Monday, September 29, 2008

This is not "The America I Knew"

James Taranto has spotted this reactionary meme at the first Presidential Debate, in Barak Obama's closing statement:
You know, my father came from Kenya. That's where I get my name.

And in the '60s, he wrote letter after letter to come to college here in the United States because the notion was that there was no other country on Earth where you could make it if you tried. The ideals and the values of the United States inspired the entire world.

I don't think any of us can say that our standing in the world now, the way children around the world look at the United States, is the same.

And part of what we need to do, what the next president has to do--and this is part of our judgment, this is part of how we're going to keep America safe--is to--to send a message to the world that we are going to invest in issues like education, we are going to invest in issues that--that relate to how ordinary people are able to live out their dreams.

And that is something that I'm going to be committed to as president of the United States.
Taranto points out:

Barack Obama may be the world's leading expert on Barack Obama, but he managed to misstate a crucial fact in his father's life story. Obama père came to the U.S. in September 1959, the Washington Post reported in March--which would mean that the letter-writing campaign Obama fils describes would have taken place in the 1950s, not the 1960s.

Why is this important? Because it is weird to hear a left-liberal politician wax nostalgic for the "moral authority" the U.S. supposedly enjoyed in the 1950s--before the Civil Rights Act of 1964 and the Voting Rights Act of 1965, the War on Poverty, America's defeat in the Vietnam War, women's liberation, gay liberation, Roe v. Wade, Nixon's resignation--all the liberal triumphs of the 1960s and '70s. It is conservatives who usually argue, rightly or not, that the era since the 1950s has been one of moral decay.

Presumably it was to divert attention from this contradiction that Obama misstated the decade in which his father attempted to come to America. Liberals, at least those who weren't there, remember the 1960s fondly. But however one evaluates the legacy of the 1960s and early '70s, is there really any substance to Obama's claim that "our standing in the world now, the way children around the world look at the United States," has deteriorated? (Obama's father, by the way, was a "child" of 22 or 23 when he arrived in the U.S.)

Our sense is that there is not, that Obama is painting a rosy picture of the past in order to disparage contemporary America. It's nothing more than feel-bad rhetoric.

In fact, we'd say the most salient contrast between America in 2008 and America in 1959 is this: In 2008, Obama fils has an excellent chance of becoming the next president. In 1959, there were large portions of the country where Obama père would have been treated as a second-class citizen. Obama père seems to have seen past America's imperfections and focused on its greatness. If Obama fils is to be the next president, one hopes he will learn to do the same thing.

Thursday, September 25, 2008

Bailout Thoughts

So there is a lot of back-and-forth about whether the Paulson Bailout will cost the U.S. trillions of dollars; or whether it will in the end reap a windfall of trillions of dollars.

The question that I have for those that think this may actually make money is this:

Are you nuts?

(Note that I generally applaud buying up distressed assets a fire-sale prices, then making a killing once everybody starts to realize how stupidly they have acted. I am, after all, a heartless capitalist.)

Andy Kessler makes this point in his Wall Street Journal article:

In 1992, hedge-fund manager George Soros made $1 billion betting against the British pound. In 2007, John Paulson's Credit Opportunities fund correctly bet against subprime mortgages, clearing $15 billion for the year and $3.7 billion for him. Warren Buffett is now hoping to make big money on Goldman Sachs.

[Chad Crowe] Chad Crowe

But these are small-time deals. My analysis suggests that Treasury Secretary Henry Paulson (a former investment banker, no less, not a trader) may pull off the mother of all trades, which could net a trillion dollars and maybe as much as $2.2 trillion -- yes, with a "t" -- for the United States Treasury...

Firms will haggle, but eventually cave -- they need the cash. I am figuring Mr. Paulson could wind up buying more than $2 trillion in notional value loans and home equity and CDOs for his $700 billion.

So the U.S. will be stuck with a portfolio in the trillions of dollars in bad loans and last-to-be-paid derivatives. Where is the trade in that?

Well, unlike Mr. Buffett or any hedge fund, the Treasury and the Federal Reserve get to cheat. It's not without risk, but the Feds, with lots of levers, can and will pump capital into the U.S. economy to get it moving again. Future heads of Treasury and the Federal Reserve will be growth advocates -- in effect, "talking their book." While normally this creates a threat of inflation and a run on the dollar, and we may see dollar exchange rates turn south near term, don't expect it to last.

First, with Goldman Sachs and Morgan Stanley now operating as low-leverage bank holding companies, a dollar injected into the economy will most likely turn into $10 in capital (instead of $30 when they were investment banks). This is a huge change. Plus, a stronger U.S. economy, with its financial players having clean balance sheets, will become a safe haven for capital.

So where is the downside?

L. Willaim Seidman and David C. Cooke list some of the lessons they learned from the Resolution Trust Corporation in the Savings & Loan bailout of the 1985:

Here are the most important lessons we learned from our experiences in the late '80s and early '90s:

- Acquired assets require active management. Assets tend to lose value while in government hands, as the government seldom can duplicate a private owner's interest in enhancing value. The RTC employed over 10,000 people in the first year of operation.

- Holding large inventories of assets will lead to depressed prices. No one wants to buy when the market has a large overhang of assets just waiting to be dumped when prices improve.

- To get the market started, assets have to be sold at very low prices. Such sales will attract buyers, with a resulting increase in prices. At the same time, selling at low prices could trigger accusations that the agency is "depressing the market."

- Every government sale or purchase creates winners and losers. This results in intense political and economic pressures to influence the actions of the agency. The RTC's independent governance and operations protected against fraud and political influence.

So the government (via its new version of the RTC) becomes the mortgage holder for hundreds of thousands of Americans. Already the cry from Democrats is "People before profit."

Will the US be able to resolve the most clear out the very worst of these loans in an fiscally responsible manner?

If there is any possibility of making money on these loans, won't that cause an outcry on the Left?

Monday, September 15, 2008

William Ayres

This is all very inside baseball. If you haven't been following the presidential campaign since 2006, it may seem as though it is an argument in progress. It is. Feel free to skip.

Just a few posts ago I was wondering about Barack Obama, "Who Does He Owe?"

It seems as though one of the people he owes is William Ayres. As pointed out by Hillary Clinton, Obama used the position that he had in Ayres operation as a bullet point on his resume.

This is the absolute sticking point for me. My family calls me McCarthyite and say that I'm attempting to smear Obama with guilt by association.

And yet.

"I don't regret setting bombs" and "I feel we didn't do enough", and, when asked if he would "do it all again" as saying "I don't want to discount the possibility."

"We weren't terrorists," Ayers told an interviewer for the Chicago Tribune in 2001. "The reason we weren't terrorists is because we did not commit random acts of terror against people. Terrorism was what was being practiced in the countryside of Vietnam by the United States."

Oh, God. Do we think that the Red Brigade were random? Bader-Meinhof Group? Were all the pain and horror and death in the end for nothing?

Calling me McCarthyite isn't the worst thing that has ever happened to me.

George Putnam has Died

Things I didn't know about George Putnam:

"I detest labels," he once told the Los Angeles Times. "I've been called many things in my career: right-wing extremist, super-patriot, goose-stepping nationalist, jingoistic SOB. And those are some of the nice things.

"But those people have never bothered to determine my background: Farmer-Labor Party, Socialist Party, lifelong member of the NAACP [National Association for the Advancement of Colored People], member of the Urban League. I went through the Depression, and my father was reduced to selling peanuts door-to-door . . . I fell in love with Franklin D. Roosevelt. I've been a lifelong Democrat. I'm a conservative Democrat."

Sorry. My head will stop spinning in just a minute.

Belly Laugh

I saw the video of Senator McCain being besieged by the harpies of "The View," and it caused me to reflect.

What I wanted McCain to do, what I wanted Sarah Palin to do when confronted by Charlie Gibson, was to laugh. I wanted John McCain to toss back his head, hold his stomach and laugh at the silly improbability of it all until tears rolled down his cheeks.

When you think about it, "Do I have to be worried about the return of slavery," seems to require one of two responses. The first is outrage that your viewpoint could be so distorted by a sadly un-funny comedienne. I have no doubt that Senator McCain could rise to heights of outrage should he so desire. The second response is to look at these Lilliputian scold-hens and see how ludicrous their jabber really is. I don't want to hear a mean snarly laugh, nor yet a derisive snort, but a belly laugh that reflects his amusement that these people, these people, contend that they speak for the American people.

Have you noticed how Senator McCain smiles these days when he is standing in the vortex of all the cheers directed at him and Governor Palin? That's how I knew that she was the right choice. America wants a happy warrior, not glum eat-your-Brussels-sprouts policy wonks.

Anyway, the election season is here. At dinner parties I attend, the hostesses hush any talk of November when I am present. My brothers and sisters are, I am sure, discussing having me committed for the insanity of disagreement with them.

Friday, September 12, 2008

Barack Obama = Steve Jobs?

Other than Jobs helped create a multi-billion-dollar industry where there was none?

I am anticipating the return of Saturday Night Live this weekend with the election in full swing. In an article about the comedians who will do impersonations of the candidates, Fred Armisen talks about "doing" Barack Obama:
Obama might at first seem almost too straight of a character for Armisen. While Hammond is a somewhat traditional standup (he performs frequently and has recently begun appearing on Broadway, notably in "The 25th Annual Putnam County Spelling Bee"), Armisen is closer to absurdist, Andy Kaufman territory...

But he says Obama reminds him of another character of his: Steve Jobs.

"There was something about Senator Obama that I felt they had some similarities — in their presentation, in their love for what they do," says Armisen. "Steve Jobs really makes moments happen."
So the similarity is that Barak Obama has his own Reality Distortion Field?

From Wikipedia:
Reality distortion field is a term coined by Bud Tribble at Apple Inc. in 1981, to describe company co-founder Steve Jobs' charisma and its effects on the developers working on the Mac project. Later the term has also been used to refer to perceptions of his keynote (or Stevenote) by observers and devoted users of Apple computers and products.

Bud Tribble claimed that the term came from Star Trek.

In essence, RDF is the idea that Steve Jobs is able to convince people to believe almost anything with a mix of charm, charisma, bluster, exaggeration, and marketing. RDF is said to distort an audience's sense of proportion or scale. Small advances are applauded as breakthroughs. Interesting developments become turning points, or huge leaps forward. Those who use the term RDF contend that it is not an example of outright deception but more a case warping the powers of judgment. The term "audience" may refer to an individual whose attitudes Steve is intending to affect.

Often the term is used as a derogatory remark to criticize Apple's products and its more enthusiastic fans.

The term has extended in industry to other managers and leaders, who try to convince their employees to become passionately committed to projects, sometimes without regard to the overall product or to competitive forces in the marketplace. It also has been used with regard to hype for products that are not necessarily connected with any one person .

Tuesday, September 09, 2008

Who Does He Owe?

I have avoided posting about the Sarah Palin Veep situation. I, like almost everyone else, was caught near flatfooted. I had considered Palin, but had filed her in my mind in along with Bobby Jindal in a box marked: "Rising Stars, check back in 2 years." I have been revolted at the toxic waste dump of hate that has been spilled by her political opponents.

But the Obama campaign's featherweight response to Palin was telling in its ineptness. It's like that they felt that had to throw something out there, rather than let the announcement dominate the next six news cycles while they did opposition research. But the response was pathetic. Calling Palin a "former mayor," rather than a "sitting governor?" Getting trapped in comparing the top of the Democratic ticket with the bottom of the Republican ticket?

This ineptness in choosing Joe Biden, blowing the Palin announcement, and the daily gaff-o-matic tone of the Obama/Biden ticket has me puzzled. How did they get this far?

Joe Biden owes Barak Obama big time. Biden couldn't get more than 1% of the Iowa vote.

So who does Obama owe? Step back a minute and contemplate just how unlikely it is for Obama to be where he is. Here is a freshman senator defeating the Clinton Machine on his first national campaign. What's up with that?

No big conspiracy theory needed. I don't need to imagine a left-wing cabal. Just the usual big-money people.

First on the list is Oprah Winfrey. I have heard that Oprah Winfrey was a big factor in convincing him after she heard his speech at the 2004 Democratic Convention. (Of course she was measuring him against John "Reporting for Duty!" Kerry, so he looked positively presidential.) She was a fellow member of Wright's church. She opened her Rolodex to him, giving him entree to the necessary early big-money donors.

So yeah, he owes Oprah. If he gets elected, she gets to swank it and go to State dinners and lay a proprietary hand on his arm and say, "Yeah, I gave him his start." That's an easy payoff.

But beating the Clintons? One of the most feared political machines in modern politics? A machine that has members so loyal that they will pull free-lance black-bag operations at the National Archives? I mean, this real life, not National Treasure.

And this fresh young man from the sticks steps in and beats The Clinton Machine?

Yeah, right.

Quite frankly that's the most impressive item on his rather slim resume'.

But in politics, everybody owes somebody.

So who does Obama owe?

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