'Reinvesting' our economy to win an election

I don't know whether to cheer or jeer since the bailout/rescue bill went down in flames. Which is it anyway, a bailout or a rescue? If this mess just threatens Wall Street, so what? Ain't got no dog in that fight. But it's bigger than that and has already come to my street. The sweet wife and I have a home mortgage with Countrywide, a credit card with WaMu and 401K and retirement funds also being threatened.

But anything Nancy Pelosi and Barney Frank are pushing can't be good, can it? Or is Nasty Nancy lying? I'm sure I saw her lips moving.

Nancy Pelosi's nasty rant about how President Bush and those evil Republicans got us into this mess is not only a lie, it's a DAMN LIE! And like Hitler's big lies that got us into WWII, I strongly suspect Broomhilda knew exactly what she was doing when she stepped to the podium just prior to the vote and torpedoed the bipartisan rescue bill. If it passed, John McCain would have benefitted and might win the election. But failure of the bill and worsening of the economy, according to conventional wisdom, will benefit Obama and the Democrats.

There's two possibilities here. Pelosi's either dumber than a box of rocks and can't count votes or she sabotaged the rescue intentionally.

Megan McArdle at The Atlantic votes for the stupid theory with a strong whiff of sabotage thrown in.

Pelosi cut a deal in which, as far as I can tell, every single Republican in a safe seat had to vote yes so that the Democrats could maximize their no votes. Given that the Republican caucus is pretty much in open revolt, this was beyond moronic. She then spent a week openly and repeatedly blaming the Republicans and the Bush administration for the current crisis. The way she set things up, it was "Heads I win, tails you lose": vote for the deal and I'll paint you as heartless reactionaries bailing out our fat cat friends. If you're going to do that, you'd better make sure you have some goddamn margin for error in your own party. She didn't. Then she got up and delivered yet another speech blaming the Republicans for the bailout deal she was about to pass.

The Washington Prowler at The American Spectator supports the sabotage theory with a side of stupidity at counting votes.

House Speaker Nancy Pelosi ordered her Majority Whip, Jim Clyburn, to essentially not do his job in the runup to the vote on Monday for the negotiated Wall Street bailout plan, according to House Democrat leadership aides.

"Clyburn was not whipping the votes you would have expected him to, in part because he was uncomfortable doing it, in part because we didn't want the push for votes to be successful," says one leadership aide. "All we needed was enough to potentially get us over the finish line, but we wanted the Republicans to be the ones to do it. This was not going to be a Democrat-passed bill if the Speaker had anything to say about it."

James Simpson at American Thinker says it's not stupidity, it's strategy and it's name is The Cloward-Piven Strategy of Orchestrated Crisis

In an earlier post, I noted the liberal record of unmitigated legislative disasters, the latest of which is now being played out in the financial markets before our eyes. Before the 1994 Republican takeover, Democrats had sixty years of virtually unbroken power in Congress - with substantial majorities most of the time. Can a group of smart people, studying issue after issue for years on end, with virtually unlimited resources at their command, not come up with a single policy that works? Why are they chronically incapable?

Why?

One of two things must be true. Either the Democrats are unfathomable idiots, who ignorantly pursue ever more destructive policies despite decades of contrary evidence, or they understand the consequences of their actions and relentlessly carry on anyway because they somehow benefit.

I submit to you they understand the consequences. For many it is simply a practical matter of eliciting votes from a targeted constituency at taxpayer expense; we lose a little, they gain a lot, and the politician keeps his job. But for others, the goal is more malevolent - the failure is deliberate. Don't laugh. This method not only has its proponents, it has a name: the Cloward-Piven Strategy. It describes their agenda, tactics, and long-term strategy.

Is Nancy Pelosi that nasty, that she would blow up the economy to win an election? Not only yes, but HELL YES! And so far the polls are confirming her low opinion of the voters' intelligence at understanding just who's trying to help and who's trying to hurt our economy.

And she's got the entire mainstream media blowing the same BS trumpet with her vs. a handful of us right-wing bloggers, but I gotta try.

The time bomb that went off on Wall Street goes back 31 years to our worst ex-president, good ol' Yellow Dog Democrat Jimmy Carter, was made worse by good ol' Democrat Bill Clinton in 1995 and has had its skids greased all along the way by the same Democrats who now loudly proclaim they're trying to "rescue" the economy, Barney Frank, Chris Dodd, Harry Reid, Nancy Pelosi, Barack Obama and Co.

As usual in Congress, the bill that started it all had an innocent sounding name, the Community Reinvestment Act (CRA). In liberal lingo, an "investment" is a tax increase and "reinvestment" means robbing people who make money to bribe Democrat voters, also known as welfare.

Roger Kimball at Pajamas Media names the players on the scorecard in Who caused “the biggest financial crisis since the Great Depression?”

"The Community Reinvestment Act” (see here for more).

* The original Community Reinvestment Act was signed into law in 1977 by Jimmy Carter. Its purpose, in a nutshell, was to require banks to provide credit to “under-served populations,” i.e., those with poor credit.

The buzz word was “affordable mortgages,” e.g., mortgages with low teaser-rates, which required the borrower to put no money down, which required the borrower to pay only the interest for a set number of years, etc.

* In 1995, Bill Clinton’s administration made various changes to the CRA, increasing “access to mortgage credit for inner city and distressed rural communities,” i.e., it provided for the securitization, i.e. public underwriting, of what everyone now calls “sub-prime mortgages.”

Bottom line? It forced banks to issue $1 trillion in sub-prime mortgages.

Ace quotes a "geek accountant" who explains in plain terms just how bad the mess we're in is and how much worse it could get - soon.

The accountant's poster name is Inspector Asshole, so get ready for some graphic talk. It's a bit rough, but so is this credit crisis.

They (these distressed assets) have to be shown on the balance sheet and marked down to marked down to market value. This means that suddenly, normally healthy companies have assets that actually have value, but have been artificially and temporarily valued at fucking zero goddamned dollars even if they bought them for several million. Even, and I want the market-valuation absolutists to read this very carefully - even when those assets are ownership of actual real property that have intrinsic worth. Due to this rule, the credit markets are being affected in a way that is not tied directly to the fact that loans were made to itinerant phrenologists and spastic mimes. Those were the root cause. The problem with valuation of these loan packages including defaulted mortgages is a fucking multiplier.

Let's put it this way - think of the "credit drain" and bad things as a military force. The CRA loans to carnies and strippers with Tourette's Syndrome is like a company of infantry - pretty impressive. The problem with marking down to market prices is like giving each sonofabich a Davey Crockett nuclear howitzer.

This means that through temporary and artificial means, a company that would say own 30,000 houses/shitty mortgages, all with $3K worth of salvagable copper in them that could be torn out and sold- that they bought for $3 million - suddenly don't have jack shit on their books. All of it is valued at zero because no one will buy it. That isn't a rumor - that is actually happening. Marking down to zero isn't done on a goddamned whim. It is documented. People/entities with these assets that have intrinsic value cannot label them on their balance sheets as what they paid for them - they must write that they are worthless.

This makes huge companies suddenly in dire straits. They may not be able to make payroll NEXT WEEK. A number of companies, who might be loaded with these, will fail.

This is because they suddenly have to book a loss - huge paper losses - that have no real relation to the situation over just the next three months.

Let me repeat - healthy companies will be unable to prove they own enough assets to float a loan. Past liabilities will be dishonored. This will spread within 21 to 30 days up and down the food chain. Each 2 weeks will result in larger and larger cycles of shrinkage of asset valuation, sudden outlays for demand notes, inability to meet payroll, layoffs, and cancellations (with penalties) of contracts.

Distribution networks would be among the first hit. I haven't gone further than that in my research. But right there, we're looking at some severe dislocation. Severe as in diabetics having to stock up on insulin.

This does have the possibility of being retardedly bad - think what would happen if 1/3rd of the train and truck traffic ceased. Stopped without notice.

The problem is systemic - not just to the credit market - it is systemic to how we do business between states. It is systemic as in "No Produce Scheduled Until Next Week" type signs in your Safeway.

If it doesn't get fixed in 2 weeks, by January some communities will be isolated due to no diesel for the road crews. In New York.

I'm not alone in smelling a rat in Pelosi's ill-timed rant. Wesley Pruden of The Washington Times smells it, too, and offers a female remedy plan. If a bad woman raised a stink to make this economic mess worse, a good woman just might be the answer in this trying hour.

Pruden speculates that the solution to this fine mess that Nasty Nancy seems determined to prolong is: A Job for the Right Woman

Perhaps her tantrum was not a tantrum at all, but a carefully orchestrated two-step to pay back John McCain for his attempt to get Barack Obama back to Washington, even if it meant postponing the Ole Miss debate (that neither man won), where together they could have twisted enough Republican and Democratic arms to win passage of the bailout that nobody wanted and nearly everybody agreed was necessary. If Mr. Obama had made common cause with Mr. McCain even after the debate in Mississippi, there might still have been enough time to make the difference.

Maybe that's what the Obama campaign wanted to avoid. The tears the Anointed One shed after the vote looked a lot like the tears of a crocodile. He even tried to be lighthearted, to show a little insouciance if not actual wit. (An insouciant Barack Obama? Who knew?) He's "confident" of a "solution," but "it's sort of like flying into Denver. You know you're going to land, but it's not always fun going over those mountains."

This sets up an opportunity, maybe the last good one, for John McCain to start burning barns. Who better to start it than Sarah Palin, the stubborn mom with true grit who so terrifies the Democratic left, to debate - in her own voice, unrestrained by the Nervous Nellies and Willie Wimps of the McCain camp who don't understand her Everywoman appeal - Joe Biden about what's real, about the prospect not of a recession but a depression, and the tough decisions ahead and the need for a maverick president with the experience of persuading partisan foes of making painful decisions.

Merely voting "present" won't do it. The people in all 57 states, clinging bitterly to God, guns and now to their life's savings, deserve nothing less.

Somebody needs to point out Nasty Nancy's "challenged" math. When 95 Democrats vote against their leaders' plan and 65 Republicans cross the aisle to vote for it, how does that equate to lack of GOP support killing the rescue bill? Sarah to the rescue is our best hope.

And if you're expecting Obama to come riding in to save the economy, don't bother. He's way too busy getting his dry cleaning done.

Obama said he was "working the phones" as part of his "long-distance encouragement" plan to save the economy right up until the vote went down in flames yesterday. He even had a speech written taking credit for the passage, but had to toss it and quickly change gears.

So today, we get a different tale. The New York Times today gives a totally different version about Obama's involvement in the rescue.

Aides to Mr. Obama said he had not directly reached out to try to sway any House Democrats who opposed the measure. But where Mr. McCain had accused Mr. Obama of taking a hands-off approach to the financial crisis, Democratic advisers said they believed that Mr. McCain now had a role in the legislation’s failure.

So if it had passed, Obama was ready to claim credit. But after it failed, he not only was not involved, it's all John McCain's fault. That's the biggest problem with being a liar. You have to remember the lies you told yesterday so today's lies won't conflict with yesterday's.

My beautiful friend Mary Katharine Ham cites the hypocrisy and lies of Obama, Pelosi, Barney Frank and the whole crowd of Democrats.

The man who's been assuring voters of his very serious weighing in by phone from the campaign trail...didn't actually pick up a phone. This is the real Obama. He is a leader of crowds, not crises.

This won't be a story, but it should be, and Republicans and McCain should point it out. The argument against Dems is the utter lack of competent leadership by Obama and Pelosi, not whining about a Pelosi speech.

Pelosi lost more than 12 of her fellow California Democrats, close friends and allies, and Committee chairs in this vote. Obama failed to take a public position on the vote or to convince any teetering Democrats with promises of a trip to their Districts or other help from the Messiah himself, losing Dems from the Chicago area and much of the Congressional Black Caucus with whom he could have had sway.

And yet, the guy who got his hands dirty, tried to make a few things happen, and didn't quite get the ball across the goal line is the one who takes the political heat for this. Which is why, as Bill Kristol and Dean Barnett have suggested, McCain may as well go all-out on the leadership front. It's where he's comfortable working, and where Obama will never dare to walk ahead of him.

Barney Frank, Chris Dodd, Maxine Waters, and Nancy Pelosi willfully ignored the impending crisis for years before they suddenly saw the light and were able to blame a politically palatable entity for it—Republican embrace of "unbridled" capitalism and deregulation. They too seem to have reaped the benefits of inaction, succeeding in pinning the blame on the markets they meddled with, letting their vulnerable members oppose an unpopular bill, and possibly getting a second run at a bailout bill filled with the pork they cut out the first time around.

In Washington, sometimes "leadership" ain't all its cracked up to be. But isn't the political windfall of inaction—conveniently kvetching without responsibility—usually a privilege reserved for the minority party? Pelosi and Co. seem to be enjoying it no matter the circumstances. Maybe that's the "change" Obama's been talking about bringing to Washington.

And speaking of "change" by Obama, Jonah Goldberg points out an amazing change in The One's view of the economy's "long-term fundamentals."

The man has spent two weeks irresponsibly excoriating his opponent for saying the fundamentals of the economy are strong -- a perfectly leaderly thing for McCain to have said during a panic. Then, campaigning in Colorado on Monday, the day the market plunged 777.68 points, Obama proclaimed: "We've got the long-term fundamentals that will really make sure this economy grows."

Amazing. The fella who kept agreeing with John McCain in the debate now agrees with McCain's upbeat comment on the economy. But now that McCain has engaged himself to deal with the credit crisis, suddenly Obama disavows that he had even "long-distance encouragement" involvement.

All this bad news, economic and political, is putting me in a personal depression as well as threatening an economic one. And then I read something that puts the troubles of this life into a little lighter perspective. Like death. Seriously. P.J. O'Rourke keeps his sense of humor.

I looked death in the face. All right, I didn't. I glimpsed him in a crowd. I've been diagnosed with cancer, of a very treatable kind. I'm told I have a 95% chance of survival. Come to think of it -- as a drinking, smoking, saturated-fat hound -- my chance of survival has been improved by cancer.

...I have, of all the inglorious things, a malignant hemorrhoid. What color bracelet does one wear for that? And where does one wear it? And what slogan is apropos? Perhaps that slogan can be sewn in needlepoint around the ruffle on a cover for my embarrassing little doughnut buttocks pillow.

Furthermore, I am a logical, sensible, pragmatic Republican, and my diagnosis came just weeks after Teddy Kennedy's. That he should have cancer of the brain, and I should have cancer of the ass ... well, I'll say a rosary for him and hope he has a laugh at me. After all, what would I do, ask God for a more dignified cancer? Pancreatic? Liver? Lung?

Now that's class. Any man who can keep a sense of humor even when cancer comes calling is my kind of man. Add P.J. to your prayers. And while you're on your knees, pray for our country, too, something along the lines of "God save us from the Democrats!"