issue — mostly because newspaper reporters and editors in this pre-talk-radio, pre-blogging era were determined to make it so.
Editorialists called for the government to force banks to end the alleged discrimination, and they castigated federal banking regulators who said they saw no proof of wrongdoing in the data.
Eventually the political climate changed, and Washington became a believer in the story. Crucial to this change was a Federal Reserve Bank of Boston study concluding that although lender discrimination was not as severe as suggested by the newspapers, it nevertheless existed. This, then, became the dominant government position, even though subsequent efforts by other researchers to verify the Fed's conclusions showed serious deficiencies in the original work.
For instance, one economist for the Federal Deposit Insurance Corp. who looked more deeply into the data found that the difference in denial rates on loans for whites and minorities could be accounted for by such factors as higher rates of delinquencies on prior loans for minorities, or the inability of lenders to verify information provided to them by some minority applicants.
Ignoring the import of such data, federal officials went on a campaign to encourage banks to lower their lending standards to make more minority loans. One result of this campaign is a remarkable document produced by the Federal Reserve Bank of Boston in 1998 titled "Closing the Gap: A Guide to Equal Opportunity Lending."
Quoting from a study declaring that "underwriting guidelines . . . may be unintentionally racially biased," the Boston Fed then called for what amounted to undermining many of the lending criteria that banks had used for decades:
• It told banks they should consider junking the traditional debt-to-income ratio used by the industry to determine whether an applicant's income was sufficient to cover housing costs plus loan payments.
• It instructed banks that an applicant's "lack of credit history should not be seen as a negative factor" in obtaining a mortgage, though a mortgage is the biggest financial obligation most individuals will undertake.
• In cases where applicants had bad credit (as opposed to no credit), the Boston Fed told banks to "consider extenuating circumstances" that might still make the borrower creditworthy.
• When applicants didn't have enough savings to make a down payment, the Boston Fed urged banks to allow loans from nonprofits or government assistance agencies to count toward a down payment, even though banks had traditionally disallowed such sources because applicants who have little of their own savings invested in a home are more likely to walk away from a loan when they have trouble paying.
Of course, the new federal standards couldn't just apply to minorities. If they could pay back loans under these terms, then so could the majority of loan applicants. Quickly, in other words, these became the new standards in the industry.
In 1999, the New York Times reported that Fannie Mae and Freddie Mac were easing credit requirements for mortgages it purchased from lenders, and as the housing market boomed, banks embraced these new standards with a vengeance.
Between 2004 and 2007, Fannie Mae and Freddie Mac became the biggest purchasers of subprime mortgages from all kinds of applicants, white and minority, and most of these loans were based on the lending standards promoted by the government.
Meanwhile, those who raced to make these mortgages were lionized. Harvard University's Joint Center for Housing Studies even invited Angelo Mozilo, CEO of the lender that made more loans purchased by Fannie and Freddie than anyone else, Countrywide Financial, to give its prestigious 2003 Dunlop Lecture on the subject of "The American Dream of Homeownership: From Cliche to Mission."
Many defenders of the government's efforts to prompt banks to lend more to minorities have claimed that this effort had little to do with the present mortgage mess. Specifically they point out that many institutions that made subprime mortgages during the market bubble weren't even banks subject to the Community Reinvestment Act, the main vehicle that the feds used to cajole banks to loosen their lending.
But this defense misses the point. In order to push banks to lend more to minority borrowers, advocates like the Boston Fed put forward an entire new set of lending standards and explained to the industry just why loans based on these slacker standards were somehow safer than the industry previously thought.
These justifications became the basis for a whole new set of values (or lack of values), as no-down-payment loans and loans to people with poor credit or to those who were already loaded up with debt became more common throughout the entire industry.
What happened in the mortgage industry is an example of how, in trying to eliminate discrimination from our society, we turned logic on its head. Instead of nobly trying to ensure equality of opportunity for everyone, many civil rights advocates tried to use the government to ensure equality of outcomes for everyone in the housing market.
And so when faced with the idea that minorities weren't getting approved for enough mortgages because they didn't measure up as often to lending standards, the advocates told us that the standards must be discriminatory and needed to be junked. When lenders did that, we made heroes out of those who led the way, like Angelo Mozilo, before we made villains of them.
Now we all have to pay.
Malanga is an editor for RealClearMarkets and a senior fellow at the Manhattan Institute.
Contact: Kevin Beaver email@example.com 850-644-9180 Florida State University
Study reveals specific gene in adolescent men with delinquent peers
But family environment can tip the balance for better or worse
TALLAHASSEE, Fla. -- Birds of a feather flock together, according to the old adage, and adolescent males who possess a certain type of variation in a specific gene are more likely to flock to delinquent peers, according to a landmark study led by Florida State University criminologist Kevin M. Beaver.
"This research is groundbreaking because it shows that the propensity in some adolescents to affiliate with delinquent peers is tied up in the genome," said Beaver, an assistant professor in the FSU College of Criminology and Criminal Justice.
Criminological research has long linked antisocial, drug-using and criminal behavior to delinquent peers -- in fact, belonging to such a peer group is one of the strongest correlates to both youthful and adult crime. But the study led by Beaver is the first to establish a statistically significant association between an affinity for antisocial peer groups and a particular variation (called the 10-repeat allele) of the dopamine transporter gene (DAT1).
However, the study's analysis of family, peer and DNA data from 1,816 boys in middle and high school found that the association between DAT1 and delinquent peer affiliation applied primarily for those who had both the 10-repeat allele and a high-risk family environment (one marked by a disengaged mother and an absence of maternal affection).
In contrast, adolescent males with the very same gene variation who lived in low-risk families (those with high levels of maternal engagement and warmth) showed no statistically relevant affinity for antisocial friends.
"Our research has confirmed the importance of not only the genome but also the environment," Beaver said. "With a sample comprised of 1,816 individuals, more than usual for a genetic study, we were able to document a clear link between DAT1 and delinquent peers for adolescents raised in high-risk families while finding little or no such link in those from low-risk families. As a result, we now have genuine empirical evidence that the social and family environment in an adolescent's life can either exacerbate or blunt genetic effects."
Beaver and research colleagues John Paul Wright, an associate professor and senior research fellow at the University of Cincinnati, and Matt DeLisi, an associate professor of sociology at Iowa State University, have described their novel findings in the paper "Delinquent Peer Group Formation: Evidence of a Gene X Environment Correlation," which appears in the September 2008 issue of the Journal of Genetic Psychology.
The biosocial data analyzed by Beaver and his two co-authors derived from "Add Health," an ongoing project focused on adolescent health that is administered by the University of North Carolina-Chapel Hill and funded largely by the National Institute of Child Health and Human Development. Since the program began in 1994, a total of nearly 2,800 nationally representative male and female adolescents have been genotyped and interviewed.
"We can only hypothesize why we saw the effect of DAT1 only in male adolescents from high-risk families," said Beaver, who will continue his research into the close relationship between genotype and environmental factors -- a phenomenon known in the field of behavioral genetics as the "gene X environment correlation."
"Perhaps the 10-repeat allele is triggered by constant stress or the general lack of support, whereas in low-risk households, the variation might remain inactive," he said. "Or it's possible that the 10-repeat allele increases an adolescent boy's attraction to delinquent peers regardless of family type, but parents from low-risk families are simply better able to monitor and control such genetic tendencies."
Among female adolescents who carry the 10-repeat allele, Beaver and his colleagues found no statistically significant affinity for antisocial peers, regardless of whether the girls lived in a high-risk or low-risk family environment.
Commentary: Bankruptcy, not bailout, is the right answer
Jeffrey Miron: Government encouraged lenders to relax their standards Mortgages were given to people unqualified to repay them, he says Miron: Rather than a bailout, government should let firms go bankrupt Talk of economic Armageddon is scare-mongering, Miron says
By Jeffrey A. Miron Special 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.
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.
Meat must be rationed to four portions a week, says report on climate change • Study looks at food impact on greenhouse gases • Return to old-fashioned cooking habits urged
All comments (33) Juliette Jowit The Guardian, Tuesday September 30 2008 Article history People will have to be rationed to four modest portions of meat and one litre of milk a week if the world is to avoid run-away climate change, a major new report warns.
The report, by the Food Climate Research Network, based at the University of Surrey, also says total food consumption should be reduced, especially "low nutritional value" treats such as alcohol, sweets and chocolates.
It urges people to return to habits their mothers or grandmothers would have been familiar with: buying locally in-season products, cooking in bulk and in pots with lids or pressure cookers, avoiding waste and walking to the shops - alongside more modern tips such as using the microwave and internet shopping.
The report goes much further than any previous advice after mounting concern about the impact of the livestock industry on greenhouse gases and rising food prices. It follows a four-year study of the impact of food on climate change and is thought to be the most thorough study of its kind.
Tara Garnett, the report's author, warned that campaigns encouraging people to change their habits voluntarily were doomed to fail and urged the government to use caps on greenhouse gas emissions and carbon pricing to ensure changes were made. "Food is important to us in a great many cultural and symbolic ways, and our food choices are affected by cost, time, habit and other influences," the report says. "Study upon study has shown that awareness-raising campaigns alone are unlikely to work, particularly when it comes to more difficult changes."
The report's findings are in line with an investigation by the October edition of the Ecologist magazine, which found that arguments for people to go vegetarian or vegan to stop climate change and reduce pressure on rising food prices were exaggerated and would damage the developing world in particular, where many people depend on animals for essential food, other products such as leather and wool, and for manure and help in tilling fields to grow other crops.
Instead, it recommended cutting meat consumption by at least half and making sure animals were fed as much as possible on grass and food waste which could not be eaten by humans.
"The notion that cows and sheep are four-legged weapons of mass destruction has become something of a distraction from the real issues in both climate change and food production," said Pat Thomas, the Ecologist's editor.
The head of the United Nations intergovernmental panel on climate change, Rajendra Pachauri, also sparked global debate this month when he urged people to have at least one meat-free day a week.
The Food Climate Research Network found that measured by production, the UK food sector produces greenhouse gases equivalent to 33m tonnes of carbon. Measured by consumption - including imports - the total rises to 43.3m tonnes. Both figures work out at under one fifth of UK emissions, but they exclude the indirect impacts of actions such as clearing rainforest for cattle and crops, which other studies estimate would add up to 5% to 20% of global emissions.
The report found the meat and dairy sectors together accounted for just over half of those emissions; potatoes, fruit and vegetables for 15%; drinks and other products with sugar for another 15%; and bread, pastry and flour for 13%.
It also revealed which parts of the food chain were the most polluting. Although packaging has had a lot of media and political attention, it only ranked fifth in importance behind agriculture - especially the methane produced by livestock burping - manufacturing, transport, and cooking and refrigeration at home.
The report calls for meat and dairy consumption to be cut in developed countries so that global production remains stable as the population grows to an estimated 9bn by 2050.
At the same time emissions from farms, transport, manufacturing and retail could be cut, with improvements including more efficient use of fertilisers, feed and energy, changed diets for livestock, and more renewable fuels - leading to a total reduction in emissions from the sector of 50% to 67%, it says.
The UN and other bodies recommend that developed countries should reduce total emissions by 80% by 2050.
However, the National Farmers' Union warned that its own study, with other industry players, published last year, found net emissions from agriculture could only be cut by up to 50% if the carbon savings from building renewable energy sources on farms were taken into account.
The NFU also called for government incentives to help farmers make the changes. "Farmers aren't going to do this out of the goodness of their hearts, because farmers don't have that luxury; many of our members are very hard pressed at the moment," said Jonathan Scurlock, the NFU's chief adviser on renewable energy and climate change.
**The Saudis are far from poor, yet they do all sorts of horrific things, why? The al qaeda leadership, and many of it's high/mid level operatives come from wealth and on average have post-graduate degrees and are multi-lingual. So where does this leave the "poor and uneducated" theory? Why do muslims buy islamic books advocating female genital mutilation while living in first world countries?**
Sheez, GM, you're not paying attention. We're talking about AFRICA, and hence circumlocuting around the unpleasant fact that in many Muslim countries in AFRICA and elsewhere women are horribly treated as a religious tenet. You must therefor ignore sweeping statements made within posts about AFRICA and only heed the parts which don't dance around unpalatable realities. Near as I can tell, at least.
Clearly you need to spend more time on a college campus in an identity politics cloister lest you be nominated for reeducation.
It's amazing that Republicans and objective media (an unfortunate oxymoron) can't identify the policies and the people that got us to collapse BEFORE they ask us to pay our way out. Bush, McCain et al all put a higher priority on making nice and forging deals instead of straight talk and consequences. Result: Bush takes the blame and the McCain candidacy is punished by association while the Obama political philosophy is a perfect match with the programs that already failed. So we learn nothing and move on.
Prophetic piece first published in late July. The original is well annotated with links.
Fannie Mae’s Thugs Vilified Whistleblowers, Told Avalanche of Lies Posted by Hans Bader
A $25 billion bailout of government-backed mortgage giant Fannie Mae is now planned. But Fannie Mae has such political power that its crooked managers will probably never be held accountable for their fraud in any way, unlike the Enron executives who went to jail. Instead, its lending authority will likely expand under federal mortgage bailout bills.
Paul Gigot, a Wall Street Journal editor, describes the personal vilification he has received over the years after the Journal began warning, prophetically, that Fannie Mae was engaged in fraudulent accounting, and that the taxpayers might some day have to pick up the tab. (To award themselves millions of dollars in bonuses, Fannie Mae’s managers used Enron-style fraudulent accounting). Fannie Mae’s managers, he notes, were ”unique in their thuggery” and arrogance.
When conservative Congressmen tried to rein it in, Fannie Mae responded with an avalanche of lies and political reprisals. It told Wisconsin Congressman Paul Ryan’s constituents that he wanted to raise the rates on their existing mortgages, a complete fabrication. And when Florida Congressman Cliff Stearns began investigating its fraudulent accounting, it got jurisdiction over its accounting practices transferred to another committee run by Michael G. Oxley, who worked in tandem with liberal stalwart Barney Frank to cover up the abuses at Fannie Mae and kill any reform legislation.
(Congressman Michael Oxley was the co-author of the devastatingly-costly and wasteful Sarbanes-Oxley Act, which ”created more busywork for accountants than real protection against abuses,” according to David Ignatius in the Washington Post. Oxley received generous donations from the big accounting firms, which were responsible for failing to detect Enron’s fraudulent accounting. The Sarbanes-Oxley law has made those firms fabulously wealthy, increasing the volume of work they receive by making auditing of public companies needlessly complicated. The big accounting firms now must be paid to evaluate and supervise companies’ “internal controls,” such as which employee has access to which computer password. The Sarbanes-Oxley Act has cost the stock market over a trillion dollars in value, and imposed ongoing compliance costs exceeding $35 billion per year, while diverting attention away from corporate incompetence at mortgage lender Countrywide Financial, a close Fannie Mae ally. It also created an unaccountable agency, the Public Company Accounting Oversight Board, to create mountains of red tape to enrich big accounting firms at the expense of productive businesses. Like Fannie Mae, it is nominally “private” to evade accountability and open-government laws (even though in reality, it is a governmental agency, and unlike Fannie, qualifies as such under the Supreme Court’s Lebron decision).
Fannie Mae was run by liberal power brokers like Franklin D. Raines who even now are unrepentant about their thuggery and accounting fraud. Franklin Raines recently took to the pages of the Washington Post to attack as “ideologues” the banking experts in the Bush Administration who had long and prophetically warned about the dangers of Fannie Mae’s risky practices. I published a letter to the editor in response criticizing Raines for his utter gall in lecturing whistleblowers about how Fannie should be managed. But amazingly enough, he continues to be treated like a financial hotshot. Law Professor James Lindgren has a post about Fannie Mae aptly entitled “Fannie Mae’s Thugs.”
Link to a very lengthy IMF paper examining 42 banking crises in 37 countries. An excerpt:
Existing empirical research has shown that providing assistance to banks and their borrowers can be counterproductive, resulting in increased losses to banks, which often abuse forbearance to take unproductive risks at government expense. The typical result of forbearance is a deeper hole in the net worth of banks, crippling tax burdens to finance bank bailouts, and even more severe credit supply contraction and economic decline than would have occurred in the absence of forbearance.
Cross-country analysis to date also shows that accommodative policy measures (such as substantial liquidity support, explicit government guarantee on financial institutions' liabilities and forbearance from prudential regulations) tend to be fiscally costly and that these particular policies do not necessarily accelerate the speed of economic recovery.
Home Invader Dies In Struggle With Father Of Intended Victim
Police: Sex Offender Brought Rope, Condoms, Knife To Planned Attack
POSTED: 4:38 pm EDT September 28, 2008 UPDATED: 6:21 am EDT September 29, 2008
INDIANAPOLIS -- A man who police said broke into a home with the intention of sexually assault a 17-year-old girl in her bedroom died early Sunday morning after a struggle with the girl's father.
David Meyers (pictured), 52, was pronounced dead at the scene shortly after officers arrived following a report of a home invasion in the 3500 block of West 79th Street at about 3:20 a.m.
Officers said they found Robert McNally, 64, on the floor with his arm around the neck of Meyers, struggling to hold him down.
When officers told McNally he could let go, they found that Meyers was unresponsive. Medics who were called to the scene then pronounced Meyers dead.
Indianapolis police Sgt. Matt Mount said Meyers had come into the home naked, except for a mask and latex gloves. "He had rope, had a knife, had condoms, had a gag," Mount said.
Police said Meyers had gotten into the home through a window next to the girl's bedroom and that he knew the home well because his uncle owns it and he was an acquaintance of the family.
The teen awoke to find a naked man in her room and began screaming, alerting McNally, police said. During a protracted struggle in the hallway of the home, McNally was able to get his arm around Meyers' neck and subdue him while his wife called police, officers said. Meyers was a registered sex offender and was released from prison two years ago after he had served 10 years of a 20-year sentence for criminal confinement and sexual deviate conduct stemming from a case in Hamilton County.
Meyers was also being sought in Boone County for failure to register as a sex offender.
Police said Meyers had been living with his mother down a gravel road from the home that the McNally family lived in and had recently lost his job. "When they got the mask off, both the father and daughter recognized him," Mount said.
Police said Meyers had a history of heart problems. They were not immediately sure if he died as a result of heart failure or from being choked. The results of the police investigation will be turned over to the Marion County Prosecutor's Office, but it is unlikely charges will be filed, police said.
Fighting back: Peter Hitchens with Michael Sata, the opposition politician nicknamed 'King Cobra' It has cancelled Zambia's debts, eased Zambian exports to China, established a 'special economic zone' in the Copper Belt, offered to build a sports stadium, schools, a hospital and an anti-malaria centre as well as providing scholarships and dispatching experts to help with agriculture. Zambia-China trade is growing rapidly, mainly in the form of copper.
All this has aroused the suspicions of Mr Sata, a populist politician famous for his blunt, combative manner and his harsh, biting attacks on opponents, and who was once a porter who swept the platforms at Victoria Station in London.
Now the leader of the Patriotic Front, with a respectable chance of winning a presidential election set for the end of October, Sata says: 'The Chinese are not here as investors, they are here as invaders.
'They bring Chinese to come and push wheelbarrows, they bring Chinese bricklayers, they bring Chinese carpenters, Chinese plumbers. We have plenty of those in Zambia.'
This is true. In Lusaka and in the Copper Belt, poor and lowly Chinese workers, in broad-brimmed straw hats from another era, are a common sight at mines and on building sites, as are better-dressed Chinese supervisors and technicians.
There are Chinese restaurants and Chinese clinics and Chinese housing compounds - and a growing number of Chinese flags flapping over factories and smelters.
'We don't need to import labourers from China,' Sata says. 'We need to import people with skills we don't have in Zambia. The Chinese are not going to train our people in how to push wheelbarrows.'
He meets me in the garden of his not specially grand house in the old-established and verdant Rhodes Park section of Lusaka. It is guarded by uniformed security men, its walls protected by barbed wire and broken glass.
'Wherever our Chinese "brothers" are they don't care about the local workers,' he complains, alleging that Chinese companies have lax safety procedures and treat their African workers like dirt.
In language which seems exaggerated, but which will later turn out to be at least partly true, he claims: 'They employ people in slave conditions.'
He also accuses Chinese overseers of frequently beating up Zambians. His claim is given force by a story in that morning's Lusaka newspapers about how a Zambian building worker in Ndola, in the Copper Belt, was allegedly beaten unconscious by four Chinese co-workers angry that he had gone to sleep on the job.
I later checked this account with the victim's relatives in an Ndola shanty town and found it to be true.
Evidence of China is never very far away Recently, a government minister, Alice Simago, was shown weeping on TV after she saw at first hand the working conditions at a Chinese-owned coal mine in the Southern Province.
When I contacted her, she declined to speak to me about this - possibly because criticism of the Chinese is not welcome among most of the Zambian elite.
Denis Lukwesa, deputy general secretary of the Zambian Mineworkers' Union, also backed up Sata's view, saying: 'They just don't understand about safety. They are more interested in profit.'
As for their general treatment of African workers, Lukwesa says he knows of cases where Chinese supervisors have kicked Zambians. He summed up their attitude like this: 'They are harsh to Zambians, and they don't get on well with them.'
Sata warns against the enormous loans and offers of help with transport, schools and health care with which Peking now sweetens its attempts to buy up Africa's mineral reserves.
'China's deal with the Democratic Republic of the Congo is, in my opinion, corruption,' he says, comparing this with Western loans which require strong measures against corruption.
Everyone in Africa knows China's Congo deal - worth almost £5billion in loans, roads, railways, hospitals and schools - was offered after Western experts demanded tougher anti-corruption measures in return for more aid.
Sata knows the Chinese are unpopular in his country. Zambians use a mocking word - 'choncholi' - to describe the way the Chinese speak. Zambian businessmen gossip about the way the Chinese live in separate compounds, where - they claim - dogs are kept for food.
There are persistent rumours, which cropped up in almost every conversation I had in Zambia, that many of the imported Chinese workforce are convicted criminals whom China wants to offload in Africa. I was unable to confirm this but, given China's enormous gulag and the harshness of life for many migrant workers, it is certainly not impossible.
Sata warns that 'sticks and stones' may one day fly if China does not treat Zambians better. He now promises a completely new approach: 'I used to sweep up at your Victoria Station, and I never got any complaints about my work. I want to sweep my country even cleaner than I swept your stations.'
Some Africa experts tend to portray Sata as a troublemaker. His detractors whisper that he is a mouthpiece for Taiwan, which used to be recognised by many African states but which faces almost total isolation thanks to Peking's new Africa policy.
But his claims were confirmed by a senior worker in Chambishi, scene of the 2005 explosion. This man, whom I will call Thomas, is serious, experienced and responsible. His verdict on the Chinese is devastating.
He recalls the aftermath of the blast, when he had the ghastly task of collecting together what remained of the men who died: 'Zambia, a country of 11million people, went into official mourning for this disaster.
'A Chinese supervisor said to me in broken English, "In China, 5,000 people die, and there is nothing. In Zambia, 50 people die and everyone is weeping." To them, 50 people are nothing.'
This sort of thing creates resentment. Earlier this year African workers at the new Chinese smelter at Chambishi rioted over low wages and what they thought were unsafe working conditions.
When Chinese President Hu Jintao came to Zambia in 2006, he had to cancel a visit to the Copper Belt for fear of hostile demonstrations. Thomas says: 'The people who advised Hu Jintao not to come were right.'
He suspects Chinese arrogance and brutality towards Africans is not racial bigotry, but a fear of being seen to be weak. 'They are trying to prove they are not inferior to the West. They are trying too hard.
'If they ask you to do something and you don't do it, they think you're not doing it because they aren't white. People put up with the kicks and blows because they need work to survive.'
Many in Africa also accuse the Chinese of unconcealed corruption. This is specially obvious in the 'Democratic Republic of the Congo', currently listed as the most corrupt nation on Earth.
A North-American businessman who runs a copper smelting business in Katanga Province told me how his firm tried to obey safety laws.
They are constantly targeted by official safety inspectors because they refuse to bribe them. Meanwhile, Chinese enterprises nearby get away with huge breaches of the law - because they paid bribes.
'We never pay,' he said, 'because once you pay you become their bitch; you will pay for ever and ever.'
Another businessman shrugged over the way he is forced to wait weeks to get his products out of the country, while the Chinese have no such problems.
'I'm not sure the Chinese even know there are customs regulations,' he said. 'They don't fill in the forms, they just pay. I try to be philosophical about it, but it is not easy.'
Unlike orderly Zambia, Congo is a place of chaos, obvious privation, tyranny dressed up as democracy for public-relations purposes, and fear.
This is Katanga, the mineral-rich slice of land fought over furiously in the early Sixties in post-colonial Africa's first civil war. Brooding over its capital, Lubumbashi, is a 400ft black hill: the accumulated slag and waste of 80 years of copper mining and smelting.
Now, thanks to a crazy rise in the price of copper and cobalt, the looming, sinister mound is being quarried - by Western business, by the Chinese and by bands of Congolese who grub and scramble around it searching for scraps of copper or traces of cobalt, smashing lumps of slag with great hammers as they hunt for any way of paying for that night's supper.
As dusk falls and the shadows lengthen, the scene looks like the blasted land of Mordor in Tolkien's Lord Of The Rings: a pre-medieval prospect of hopeless, condemned toil in pits surrounded by stony desolation.
Behind them tower the leaning ruins of colossal abandoned factories: monuments to the wars and chaos that have repeatedly passed this way.
There is something strange and unsettling about industrial scenes in Africa, pithead winding gear and gaunt chimneys rising out of tawny grasslands dotted with anthills and banana palms. It looks as if someone has made a grave mistake.
And there is a lesson for colonial pride and ambition in the streets of Lubumbashi - 80 years ago an orderly Art Deco city full of French influence and supervised by crisply starched gendarmes, now a genial but volatile chaos of scruffy, bribe-hunting traffic cops where it is not wise to venture out at night.
The once-graceful Belgian buildings, gradually crumbling under thick layers of paint, long ago lost their original purpose.
Outsiders come and go in Africa, some greedy, some idealistic, some halfway between. Time after time, they fail or are defeated, leaving behind scars, slag-heaps, ruins and graveyards, disillusion and disappointment.
We have come a long way from Cecil Rhodes to Bob Geldof, but we still have not brought much happiness with us, and even Nelson Mandela's vaunted 'Rainbow Nation' in South Africa is careering rapidly towards banana republic status.
Now a new great power, China, is scrambling for wealth, power and influence in this sad continent, without a single illusion or pretence.
Perhaps, after two centuries of humbug, this method will work where all other interventions have failed.
But after seeing the bitter, violent desperation unleashed in the mines of Likasi, I find it hard to believe any good will come of it.
PETER HITCHENS: How China has created a new slave empire in Africa
By PETER HITCHENS Last updated at 12:00 PM on 28th September 2008
Narrow escape: Peter Hitchens I think I am probably going to die any minute now. An inflamed, deceived mob of about 50 desperate men are crowding round the car, some trying to turn it over, others beating at it with large rocks, all yelling insults and curses.
They have just started to smash the windows. Next, they will pull us out and, well, let's not think about that ...
I am trying not to meet their eyes, but they are staring at me and my companions with rage and hatred such as I haven't seen in a human face before. Those companions, Barbara Jones and Richard van Ryneveld, are - like me - quite helpless in the back seats.
If we get out, we will certainly be beaten to death. If we stay where we are, we will probably be beaten to death.
Our two African companions have - crazily in our view - got out of the car to try to reason with the crowd. It is clear to us that you might as well preach non-violence to a tornado.
At last, after what must have been about 40 seconds but that felt like half an hour, one of the pair saw sense, leapt back into the car and reversed wildly down the rocky, dusty path - leaving his friend behind.
By the grace of God we did not slither into the ditch, roll over or burst a tyre. Through the dust we churned up as we fled, we could see our would-be killers running with appalling speed to catch up. There was just time to make a crazy two-point turn which allowed us to go forwards and so out-distance them.
We had pretty much abandoned our other guide to whatever his fate might be (this was surprisingly easy to justify to myself at the time) when we saw that he had broken free and was running with Olympic swiftness, just ahead of pursuers half hidden by the dust.
We flung open a rear door so he could scramble in and, engine grinding, we veered off, bouncing painfully over the ruts and rocks.
We feared there would be another barricade to stop our escape, and it would all begin again. But there wasn't, and we eventually realised we had got away, even the man whose idiocy nearly got us killed.
He told us it was us they wanted, not him, or he would never have escaped. We ought to be dead. We are not. It is an interesting feeling, not wholly unpleasant.
Why did they want to kill us? What was the reason for their fury? They thought that if I reported on their way of life they might lose their livings.
Livings? Dyings, more likely.
Peking power: A Chinese supervisor cajoles local workers as they dig a trench in Kabwe, Zambia These poor, hopeless, angry people exist by grubbing for scraps of cobalt and copper ore in the filth and dust of abandoned copper mines in Congo, sinking perilous 80ft shafts by hand, washing their finds in cholera-infected streams full of human filth, then pushing enormous two-hundredweight loads uphill on ancient bicycles to the nearby town of Likasi where middlemen buy them to sell on, mainly to Chinese businessmen hungry for these vital metals.
To see them, as they plod miserably past, is to be reminded of pictures of unemployed miners in Thirties Britain, stumbling home in the drizzle with sacks of coal scraps gleaned from spoil heaps.
Except that here the unsparing heat makes the labour five times as hard, and the conditions of work and life are worse by far than any known in England since the 18th Century.
Many perish as their primitive mines collapse on them, or are horribly injured without hope of medical treatment. Many are little more than children. On a good day they may earn $3, which just supports a meagre existence in diseased, malarial slums.
We had been earlier to this awful pit, which looked like a penal colony in an ancient slave empire.
Defeated, bowed figures toiled endlessly in dozens of hand-dug pits. Their faces, when visible, were blank and without hope.
We had been turned away by a fat, corrupt policeman who pretended our papers weren't in order, but who was really taking instructions from a dead-eyed, one-eared gangmaster who sat next to him.
By the time we returned with more official permits, the gangmasters had readied the ambush.
The diggers feared - and their evil, sinister bosses had worked hard on that fear - that if people like me publicised their filthy way of life, then the mine might be closed and the $3 a day might be taken away.
I can give you no better explanation in miniature of the wicked thing that I believe is now happening in Africa.
Out of desperation, much of the continent is selling itself into a new era of corruption and virtual slavery as China seeks to buy up all the metals, minerals and oil she can lay her hands on: copper for electric and telephone cables, cobalt for mobile phones and jet engines - the basic raw materials of modern life.
It is crude rapacity, but to Africans and many of their leaders it is better than the alternative, which is slow starvation.
The Congolese risk their lives digging through mountains of mining waste looking for scraps of metal ore It is my view - and not just because I was so nearly killed - that China's cynical new version of imperialism in Africa is a wicked enterprise.
China offers both rulers and the ruled in Africa the simple, squalid advantages of shameless exploitation.
For the governments, there are gargantuan loans, promises of new roads, railways, hospitals and schools - in return for giving Peking a free and tax-free run at Africa's rich resources of oil, minerals and metals.
For the people, there are these wretched leavings, which, miserable as they are, must be better than the near-starvation they otherwise face.
Persuasive academics advised me before I set off on this journey that China's scramble for Africa had much to be said for it. They pointed out China needs African markets for its goods, and has an interest in real economic advance in that broken continent.
For once, they argued, a foreign intervention in Africa might work precisely because it is so cynical and self-interested. They said Western aid, with all its conditions, did little to create real advances in Africa, laughing as they declared: 'The only country that ever got rich through donations is the Vatican.'
Why get so het up about African corruption anyway? Is it really so much worse than corruption in Russia or India?
Is it really our business to try to act as missionaries of purity? Isn't what we call 'corruption' another name for what Africans view as looking after their families?
And what about China herself? Despite the country's convulsive growth and new wealth, it still suffers gravely from poverty and backwardness, as I have seen for myself in its dingy sweatshops, the primitive electricity-free villages of Canton, the dark and squalid mining city of Datong and the cave-dwelling settlements that still rely on wells for their water.
After the murderous disaster of Mao, and the long chaos that went before, China longs above all for stable prosperity. And, as one genial and open-minded Chinese businessman said to me in Congo as we sat over a beer in the decayed colonial majesty of Lubumbashi's Belgian-built Park Hotel: 'Africa is China's last hope.'
I find this argument quite appealing, in theory. Britain's own adventures in Africa were not specially benevolent, although many decent men did what they could to enforce fairness and justice amid the bigotry and exploitation.
Taking over: Chinese building workers in Zambia It is noticeable that in much former British territory we have left behind plenty of good things and habits that are absent in the lands once ruled by rival empires.
Even so, with Zimbabwe, Nigeria and Uganda on our conscience, who are we to lecture others?
I chose to look at China's intervention in two countries, Zambia and the 'Democratic Republic of the Congo', because they lie side by side; because one was once British and the other Belgian.
Also, in Zambia's imperfect but functioning democracy, there is actual opposition to the Chinese presence, while in the despotic Congo, opposition to President Joseph Kabila is unwise, to put it mildly.
Congo is barely a state at all, and still hosts plenty of fighting not all that far from here.
Statues and images of Joseph's murdered father Laurent are everywhere in an obvious attempt to create a cult of personality on which stability may one day be based. Portraits of Joseph himself scowl from every wall.
I have decided not to name most of the people who spoke to me, even though some of them gave me permission to do so, because I am not sure they know just how much of a risk they may be running by criticising the Chinese in Africa.
I know from personal experience with Chinese authority that Peking regards anything short of deep respect as insulting, and it does not forget a slight.
I also know that this over-sensitive vigilance is present in Africa.
The Mail on Sunday team was reported to the authorities in Zambia's Copper Belt by Chinese managers who had seen us taking photographs of a graveyard at Chambishi where 54 victims of a disaster in a Chinese-run explosives factory are buried. Within an hour, local 'security' officials were buzzing round us trying to find out what we were up to.
This is why I have some time for the Zambian opposition politician Michael Sata, known as 'King Cobra' because of his fearless combative nature (but also, say his opponents, because he is so slippery).
Sata has challenged China's plans to invest in Zambia, and is publicly suspicious of them. At elections two years ago, the Chinese were widely believed to have privately threatened to pull out of the country if he won, and to have helped the government parties win.
Peking regards Zambia as a great prize, alongside its other favoured nations of Sudan (oil), Angola (oil) and Congo (metals).
That select (Democratic) law enforcement officials have been tapped to go after those who disseminate campaign material the Obama campaign deems false. I note there is currently a fight over ads and mailings the NRA is sending out; MO is a state with a significant hunting heritage; so I wonder if this is part of the brouhaha. Bottom line is that there is the taint of prior restraint in this effort.
I've seen this on a couple RSS feeds, but haven't liked the sourcing so didn't post. Now its coming out of the MO Governor's office. . . .
FOR IMMEDIATE RELEASE Saturday, September 27, 2008
Contact: Jessica Robinson, 573-751-0290
Gov. Blunt Statement on Obama Campaign’s Abusive Use of Missouri Law Enforcement
JEFFERSON CITY - Gov. Matt Blunt today issued the following statement on news reports that have exposed plans by U.S. Senator Barack Obama to use Missouri law enforcement to threaten and intimidate his critics.
“St. Louis County Circuit Attorney Bob McCulloch, St. Louis City Circuit Attorney Jennifer Joyce, Jefferson County Sheriff Glenn Boyer, and Obama and the leader of his Missouri campaign Senator Claire McCaskill have attached the stench of police state tactics to the Obama-Biden campaign.
“What Senator Obama and his helpers are doing is scandalous beyond words, the party that claims to be the party of Thomas Jefferson is abusing the justice system and offices of public trust to silence political criticism with threats of prosecution and criminal punishment.
“This abuse of the law for intimidation insults the most sacred principles and ideals of Jefferson. I can think of nothing more offensive to Jefferson’s thinking than using the power of the state to deprive Americans of their civil rights. The only conceivable purpose of Messrs. McCulloch, Obama and the others is to frighten people away from expressing themselves, to chill free and open debate, to suppress support and donations to conservative organizations targeted by this anti-civil rights, to strangle criticism of Mr. Obama, to suppress ads about his support of higher taxes, and to choke out criticism on television, radio, the Internet, blogs, e-mail and daily conversation about the election.
“Barack Obama needs to grow up. Leftist blogs and others in the press constantly say false things about me and my family. Usually, we ignore false and scurrilous accusations because the purveyors have no credibility. When necessary, we refute them. Enlisting Missouri law enforcement to intimidate people and kill free debate is reminiscent of the Sedition Acts - not a free society.”
This paper, in its entirety, can be found at: www.heritage.org/Research/Economy/wm2079.cfm Produced by the Center for Legal and Judicial Studies Published by The Heritage Foundation 214 Massachusetts Avenue, NE Washington, DC 20002–4999 (202) 546-4400 • heritage.org
Nothing written here is to be construed as necessarily reflecting the views of The Heritage Foundation or as an attempt to aid or hinder the passage of any bill before Congress. All Deliberate Speed: Constitutional Fidelity and Prudent Policy Go Hand in Hand in Fixing the Credit Crisis
Todd F. Gaziano and Andrew M. Grossman
Even in times of difficulty or crisis, the constitutional design for legislation requires careful, bicameral deliberation and presentment to the President. For sound policy and constitutional reasons, Congress should not recess until it acts on a solution to the credit crisis, but it should also be mindful of the virtues of calm deliberation and the dangers to liberty of a crisis mentality. The mounting resistance to the Administration’s proposal presents an opportunity for careful deliberation. The constitutional and policy concerns expressed by many Members of Congress and thoughtful scholars this past week must be thoroughly considered.
No one doubts the importance of Treasury Secretary Henry Paulson’s call for immediate legislative action to calm the financial markets, which have the potential to wreak long-term damage to the world economy, but the initial deadline with which he urged Congress to act on a dramatic bail- out plan raises risks that Congress must avoid: either acting imprudently (and with serious constitutional consequences) or not acting at all before it recesses.
Members of Congress had planned to depart Washington on Friday to spend the month campaigning for votes, but they should stay in session around the clock if that is necessary to complete action before the end of the month. The exigencies of electoral politics should not be allowed to keep Congress from its constitutional duties. That result—Members of Congress abandoning Washington in a time of crisis to campaign for their own reelections—would be irresponsible. It is also, in all likelihood, unnecessary: What statesman would believe that his constituents would exact punishment for staying a few extra days to do the people’s work? In the minds of true statesmen, this con- test between constitutional values and politicking should not present a conflict.
Constitutional and Policy Concerns Converge. As many have come to realize this week, there are some fundamental constitutional values at stake in the present debate. The Paulson proposal, and the several congressional proposals based upon it, raise substantial constitutional questions regarding: (1) Congress’s enumerated power—or lack thereof—to intervene with private markets in the manner contemplated, (2) the lack of meaningful standards to guide the extremely broad grant of discretion to the Treasury secretary (the “legislative delegation” problem), (3) limitations on judicial review over the exercise of that almost limitless discretion, and (4) related separation of powers concerns. From a constitutional standpoint, the current versions of the legislation are different in scope, and especially in kind, from almost any federal legislation that has come before. In short, many analogies to past emergency economic powers, such as those exercised in response to the thrift failures of the 1980s, are not on point with regard to these central constitutional concerns. Rather than rely on these precedents, Congress must take the time to work through these constitutional concerns.
And these concerns are serious, regardless of how the courts might resolve them. Some would treat the Constitution as a legalistic document and employ narrow legalistic arguments to circumvent its strictures and protections. The substance of this debate, however, should not turn on what provisions might or might not pass muster with the courts under a pinched conception of our fundamental law. Rather, it is the principles the Constitution embodies, which have served us well through so many crises, that should be the focus of debate. In short, Americans should take little comfort that legislation might barely pass muster in the courts if the legislation does serious damage to the underlying constitutional principles that were designed to protect our individual rights against governmental usurpations.
In particular, legal scholars across the ideological spectrum recognize that, with regard to sweeping and seemingly standardless delegations of discretion to the executive branch, the courts have not been assertive in policing this aspect of the constitutional separation of powers. Yet even under the courts’ permissive, modern approach to such delegations, the delegation of authority in the legislation that some recommend for swift passage is question- able. This counsels caution.
Moreover, fidelity to our constitutional principles also coincides with prudent policy prescriptions. Those who argue that we need to suspend the fundamental charter in order to save it (or the economy) have it backward. Our fundamental charter has always been a bulwark for the free market. The recommendations below to address constitutional concerns should not only improve the short-term value of any emergency legislation; it should also support the long-term viability of free markets and, ultimately, free people.
Needed Constitutional Changes. To satisfy the substantial constitutional and policy concerns— if not the Constitution itself—the draft legislation must cabin the scope and character of the Treasury secretary’s discretion, connect the exercise of that discretion to legitimate government purposes, and allow Americans adversely affected to seek meaningful judicial review. If the bailout is to pass constitutional muster, lawmakers must concern themselves with at least the following specifics, while keeping in mind the broader outlines of its constitutional authority:
• Type and Scope of Indebtedness. The type of financial instruments or debt that the secretary can purchase, as well as the industries that may seek relief, should be defined by statute carefully so as to limit the secretary’s discretion. There are various ways to do this that would preserve the discretion necessary for the secretary to achieve the goals of the legislation and provide the limits necessary to protect the taxpayers. For instance, the legislation could expressly cover defined mortgage-related, non-equity securities of the type normally held by financial institutions. In addition, Congress and the administration could work together to identify other relevant, non- debt securities and set forth the circumstances under which the secretary could acquire them. If the nature of the economic problems changes, Congress may choose to expand the scope of authority in specific ways rather than granting a blank check at the outset. This and future Administrations should bear the burden of defining and limiting the necessary financial instruments or debt that they are seeking power to manage. Indeed, Congress should exercise a healthy suspicion if the Administration cannot define the scope of the authority it needs. The revolving nature of expenditures should also be capped. In the Administration proposal, the only limitation was the total value of securities the government could hold at any one time, which was $700 billion. The House bill con- verted that figure into an overall cap. Congress should impose some overall limit and stand ready to reconsider the cap if additional expenditures prove necessary.
• Standards to Guide the Secretary’s Discretion. It is questionable whether the current bills satisfy the court-created test of providing an “intelligible principle” to guide the secretary’s discretion (see, e.g., Whitman v. American Trucking Association), but that minimum standard is woefully inadequate for citizens and Members of Congress who care about the constitutional order. Congress must undertake the hard work of crafting legislative alternatives that achieve vital ends without straining our constitutional structure. In order to do so, the legislation itself must contain an objective set of criteria that would guide the secretary’s exercise of discretion in practice and not just in theory. The criteria that the government has employed in deciding when to act (e.g., Bear Stearns, AIG, etc.) and when not to act (e.g., Lehman Brothers) suggest that some guiding principle is necessary, and the Administration should be made to articulate it expressly and ex- pose it to the process of democratic consideration. In contrast, the existing drafts provide almost no meaningful standards to cabin the secretary’s discretion on what debt he may buy, for what purposes, to whom he may sell it, and on what terms. The definition of “troubled” assets is also unreasonably open-ended and not subject to judicial review. The two sweeping, subjective findings the secretary must make in the Administration proposal (three in the House bill) do not seriously limit his subsequent actions. Coupled with the existing limitation on judicial review, his discretion to manage “troubled” markets, “pro- vide stability,” or “prevent disruption” is almost limitless. Equally important, that a particular market is “troubled” or that there is a risk of “disruption” is still a questionable ground for action if there is no legitimate government interest involved. The statute should set forth some objective criteria that connect the particular market problem with a traditional government purpose—e.g., currency stabilization. That connection should not be fictionalized or unreason- ably tenuous, or it will simply serve as a bad precedent for other questionable delegations. With regard to all of these factors, the objective criteria must actually operate to guide and some- times limit the secretary’s exercise of discretion and not merely serve as a hortatory preamble for congressional action.
• Meaningful Judicial Review. It might be reason- able to subject particular factual determinations made by the secretary to a deferential standard of review and to limit certain types of judicial remedies (e.g., injunctions and other equitable relief). But citizens adversely affected by the government’s actions must be able to seek a redress in the courts for fundamental constitutional violations or damages at law.
• Sunset of All Regulatory Authority. Congress can codify or expand regulatory authority within two years if it proves necessary and prudent. How- ever, there is no sound reason to sunset some of the authorities under the proposed legislation but allow unlimited discretion to issue market regulations that will never sunset, as the current proposals provide. All regulations promulgated under the authority of the emergency legislation should sunset with the rest of the statute absent subsequent congressional action.
This combination of changes will go far to addressing the substantial constitutional questions about the existing proposals. If the scope of the authority is carefully defined, the standards for proper action are set forth in the statute, and those two limits are subject to meaningful court review, then citizens can at least know whom to hold accountable and where to go for redress of grievances. The ensuing changes will also move the proposals in the right policy direction as well.
Bicameral for a Reason. As Alexis De Tocqueville observed: “To divide legislative strength, thus to slow the movement of political assemblies…are the sole advantages” of our system of legislative bicameralism. Congress needs to act swiftly to address the financial crisis, but it also needs to deliberate.
—Todd F. Gaziano is the Director of, and Andrew M. Grossman is Senior Legal Policy Analyst in, the Center for Legal and Judicial Studies. They wish to thank Heritage colleagues James L. Gattuso and David C. John for their contributions.
Why We're Floundering And a better way forward. by Lawrence B. Lindsey 09/24/2008 7:45:00 PM
LAST THURSDAY NIGHT Treasury Secretary Hank Paulson and Fed Chairman Ben Bernanke stood surrounded by the bipartisan leadership of Congress to announce that a consensus had emerged that drastic action was needed to save our financial system. On Saturday the first vague details of that action began to emerge. By the time of the first hearings on Tuesday a groundswell of popular opposition produced some of the most broad-based skeptical questioning of the nation's economic leadership that I can remember. What happened?
First, it is now obvious that the Thursday consensus to pass a bill was not backed by the reality of legislation, or even a coherent plan of action. When Washington let Lehman Brothers fail (after a century and a half of operations), many in Washington said that Lehman had had six months to get its problems revolved--since being put on notice when its sister firm Bear Stearns was bailed out--and had not done so. Hence it was denied the assistance Bear had gotten. But what had Washington been doing in the intervening six months to get ahead of the developing financial crisis? By the weekend it appeared that the answer was: about as much as Lehman.
Second, when the first details emerged, the focus of the plan was for the government to buy the assets in the financial system that were not easily valued and therefore could not be sold. They were clogging up the books and thereby consuming most of the spare capital in the system. Those that could be sold were being sold out of desperation at fire sale prices. For example, Merrill Lynch had sold assets at 22 cents on the dollar, and had to lend three-quarters of that amount to the buyer. Trouble was, if the government bought at those prices, the financial industry would take massive losses and many firms might go under. That meant that the only way the plan made sense was for the government to buy assets at prices well above current market values. Not even the most talented wordsmith could find a way of getting around the word "bailout" for this type of action. This meant bailing out the same gigantic firms which government regulators and prosecutors had been saying for months had used shady accounting practices and paid their CEOs tens of millions of dollars per year. I'm just an economist, but that hardly seems like a political winner to me.
Third, to make these purchases the government would have to set a price on assets that are so opaque and differentiated that no market price had been determined for over a year. This opacity led Wall Street to employ some of the smartest people in the world to come up with computer models to determine these prices, and when they did, the prices were so subject to small changes in underlying assumptions that they proved wildly volatile. Passing the plan meant asking members of Congress, most of whom would have to ask a staffer what the formula was for compound interest, to either figure out a fair price or trust the same geeks who got us into this mess in the first place to figure one out instead.
The most likely end game of this approach is passage of a bill that hands the job over to the geeks with so many constraints and conflicting objectives that the entire enterprise runs up against Arrow's Impossibility Theorem. (Kenneth Arrow got a Nobel Prize for formalizing a way of saying "you can't get there from here.") The resulting process would be open to manipulation by private players who could hire their own geeks to figure it out, and therefore almost certain to produce instant billionaires in the process. But, this outcome will still allow congressmen to go home to campaign and tell voters that they have both solved the problem and protected the taxpayer. After the process collapses and the Congress returns in January, the blame will be dumped on the appointed officials who were supposed to oversee the geeks assigned to complete the impossible task. A new process will then be created in January by people with even less experience and with the deterioration in the system much further advanced.
One likely way the new folks could proceed is to stay away from the tar pit of trying to bail out institutions directly and instead opt for an indirect approach. Specifically, the government might choose to bail out homeowners instead. Suppose all homeowners were allowed to refinance their existing mortgage at some low subsidized rate that was also extended to all new buyers, say 4 percent. One catch--the government would have recourse to the borrower and not just the house in the case of default. This is a huge broadening of the plan originally suggested by Martin Feldstein. Not everyone would take this up because it would mean they would have to pay the money back and not just default on their mortgage. So, it would quickly separate the good mortgages from the bad ones that are creating problems in the system.
For those who did take up the plan, a wave of prepayments would begin that would trigger positive cash flow and reduce the risk to all that derivative paper the financial service industry now holds. Prices on that paper would quickly rise and firms would enjoy both more liquidity and more capital. For those who did not refinance, the expectation would be that the house was so far under water that it will ultimately produce a loss. This would help clarify precisely just how much the losses were in the system and on each of the many securitized products and mortgage derivatives as well.
But the biggest advantage is that it avoids the quagmire in which the political class now finds itself. No need for direct bailouts, no need to warehouse paper, no need to hire geeks to figure it all out, and no instant billionaires who simply gamed the system. Better yet for those up for election, no political complaints since it is the voters themselves who were being bailed out.
Lawrence B. Lindsey, a former governor of the Federal Reserve, was special assistant to President Bush for economic policy and director of the National Economic Council at the White House. His most recent book is What a President Should Know . . . but Most Learn Too Late (Rowman and Littlefield).
Stop the Socialist Spendathon Try pro-market, pro-growth solutions instead.
By Deroy Murdock
It is beyond irritating to watch President Bush, Treasury Secretary Henry Paulson, and Federal Reserve Chairman Ben Bernanke gift-wrap their $700-billion early Christmas present for financially irresponsible bankers and the overleveraged borrowers who love them. These “three wise men” consider theirs the only method to stop the turmoil roiling trading desks from Gotham to Tokyo.
“Action by the Congress is urgently required to stabilize the situation and avert what otherwise could be very serious consequences for our financial markets and for our economy,” Bernanke told the Senate Banking Committee Tuesday.
But this mother of all government interventions is unlike a long, cold hypodermic needle in the belly: an inescapable misery, but preferable to death by rabies. There actually are desirable alternatives to building socialism and saddling every American man, woman, and child with another $2,300 in unjustified federal spending.
One option is to instruct the geniuses from Fannie Mae to Wall Street to deal with it. They made this mess; they should mop it up. Cut back, sell assets, develop fresh services, or get new jobs. Absent a federal bailout, Lehman Brothers sold parts of itself to Barclay’s Bank. Facing Uncle Sam’s cold shoulder, Merrill Lynch ran into the loving arms of Bank of America. Merrill’s customers will survive, and its employees will work for B of A or seek their fortunes elsewhere.
It may take time and tightened belts, but padlocking Washington’s bailout window will offer a generation of “masters of the universe” lessons that America’s Mr. Rogers-in-Chief cannot teach: Keep your winnings, but own your losses. If you fall on your face, especially after dancing drunk on the roof, Uncle Sam may empathize, but he no longer will rush in to swaddle you in silk sheets and place your bruised head on pillows stuffed with crisp $100 bills.
Other options exist, of course — and while they lack the bracing appeal of this sort of financial Darwinism, they remain far more attractive than our current policy of “survival of the fattest.”
Rep. Jeb Hensarling (R., Texas) chairs the Republican Study Committee, the congressional caucus of idea-driven, free-market stalwarts. These practicing Reaganites seem appalled to watch their GOP president morph before their eyes from GWB to LBJ to FDR. At a Capitol Hill press conference at high noon on Tuesday, Hensarling and a dozen RSC members expressed deep misgivings about Bush’s $700-billion baby. Preferring to drown it in the bathwater, Hensarling and his band of true believers rejected Bush’s collectivism and offered their own proposals for escaping this rubble — and returning America to a path of robust growth:
Give the capital-gains tax a two-year vacation. “Suspending capital gains taxes would bring as much as a trillion dollars of capital sitting on the sidelines back into the market,” Hensarling predicts. Also, as the Tax Foundation proposes, cutting America’s 35-percent corporate tax — the industrialized world’s second highest, after Japan’s — would boost U.S. global competitiveness. Since equity prices partially reflect long-term after-tax profits, lowering corporate levies should buoy stock markets.
Denationalize, then privatize Fannie and Freddie. “These troubled financial Frankensteins — created in a government laboratory — are not creatures of the free enterprise system,” Hensarling said. “We must ultimately take their monopoly powers away and return them to the marketplace.” Why not array Fannie’s and Freddie’s loans according to mortgage holders’ surnames? They then could be divided alphabetically into 26 units and auctioned off.
Waive “mark-to-market” accounting. As the Competitive Enterprise Institute’s John Berlau argues, when distressed mortgage-backed securities sell at bargain-basement prices, unhelpful new bookkeeping regulations require that similar instruments elsewhere — including viable loans — be valued at equally low prices. This needlessly stains balance sheets.
Strengthen the dollar. Bernanke should boost U.S. currency, not pose as America’s uber-stock broker. A strong dollar lowers inflation, cheapens oil, and soothes world markets.
Bush’s bailout bonanza began with $29 billion for Bear Sterns. Then came the taxpayer-financed purchase of an 80-percent stake in AIG. And while the public and press gaped open-mouthed at the $700 billion request to rescue the financial-services sector, Washington quietly passed $25 billion to the auto industry. Doubtless, credit-card companies now await their slab of bacon. This cavalcade of giveaways and takeovers monumentally betrays the Republican Party’s most sacred tenets.
Even worse, Bush’s hyper-statism offers nothing imaginative. It takes brains to generate interesting ideas like Hensarling & Co.’s. It takes mere muscle to nationalize companies and toss handfuls of cash into the air. Just ask Eva Peron.
Recalling that people such as Robert F. Kennedy have called climate skeptics “traitors”, David Suzuki calls for their jailing, the Grist website called for Nuremburg trials for them, NASA’s Dr. Jim Hansen calling for their trials for treason, along with the habitual insults from Al Gore, its been difficult for anyone to respectfully dissent. It’s been difficult to stick to the rules of hard science, by demanding evidence and replication, both of which require questioning but are often followed by insults and threats.
The world owes a lot to many climate scientists who are closely studying and reviewing the claims of the global warming lobby. They are also attempting to replicate some of these findings without the traditional support of the originating authors. Ordinarily, in the world of hard nosed science, such scrutiny and replication has been historically welcomed. No longer. The well-known name calling, the dismissiveness, the ad hominem attacks, is regrettably now the standard level of discourse. Additionally, these include many laboratory directors, media editors, and Ph.D.s who for whatever reasons adopt the same low roads of discourse and the abandonment of science.
These are difficult times for traditional climate scientists who do practice good science, serious peer review, welcome scrutiny, replication, and the sharing of data. Thanks to the whole world of the global warm-mongers and indentured PhDs, the integrity of the entire world of science is being diminished, followed by a loss of trust and respect.
Among the giants challenging the global warming dogma has been Christopher Monckton. He has been a strong international leader, spokesman, and expert in unraveling the complexities of the man-made warming hypothesis.
The greatest drivers behind the hypothesis have not been the actual evidence, but computer models. Relative to the largely unknown climate complexities, these are still known to be primitive and incapable of replicating climate data as measured from observations. If a hypothesis can’t explain actual evidence and climate observations, it is wrong, and needs to be modified or abandoned.
In a recent exchange with an expert modeler and believer of global warming, Monckton responded in incredible detail by identifying many of the problems found with the computer models themselves. Monckton is impressively expert in the minutiae of computer modeling, a skill which applies directly to the analyses of the computer climate models. Monckton has performed a detailed analysis of the IPCC’s hypothesis of global warming and identified a long list of failings. They deserved much wider distribution, with an understanding of the serious implications. They and literature references can be found here (http://tinyurl.com/6edjzo).
Monckton is not alone in his concerns with computer modeling. Tens of thousands of scientists and engineers who have taken basic mathematics know of the problems and complexities with modeling even simple situations. This author has met a fellow scientist (a bit nerdy admittedly) who carried a long multi-variable multi-term equation on a paper kept in his wallet, which was the equation of the outline of his wife’s face. The modeling problem is delightfully defined by atmospheric physicist Dr. James Peden, who recently said Climate Modeling is not science, it is computerized Tinkertoys, with which one can construct any outcome he chooses.. And for my nerdy modeler above, it’s easy to change his wallet equation if he gets a new wife!
Monckton’s analyses are summarized in a number of points below, which are devastating to the hypothesis and computer modeling. These have profound implications for policy makers and the energy and economic future of our country. We’d better learn these: Point 1: There are… serial, serious failures of the computer models of climate
….the computer models upon which the UN’s climate panel unwisely founds its entire case have failed and failed and failed again to predict major events in the real climate.
a. The models have not projected the current multidecadal stasis in “global warming”:
b. no rise in temperatures since 1998; falling temperatures since late 2001; temperatures not expected to set a new record until 2015 (Keenlyside et al., 2008).
c. nor (until trained ex post facto) did they predict the fall in TS from 1940-1975;
d. nor 50 years’ cooling in Antarctica (Doran et al., 2002) and the Arctic (Soon, 2005);
e. nor the absence of ocean warming since 2003 (Lyman et al., 2006; Gouretski & Koltermann, 2007);
f. nor the behavior of the great ocean oscillations (Lindzen, 2007),
g. nor the magnitude nor duration of multi-century events such as the Mediaeval Warm Period or the Little Ice Age;
h. nor the decline since 2000 in atmospheric methane concentration (IPCC, 2007);
i. nor the active 2004 hurricane season;
j. nor the inactive subsequent seasons;
k. nor the UK flooding of 2007 (the Met Office had forecast a summer of prolonged droughts only six weeks previously);
l. nor the solar Grand Maximum of the past 70 years, during which the Sun was more active, for longer, than at almost any similar period in the past 11,400 years (Hathaway, 2004; Solanki et al., 2005);
m. nor the consequent surface “global warming” on Mars, Jupiter, Neptune’s largest moon, and even distant Pluto;
n. nor the eerily-continuing 2006 solar minimum;
o. nor the consequent, precipitate decline of ~0.8 °C in surface temperature from January 2007 to May 2008 that has canceled out almost all of the observed warming of the 20th century.
As Monckton states, the computer models are demonstrable failures.
Point 2: The IPCC’s method of evaluating climate sensitivity is inadequate and error-laden Monckton showed that the IPCC’s method of evaluating climate sensitivity can be reproduced by nothing more complicated than a few equations which, if the IPCC’s values for certain key parameters are input to them, generate the IPCC’s central estimate of climate sensitivity to a high precision. Nowhere else has this method been so clearly or concisely expounded before.
And, once the IPCC’s method is clearly seen for what it is, it is at once apparent that their method suffers from a series of major defects that render it useless for its purpose. The laboratory experiments that form the basis for estimates of forcings do not translate easily to the real atmosphere, so that the IPCC’s claimed “Levels of Scientific Understanding” for the forcings are exaggerated; its estimates of the feedbacks that account for two-thirds of total forcing are subject to enormous uncertainties not fairly reflected in the tight error-bars it assigns to them; the feedback-sum is unreasonably close to the point of instability in the Bode feedback equation (important in the study of circuit [and climate] feedbacks), which has in any event been incorrectly used for amplification in a chaotic system, when it was designed only for systems whose initial state was linear; the IPCC’s value for the no-feedbacks climate sensitivity parameter is the highest in the mainstream literature, and is inconsistent with the value derivable from the 2001 report; the value of this and other parameters are not explicitly stated; etc., etc.
Point 3: The IPCC’s value for climate sensitivity depends upon only four scientific papers Climate sensitivity is the central – properly speaking, the only – question in the debate about the extent to which “global warming” will happen. Monckton’s presentation of the IPCC’s method of calculating how much the world will warm in response to a doubling of CO2 concentration shows that the IPCC’s values for the three key parameters whose product is climate sensitivity are taken not from 2,500 papers in the literature but from just four papers. Had a wider, more representative selection of papers been relied upon, a far lower climate sensitivity would have resulted.
Point 4: Uncertainty in evaluating climate sensitivity is far greater than the IPCC admits The IPCC baselessly states that it is 90% sure we (humans) caused most of the observed warming of the past half-century (or, more particularly, the warming in the 23 years between 1975 and 1998: the remaining 27 years were in periods of cooling). However, the uncertainties in the evaluation of climate sensitivity are so great that any conclusion of this kind is meaningless. None of the three key parameters whose product is climate sensitivity can be directly measured; attempts to infer their values by observation are thwarted by the inadequacies and uncertainties of the observations depended upon; and, in short, the IPCC’s conclusions as to climate sensitivity are little better than guesswork.
Point 5: The published literature can be used to demonstrate lower climate sensitivity The second part of Monckton’s paper examines the literature on climate sensitivity. A surprisingly small proportion of all papers on climate change consider this central question. The vast majority concentrate on assuming that the IPCC’s climate-sensitivity estimate is right and then using it to predict consequences (though, as Schulte, 2008, has shown, none find that the consequences are likely to be catastrophic). Monckton demonstrates, using papers from the literature, that it is at least as plausible to find a climate sensitivity of <0.6 C as it is to find the IPCC’s 3.3C ( a factor of 5--- such a large uncertainty does not inspire confidence).
Point 6: Even if climate sensitivity is high, adaptation is more cost-effective than mitigation Monckton concluded as follows: “Even if temperature had risen above natural variability, the recent solar Grand Maximum may have been chiefly responsible. Even if the sun were not chiefly to blame for the past half-century’s warming, the IPCC has not demonstrated that, since CO2 occupies only one-ten-thousandth part more of the atmosphere that it did in 1750, it has contributed more than a small fraction of the warming.
Monckton’s analysis here is a major contribution to understanding a difficult subject. He has broken through the dense modeling processes, not to mention the ad hominem attacks, in such a way that many more can understand its weaknesses.
It is time to break the relationship between energy policy and computer forecasting. The models are not sources of climate information so badly needed to formulate rational energy policy without the threats of economic suicide. The economic and energy future of our nation should not rest so completely on such primitive modeling.
It is well beyond the time when the policy makers, the educators, and the media, demand evidence instead of scare stories. Glossy documentaries won’t do.
As Dennis Avery said recently, co-author of the book “Unstoppable Global Warming”, “We look forward to a full-scale exploration of the science. We have heard quite enough from the computers”.
Michael R. Fox, Ph.D., a science and energy reporter for Hawaii Reporter and a science analyist for the Grassroot Institute of Hawaii, is retired and now lives in Eastern Washington. He has nearly 40 years experience in the energy field. He has also taught chemistry and energy at the University level. His interest in the communications of science has led to several communications awards, hundreds of speeches, and many appearances on television and talk shows. He can be reached via email at mailto:firstname.lastname@example.org
As I figure it, $700,000,000,000 divided by a population of 300,000,000 equals $2333 each. Before our government commits each of us to a share of this handout, it has some questions to answer:
Sunday, September 21, 2008
Before D.C. Gets Our Money, It Owes Us Some Answers [Newt Gingrich]
Watching Washington rush to throw taxpayer money at Wall Street has been sobering and a little frightening.
We are being told Treasury Secretary Henry Paulson has a plan which will shift $700 billion in obligations from private companies to the taxpayer.
We are being warned that this $700 billion bailout is the only answer to a crisis.
We are being reassured that we can trust Secretary Paulson "because he knows what he is doing".
Congress had better ask a lot of questions before it shifts this much burden to the taxpayer and shifts this much power to a Washington bureaucracy.
Imagine that the political balance of power in Washington were different.
If this were a Democratic administration the Republicans in the House and Senate would be demanding answers and would be organizing for a “no” vote.
If a Democratic administration were proposing this plan, Republicans would realize that having Connecticut Democratic senator Chris Dodd (the largest recipient of political funds from Fannie Mae and Freddie Mac) as chairman of the Banking Committee guarantees that the Obama-Reid-Pelosi-Paulson plan that will emerge will be much worse as legislation than it started out as the Paulson proposal.
If this were a Democratic proposal, Republicans would remember that the Democrats wrote a grotesque housing bailout bill this summer that paid off their left-wing allies with taxpayer money, which despite its price tag of $300 billion has apparently failed as of last week, and could expect even more damage in this bill.
But because this gigantic power shift to Washington and this avalanche of taxpayer money is being proposed by a Republican administration, the normal conservative voices have been silent or confused.
It’s time to end the silence and clear up the confusion.
Congress has an obligation to protect the taxpayer.
Congress has an obligation to limit the executive branch to the rule of law.
Congress has an obligation to perform oversight.
Congress was designed by the Founding Fathers to move slowly, precisely to avoid the sudden panic of a one-week solution that becomes a 20-year mess.
There are four major questions that have to be answered before Congress adopts a new $700 billion burden for the American taxpayer. On each of these questions, I believe Congress’s answer will be “no” if it slows down long enough to examine the facts.
Question One: Is the current financial crisis the only crisis affecting the economy?
Answer: There are actually multiple crises hurting the economy.
There is an immediate crisis of liquidity on Wall Street.
There is a longer time crisis of a bad energy policy transferring $700 billion a year to foreign countries (so foreign sovereign capital funds are now using our energy payments to buy our companies).
There is a longer term crisis of Sarbanes-Oxley (the last "crisis"-inspired congressional disaster) crippling entrepreneurial start ups, driving public companies private, driving smart business people off public boards, and driving offerings from New York to London.
There is a long term crisis of a high corporate tax rate driving business out of the United States.
No solution to the immediate liquidity crisis should further cripple the American economy for the long run. Instead, the liquidity solution should be designed to strengthen the economy for competition in the world market.
Question Two: Is a big bureaucracy solution the only answer?
Answer: There is a non-bureaucratic solution that would stop the liquidity crisis almost overnight and do it using private capital rather than taxpayer money.
Four reform steps will have capital flowing with no government bureaucracy and no taxpayer burden.
First, suspend the mark-to-market rule which is insanely driving companies to unnecessary bankruptcy. If short selling can be suspended on 799 stocks (an arbitrary number and a warning of the rule by bureaucrats which is coming under the Paulson plan), the mark-to-market rule can be suspended for six months and then replaced with a more accurate three year rolling average mark-to-market.
Second, repeal Sarbanes-Oxley. It failed with Freddy Mac. It failed with Fannie Mae. It failed with Bear Stearns. It failed with Lehman Brothers. It failed with AIG. It is crippling our entrepreneurial economy. I spent three days this week in Silicon Valley. Everyone agreed Sarbanes-Oxley was crippling the economy. One firm told me they would bring more than 20 companies public in the next year if the law was repealed. Its Sarbanes-Oxley’s $3 million per startup annual accounting fee that is keeping these companies private.
Third, match our competitors in China and Singapore by going to a zero capital gains tax. Private capital will flood into Wall Street with zero capital gains and it will come at no cost to the taxpayer. Even if you believe in a static analytical model in which lower capital gains taxes mean lower revenues for the Treasury, a zero capital gains tax costs much less than the Paulson plan. And if you believe in a historic model (as I do), a zero capital gains tax would lead to a dramatic increase in federal revenue through a larger, more competitive and more prosperous economy.
Fourth, immediately pass an “all of the above” energy plan designed to bring home $500 billion of the $700 billion a year we are sending overseas. With that much energy income the American economy would boom and government revenues would grow.
Question Three: Will the Paulson plan be implemented with transparency and oversight?
Answer: Implementation of the Paulson plan is going to be a mess. It is going to be a great opportunity for lobbyists and lawyers to make a lot of money. Who are the financial magicians Paulson is going to hire? Are they from Wall Street? If they’re from Wall Street, aren't they the very people we are saving? And doesn’t that mean that we’re using the taxpayers’ money to hire people to save their friends with even more taxpayer money? Won't this inevitably lead to crony capitalism? Who is going to do oversight? How much transparency is there going to be? We still haven't seen the report which led to bailing out Fannie Mae and Freddie Mac. It is "secret". Is our $700 billion going to be spent in "secret" too? In practical terms, will a bill be written in public so people can analyze it? Or will it be written in a closed room by the very people who have been collecting money from the institutions they are now going to use our money to bail out?
Question Four: In two months we will have an election and then there will be a new administration. Is this plan something we want to trust to a post-Paulson Treasury?
Answer: We don’t know who will inherit this plan.
The balance of power on election day will shift to either McCain or Obama. Who will they pick for Treasury Secretary? What will their allies want done? We are about to give the next administration a level of detailed control over big companies on a scale even FDR did not exercise during the Great Depression. Is this really wise?
For these reasons I hope Congress will slow down and have an open debate.
And in the course of that debate, I hope someone will introduce an economic recovery act that makes America a better place to grow jobs. I hope the details will be made public before the vote.
For more details on my action plan for getting the American economy back on track and building long-term economic prosperity, you can read this message recorded yesterday to American Solutions members.
This is a very important week for the integrity of the Congress.
This is a very important week for the future of America.
If Washington wants our money, then it owes us some answers.
When I first got to college, back in the last few weeks of the Seventies, I finally got a chance to see an ordinary game of Dungeons and Dragons. My immediate inclination was to play as a Paladin: the pinnacle of Lawful Good, a character required to dash in and fight overwhelmingly powerful evil forces anywhere and at whatever odds. These contests were short, depressing and hilarious, but all D&D really came down to in the end was slaying small monsters, taking their gold, buying slightly better gear and then slaying slightly larger monsters. Why not just save some time and become a Vorpal Sword distributor? Then you get the weapons and the gold, and people bring them both to you. And so a larval conservative was born. And I never played again.
That was the attitude I took into The Lord of the Rings when the first of the trilogy appeared in 2001, just a few months after the Two Towers actually did fall and the idea of good and evil suddenly became — to me and no doubt to you too — a great deal less ironic and a great deal more real.
And there, in the darkness, staring up at that screen, I marveled at this monumental font of deep and eternal ideas: the aversion to facing danger, even when it is right in front of us; the value of old and true allies; the corrosive force of addiction; responsibility forsaken, then reclaimed… and through it all the fear that we may be lesser sons of greater fathers, and that we may no longer have the courage or the will to defend the City entrusted to our care.
This, and more, what was what John Ronald Reuel Tolkien was trying to teach me, down that dark river of the future — and he ought to know. The Lord of the Rings was written between 1937 through 1949… years of dark waters, indeed.
A few years before Tolkien put pen to paper, an event took place that a man of his education would have undoubtedly been aware. On February 9th, 1933, the ruling elite of the world’s great Civilization held a debate in the Oxford Union. With thunderclouds growing dark across the English Channel, at a time when resolute action could still have averted the worst catastrophe the world has ever known, these elites resolved that “This House will in no circumstances fight for its King and Country.”
The Resolution passed by a vote of 275 to 153. Needless to say, this vote did not avert the fight. It guaranteed it.
How much of the weight of that, I wonder, sat along side him as he penned page after page about the decline of the Men of the West. For taken in its entirety, The Lord of the Rings is about the collective regeneration of the will and courage of a previous age, and ends with the hope that the greatest days of the City lie yet ahead.
I live a few miles from Santa Monica High School, in California. There, young men and women are taught that America is “a terrorist nation,” “one of the worst regimes in history,” that it’s twice-elected leader is “the son of the devil,” and dictator of this “fascist” country. Further, “patriotism” is taught by dragging an American flag across the classroom floor, because the nation’s truest patriots, as we should know by now, are those who are most able to despise it.
This is only high school, remember: in college things get much, much worse.
Two generations, now, are being raised on this poison, and the reason for that is this: the enemies of this city cannot come out and simply say, “Do not defend the city.” Even the smartest among us can see that is simple treason. But they can say, “The City is not worth defending.” So they say that, and they say that all the time and in as many different ways as they are able.
If you step far enough back to look at the whole of human history, you will begin to see a very plain rhythm: a heartbeat of civilization. Steep climbs out of disease and ignorance into the light of medicine and learning — and then a sudden collapse back into darkness. And it is in that darkness that most humans have lived their lives: poor, nasty, brutish, and short.
The pattern is always the same: at the height of a civilization’s powers something catastrophic seems to occur — a loss of will, a failure of nerve, and above all an unwillingness to identify with the values and customs that have produced such wonders.
The Russians say a fish rots from the head down. They ought to know. It may not be factually true that Nero fiddled while Rome burned, the saying has passed into common usage because the image as the ring of truth to it: time and time again, the good and decent common people have manned the walls of the city, and have been ready to give their lives in its defense, only to discover too late that some silk-robed son of a bitch has snuck out of the palace at midnight and thrown open the gates to the barbarians outside.
And how is this done, this “throwing open of the gates?” How are defenders taken off the walls?
Well, most of what I learned about Vietnam I learned from men like Oliver Stone. This self-loathing narcissist has repeatedly tried to inculcate in me a sense of despair and outrage at my own government, my own culture, my own people and ultimately myself. He tried to convince me — and he is a skillfull man — that my own government murdered my own President for political gain. I am told daily in those darkened temples that rogue CIA elements run a puppet government, that the real threat to the nation comes from the generals that defend it, or from the businessmen that provide the prosperity we take for granted.
I sit with others in darkened rooms, watching films like Redacted, Stop-Loss, and In the Valley of Elah, and see our brave young soldiers depicted as murderers, rapists, broken psychotics or ignorant dupes –visions foisted upon me by bitter and isolated millionaires such as Brian de Palma and Paul Haggis and all the rest.
I’ve been told this story in some form or another, every day of every week of the past 30 years of my life. It wasn’t always so.
But it is certainly so today. And standing against all this hypnotic power — the power of the mythmakers in Hollywood, the power of the information peddlers in the media, the corrosive power of America-hating professors on every campus in America… against all that we find an old warrior — a paladin if ever there was one — an old, beat-up warhorse standing up in defense of his city one last time. And beside him: a wonder. A common person… just a regular mom who goes to work, does a difficult job with intelligence and energy and grace and every-day competence and then puts it away to go home and have dinner with the family.
Against all of that stand these two.
No wonder they must be destroyed. Because — Sarah Palin especially — presents a mortal threat to these people who have determined over cocktails who the next President should be and who now clearly mean to grind into metal shards the transaxle of their credibility in order to get the result they must have. Truly, they are before our eyes destroying the machine they have built in order to get their victory. What the hell is so threatening to be worth that?
Only this: the living proof that they are not needed. Not needed to govern, not needed to influence and guide, not needed to lecture us on our intellectual and moral failings which are visible only from the heights of Manhattan skyscrapers or the palaces up on Mulholland Drive. Not needed. We can do it — and do it better — without all of them.
When all is said and done, Civilizations do not fall because of the barbarians at the gates. Nor does a great city fall from the death wish of bored and morally bankrupt stewards presumably sworn to its defense. Civilizations fall only because each citizen of the city comes to accept that nothing can be done to rally and rebuild broken walls; that ground lost may never be recovered; and that greatness lived in our grandparents but not our grandchildren. Yes, our betters tell us these things daily. But that doesn’t mean we have to believe it.
Ask the common people of all politics and persuasions aboard Flight 93 whether greatness and courage has deserted America. Through this magical crystal ball — the one we are using right now — we common people can speak to one another. And by reminding ourselves and those around us of who we are, where we came from, what we have achieved together and of the marvels we have yet to achieve, we may laugh in the face of despair and mock those people that think a man with an MBA from Harvard knows more about running a gas station than the man that actually runs the gas station.
It is the small-town virtues of self-reliance, hard work, personal responsibility, and common-sense ingenuity — and not those of the preening cosmopolitans that gape at them in mixed contempt and bafflement — that have made us the inheritors of the most magnificent, noble, decent and free society ever to appear on this earth. This Western Civilization… this American City… has earned the right to greet each sunrise with a blast of silver trumpets that can bring down mountains.
And what, really, is a Legion of Narcissists and a Confederacy of Despair against that?
Reason had a piece about this yesterday. I've taken the liberty of bolding a germane point:
Sharia Invades Britain, Cultural Relativists Quietly Pack Their Bags Mike Riggs | September 16, 2008, 3:19pm
First, the big news:
Islamic law has been officially adopted in Britain, with sharia courts given powers to rule on Muslim civil cases.
The government has quietly sanctioned the powers for sharia judges to rule on cases ranging from divorce and financial disputes to those involving domestic violence.
Rulings issued by a network of five sharia courts are enforceable with the full power of the judicial system, through the county courts or High Court....
Under the act, the sharia courts are classified as arbitration tribunals. The rulings of arbitration tribunals are binding in law, provided that both parties in the dispute agree to give it the power to rule on their case.
Next, some thoughtful analysis from the students at the GW Patriot blog:
[T]he act in question--sanctioning Muslim Sharia courts to serve as officially-recognized arbiters in British civil cases--shouldn't be so repugnant to thinking people. As liberals (and, in global terms, all of us here at the Patriot are liberal), we ought only to worry whether these courts are really as "voluntary" as they claim to be, which are similar to the Beth Din courts that decide civil cases between consenting Jews. We might find Sharia law itself repugnant, but the degree of cultural relativism inherent in liberal political institutions is there for a good reason. If we don't like it, we don't have to consent.
It's an open question just how voluntary these sorts of arrangements really can be. The possibility that participation in these courts could be coerced is there, which is worrisome enough to justify significant state oversight. That is not sufficient reason, though, to dismantle the courts entirely. We have to swallow our principles here and admit that--since we allow people to make self-harming decisions elsewhere all the time--it would make sense only to a xenophobe to stop at sanctioning a Sharia arbitration court.
Critics should examine not just the voluntary aspect of sharia, but also its fairness. How many Muslim women will be coerced by their fathers and husbands into submitting to sharia instead of taking their chances with the British court system? And how many of them, as a result of this cultural insulation, will end up being punished for—or as a result of—their gender? Anecdotal evidence suggests quite a few women will end up worse off under sharia:
There are concerns that women who agree to go to tribunal courts are getting worse deals because Islamic law favours men.
Siddiqi said that in a recent inheritance dispute handled by the court in Nuneaton, the estate of a Midlands man was divided between three daughters and two sons.
The judges on the panel gave the sons twice as much as the daughters, in accordance with sharia. Had the family gone to a normal British court, the daughters would have got equal amounts.
Almost as disturbing as the people who advocate for sharia on principle are the people who ask why the Jews get special treatment and the Muslims don't. Where are the advocates for dissolving both Beth Din and Sharia?
Bruce Bawer saw this coming, and said as much three years ago in reason.
Addendum: The astute Jesse Walker brought this H&R post to my attention, as well as this defense of alternative forms of arbitration. Despite his seductive intellectual prowess, I maintain my disdain for sharia.
Both John McCain and Barack Obama have many smart policy proposals, but not all of them are ready for prime time. This week, FP looks at 10 Obama ideas that should have never seen the light of day. Next week? McCain on the hot seat.
Renegotiating the North American Free Trade Agreement
What he said: “I will make sure that we renegotiate. … I think we should use the hammer of a potential opt-out as leverage to ensure that we actually get labor and environmental standards that are enforced.” —Democratic primary debate in Cleveland, Feb. 26, 2008
Why it’s a bad idea: Trade agreements take years to negotiate, and Mexico and Canada would almost certainly seek new concessions of their own in a new round. Obama is right to argue that more economic development in Mexico will lower illegal immigration; he’s wrong to think that bashing NAFTA is the right way to address the Rust Belt’s economic woes. Happily, since the Ohio primary, Obama has backed off his harshest criticisms of the agreement.
Opposing the U.S.-Colombia Free Trade Agreement
What he said: “And I’ll also oppose the Colombia Free Trade Agreement if President Bush insists on sending it to Congress because the violence against unions in Colombia would make a mockery of the very labor protections that we have insisted be included in these kinds of agreements.” —Speech to Philadelphia AFL-CIO, April 2, 2008
Why it’s a bad idea: Although Obama cited antilabor violence, the murder rate for union members in Colombia last year was 4 per 100,000, well below the rate for the general population. The deal carries little to no cost for the United States; economists actually predict modest increases in U.S. exports. The upshot for an important ally in the war on drugs, however, is high, and consolidating Colombia’s commitment to open trade with the United States is a worthy goal.
Talking Openly About Bombing Pakistan
What he said: “If we have actionable intelligence about high-value terrorist targets and President Musharraf won’t act, we will.” —Speech at the Woodrow Wilson International Center, Washington, D.C., Aug. 1, 2007
Why it’s a bad idea: Engaging in military strikes in Pakistan happens to be established policy. But, as none other than Joe Biden pointed out last August, “It’s not something you talk about. … The last thing you want to do is telegraph to the folks in Pakistan that we are about to violate their sovereignty.”
Sitting Down with Mahmoud Ahmadinejad
What he said: Asked if he’d be “willing to meet separately, without precondition, during the first year of your administration, in Washington or anywhere else, with the leaders of Iran, Syria, Venezuela, Cuba, and North Korea,” Obama replied: “I would.” —Democratic primary debate, Charleston, S.C., July 23, 2007
Why it’s a bad idea: Engaging rogue states can be a savvy move, and even the Bush administration has negotiated with Pyongyang and sent envoys to meetings with Iran. But sitting down with heads of state without precondition? That’s another thing entirely, especially when it comes to Iranian President Mahmoud Ahmadinejad. As Carnegie Endowment expert Karim Sadjadpour told the Wall Street Journal, “Only two things can rehabilitate Ahmadinejad politically: bombing Iran or major efforts to engage.” No wonder Obama’s foreign-policy team has walked back its candidate’s off-the-cuff remarks.
Pushing the Patriot Employer Act
What he said: “When I am president … I’ll pass the Patriot Employer Act that I’ve been fighting for ever since I ran for the Senate—we will end the tax breaks for companies who ship our jobs overseas, and we will give those breaks to companies who create good jobs with decent wages right here in America.” —Speech in Janesville, Wis., Feb. 13, 2008
Why it’s a bad idea: British economists Willem Buiter and Anne Sibert slam the bill as, “reactionary, populist, xenophobic and just plain silly.” That’s a bit much. A little populist pandering is hardly a threat to the global economic order—the bill offers employers a small tax credit if they meet six conditions, including the probably unworkable provision that they keep their headquarters in the United States. It’s never smart economic policy to reward companies for placing limitations on their own profitable activities, but as The Economist put it, “Obama deserves a slap on the wrist” for this one, not a full-throated indictment.
Promoting Coal-to-Liquid Fuels
What he said: “The people I meet in town hall meetings back home would rather fill their cars with fuel made from coal reserves in Southern Illinois than with fuel made from crude reserves in Saudi Arabia. We already have the technology to do this in a way that’s both clean and efficient. What we’ve been lacking is the political will.” —Statement introducing the Coal-to-Liquid Fuel Promotion Act of 2006, June 7, 2006
Why it’s a bad idea: Obama’s energy policy has much to commend it. But borrowing an idea from World War II Germany and apartheid South Africa? Bad move. Coal-to-liquid fuels produce nearly twice the greenhouse gases of ordinary petroleum, experts say, and it’s foolish to subsidize an industry that easily could go under if oil prices fall. Under withering fire from environmentalists, the Obama camp clarified his position in June 2007 as, “nless and until this technology is perfected, Senator Obama will not support the development of any coal-to-liquid fuels unless they emit at least 20% less life-cycle carbon than conventional fuels.” It’s since been dropped from campaign materials.
Eliminating Income Taxes for Seniors Making Under $50,000
What he said: “I’ll make retirement more secure for America’s seniors by eliminating income taxes for any retiree making less than $50,000 per year.” —Speech on Nov. 7, 2007, in Bettendorf, Iowa
Why it’s a bad idea: Most seniors already pay no income taxes. That’s because they already get preferential treatment in the tax code. Plus, why are seniors more deserving of tax relief than struggling young families? The Tax Policy Center—run by the Brookings Institution and the Urban Institute—criticized the idea in a recent report, saying that because government spending on seniors is already set to balloon due to retiring baby boomers, “it seems inappropriate to target special income tax breaks to this group.”
Boosting Ethanol Subsidies
What he said: “[Ethanol] ultimately helps our national security, because right now we’re sending billions of dollars to some of the most hostile nations on earth.” —Statement at the opening of a VeraSun Energy ethanol processing plant in Charles City, Iowa, August 2007
Why it’s a bad idea: As economist Paul Krugman has written, corn-based ethanol is “bad for the economy, bad for consumers, bad for the planet—what’s not to love?” World Bank economist Donald Mitchell blames biofuels, including ethanol, for a 75 percent increase in global food prices since 2002 that has led to economic distress and rioting in such countries as Haiti, Egypt, and Somalia. There’s also little evidence that they do much to prevent global warming. A recent study published in Science demonstrated that the farmland needed to grow corn for ethanol results in deforestation on a massive scale, negating any benefit the reduction in carbon emissions might have. So why does the senator support such a wasteful and damaging subsidy, even voting for the recent farm bill’s billions in pork for ethanol producers? “ecause Illinois … is a major corn producer,” he said in April. At least he’s honest.
Taxing Oil Companies Extra
What he said: “I’ll make oil companies like Exxon pay a tax on their windfall profits, and we’ll use the money to help families pay for their skyrocketing energy costs and other bills.” —Speech in Raleigh, N.C., June 9, 2008
Why it’s a bad idea: He’s attacking the symptom, not the disease. It’s certainly hard to defend oil companies making record profits while consumers are struggling to fill their tanks, but Big Oil has very little control over day-to-day gas prices, which are set by global supply and demand and, of course, OPEC. By discouraging oil companies from making big profits, such a tax could potentially discourage them from making investments in new refineries and finding new oil sources, resulting in fewer jobs and even higher prices at the pump. Jimmy Carter tried this in 1980, and it only increased U.S. dependence on foreign oil. Singling out one particular industry for punishment because it is politically unpopular doesn’t make much economic sense, either.
Opening the Strategic Petroleum Reserve
What he said: “We should sell 70 million barrels of oil from our Strategic Petroleum Reserve for less-expensive crude, which in the past has lowered gas prices within two weeks.” —Speech in Lansing, Mich., Aug. 4, 2008
Why it’s a bad idea: Obama was right in July when he said that the strategic oil reserve “has to be reserved for a genuine emergency.” Selling oil from the 700 million barrel reserve would increase domestic supply and could drive down prices in the short term, but encouraging consumers to use more oil isn’t going to fix anything. And depleting the reserve would leave the United States vulnerable to a supply disruption caused by a natural disaster or further unrest in the Middle East. Obama swapped common sense for this dangerous boondoggle in August after McCain started to hammer him on offshore drilling. So much for tough truths.
WASILLA, AK - Records and eyewitnesses have come to light that prior to announcing her candidacy for the Vice Presidency; Sarah Palin shot a Bigfoot from a helicopter. A government helicopter was seen flying low over the Chugach National Park with what witnesses described as “a sexy librarian shooting out the side.” Employees at a local bait shop report seeing a similar woman only hours before carrying an infant in a camouflage Baby Bjorn.
The Bigfoot, or Sasquatch as it is known in scientific circles, was found dead on the outskirts of the park, just south of Wasilla, Alaska. Preliminary forensics reports confirm that an adult male Sasquatch was shot in the face with Palin’s trademark 5mm M4 Carbine Assault Rifle.
Environmental groups are in an uproar at the hunting death of a rare and notoriously reclusive species. Efforts to have the Sasquatch placed on the endangered species list have met with repeated opposition from state legislature, since protecting the ‘Missing Link’ could be seen as validating evolution.
Conservatives have immediately rallied to their party’s new star, citing that gun ownership and hunting are indelible parts of American culture. Indeed this point is hard to argue, as John Adams was notorious for having captured what he called a “Skunk Ape” and killing it with his bare hands on the White House lawn in front of a paying audience.
Don't see a link, but if this is indeed Pat Buchanan then I'm surprised he didn't raise the specter of the Illuminati and Trilateral Commission. Buchanan's Hitler apologia he recently published is just one element of a long list of rank foolishness he's been associated with.