Fiddling with our freedom while the house burns down

I got up this morning, fixed my breakfast and turned on the TV to Fox News to see what is happening. First guest on The Pundit Pit is a black woman, who responds to this question about nationalizing our health care system, which is being planned by Obama and the nutroots left.

"Is this the right time?" asks the Fox News host. "Oh absolutely this is the right time," responds the Obama spokesperson, but before she can continue her blah, blah, blah, "click" I turn it off.

Our financial house is on fire, has been on fire since last October, and Barack Obama waltzed into the White House on a foggy, blue smoke and mirrors campaign for "change." But 40 days into his administration, it's is obvious even to a stupid redneck like me that his plans for "change" do not include putting the fire out and setting our financial house in order. Quite the contrary, his plans are Neroish. Fiddle away like Charlie Daniels on "The Devil Went Down To Georgia," and while the voters are distracted with worry as the financial system burns down around their ears, their jobs are lost, their retirement funds are zeroed out and their nest eggs are cracked -- while all that is happening, push through the biggest government grab in history to consolidate power.

Push through nationalizing heathcare, mandatory government-funded college educations for all, bankrupt businesses with tax hikes to pay for "alternative energy" and "cap and trade" schemes to solve the nonexistent global warming crisis -- and after all that is done, maybe then we might call the fire department to put out the fire, if there's anything left of our republic unburnt.

Emmett Tyrrell explains quite clearly how the fire started in our financial house.

From our vantage point in early 2009, we can see that critics of Alan Greenspan were right when they said that he lowered interest rates too much between 2001 and 2004. But what about the products that the Wall Street wizards were selling? They were called -- in hushed tones of awe -- "complex derivatives." Actually, they were sausages stuffed with junk loans, mediocre loans, good loans and sufficient spice to sucker the credulous. These sausages were sold all over the world, and every time a transaction was made, those in on the transaction made money, even the vegetarians, even the economic ignoramuses. It was a kind of gigantic chain letter. Government regulators did not take heed. The politicians did not take heed. Those investment bankers who did and who spoke out were ignored.

Complex derivatives. Sorta like sausage with an undetermined amount of hog crap mixed in. Works for a while until somebody smells the crap and guess what? Nobody buys any sausage.

Charles Krauthammer, as usual, cuts through the fog and blue smoke to explain the scheme.

At the very center of our economic near-depression is a credit bubble, a housing collapse and a systemic failure of the entire banking system. One can come up with a host of causes: Fannie Mae and Freddie Mac pushed by Washington (and greed) into improvident loans, corrupted bond-ratings agencies, insufficient regulation of new and exotic debt instruments, the easy money policy of Alan Greenspan's Fed, irresponsible bankers pushing (and then unloading in packaged loan instruments) highly dubious mortgages, greedy house-flippers, deceitful homebuyers.

The list is long. But the list of causes of the collapse of the financial system does not include the absence of universal health care, let alone of computerized medical records. Nor the absence of an industry-killing cap-and-trade carbon levy. Nor the lack of college graduates. Indeed, one could perversely make the case that, if anything, the proliferation of overeducated, Gucci-wearing, smart-ass MBAs inventing ever more sophisticated and opaque mathematical models and debt instruments helped get us into this credit catastrophe in the first place.

And yet with our financial house on fire, Obama makes clear both in his speech and his budget that the essence of his presidency will be the transformation of health care, education and energy. Four months after winning the election, six weeks after his swearing in, Obama has yet to unveil a plan to deal with the banking crisis.

What's going on? "You never want a serious crisis to go to waste," said Chief of Staff Rahm Emanuel. "This crisis provides the opportunity for us to do things that you could not do before."

Things. Now we know what they are. The markets' recent precipitous decline is a reaction not just to the absence of any plausible bank rescue plan, but also to the suspicion that Obama sees the continuing financial crisis as usefully creating the psychological conditions -- the sense of crisis bordering on fear-itself panic -- for enacting his "Big Bang" agenda to federalize and/or socialize health care, education and energy, the commanding heights of post-industrial society.

Clever politics, but intellectually dishonest to the core. Health, education and energy -- worthy and weighty as they may be -- are not the cause of our financial collapse. And they are not the cure. The fraudulent claim that they are both cause and cure is the rhetorical device by which an ambitious president intends to enact the most radical agenda of social transformation seen in our lifetime.

Breathtaking. Rahm Emanuel brazenly admits the Obama administration plan to ignore dealing with the banking crisis and take advantage of it to socialize America for a political power grab.

And Bill Kristol says Don't Worry, Be Happy is the tune Obama is fiddling madly on while the stock markets crash and burn and keep plunging towards a bottom yet unseen.

But the markets were aware of the huge problems plaguing the banking system before Obama became president. Surely what they are reacting to now is his failure to address them. Obama has spent far more time publicly defending his stimulus package, and touting his health care, energy, and education proposals, than explaining how he's going to deal with the banking crisis. Yet virtually all serious observers--whatever their politics, whatever their economics--agree that the financial crisis is the central crisis we face, that the core of the problem is the banking system. But the administration has treated this as merely one "leg" of a three-legged stool (the other two are stimulus and housing), and the least urgent one to fix at that. And now Obama wants to focus on "long term" issues like health care and energy and education--while not showing any sense of urgency about the banking crisis.

Instead, the Obama administration throws more money at Citi and AIG. This at best simply puts off the day of reckoning (but at some considerable cost); at worst, Obama's Treasury is fiddling while Rome burns. And it's not as if there's that much disagreement across the political or economic spectrum as to what has to be done; everyone agrees the toxic assets have to be separated from the rest. And the disagreements about how to do this seem to some degree semantic ("nationalization" followed by selling off good assets vs. setting up a "bad bank" vs. public-private partnerships to buy and manage toxic assets, etc.). What spooks the markets, I believe, is that the Obama administration has shied away from embracing any solution. Under his administration, has a single toxic asset actually been seized, separated, sold, or de-toxified? I don't think so.

No, the stock market isn't like a tracking poll. Tracking polls were just about the electoral prospects of Barack Obama. The stock market is about real money, about the real livelihoods of real Americans. Obama's political advisors may have told him that dealing with the banking system will be politically difficult. Treasury Secretary Tim Geithner may want to build up his political capital after a rough confirmation before he steps up to the plate. Larry Summers may not want to endanger his chance to be Fed chairman by being identified with an unpopular bank "bailout". I'm told almost every theme in Obama's speech last Tuesday night was focus-group tested--and the speech played pretty well politically. But the markets weren't impressed. Isn't it time for Obama and his team to get up the nerve to stop playing politics and to govern?

God help us all. He's our only hope. Don't look to Washington for economic salvation. It ain't there.

Let me conclude with a quote from Professor Mike Adams, writing about the weirdos on faculty at the University of North Carolina at Wilmington, where he appears to be the only sane person in that insane asylum. The quote is on an entirely different topic, but it expresses my true feelings perfectly about this whole power grab under way by Obama/Pelosi/Reid & Co.

If any member of the Gender Mutiny Collective is offended by this column I invite you to come and monitor my classroom. I also invite you to kiss my ass.

Say goodnight Gracie.