In a 1992 three-way, townhall style debate between incumbent George H.W. Bush, challenger Bill Clinton and his pet gerbil, Ross Perot, the nation was introduced to the infamous “Ponytail Man.” Likely a plant from the Clinton campaign, a man with a ponytail (hence the name) asked the candidates to put aside the rancor. Describing voters as “symbolically the children of the future president,” he implored a focus on “meeting our needs.”
Conservatives at the time rightly mocked such a paternalistic political stunt. Citizens are not children; government should not be parental. A truly free people must provide for their own needs. That is the foundation for our nation’s great success. Modern liberals have never understood this idea, while conservatives have simply lost sight of it, countering liberal paternalism not with freedom, but with their own paternalism, or “compassionate conservatism.”
Citizens are not children; government should not be parental.
It is this turn toward nanny-state government which disillusioned small government conservatives and ultimately cost republicans the 2006 election. But there is reason to hope that the tide is turning. The alliance between big government conservatives and liberals has been, at least for the moment, defeated in their effort to pass a massive government “bailout,” thanks to those conservatives ready to shed the ponytails they’ve grown over the last decade.
In a letter urging his colleagues to oppose the bailout, Rep. Mike Pence stood on principle:
Economic freedom means the freedom to succeed and the freedom to fail.
The decision to give the federal government the ability to nationalize almost every bad mortgage in America interrupts this basic truth of our free market economy.
…Before you vote, ask yourself why you came here and vote with courage and integrity to those principles.
If you came here because you believe in limited government and the freedom of the American marketplace, vote in accordance with those convictions.
In the past I’ve chastised those who put party before principle, supporting RINO’s like Lincoln Chafee for no other reason than that he was, for some odd reason, registered republican. Now, thanks to the disproportionate defeat of RINO’s in the last election (there’s a lesson there), conservatives have a stronger say in the republican party than before. Certainly, conservative principles have not yet been restored as the primary driver of party policy, but stands like this give me hope that they yet will be.
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The False Explanation
You’re going to hear a lot of stories in the coming days, and probably have heard a few already. Following the high profile collapse of the giants in the financial sector, there are going to be a number of groups jumping to advance their agenda by telling you falsehoods about who is to blame. Socialists, statists, anti-capitalists and all manner of other market and freedom haters are already jumping to lay blame at the feet of capitalism. Yet many of these people have themselves played a part in this mess. The Obama campaign is already out to make “deregulation” a dirty word, and has released an ad making two false claims: first, that deregulation had anything to do with the financial crises and, second, that allowing competition in health care would create a similar situation. Even the New York Times, criticizing the ad for its falsehoods, acknowledged that “[deregulatory changes] were viewed by many as having benefited consumers by encouraging competition, and those changes have not been linked to the current crisis.” But in order to advance the socialist regulatory agenda, it is constantly necessary to demonize the free market.
The most hypocritical market-basher, by far, is long-time Democratic Party embarrassment Barney Frank. Frank has been making the rounds dispensing his distorted account of what has happened. For instance, he attributed AIG’s troubles to “lack of regulation,” and self-righteously declared, “the private market screwed itself up and they need the government to come help them unscrew it.” On the overall financial meltdown he says, “Some private-sector people made irresponsible decisions because there wasn’t adequate regulation.” Not quite. There was inadequate regulation, but of government, not the private-sector. It is government policy and government sponsored entities Fannie Mae and Freddie Mac that are the drivers of this meltdown. And when it came to regulating their behavior, Barney Frank was a chief roadblock.
Freddie and Fannie became a half-way house for democrats heading out of government.
In 2003 President Bush attempted to address the problem created by Fannie and Freddie’s insulation from market incentives. The President proposed an agency to oversee the quasi-governmental companies. Democrats, bought and paid for by F&F, were strongly opposed.
Granted, I would have preferred that President Bush had chosen market incentives over regulation by cutting Fannie and Freddie loose from government altogether. But, and this is a big but, if government is going to insist on socializing risk, it’s better that it also provide even a crude form of accountability (and crude is all the accountability government can muster compared to markets), to make up for it. Leaving F&F roaming free as part-private and part-governmental, with the dueling and often contradictory missions it implies, without either market or government forms of accountability, was the worst possible solution. It’s also the one Barney Frank demanded when he opposed Bush’s effort and declared that, “[Fannie and Freddie] are not facing any kind of financial crisis,” before also concluding, “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.” And that is exactly what led us to this mess: the government’s reckless demands for “affordable housing.”
A Government Created Mess
In 1977 a Democratic Congress, working with a Democratic President, produced the Community Reinvestment Act (CRA). The CRA forced banks to make unsound loans to poor, uncreditworthy borrowers, all in the name of liberal fairness. Required to keep extensive records of their minority lending practices, banks became targets of racial shakedown artists. If they weren’t satisfied with a bank’s submission to their extortionist demands, they could have them denied the right to expand or merge with other banks.
In 1994 Clinton revamped the CRA and kicked off a new wave of reckless lending. This is where Freddie and Fannie jumped in to corner the market on bad loans, loans which wouldn’t have ever been made if rules requiring money down and sufficient sources of income hadn’t been thrown out the window in the name of racial equality.
Another contributing government factor was the loose monetary policy pursued by the Fed. By keeping interest rates too low, the Fed contributed to an influx of dollars into the market. When money is created faster than productivity warrants, it results in a misallocation of resources in certain assets, creating “booms.” Former vice president and economic advisor at the Federal Reserve Bank in Dallas, Gerald P. O’Driscoll Jr., blames the Fed for not properly weighing the costs of their inflation targeting methods:
In a vibrant market economy with technological innovation and ever new profit opportunities, the monetary policy that maintains price stability in consumer goods (or zero price inflation) requires substantial monetary stimulus. That stimulus will have a number of real consequences, including asset bubbles. These asset bubbles have real costs and involve misallocations of capital. For example, by the peak of the tech and telecom boom in March 2000, too much capital had been invested in high-tech companies and too little in “old economy firms.” Too much fiber optic cable and too few miles of railroad track were laid.
The Democrats’ Revolving Door
While government policy was meddling with the financial markets, government officials made themselves quite comfortable in the financial sector. Freddie and Fannie became a half-way house for democrats heading out of government. Franklin Raines, currently Barack Obama’s financial advisor and former Clinton era budget director, spearheaded Fannie Mae into countless Enron-style accounting manipulations and scandals. Foreshadowing the left’s current strategy to peg their failures on advocates of free markets, Raines derided those who pointed out his companies risky and shady practices as “ideologues” trying to “undermine” Fannie Mae.
Jim Johnson, also a former Fannie CEO and a board member of Goldman Sachs, is a policy advisor who was chosen by Obama to lead his vice-presidential selection team. Johnson was forced to fall on his sword when it was revealed he and several other prominent democrats received special perk loans from Countrywide Financial’s CEO Angelo Mozilo. With no banking or financial experience whatsoever, Jamie Gorelick, former Deputy Attorney General under Clinton, was appointed Vice Chairman of Fannie Mae in 1997, and got fat off of Raines’ accounting scandals. Rahm Emanual, the 4th highest ranking democrat in the House, was similarly shuffled onto Freddie’s board after leaving the Clinton White House.
Meanwhile, their Democratic colleagues who remained in government were assured their part of the take. Chris Dodd, now Chairman of the Senate Banking Committee, raked in the most from Freddie and Fannie, at $165,000. Perhaps these donations are what Dodd had in mind when, in July, he referred to Fannie and Freddie as “fundamentally sound and strong.” Number 2 on the graft list is Barack Obama, who took in over $125,000 in his short tenure in the Senate. The government’s pet mortgage lenders further feathered their nests by opening “partnership offices” in the district of key members of Congress, where they could funnel millions of dollars to their supporters. The bribes paid off. Compared to IndyMac, which didn’t offer democrats any protection money and was thrown to the wolves by Chuck Schumer, Fannie and Freddie are now looking at billions in taxpayer support.
It’s not hard to see why, when President Bush sought to counter Fannie and Freddie’s government created incentives for recklessness, he was fought by Democrats at every turn. According to the White House, 17 attempts at reform were blocked by democrats. Government’s inability, thanks to Democratic cronyism, to replace the market checks which it destroyed by demanding reckless behavior on the one hand, and subsidizing risk with an implied guarantee on the other, provided the perfect financial storm for disaster.
One would think it would be difficult for those on the left to so easily absolve themselves of any responsibility, while simultaneously blaming those who attempted to stop them from creating this disaster, but that is exactly what they’ve done. Phil Gramm, who sought to relax the Democratic created requirements that banks issue risky subprime loans, has been tagged a “deregulator,” which is, in their view, automatic proof of guilt. Barack Obama blames the problem, as he does everything, on “Bush-McCain,” even as he found room in his campaign for those actually responsible and belongs to a party which protected Fannie and Freddie from reform. In short, the left is trying to rewrite history even as it’s being made. The ink hasn’t yet dried on the reporting of their government sponsored mess, and already they are blaming those who believe in freedom and oppose their interventionist programs. They think the failures of government should justify yet more government. They are wrong and their lies shouldn’t be allowed to disguise this fact.
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Sometimes questions can escape obvious answers despite being pondered by our greatest thinkers. How did our universe come into existence? What happens when we die? Which came first: the chicken or the egg? Can markets exist without government?
Ok, we all know that last one shouldn’t be there. The answer, surely, is obvious: markets most certainly can exist without government. But this is not so obvious to Fareed Zakaria:
This crisis should put an end to false debates about government versus markets. Governments create markets, and markets can exist only with regulation. If you want to be truly free of regulation, try Haiti or Somalia. The real trick is to craft good regulations that allow markets to work well. No regulatory structure will be perfect, none will eliminate risk, nor should they. At best they can tame the wildest gyrations of the market economy while maintaining its efficiency.
Government creates markets? They can only exist with regulation? This is hyperbolic nonsense.
Markets are created by free and voluntary exchange, not governments. Without government the fisherman would still exchange some of his catch for clothes from the tailor, and to suggest otherwise is pure folly.
There is no doubt that the rule of law provides the best environment for markets to function. Zakaria, however, misconstrue the meanings of “regulation” and confuses it for rule of law. Those who, as a rule of thumb (there are always exceptions), find regulation prohibitive to the best functioning of markets are not calling for an abolition of government, as Zakaria implies. Nor do Haiti and Somalia accurately represent what a market without regulation would look like. It is entirely dishonest for him to point to these as examples of unregulated market outcomes, as if the only alternative to busy-body bureaucrats deciding all manner of economic decisions is ethnic cleansing and a total breakdown of law and order.
There certainly are situations in which government can be used to unleash the power of the market. Common market failures can often be improved with government rule-making, but to claim that government creates markets is to suggest that the grease on the wheel creates motion.
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And by we, I mean the polar bears.
Polar bears and other rare species are in danger of dying out, scientists fear, as latest figures show the Artic sea ice is at record lows.
Scientists from the World Wildlife Fund, who are recording the ice cover over the North Pole, said less ice is predicted in the Arctic this year than in any other.
Experts say this not only means a loss of habitat to species like polar bears and loss of livelihood for indigenous peoples but could speed up global warming as water absorbs heat rather than reflecting the sun’s rays back into space.
Dr Martin Sommerkorn, senior climate change advisor at WWF International’s Arctic Programme, said: “We are expecting confirmation of 2008 being either the lowest or the second-lowest year in terms of summer ice coverage.
“This means two years in a row of record lows since we started recording Arctic sea ice coverage.“
I bolded the key point there, in case you missed it. Sometimes I wonder how smart people can be so dumb. I don’t know exactly how long we’ve been recording sea ice coverage, but it can’t be very long, at most around 50 years. Polar bears, to make an understatement, have been around a bit longer than that. They’ve survived with less ice, with more ice, with warm temperatures, with cold temperatures. They’re not so delicate as to whither and die from fluctuations within, in the perspective of earth’s climactic history, a normal temperature range.
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The McCain campaign’s decision to run an ad attacking Obama for making a sexist attack in use of a common metaphor was unquestionably stupid. On the back of the Sarah Palin and convention bounce, McCain is spending too much time engaging in democrat-like tactics of phony indignation, when he should instead be pressing for the advantage on the economy following the huge gains he’s seen on the issue.
Any fair-minded observer can see the charge is false and that Obama was not calling Palin a pig with lipstick. Making such a charge gives democrats a chance to distract from Obama’s floundering and lifeless campaign and cast McCain as a deceitful candidate. Moreover, while Democrats routinely exploit identity politics to make these kinds of spurious charges, republicans should not follow suit. McCain should get back to pointing out Obama’s irresponsible and socialistic economic policies and save the fake anger for those on the left otherwise devoid of ideas.
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Russia wants the United States and its European allies to provide convincing guarantees that a planned missile defence shield is not aimed against Moscow, Foreign Minister Sergei Lavrov was quoted as saying on Thursday.
…”We are open to serious negotiations (on the missile shield). If the United States and Poland are willing to guarantee that the European anti-missile base is not aimed at Russia, then we are ready to consider concrete proposals,” Lavrov told the Gazeta Wyborcza daily in an interview.
“But we should talk about guarantees, not of cosmetic political gestures,” he said.
Russia strongly opposes U.S. plans to establish an anti-missile shield in NATO members Poland and the Czech Republic, Moscow’s Soviet-era satellites, saying they upset the balance of power by undermining its own nuclear arsenal.
First of all, entirely defensive measures cannot be “aimed” at anyone. What Russia is really asking for is that, should they decide to start a nuclear war, we let their missiles pass by unmolested. This is a gross and deliberate perversion of “balance of power” theory that Russia hopes exploit to insure that it can continue to bully the caucuses. Defensive measures do upset the balance of power; they make aggression less likely.
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Too biased even for MSNBC:
MSNBC is replacing Keith Olbermann and Chris Matthews as co-anchors of political night coverage with David Gregory, and will use the two newsmen as commentators.
The change reflects tensions between the freewheeling, opinionated MSNBC and the impartial newsgatherers at NBC News. Throughout the primaries and summer, MSNBC argued that Olbermann and Matthews could serve as dispassionate anchors on political news nights and that viewers would accept them in that role, but things fell apart during the conventions.
…The tipping point appears to have come during the GOP convention when Olbermann criticized MSNBC for showing a Sept. 11-themed video prepared by the Republicans.
MSNBC executives, who had publicly defended their anchors’ roles while privately monitoring them throughout the political season, made the change over the weekend after discussions with Olbermann. Despite the controversy around him, Olbermann has been a hero with left-leaning viewers and keyed MSNBC’s growth among coveted young viewers.
During her acceptance speech last week, Republican vice presidential candidate Sarah Palin talked about the “Washington elite” not accepting her qualifications for the job. Some delegates on the convention floor began chanting, “N-B-C, N-B-C.”
Olbermann began to have difficulty keeping his opinions in check, or simply stopped trying.
That blowhard’s moronic opinions have never been in check. That such an obvious party socket-puppet is propped up as a serious journalist is a blight on the profession’s last remnants of credibility.
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The New York Times has an interesting diagram highlighting the frequency in which certain words and phrases were used during the recent conventions.
A couple of things stand out. Contrary to the media narrative, the democrats, and in particular Barack Obama, were more negative. Also, neither party seems to want to talk about immigration. This is probably because both candidates are at odds with the wishes of a majority of the country.
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Some things just make you shake your head in disgust, wondering how so many people could possibly be so stupid. Rasmussen reports, “60% of Voters Say Supreme Court should Base Rulings on Constitution.”
During his acceptance speech last night at the Republican National Convention in Minnesota, John McCain told the audience, “We believe in a strong defense, work, faith, service, a culture of life, personal responsibility, the rule of law, and judges who dispense justice impartially and don’t legislate from the bench.” Most American voters (60%) agrees and says the Supreme Court should make decisions based on what is written in the constitution, while 30% say rulings should be guided on the judge’s sense of fairness and justice. The number who agree with McCain is up from 55% in August.
What the other 10% think should be used is a mystery – ouija boards maybe. Don’t laugh, they couldn’t be worse than something as frightening as the “sense of fairness and justice” of a small group of judges. If that’s how our law is to be decided, why even bother with a democracy?
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The New York Times has a problem with McCain’s chosen tactic of running against the establishment.
“Party in Power, Running as if It Weren’t”
The nominee’s friend described him as a “restless reformer who will clean up Washington.” His defeated rival described him going to the capital to “drain that swamp.” His running mate described their mission as “change, the goal we share.” And that was at the incumbent party’s convention.
After watching two political conclaves the last two weeks, it would be easy to be confused about which was really the gathering of the opposition. As Senator John McCain accepted the Republican nomination for president, he and his supporters sounded the call of insurgents seeking to topple the establishment, even though their party heads the establishment.
…But as a matter of history, it is easier to run as the opposition party if you actually are the opposition party.
“When the president of the United States is from your own party, to present yourself as a change agent is not the easiest thing to pull off,” said Joe Trippi, a Democratic strategist. Referring to Senator Barack Obama, the Democratic nominee, Mr. Trippi added, “All Obama has to do is say, ‘Bush-McCain, Bush-McCain.’ ”
How does something so moronic get printed in the New York Times? You would think, after however many years of peddling such blatantly biased reporting, they would have at least managed to comprehend that there is more than one branch of government. A Republican most certainly can run against the establishment, since that establishment includes a Democrat controlled House and Senate (which also just so happens to be more unpopular than the Republican controlled branch of government).
Here’s a little quiz for the New York Times. Which of the two Presidential candidates holds committee chairs as a member of the majority party? Here’s a hint: it’s not the republican.
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I am a libertarian-conservative blogger living in the DC area. I have a Master's degree in Political Science, but please don't hold that against me.
