103 Comments

1. Xixi:

The next big under-the-radar boondoggle is the Trans Texas Corridor. It’s the first step in the plan to make a new country called Norte America.

Oct 3, 2008 - 11:48 am 2. Snoopy:

This is one hell of an essay, Michael. Sadly, I couldn’t agree more.

Oct 3, 2008 - 12:02 pm 3. vashnugel:

The author leaves out one neat little nugget: Our fearless, liberal leaders forced banks, by law, to endanger your bank deposits, thus breaking another law.

That’s right! The Community Investment Act FORCED banks to make mortgage loans to people who simply could not afford those mortgages. If they didn’t make these crummy loans they were subject to all sorts of penalties.

When a bank makes loans with little prospect of repayment they put the depositors money at risk. That breaks all federal regulatory law, whether under the Fed, the OCC, or the OTS. The basis of that law, dating to the great depression, is that banks NOT endanger deposits.

So our brilliant leaders in Washington passed one social engineering law that forced banks to break the far more important regulatory law.

Oct 3, 2008 - 12:02 pm 4. RJ:

I don’t disagree, but we voted for these people, remember? So who’s to blame?

Oct 3, 2008 - 12:09 pm 5. elHombre:

What is really incredible is that this is was probably the underpinning of the only successful platform for John McCain and Sarah Palin is the perfect partner.

The platform: “Washington has succumbed to systemic corruption that I cannot hope to combat as a mere Senator. I have recruited Gov. Palin because she has had to deal with corruption in her own state. Like you, ‘We’re as mad as hell, and we’re not going to take this anymore!!’”

That is all that is necessary. If McCain and co. were not immersed in beltway bs, they could see it.

Oct 3, 2008 - 12:09 pm 6. Bob:

Isn’t the bank crises a result of the “trickle up” theory of economics? By giving lower income people money to buy a home, to experience the American Dream, the benefits will trickle up through the middle class. Unfortunately, there are no benefits. Instead, all but the lower income people will pay for the “trickle up” economic failure.

Oct 3, 2008 - 12:10 pm 7. edh:

Anyone with the necessary leadership qualities has the intelligence to know he or she will be destroyed as the price for the effort. That is assured now, and a huge deterrent to anyone thinking of stepping forward into the breach.

Oct 3, 2008 - 12:15 pm 8. Hogarth:

but we voted for these people

Fine, as far as it goes, but when is the last time to you felt that you had a say in exactly whom you were offered the “opportunity” to vote for?

Incumbency protection acts (ala McCain-Feingold) and gerrymandering have given control of who we’re allowed to vote for to those that want to protect their sinecures.

Congress is unlikely to ever relinquish control over the process. We are unlikely to ever be able to boot their asses out.

Oct 3, 2008 - 12:34 pm 9. Jim:

Bob: Where is the alternate universe in which you reside?

Oct 3, 2008 - 12:34 pm 10. Three Piece Suit:

“And a good place to start would be Sarbanes-Oxley,”

Which, remember now, was enacted because corporate executives found it easier to “cook the books” through off-books entities and accounting slight-of-hand than to actually make real money.

S-O may be a ineffective response, but someone has to keep HONEST books if we expect investors to continue keep buying stock and employees to get rich when their companies go public (as most employees at Enron, Worldcom, etc. did not).

Oct 3, 2008 - 12:35 pm 11. mrkwong:

Once upon a time, there was one baseline constraining factor on rulers that they couldn’t avoid. Physical fear. Now, this led often as not to rulers that used terror upon their own citizenry, but in extremis the rabble could coalesce to do something about their situation.

Sometimes I have to think that a guillotine out front of the Capitol might have a salutary effect on our elected “leaders”.

Oct 3, 2008 - 12:36 pm 12. fred lapides:

What percentaqgez of the total sub prime loans went to blacks, so that you call those op-posed to legislation “racists” if they opposed it?

In fact, it was the banks that gave the loans that were lousy ones…they were not required to. Teaser loans, no interesst for a while loans…and then the variable rates went way up.

After all, who had control of the White House and of Congress for 7 years? The commies or the GOP?

Oct 3, 2008 - 12:40 pm 13. Bruce:

“The crowning moment of course comes just before the vote on the bail-out package when Speaker Pelosi decided, putting the needs of her country first, to use the podium to attack the Administration and the GOP.

The Republicans, as we all heard, maturely responded to Pelosi by banging their little fists on the floor and refusing to play any more. Wah-wah-wah. Remember when Republicans were the outsiders in D.C.? Now they are such corrupt Washington insiders that, like a group of palace courtiers, they are willing to put the entire U.S. economy at risk over protocol and etiquette.”

Not to spark an argument, but imho, the Republican response was over political power in an election cycle, not “protocol and etiquette”. What Pelosi did was also done in an effort to garner votes for Dems at the cost of Repubs.

Just trying to be honest and objective. I’m a registered Repub and will vote for McCain, but it’s all about power and money, not about ethics and integrity.

And I consider myself an optimist.

Oct 3, 2008 - 12:53 pm 14. On “The Bailout”, Part 10: The Sunny Side of the Street « PurpleSlog:

[...] On “The Bailout”, Part 10: The Sunny Side of the Street From here: [...]

Oct 3, 2008 - 12:56 pm 15. JMHawkins:

Well, you’re right about D.C. being bankrupt of ideas and leadership, but they’re not going to let you just ignore them. D.C. has to get fixed. You see, folks in Silicon Valley don’t get to shoot people or put them in jail. Folks in Washington D.C. get to do both of those things if they want to.

Microsoft tried going their own way, ignoring the Federal Government, and ended up getting beat up pretty bad. And they were the biggest tech titan. If the current members of Congress can get away with creating an economic crisis and then larding up the bail-out bill with pork, they will continue to suck money from the taxpayers and productive members of society at ever-increasing rates until we’re all bankrupt and various friends and family members of political big-wigs own everything, like some third-world banana republic.

It has to be fixed, in one sense or the other of the word. Either fixed so it isn’t broken, or fixed so that it’s neutered and can’t continue to grow.

Oct 3, 2008 - 1:19 pm 16. JaimeRoberto:

While I think the CRA was bad law, and it has likely played some role in this crisis, it seems to me that the banks were offering these loans with a vigor that goes beyond being forced to make loans. I believe that the banks were willing to make these loans not due to pressure, but because there were willing buyers, especially Fanny and Freddie.

Oct 3, 2008 - 1:28 pm 17. DirtCrashr:

As a fellow Bay Aryan (from the Paloaltocene) I see a lot to agree with – but in contrast to the “We voted for these people” position I must respectfully disagree.
In this State, and in particular this region, we are suffocated in a Gerrymander. California is basically run by a Politburo intent on its own body of self aggrandizement and legislative social-engineering, and my vote has not counted for the past fifteen years at least.
To the extent that such a reptilian body has extended its tentacles from the West Coast to Washington DC I am truly sorry, but not for the apparent glad welcome it has received there.
Ironically some of this malaise is in the form of diseased avians returning to their East Coast Roost. Like Babs Boxer from Brooklyn, Brooklyn College ‘62, stockbroker in NYC – not a native Californian.
Also Nan Pelosi of Baltimore, daughter of a Mayor of Baltimore and U.S. Congressman – a political Ward healer in Baltimore’s Little Italy, graduate of Trinity University – not Stanford, Cal, UCLA or USC either. It’s too bad they couldn’t find a career closer to home and instead migrated out West.

Another nugget omitted, the massive and sustained Media cheerleading for each of those unfunded mandates and initiatives – both on “Green” energy issues and homeownership/mortgage entitlement.

Oct 3, 2008 - 1:30 pm 18. pawnbroker:

Michael you are entirely right. I would add biofuel and 6 dollar corn and high gasoline prices plus rapidly enlarging the labor pool as end game procedures to make sure the mortgage problem hit home during election time.

What can we as a nation do about policies which make no sense, enrich the few, and hurt the many?

Other than to now pay twice as much for health insurance to further destroy our disposable income

Oct 3, 2008 - 1:32 pm 19. Douglas Cohen:

Why not have every election offer the choice “none of the above”? If none-of-the-above gets a plurality, then the current office holders remain in place while a second election with all new candidates is organized in a specified amount of time (a month should be enough). The current office holders would then have some slight incentive to campaign against all the nominees, in order to get another paycheck or two. They would be perfect debate moderators. None-of-the-above would also put the political parties under pressure to nominate truly attractive candidates and make it more difficult for political consultants to game the system, especially if the none-of-the-above election quickly follows the first. The media, which have an obvious incentive to keep things exciting, would also tend to root for none-of-the-above, leading to more thorough and even-handed coverage.

Oct 3, 2008 - 1:35 pm 20. cgp:

It as if, you all have failed to do any research whatsoever on the CRA (the Community Reinvestment Act) for which so much blame has been put on for the failure of these banks. If you had, then you would have realized that 1 in 4 of ALL subprime loans were made by institutions which were even governed by the CRA. Meaning, FULLY 75% of the bad loans made banks and institutions DID NOT EVEN HAVE TO FOLLOW THOSE GUIDELINES.

So what about the other 25%? Are you prepared to tell me, that the other 25% were a result of CRA? Of course, there’s no way to say that ANY OF those loans were a result of the CRA. *GASP* I think, it might just be, that they were looking to make a quick buck!?!

Oct 3, 2008 - 1:36 pm 21. Letalis Maximus, Esq.:

And just as soon as DC can do away with “paper money” and force all transactions to be digital, they can tax everything electronically and that will be that.

Oct 3, 2008 - 1:37 pm 22. David A. Young:

Here’s a “Change” meme for ya:

Revolution 2008

Re-elect NO ONE.

Oct 3, 2008 - 1:39 pm 23. jt007:

Malone describes the problem with Washington very well. However, I don’t have much faith in the private sector bailing us out when Obama is about to be elected president and our so called “conservative” leaders are failing to lead. I am sorry, Palin was inept las night. She, like McCain last week, missed multiple opportunities to deliver knockout punches as Biden repeated liberal idiocy about the economy and foreign policy.

We will not get out of this mess caused by our monstrosity of a federal government until we have conservative leaders who are willing to stick to their principles in the face of liberal demagogues in Washington and the media. On everything from lowering taxes to eliminating social engineering like the CRA to taking on teacher’s unions to reforming social security Republicans have more concerned with being re-elected than sticking to their guns on these issues. Ronald Reagan was never intimidated by people calling him names.

We need real, principled leadership now more than ever. I wish Malone were right about the private sector bailing us out of this, but we are on the precipice of a major expansion is the size, scope and power of the federal government. A country run by Obama, Pelosi, Reid, Frank, Rangel etc. is going to be high tax, high regulation, socialized healthcare, fairness doctrine, weak forign policy, etc. the only alternative is the nonsensical populism of McCain. All the indicators now seem to show we are screwed.

Oct 3, 2008 - 1:41 pm 24. Well, It Passed « Tai-Chi Policy:

[...] Malone notes that there have been two, giant, social engineering projects government has been embarking on, both now r…, and both now scapegoating capitalism as the problem. If we want to really fix our problems, we [...]

Oct 3, 2008 - 1:41 pm 25. cgp:

It’s hard to be snarky when you can’t get the link right!

It’s just wikipedia, not hard to find.

(fail)

Oct 3, 2008 - 1:42 pm 26. Daniel k:

I’m with Dave Young.

But you know, Malone, that Bush and Congress did everything they could to enourage home ownership (even to the point of selling “the ownership society”) and kept giving tax breaks to oil companies even thugh prices kept climbing anyway.

Oct 3, 2008 - 1:45 pm 27. Capster:

Michael:
I have to agree with much of what you say but there are two points where I differ:
1) Silicon Valley is not somehow above all this. Loose monetary policy created the .com bubble as well as the housing bubble.
2) Your conclusion that this marks the end of government social engineering is not supported historically. In fact the usual response to these crises is more social engineering devolving into despotism. Clearly the bailout isn’t a move away from government involvement in the market, they just became the market.

Oct 3, 2008 - 1:46 pm 28. Lawrence Schmerel:

“another yet another”

Is that an error? Why just leave it there? Change it.

Oct 3, 2008 - 1:46 pm 29. SDN:

cgp, the problem is that unless you want to make it obvious to all concerned that you are giving Official Victim Groups preferential treatment, there are questions you CAN’T ask:

Do you make enough money to afford the payments? Have you made payments in the past? If asking those questions means that Official Victim Groups get denied loans, then CRA authorizes victim groups like ACORN to camp in your lobby and take you to court, where you will be presumed guilty of “redlining”.

If you only ask those questions of the Straight Males Of Pallor (SMOP) who walk in the door, sooner or later, someone will notice and find some way to get around the system. For example, in government contracting, there are “8A Minority Set-Aside Firms” who get preferential treatment. In my 20+ years in that world, the number of “8A firms” with one token Official Victim Groupie as the CEO / President backed up by SMOPs have become legion.

So you don’t ask anyone anything. And the result is inevitable. Either the SAME standard for EVERYONE, or NO standard for ANYONE.

And you are well aware that this is how it works. And even if the Republicans wanted to change it, the howls of “racism” from people like you would be heard atop Mt Everest. Spare me the false piety.

Oct 3, 2008 - 1:59 pm 30. JohnR(DC):

Rather than expecting technological advances to overcome Washington corruption, I would predict another scenario: In a few years the U.S. will come to look like Argentina. Argentina has defaulted on foreign debt and as a result has been cut off from outside funding for seven years. It depends entirely on Hugo Chavez’ government for help in papering over its large budget deficits. In turn, government welfare expands.

We won’t look like Venezuela, with its “Bolivarian brigades” that sustain the Chavez regime, because we do not have oil available for export via a state-owned enterprise. But politicians in Washington nevertheless have become enamored of the Chavez-statist business model, which includes increasing the already very large public employment rolls. The new minority in the U.S. will be non-government employees and business owners, who will basically have no say in how things are run but will be taxed to help pay for it.

Don’t count on the internet—or any other technology—to restore the U.S. to fiscal sanity. It can’t be done. Before long, most Americans will be dependent on a (broke) federal government for their livelihoods, and thus will be in no mood to buck the system. Without fiscal sanity, freedom goes out the window, by the way. That’s fine with the folks in the Capital. No problem.Argentina, here we come.

Oct 3, 2008 - 2:02 pm 31. Economic bailout crisis caused by social engineering - Ayn Rand Meta-Blog:

[...] commentary by Michael Malone on the bailout mess: From where I sit, the United States government has embarked on two pieces of [...]

Oct 3, 2008 - 2:04 pm 32. Pajamas Media » From Main Street to Wall Street: The End of an Era:

[...] Read the rest here… [...]

Oct 3, 2008 - 2:05 pm 33. JohnR223:

Craziness in DC and Wall Street? I see Gov Arnold will soon be the next one with his hand out for more billions. Where does it end?

Oct 3, 2008 - 2:06 pm 34. Toads:

On a similar topic, read :

A future timeline for economics.

Why the US will still be the only superpower in 2030.

Pre-singularity abundance milestones.

The turning points come when sentiment is gloomiest.

Oct 3, 2008 - 2:06 pm 35. Clark:

> From where I sit, the United States government has embarked on two pieces of social engineering in the last few years.

3.) Open southern border.

> None of us voted on these decisions – indeed, neither was even spoken about directly, much less debated.

Government’s thinking they are sovereign, not servants. Question is, how do we solve that problem?

Oct 3, 2008 - 2:14 pm 36. Toads:

Always remember, it is MUCH worse to be a socialist/communist than to be a racist. Somehow, our society has forgotten this, with people being deathly afraid of being called a ‘racist’. I suspect that Obama’s Presidency will correct this misperception.

Oct 3, 2008 - 2:18 pm 37. M:

The baby boomers are running the world,of course it’s screwed up.Look what the ‘68′ers have done to Europe.

And the really scary part?Gen-X,Gen-Y,etc are even worse.

Oct 3, 2008 - 2:36 pm 38. JinnyB:

Paulson and his Wall Street cronies just ate the American taxpayers lunch with this so called “bailout” – and found it to be a nice tasty snack. The ink isn’t even dry on the first 805 Billion dollar bailout obscenity, and they’re already screaming “It’s not nearly enough, we need even more”.

If I were you, I’d move everything you can out of stocks and into cash or gold – or swiss francs – while it’s still possible to do so. Paulson, Obama, Pelosi, Dodd, Reid and the rest that nice little band of thieves are now ready for the main course – which is the equity in the stock market. Dinner will be served all next week, and under the table nobody notices as the foreign markets import their bad paper, sell it off, and suck all that cash right back out. Additional feedings are going to be required…

I suppose they thought they were just going to create a “little crisis” to help get Obama elected, but what they have just done is to remove the lid from a 253 Trillion dollar pit, and shoved the American economy over the edge from behind. At least Paulson’s 3/4 billion conflict of interest laden nest egg is safe now. Oh sorry George – did you think the crisis was about the COUNTRY? My bad… I was speaking of ME having a crisis. Oh, and I transferred all that bailout money to my Swiss account – thanks for all the fish….

They claimed this was was being passed to prevent a depression, but it doesn’t do ANYTHING to help there, in fact, this has better than a 50% chance of being the fatal blow that crushes the economy and causes one. I hope and pray that the market doesn’t do what I expect when it opens on Monday, because if it does, that little 777 point drop in the Dow Industrials is likely to be just a mild forewarning of what is to come.

Hang on to your hats, folks, and saying a little prayer wouldn’t hurt. Once the market realizes what has actually just taken place, and the implications of this shredding of our Constitution, and the fact that our politicians have just proved they value greed over integrity (and are for sale to the highest bidder), well – I don’t expect the market opening on Monday morning to be very pretty…

God help us all…

I’ve been screaming warnings about this for two weeks now, and all it has gotten me is: to have all my posts deleted and to be permanently banned from McCainSpace for being critical of Johns vote on the bailout… You can’t say I didn’t at least try to warn everyone.. We’ve been HAD, and it’s only just the beginning…

Forget remembering names for when these crooks come back up for re-election – how about some nice RECALL PETITION drives? Let’s just remove them all from office – RIGHT NOW!

Oct 3, 2008 - 2:57 pm 39. Will:

You have just identified actions and consequences of the government-industrial complex. Not pretty.

Oct 3, 2008 - 3:02 pm 40. Freedom is just another word...:

Section 110 (THE NAIL IN THE HOUSING MARKET COFFIN)

General. To the extent that the Federal property manager holds, owns, or controls mortgages, mortgage backed securities, and other assets secured by residential real estate, including multifamily housing, the Federal property manager shall implement a plan that seeks to maximize assistance for homeowners and use its authority to encourage the servicers of the underlying mortgages, and considering net present value to the taxpayer, to take advantage of the HOPE for Homeowners Program under section 257 of the National Housing Act or other available programs to minimize foreclosures….In the case of a residential mortgage loan, modifications made under paragraph (1) may include: (A) reduction in interest rates; (B) reduction of loan principal; and (C) other similar modifications.”

THE DEATH OF OUR MORTGAGE INDUSTRY. Mortgages are going to dry up.

Would you give someone a loan for $200,000 at 6%, knowing the federal government can make you change the loan to $100,000 at 0%? Money is are going to bail out of the market faster than the insurance companies left Florida.

Oct 3, 2008 - 3:07 pm 41. Freedom is just another word...:

Section 110 (Continued)

There is no “grandfather” clause (only mortgages in existence today would qualify for adjustment).

there is no guidelines (2+ prime, no reduction over 10% of the appraised value, 25% debt-2-income ratio, credit scores, etc.).

FREDDIE AND FANNIE are now CLASS 5 hurricanes…… Warning, warning.

If people can’t get mortgages, everyone’s house becomes “upside down” and we ALL LOSE VALUE.

THIS IS GOING TO BE A “race to the bottom” for housing prices.

Oct 3, 2008 - 3:14 pm 42. Never Yet Melted » Exactly Whose Death Crisis?:

[...] Michael S. Malone [...]

Oct 3, 2008 - 3:27 pm 43. Marc Boyd:

Michael,

You are right. We are entering a new era in finances and in government. We have seen the smoke signals on the horizon for years.

In 2004, the Republicans got spanked for not doing what they said they would do earlier; they had the majority. Now the Democrat party and the Republicans are in deep doo-doo together, at least some (most) of them. I am ticked off! I don’t have a lot of money, but I will make a generous contribution to whoever runs against Reid and Pelosi in the next election cycle. And I will also look at the Pork each congressman put in to bills and vote for the challenger.

Starting in the ’90s, I started paying more principle into my home loan in Houston. I bought 16+ AC of land near Brookshire, TX, west of Houston. I built a small place there (using cash and our labor), and later sold the Houston house for top price. I now owe nothing except taxes, Propane, Electric, and insurance. Gasoline and food aren’t too much.

All of this started due to Y2K worries. I also have my own 10KW hard wired Generator, 1000 Gal Propane tank, and an aerobic sewer system. Heat, hot water and kitchen stove are propane, so we are as independent as we can be at this point. I need a small Aux. Generator to run the Aerobic plant sometime in the future to avoid using the big one.

Real Estate can totally crash and I won’t be hurt. I don’t plan on selling any time soon…maybe in 20 years. Lower construction costs may let me add on some needed office and living space out here.

Oct 3, 2008 - 3:34 pm 44. Jeff:

What people don’t understand is why some of us are so against the current Republican ticket, but we have an obligation to fight against history of ever being repeated again. Many of us out here are not fighting for the Democratic campaign but are fighting against an ideology.

1) An ideology that completely mirrors the ideology of this past 8 years.
2) An ideology that recognizes the few while completely disregarding the masses.
3) An ideology that believes in taking military action against Iraq, an incident that is completely unrelated to 9/11, without solidifying our claims beforehand. In the present, we have found no evidence of weapons of mass destructions or a tie to Osama Bin Laden. The devastation of this war has cost us over 4,000 of our brave troops and counting, over 1/2 trillion dollars of taxpayer’s money and counting, and over 1 million Iraqi lives unrelated to the terrorists or insurgency.

Cost of the Iraq War — http://www.nationalpriorities.org/costofwar_home

4) An ideology that still believes that the Iraq War is the right war on terrorism when the Afghanistan War should had been the right war on terrorism, where Osama Bin Laden actually was until he slipped into the mountains and into Pakistan’s territory now. The Iraq War also diverted our attention away from the Afghanistan War. We now have extended our resources in two separate places and have heightened our risk to our troops, our expenses, and creating another dilemma that will take quite some time to finalize. The Iraq War will not go away overnight and it is now our obligation to see it all the way through for God knows how many more years. This has also been the most unpopular war in the eyes of the world’s communities.
5) An ideology that believes that we are at our safest state since 9/11, when a recent terrorist plot was still trying to enter Great Britain’s airports with liquid explosives heading directly to us, but thankfully the plot was foiled. While in Afghanistan, the terrorists are regrouping and strengthening and we have recently suffered another high casualty to our troops yet again within this past month. We currently have the least amount of alliances in the world’s communities due to this unpopular Iraq War. True national securities are the ties that bind us to our world’s communities and the ties that bind them to us.
6) An ideology that vetted one of the most inexperience VP ticket in history, from foreign policies to national defense. If God forbids that anything happens to this President if elected and is stricken with illness, this VP will be running the country. For a more compelling look at Sarah Palin’s VP readiness, please look at these links below —

http://www.youtube.com/watch?v=loUHRv3ipLE

http://www.salon.com/opinion/walsh/election_2008/2008/09/30/palin_gaffes/

7) An ideology that believes in “the fundamentals of our economy are strong” while we are facing the highest mortgage foreclosure crisis, high unemployment rate, and the largest collapse of our financial infrastructures since The Great Depression of 1929.

This is an ideology that many of us in America are against. Whether this ideology is in the Republican or Democratic ticket is not the main issue but the fact is that America does not want to fall into another 4 more years of devastation. We cannot afford this anymore.

Oct 3, 2008 - 4:12 pm 45. » End of an Era:

[...] the whole thing, but I agree with pretty much everything this guy says: ….From where I sit, the United States government has embarked on two pieces of social [...]

Oct 3, 2008 - 4:17 pm 46. Belmont Club » Good or bad?:

[...] Malone at Edgelings puts it more forcefully than Krugman. “What makes this particular economic crisis so [...]

Oct 3, 2008 - 4:22 pm 47. Old_Airman_2000:

We need a Tarpeian Rock. And we need it now! I think their flying bodies should blot out the sun.

Oct 3, 2008 - 4:33 pm 48. fred:

How does this trend away from social engineering and government intervention gain traction when more than 50% of the electorate so far looks to The Messiah of Hope and Change for statist/socialist solutions?

Culture is the anchor to everything. Changing a culture is not something that happens quickly. It can take generations. I think the next act in this unraveling of the social engineering model of society will require that the masses (and many of them college educated, where a lot of his support comes from)who clamor for the state to bail them out of the shit learn the right lessons from the coming four years of crisis, failure, and perhaps even catastrophe from a WMD.

Remember Obama’s plans for a very large army of federally-paid community organizers whose job it will be to socially-engineer the “right attitudes” into the social fabric. Downsizing the military and raising taxes will be used to pay for this civilian army of Brownshirts.

Oct 3, 2008 - 5:36 pm 49. fred:

And “Jeff” is a case in point of what I wrote about in my above post. He is not alone among the activists who want to bulk up socialist social-engineering. He’s against the West even defending itself against 7th century savages and is angry that we have enhanced our deterrence posture vis-a-vis the jihadists.

He may even be an anarchist. Whatever. He is against capitalism and the states that embrace it.

The author of the article does not grasp how deeply embedded into our society’s institutions people like “Jeff” are. And millions agree with him, at least with the more open criticisms of of our government. He won’t tell the normal useful idiots the rest of the program. Just sweep away the present and the past, and we’ll take care of the future.

Oct 3, 2008 - 5:45 pm 50. Richard:

The problem with the “trickle up” theory is that when a load of mortgages are forced into the bottom of the “pyramid”, it just pushes everyone else upwards. The brief elation of upward moving wealth is shattered when the “bottom falls out” and everything comes crashing down.
Of course, after the dust settles, we’ll start to rebuild the “pyramid’.

Oct 3, 2008 - 5:55 pm 51. Bob:

Alright, I just don’t get this. The author described the problem quite well, but his solution seems so much hand waving.

The first part of the article is spot on and easy to follow. The pols have CAUSED our high fuel prices with their refusal to drill. They have CAUSED this economic mess with Fan, Fred, and the CRA. Their so-called “good” intentions are apparently sufficient justification, in their minds, for unlimited mayhem and upheaval…we should just trust them. :rolleyes:

But what’s the connection to Silicon Valley technology? How is that supposed to step in and right anything? At best it’s neutral. The knaves and jokers can use technology as well as responsible people. The author seems to be indulging in a flight of fantasy here. If we can’t deal with what we have, how do we know we’ll do better with more technology, better networking, and faster web connections?

Even now, in the 21st century, people are coming around to realize that good old paper ballots are the best insurance against voter fraud. Technology’s foray into the mundane world of simple voting has come to be viewed as a failure due to its untrustworthiness. Reason being, of course, no matter how good the system or the technology, there will be those who will find a way to game it.

Oct 3, 2008 - 7:15 pm 52. The DC Nuke & the Saving Monks | The Anchoress:

[...] Michael Malone at PJM: Pretty unhappy [...]

Oct 3, 2008 - 7:26 pm 53. bill:

from catholicfundamentalism.com a week or so ago:

Friday, September 26, 2008

On the left, Trotskyites are winning, Stalinists losing.

The recent reductions in the value of real estate were caused by Congressional Trotskyites. They cleverly forced banks to give mortgages to people who had no realistic way of paying for them. When they couldn’t pay, they went into foreclosure. The plummeting property values hurt the entire economy. Now, we’re all stuck, but no one more than the Stalinists in their shaken empire of Public Education. The drop in appraised values of homes reduces the taxes those properties pay that support the millions of Stalinists in their comfortable, but weakened, system. Trotskyites knew that would happen.

The Stalinists were first blind-sided, then sand-bagged. They gave in to the “fairness for all” message the Trotskyites trumpeted from the housetops. Public educationists, all with above-average incomes, tenure, huge benefit packages, short hours, and lush pensions were too comfortable to fight to protect their own source of funding.

The second prong of the Trotskyite attack was launched by their fast-moving environmental wing. Moving with the speed of Mongol cavalry, their new rules and regulations “to protect the planet” have made it so difficult to build new houses that the usual, automatic increase in property taxes provided by new building disappeared. Trotskyites knew that would happen, too.

Stalinists appear to be on the ropes, paralyzed by their own success. So far, their responses have been weak. Sure, there’s been a little bit of Stalinist recognition of the fact that global warming is caused by solar cycles, and there has been an attempted bailout of the system that will cost American taxpayers another trillion dollars, but the Stalinists seem almost crippled in their ability to respond effectively. Their best defense, the truth, is something that no one living in a pyramid of lies likes to use.

Both of the Clintons, and others on the Stalinist side, are quietly pushing for McCain’s election. In the next weeks, we will see growing support for McCain from the old-line Stalinists.

Oct 3, 2008 - 7:28 pm 54. Roger Godby:

McPalin don’t want to win. Fannie and Freddie could deliver them victory, but they’re not touching it, they’re not taking every media opportunity to throw Ayers/Raines/Annenberg Project/Fannie donations to Dodd/Obama/Frank into the public’s face, if it clears the edit room. Big if.

I will not vote for any incumbent, but I’ll vote Libertarian (the least likely to interfere or cause harm) unless a Dem has a chance of winning.

Maybe it’s time to become Amish. They do fine without plenty of things and their population has been steadily growing. No danger of progressives moving into or near their “Christofascist” communities either.

Oct 3, 2008 - 7:33 pm 55. cgp:

SDN (and others), it’s as if you didn’t read a thing I wrote.

I’ll put it in caps, there’s a better shot:

ONLY 25% OF SUBPRIME LOANS WERE MADE BY COMPANIES NOT GOVERNED BY CRA.

And of those 25% that were made by institutions that were covered by CRA, it is impossible to show why they were made, it isn’t as if the loans are stamped CRA SUBPRIME LOAN.

I’m not going to defend the practice of CRA, there is no need. I simply don’t care. I’m only saying that CRA is not the reason for the failure. No way. There are plenty of other potential causes which, if you must, to try to tie to the democrats or republicans.

Oct 3, 2008 - 7:52 pm 56. Neokenservative:

Nice sentiment, but not gonna happen. The Federal Government now controls taxes, education, finance, and even the housing mortgage market. They are importing tens of millions of dependents to vote them power.

They won’t give that up without a fight or when it all comes down. The technology Malone praises gives the government unprecedented awareness of what its citizens are up to. The 16th amendment gives them unlimited funds. And if they run out of taxes they print more money.

Nope… we can just hold on and wait for the collapse. It wont’ be pleasant for 40 somethings, and it is going to suck for 20 somethings, and today’s youth will be embroiled in technology enabled killing that will make WWII seem “teensy”.

It makes me sad, because it doesn’t have to be that way. This generation and the last are guilty of the same kind of appeasement Neville Chamberlain conducted. If we had fought and defeated the change of the income tax to confiscatory levels, or NCLB, or this bail out, or the over reach of the Supreme Ct, or any number of other baby steps the government took. But each thing makes them stronger and the fight to get rid of it will be immense.

Sorry.

Neokenserative

Oct 3, 2008 - 7:57 pm 57. fred:

The author failed to provide the logic and proof to back up the allegation that the higher oil prices was a deliberate policy of the government. I work as an investment professional (but not in commodities – I am a securities’ analyst following retail and banking)and I do have an idea that, despite some gaming being done by speculators, overall it really did come down to supply and demand. Russia, Venezuela, and Nigeria – all for different reasons – were cutting production. The Gulf states were actually trying to be rational about it and did try to increase supply so as to prevent the bubble form inflating even more outrageously.

China and India are indeed huge consumers of oil and distillates. This has been building for some time.

Supply was low because prices for oil during the nineties were depressed, which, by the way, tends to also depress exploration and drilling for new sources.

The only thing close to “social engineering” with respect to energy going on… would be our environmentalist lobby, who have for decades been very successful at killing a lot of domestic drilling and building more nuclear power plants.

That the supposed best and brightest of Silicon Valley believe this hypothesis in its entirety is worrisome. They should stick to engineering and writing code.

Oct 3, 2008 - 8:09 pm 58. Sarah Rolph:

Bravo, Mr. Malone. Bravo. I am standing up and cheering. An absolutely delicious essay full of truth and hope. Very heartening.

Oct 3, 2008 - 8:49 pm 59. fred:

bill,

Loved that post of yours. Entertaining and funny. As one who hates the NEA and the Gramscian Stalinists within their education sinecures, it sure is funny as hell to see them get pitch forked like this. And now the Trotskyists might get theirs too, if the Clinton Democrats defect to McCain. I’m not holding my breath, because a huge demographic of the under-30 crowd is smitten with The Messiah of Hope and Change. The females especially. Even older ones. But maybe just enough of the angry Hillary ladies will make a difference. Hard to tell. ACORN is out there on the highways and byways, casting a net for the look-what-the-cat-dragged-in to register to vote in multiple municipalities. ACORN just might be Obama’s ace in the hole.

Oct 3, 2008 - 9:08 pm 60. ellie:

Michael Malone! What a wonderful vision and statement of fact!! I wish I was 40 years younger so I could join you on this journey. I love the new technology and rejoice each time I luxuriate in delicious moments of acuiring new information I could never find in front of the evening news. Good luck! My greatest fear for the future is that politicians who do not want us people to become fully informed will find equally creative ways to stifle innovation something akin to Big Brother. I fear we are entering a new governmental Stalinist era of keeping the people ignorant for self-gain and power. As we can see by the bill that was signed today, the IRS is being given new and frightening powers and we have recently learned how Obama’s campaign used such powers to stifle a small group of women from effectively demonstrating against a nuclear Iran at the UN. We all must fight against this coming regime of “liberalism” because it is, in fact, quite the opposite. It will be warriors like you that will lead this fight to save freedom and the right to know against these terrible new tides. Hopefully, technology will prevail over greed and deceit. Thank you!

Oct 3, 2008 - 9:11 pm 61. Robohobo:

“David A. Young:

Here’s a “Change” meme for ya:

Revolution 2008

Re-elect NO ONE.”

Throw The Bums Out

Vote against the incumbent! For about the next 12 years. Time for the PEOPLE to reassert control of OUR country.

Oct 3, 2008 - 9:28 pm 62. Tombo:

From where I sit, the United States government has embarked on two pieces of social engineering in the last few years. One was to make oil expensive as expensive as possible to drive people to greater use of alternative energy sources – because anything less would be irresponsible and destructive to the environment. The other was to enshrine home ownership (i.e., easy-to-obtain mortgages) as a new American right – because anything less would be unequal and racist.

I don’t think these were intended consequences, I think they were just good intensions, with lack of clairvoyance, gone wrong. I don’t give these politicians that much credit for being diabolical. Politicians were trying to push ideals: everyone can own a home and save the environment. I’m not defending them, I just don’t think they are masterminds enough to have disarming our economy as their ultimate goal. They make mistakes as politicians often do. Simple reprisal, make laws harder to pass.

Oct 3, 2008 - 9:46 pm 63. bluecollar:

CGP:
Heres a quick answer for you.
Sure, it is quite possible that most of the bad loans were not covered by CRA, but that does not mean that CRA was not the root cause of the issue. Once the CRA forced banks to make bad loans, the first thing they had to do was figure out how to get them off their balance sheet. Fannie Mae was quite willing to buy these mortgages. In addition investment banks were more than happy to shuffle the good with the bad in order to come up with marketable securities. The government social program ended up creating a market for ninja mortgages. Once the market was established, everybody that could originate a mortgage got with the program, it’s not like they had to actually hold the mortgage. Besides everybody knows home prices never come down, just ask Franklin Raines.

There were some lawmakers who sounded the alarm as early as 1999. Other lawmakers did not hesitate to use the race card to prevent regulation of the mortgage market. This was not a market failure. It was just an example of what happens when the government interferes with the market to promote a social program.

Oct 3, 2008 - 9:57 pm 64. ic:

“the instant it passes the bail-out bill, get to work not adding more regulations in response to this crisis, but stripping away the destructive ones we created after the last big one”

When will the cows come home?

Oct 3, 2008 - 10:15 pm 65. ic:

Hey, Obama promised a politician-supporter that he would work to pass the law allowing judges to “adjust” the principals of on the brink of default mortgages.

Mind you, not adjustable interests, but adjustable principals. So the greedy predatory lenders who are pushed into greedy predatory lendings by greedy predatory politicians will be responsible for the prices of the homes of innocent victimized home owners.

Oct 3, 2008 - 10:29 pm 66. 888:

Even Bill Clinton blamed the Democrats on this financial/mortgage mess — read the last sentence of this article: http://www.foxnews.com/printer_friendly_story/0,3566,432501,00.html

Or, this piece from the Boston Globe which outs Barney Frank’s involvement: http://www.boston.com/bostonglobe/editorial_opinion/oped/articles/2008/09/28/franks_fingerprints_are_all_over_the_financial_fiasco/

Oct 3, 2008 - 11:26 pm 67. Confused in Vrginia:

Very nice essay. While I agree that social engineering is not a good thing, I think that the culture in this country is an even bigger problem. This culture almost requires that people assess blame first, and then work on coming up with a solution. But, not just any old solution will do – it has to be one that will insure that politicians get the benefit of re-election. If the solution does not guarantee re-election, then we just vote against it to get more votes.

Another part of the culture is to see government as a foreign entity that just appeared one day. I don’t recall meeting anyone who has voted for the people representing us in Congress or in the White House, so maybe it is a foreign entity and I’m a space cadet. This component of the culture also requires that people get as many handouts as possible, since “the government” is footing the bill, so we don’t have to worry about it running out of money.

The last component is the most perplexing, and that is: reasonable, intelligent people see a candidate whose looks they like, and without doing any kind of research of this person’s experience, character or policies, they take everything he/she says at face value and start spouting off the same dribble incesstantly, as though if they repeat it enough times it will come true.

Changing this culture is almost impossible since it would take work, and time that we may or may not have. It requires that we research everything we can find on a candidate, so that when we vote, we are doing so as an informed citizenry. It also requires that we find out as much as possible about how Washington works (or fails to do so), so that we can demand that our chosen representatives do what we want, not what they (or the lobbyists) want.

I’ll get off my soap box now. I apologize for the long rant, but I just had to get all that out.

Oct 3, 2008 - 11:40 pm 68. Stewart:

Tombo, I agree about the housing push, with allowances for the greed of Dodd, Obama, Frank, et. al. However, on the energy issue the raising price of all efficient kinds of energy (oil, nuclear) has been used as the rationale for “alternative sources”. Instead it has predictably led to inflation and hardships for American citizens. Were gas at $1.00/gallon the increase in productivity would fund all the R & D needed to find and invest in the”fuels of tomorrow”. Poorer countries don’t invent a lot of new technologies or energy sources.

Oct 4, 2008 - 2:38 am 69. Muggins, San Jose, USA:

Two very important points. That would be 2 out of six main problems. Missed are the banks bundling mortgages and selling them to buyers who didn’t really know what they were buying, some of them overseas, irresponsibly placing value on quantity rather than quality of the loans. Once sold, those units were difficult to value, esp. when the interest rates and unemployment began to rise from historically low levels…and homes abandoned. Investment banks, and Fanny & Freddy were allowed to become overleveraged.
http://www.savingtoinvest.com/2008/09/leverage-101-real-cause-of-financial.html
The naked short selling intensified the predator instinct of the short sellers, who preyed on those banks, one at a time, who were over-leveraged with mortgage backed equities that were of unknown value in this market. But, it’s very true, that artificially high oil (by fault of congress) and irresponsible bank loans are the problem.

Oct 4, 2008 - 3:01 am 70. Peter in Pawtucket:

The leadership lives in a world without shame or consequences. How many times have Chris Dodd, Barney Frank, et al been on the TV over the last 10 days? They know they can get away with it and the alleged overseers in the MSM are either absent, stupid, or accomplices.

Where is the route to satisfaction that the truth will be told and these self-enriching blowhards will get the public punishment they deserve? Is there any elected representative who can carry the message and has the stones and the platform to be heard? John McCain do you hear me? Or could you please take the wrapper off Palin? Unfortunately, I see a missed opportunity the size of Mars being blown here.

Any alternatives? There needs to be a creative, massive, viral campaign to clear out the satanic stench coming from Washington and start building anew. And it has to happen very soon before the beltway covers its tracks. History is made by the victors.

This essay is a good starting point. Bravo and thanks.

Oct 4, 2008 - 5:36 am 71. Bill Perron:

If we divided the U. S. into two separate countries, red America and blue America and just went on as two totally separate entities it would most likely demonstrate in a few years the dramatic difference between industry and socialism. Of course on a larger scale this has been already domonstrated by the U. S. and the U. S. S. R. but unfortuneately the leftist never seem to learn that, so the drag us all down with them thru social engeneering.

Oct 4, 2008 - 6:54 am 72. John Anthony:

This is a failure of socialism not capitalism as is being touted. If you allow people to enter into foolish deals, en masse, the deals always collapse and the market prevails, destroying the lender and the borrower. You can ignore the market ( communists did it for 80 years) but it will prevail.

Oct 4, 2008 - 9:02 am 73. mark abrams:

This is a self correcting problem. The money of the United States was commodity based until Jon Kennedy changed it to pure fiat (at least for Amercan citizens). Once you give politicians an unlimited checkbook they will write unlimited checks. However their checks will be worth less and less as they spend more and more until voila, Zimbabwe.
We will end up going back to commodity based money and the power of government will be limited once again . Just as the articles suggests there are new technology forms of commodity money (goldmoney.com, SLV and GLD ETFs).

Oct 4, 2008 - 9:16 am 74. geokstr:

I question the whole timing of this “financial crisis”.

Both Paulson and others, especially key democrats in congress like Dodd and Frank, and top management in both Fannie and Freddie, must have known that their takeover was inevitable a year ago. There were plenty of signs that were ignored by the media. Generally, it takes some kind of signal event, like an unfavorable audit, or a massive plunge in the stock, or a run on the banks, to cause something of this magnitude to come out. But I have googled unsuccessfully looking for the specific reason this hit precisely when it did.

If it happens 3 months ago, the shock would have already worn off and not been so beneficial to Obama, and if the takeover was not announced until 2 months from now, it would have had no influence on the election. Was it just coincidence that it happened 7 weeks before the election, and only a week after the surprise nomination of Palin had begun to turn the tide for McCain?

I don’t think so.

Was this perhaps the mother of all October surprises that they pulled out a month early because they panicked over the massive shift in the polls threatened to derail the coronation of The One?

Frank and Dodd and Raines, and even Obama himself, and so many other democrat power players would be totally screwed if a republican administration were to take over, and held real hearings on this. Instead, Pelosi is reported to have already promised Dodd and Frank that there will be no investigations into their major roles in the cause and compounding of this mess over many years. If Obama wins, look for kangaroo trials of any republican even tangentially involved and any republican Master of the Universe on Wall Street (lots of whom are democrats).

If Obama had continued his early success before Palin, he might have cruised to a victory in November and there would have been no “crisis” yet. It is possible then that the “crisis” would not have been announced until after the election, with potentially veto-proof majorities for the left in both houses. Then there would have been no way to stop the inevitable feeding frenzy of add-ons to this bill; i.e., billions for ACORN, the “Fairness Doctrine” to kill talk radio, the reinstatement of the ban on drilling, “obscene” profits taxes on the oil companies, ad infinitum, ad nauseum.

These are all likely in an Obama administration anyway, but at least they will not be spirited away in a 500 page bill that was rushed to a vote without debate or opportunity to amend in a deliberative manner.

As support for this theory, see the fantastic article linked to below that discusses the left’s plan long-held plans for “Manufactured Crises” and the opportunities they provide for tearing down both capitalism and democracy.

It documents in detail the radical atmosphere Obama has been immersed in his entire life. It also directly links him to the 1995 regulatory revisions that opened the piggy banks at Fannie and Freddie, where Obama was the attorney for ACORN in a suit that led directly to those revisions.

http://www.americanthinker.com/2008/09/barack_obama_and_the_strategy.html

You would think that, under intense pressure to name any accomplishments on a thin resume, Obama would be emphatically proclaiming his major role in this landmark case. Since it led directly to the mess we are in now, perhaps it’s not so difficult to understand.

Oct 4, 2008 - 10:29 am 75. Wake Up! The Remodeling Job Is Not Going Well..You Didn’t Contract For This! « Zipline Conservative:

[...] http://pajamasmedia.com/edgelings/2008/10/03/the-end-of-an-era/ [...]

Oct 4, 2008 - 1:04 pm 76. namronnik:

It will take a Second American Revolution to get these guys in Washington away from the trough!

Oct 4, 2008 - 1:57 pm 77. Sandra M:

This crisis happening a month before a national election could be very bad news for the Democrats who have been quietly registering every felon and corpse they can find.

Politicians LIKE low turnout. They want their folks to go to the polls and everyone else to stay home.

Alas, now they have gotten everyone’s full attention. And the financial channels are explaining how all this happened. But not yet simply enough.

1. How many people know that there are environmentalist forces that want gas prices as high as possible? And that thee Democrats oppose drilling here and drilling now?

2. How many people know that banks were FORCED to give loans to people who were financially ineligible for those loans?

When EVERYONE gets it, then voters will express their fury at the polls.

Most of us never pay attention to politicians until they really, really annoy us. People are beyond annoyed. However, that energy is not yet focussed. The press won’t focus it. It’s up to the 527’s to come up with simple and witty ads that any intelligent 10 year old can understand.

Oct 4, 2008 - 4:12 pm 78. josil:

Divide the country into a conservative portion and a liberal portion. The latter would be anti-military and very likely unwilling to spill blood or treasure to defend itself. In addition, it would take a while to discover that the financial support for the enormous size of the public sector was the public sector itself; i.e., bureaucrats taxing bureaucrats. There are many other differences that could be specified in the realm of cultural and social matters. But let’s start with defense and the economy.

Oct 4, 2008 - 5:45 pm 79. Jeff:

I am neither a Republican nor a Democrat but a true Independent who believes in facts and really believes in learning the lessons of our history.

So here is a simple fact for America -
1) During Ronald Reagan’s Presidency of 2 terms, between 1981-1989, we were at our economic best in a quarter of a century. We made the right choice in these 8 years as a country.
2) During George H. W. Bush Sr.’s Presidency of 1 term, between 1989-1993, we were at our economic worst in a quarter of a century. We made a huge mistake as a country but corrected it by keeping him in office for only 1 term.
3) During Bill Clinton’s Presidency of 2 terms, between 1993-2001, we were again at our economic best in a quarter of a century, even better than Reagan’s era. We made the right choice again in these 8 years as a country, despite his personal scandals.
4) Now, during George W. Bush Jr.’s Presidency of 2 terms, between 2001-this coming January 20, 2009; we have been at our economic worst in a quarter of a century, even worst than Bush Sr.’s era. We really made a huge mistake as a country on this one by not realizing that the apple really doesn’t fall very far from the tree. Yet we chose this apple again the second time around.

Now, really let this simple fact sink in America and take your time to think carefully this time around about how you want the direction of this country to go.

We made history with Reagan. We then made a mistake with Bush Sr. but corrected history by allowing him to only serve 1 term. We then made history again with Clinton, despite his personal scandals. Now, we have made 2 mistakes with Bush Jr. by allowing him to serve not once, but twice. So my last question to America is, guess which candidate shares the interests of both, Bush Sr. and Bush Jr.? I will let America answer this one. We are much, much smarter as a country to want to make history rather than make mistakes and to suffer yet again from our own mistakes by not using objectivity as our first and foremost agenda.

Oct 4, 2008 - 7:27 pm 80. Judy, NYC:

usually, you need a job to pay your mortgage. to find one, a moderate income american worker needed enough money to commute to mexico and or china. the most bizarre part of this breakdown is blaming the working poor who aren’t working. our legislators have no vision, and apparently give no thought whatsoever to what they are legislating. when we had a productive economy, supporting home ownership through the freddies helped a lot of people buy homes, and the mortgages got paid. until we combined mortgage backed securities with “streamlining” (firing everyone) and “profit maximization” (firing everyone). apparently, we were supposed to live on credit cards and the dividends from these incredibly profitable companies. we’d just sit around have coffee and study the stock market. and, if you didn’t have either, too bad, drop dead. the bailout as we all know won’t be any kind of solution, because nothing’s been figured out. instead of sweating out a real plan, all congress wanted to do was wrap it up and adjourn. even more astonishing these lazy stupid idiots are actually proud of what they’ve done, which is nothing but more bad. no one is looking holistically at the american economy. schmucks. this congress, democrats and republicans, with their stuffed pockets and fat asses are killing us.

Oct 4, 2008 - 9:35 pm 81. Darius_LaMonica:

Mr. Malone:

Excellent essay, but I must point out that many VCs in Silicon Valley are eating at Uncle Sugar’s trough as well. They’ve sunk millions into specious “solar power” investments during the past few years and they’re going to need an exit strategy to pass the problem onto someone else. I’m guessing that their support for SnObama is directly related to his proposed subsidies for solar power.

And I’m *not* knocking solar power per se. The reflective concentrator systems that use mirrors to heat mineral oils (or water) for power generation work fine.

Oct 4, 2008 - 9:36 pm 82. Danny:

Jeff, during Clinton’s administration there were three serious dislocations just like this one – Mexico, Asian Crisis and LTCM. Not to mention he was just lucky enough to escape the consequences of 9/11, Dot.com bust and the corporate scandals, the basis of all three laid on his watch. Clinton had the party, GWB got the hangover.

Oct 5, 2008 - 1:17 am 83. Mr.Obvious:

Nancy Pelosi lives in a political bubble. She is returned to office year in and year out by margins of 80% and greater. She is not threatened by anything. She can speak and act with impunity. She has triangulated herself into an immortal politican. Until the voters wake from their slumber and stop voting for these mental midgets … we’re doomed.

Oct 5, 2008 - 1:29 am 84. Susan:

I must point out that any failure to shift from expensive terrorist-supporting (as well as worst-polluting) oil was invisible to this DC resident’s eyes, as well as any actual attempts to make this country do the sane thing. In fact, the only answer to the crisis is a dogged insistence on merely finding more of the same, just closer to home. Anyone who doesn’t place the blame squarely on the oiligarchy (& no,m that is not a typo) is even more blind than the legislators who are agitating for it.

Oct 5, 2008 - 2:47 am 85. Silent Running » Blog Archive » Dissection:

[...] But what makes this particular economic crisis so appalling, at least from this vantage point, is th… [...]

Oct 5, 2008 - 4:58 am 86. threedonia.com » Blog Archive » More bailout blues:

[...] Malone (not that Michael Malone) puts things in perspective on how we got into this mess in the first place. From where I sit, the United States government has [...]

Oct 5, 2008 - 7:27 am 87. PD Quig:

This will come down to pitchforks and torches ascending the hill. It will take more time, but once Americans realize the degree to which their government has fouled the nest–and the degree to which the ‘progressive’ agenda has underpinned the demise–it will not be pretty. In time we are going to see why it is that the left has always feared the 2nd Amendment.

Oct 5, 2008 - 8:20 am 88. Barry 0351:

Yup, what he said.

Oct 5, 2008 - 9:51 am 89. Gerry:

Jeff, you’re a Communist, a wolf in sheep’s clothing.
Your posts do what socialists do best – undermining democracy and capitalism, and the defense of these.

Michael – Technology is nice but in the wrong hands a butter knife can be used for murder instead.

If it weren’t my belief in G-d and divine providence,
I’d be awfully panicky, desperately looking for democratic horizons where the winds of freedom still blow freely (is there such a place anymore?). As great as this country is, the excrement rises quickly to the top, which seems to be the achilles heel of democracy. We can see the rise – all the way to the top – of the likes of the Clintons, worthless people at best, the like of Soros who can spit in the face of those who let him make millions, or the likes of Obama, who is nothing but an arrogant, smelly and lying puppet of some Communist agenda; And the list goes on.

Want to see – in advance – what leftists can do to our country? Well you have a good model to see in Israel. Here is a country that ostensibly democratic; But look a little deeper and you’ll notice how the entire higher echelon has all but destroyed everything that country can take pride in.

Israel now has a leftist court system in place, treating the enemy better than its citizenry; A leftist media that promotes the leftist dogma, at first insidiously, now openly, while mocking any rightist attitude; A police force destroys Israeli homesites, while defending illegal Arab homesites from court ordered destruction; One that will not allow any rightist TV channels or radio stations to exist, let alone flourish, especially when important government “reforms” are underway – a real police state not unlike the KGB; A military that has all but been emasculated; A knesset cabinet system that always recycles the same corrupt politicians; A country where every day the news is worse than it was the day before.

And just like the American plan for the union of Mexico, USA and Canada – you have the same going on right now in Israel where every day sees more and more democratic deterioration to satisfy the foreign agenda to absorb this country into the greater geographical region, stripping Israel of statehood altogether as the end result.

Israel had their own wells of oil. So what did they do to be sure they remain dependent on foreign oil? They transfered ownership of these wells to Egypt. And about the country’s security? They had a spy in America warn them (when America, a supposed friend, failed to warn them) regarding their own safety about an Arab enemy’s nuclear plans – so they disowned him, leaving him to waste away (in solitary confinement) in an American prison for life without lifting a finger to help him – although they could.

The entire Israeli “establishment” stinks so bad – while its folk are wonderful and cannot fathom how to break out of this straighjacket that crept up on them stealthily, and only too late noticed that the pollution can kill them now.

Speaking about that spy – Jonthan Pollard – his crime averages 2 to 4 years of prison time. Pollard now sits imprisoned 23 years and the Israeli government, AS WELL AS the American higher-ups, let him languish to death.

If fairness cannot come forth from our government, from people who lead us, we have nothing to believe in – to better our lot, than G-d. For those who dispel belief in G-d as something artificial, far-fetched or ridiculous – I pity you, for then you really have NOTHING but vacuous hope to rely on.

Oct 5, 2008 - 10:23 am 90. Peter:

Isn’t it about time to raise the term limits discussion again? I’m not sure it will fix our political problem but at least absolute power will only corrupt absoulutely for a limited timespan.

Oct 5, 2008 - 12:18 pm 91. The Dark Chew: « Chockblock’s blog:

[...] great meltdown! it’s the end -or the beginning… (via [...]

Oct 5, 2008 - 2:25 pm 92. PJ:

“The Republicans, as we all heard, maturely responded to Pelosi by banging their little fists on the floor and refusing to play any more. Wah-wah-wah. Remember when Republicans were the outsiders in D.C.? Now they are such corrupt Washington insiders that, like a group of palace courtiers, they are willing to put the entire U.S. economy at risk over protocol and etiquette.”

This is untrue. Yes, Speaker Pelosi made an egregiously partisan speech prior to the vote, and yes it indicated to the Republicans that Speaker Pelosi was putting politics about country, and when combined with her failing to whip her own party into shape and have friends vote on it they saw a ‘trap’, but no, not a single Republican actually switched votes for that reason.
In fact it was the prior week that it was reported that only 4 (!!!) Republican Congressmen were on board the week prior after Paulson met with them. Republicans only got on board the bailout when the Democrats actually let them in the room to negotiate. the bailout bill puts the taxpayer on the hook for the mistakes of others, so fiscal conservatives are of course going to rebel at a blank check. It didnt help that (a) major questions and alternative good ideas arose and (b) it aroused populist rage to bailout those guilty of such malinvestment. It took major armtwisting to get it up to 66 votes.

In the end, the Republicans who voted NO were doing a GOOD THING, forcing some of those good ideas, like raising FDIC caps and putting an insurance component in, into the bill on Friday. Republican resistance also ensured that Chris Dodd’s horrible idea of diverting profits to ACORN and the bad idea of letting BK judges rewrite mortgage contracts got taken out.

Folks, the WORST THING WE COULD DO NOW IS GIVE THE DEMOCRATS CARTE BLACHE IN WASHINGTON DC. Since Obama is very likely to be President (even though he deserves no such thing), THAT MEANS FIRING THE PELOSI/ REID INCUMBENT DEMOCRATS BY KICKING ALL DEMOCRATS OUT OF OFFICE IN CONGRESS. If change is what we need – CHANGE THE CONGRESS.

Oct 5, 2008 - 7:41 pm 93. PJ:

“We made history with Reagan. We then made a mistake with Bush Sr. but corrected history by allowing him to only serve 1 term. We then made history again with Clinton, despite his personal scandals. ”

Too simplistic. With Clinton in 1994 came Newt Gingrich, who was speaker from 1994 to 1998. In that period was the ONLY period in the last 50 years of history where the budget deficit and burden of Govt shrank relative to GDP and also where taxes were cut. The GOP Congress did this, and they passed Welfare reform. So you need to consider ALSO the Congress AND the specific actions.

For Reagan, there were 2 key actions: Lower tax rates and sound money (via Volker’s Fed).

For GHWBush, his #1 error was agreeing to the tax hikes of the Mitchell Congress. Sen Mitchell also egregiously stopped the cutting of capital gains – when it finally was done in the 1990s later (by GOP Congress) the economy responded so positively it *gained* revenue.

The real Clinton success was the Clinton/Gingrich combo. While Clinton triangulated himself with a Gingrich Congress into fiscal conservative governance, we got the opposite triangulation from GWBush with Medicare part D, NCLB, and increases in alternative energy subsidies and farm pork bills.

GWBush had an (R) label, but he squandered the brand by increasing spending at a faster rate than any of the previous 4 presidents, in the 2001-2005 timeframe.

The spending situation has worsened considerably with the very liberal Democrat Congress we have now. They were not satisfied with Bush’s plan to almost double S-CHIP spending, they wanted to triple it! Hundreds of billions in pork and bailouts this year alone. Planting the errors of the Pelosi Congress at the feet of President GWBush though would miss the point, since the Pelosi Congress will hardly get more fiscally responsible under Obama, who himself has made about $800 billion in reckless campaign promises, and even a fraction of those would bankrupt us.

In the end the lesson is simple: Our Government under either party seems only occasionally capable of fiscal conservative governance, but when we manage to achieve it, WE DO VERY WELL, well enough it seems, to pay for all the terrible mistakes made when non-conservative governance rules the roost.

Oct 5, 2008 - 8:06 pm 94. PJ:

“If it happens 3 months ago, the shock would have already worn off and not been so beneficial to Obama, and if the takeover was not announced until 2 months from now, it would have had no influence on the election. Was it just coincidence that it happened 7 weeks before the election, and only a week after the surprise nomination of Palin had begun to turn the tide for McCain?”

The timing is suspicious indeed. But then you have a non-conservative (in fact non-Republican) Treasury Secty in a supposedly Republican administration, who makes a non-conservative taxpayer-bilking proposal to bailout the very industry the man came from. Oh, and a bunch of economists look at it and many say there are 3 or 4 other ways to handle this…

AND we have the suspicious reporting like its Great Depression 2.0, when in fact credit is plentiful from regional banks and many other sources.

Our leaders need to calmly assert “This is not a crisis, but a necessary period of readjustment in our economy. Some businesses will fold, some jobs will be lost, some homes will be lost. Up until this time, the adjustment did not take us into recession; that may or may not happen now, but in the readjustment process, whether growth is merely slow or negative, we will be retooling our economy for the next phase of growth. As such, we ought not tinker with the engines of growth in the vain and futile attempt to forestall or stop the pain of this necessary adjustment. We will instead work to keep the financial system stable and operating and work to make sure housing and investment markets reach a stable footing for future advances.”

Oct 5, 2008 - 8:16 pm 95. PJ:

“And a good place to start would be Sarbanes-Oxley, which brilliantly keeps wealth out of the hands of regular workers (by keeping start-up companies from going public), all while costing, by my reckoning, $200 billion over the last six years.”

The Republican alternative proposal includes that proposal. It was inspired by Newt Gingrich, who in turn has been highlighting it as a key issue, inspired by the lamenting of this by silicon valley folks.

Oct 5, 2008 - 8:27 pm 96. NS:

Thank you Michael, for a very optimistic look forward.

I agree that this need be nothing like the 1930’s because of the potentially limitless ability we now have to move information around with technology. Wall Street would like us to believe they are the most important players, but there is enormous value being created far from Wall Street that doesn’t just evaporate the way the financiers’ inflated dreams have.

PJ, I agree with your suggested comment in quotes. It is irresponsible and destructive for the socialists to harp incessantly on how things are so bad, but that is all they know, since they have not an inkling of how to nurture a healthy economy.

The typical leftist attorney-politico like Obama is seldom interested in economics…why study a dry subject like that when you can instead troll for votes by claiming more entitlements through redistribution?

The Dems’ idea of raising taxes on those earning > 250K is appalling…often those are the small business owners whose businesses are just reaching the point of scalability to where they can hire staff.

“Government will be your partner” —Obama

Oct 5, 2008 - 11:13 pm 97. James:

You’re kidding me, right? The east coast is to blame? Have you not been paying attention? You say the problem has been two large “social engineering” projects of the US government. The first being the escalation of gas prices for environmental ends. Coorect me if I am wrong, but the modern envirnmental movement is not based in the east. This agenda has been pushed on the country from your coast and led by your members of Congress. The second “social engineering” project you mentioned was advancing home-ownership. A big component of this was record low interest rates. Where did these rates come from? They were the response of a Fed Chairman reacting to the collapse of the dotcom bubble. Snake oil is sold in abundance on both coasts and before the housing bubble, most of it was coming from the west. Speaking of the housing bubble, it is at its worst in CA, AZ, FL and NV. Three of those 4 states are not on the east coast.

The notion that Facebook and iPods are going to save the world is ludicrous. The current situation is due in large part to the fact that we as Americans have been obsessed with living beyond our means. As long as I can remember, that has been part of west coast culture; look like a movie even if you are a waiter. Get the plastic surgery, buy the car and the gadgets and look the part even if it’s not yours. If you think that only happens in SoCal, your eyes aren’t open.

As for the role of government and the financiers, check out the electoral map. For the last 50 years it has been shifting west. Yes, Washington doesn’t worl well, but don’t forget that it is incresingly run by the west. Who’s Speaker of the House now?

Financiers will take money from anyone who is willing to give it. There are just as money suckers paying $$ to them from the west as there is the east.

Your whole article piles one ridiculous and ill-informed premise on top of the other. Reading through some of the responses, it appears you have a fair number of west coast slappies reading this, but you also have a few who are paying attention.

Oct 6, 2008 - 2:00 pm 98. Fresh Bilge » Second and Third:

[...] There are still a few optimists around — people who see the bankruptcy of the statist establishment, but believe it will be transcended by entrepreneurial zeal and the internet. I would have asserted this position with more confidence a few weeks ago. Now I am not sure we can avoid a second Great Depression — or a Third World War. Posted at 8:46 PM | | [...]

Oct 6, 2008 - 5:46 pm 99. D.C. socialists versus technology « Take Your Cross:

[...] While socialists are gaining, technology is outpacing them, writes Michael Malone wrote in The End o…: [...]

Oct 9, 2008 - 5:49 am 100. msmalone:

Thank you everyone for the spirited debate — and for pushing this essay to the most-commented-upon entry in Edgelings’ short history: we’ve now crossed the 100 comment milestone for the first time. I hope that you will write and comment again on future articles and essays.

Mike Malone
Editor-in-Chief
Edgelings.com

Oct 9, 2008 - 9:10 am 101. Walt:

Very nice piece.

Perhaps Obama is the right man for the job. We are supposed to judge our leaders by their charachter and record. His charachter scares the H*#L out of me. His record is a different matter all together. He is known to vote present most of the time. Perhaps that is just the governmental leadership we need!!! Perhaps he will just sit in the chair look all presidential and do nothing for which he is known. A guy can always dream.

Oct 9, 2008 - 2:00 pm 102. this is the samaBlog » Blog Archive » Decision Tree:

[...] doesn’t work when people are only half paying attention. When those responsible for a crisis benefit from it, we know that nobody is really paying [...]

Oct 13, 2008 - 5:47 pm 103. William K. Wolfrum Chronicles » Blog Archive » I am proud to be a journalist:

[...] has written columns for Pajamas Media. He’s also had a bizarre defense of the free-market system that could have come directly from [...]

Oct 28, 2008 - 9:28 pm

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