Friday, August 31, 2007

Bi Partisan Mortgage Nonsense

President Bush unveiled his plan for dealing with the mortgage crisis today, and while it doesn' quite rise to the level of nonsense of Hillary's plan, it is pretty much as "effective" as Obama's, plan,
Bush has three main points...

-Urge Congress to pass legislation that would give the Federal Housing
Administration more flexibility in assisting mortgage holders with subprime
— Pledge to work with Congress to reform the tax code to help
troubled borrowers rework their loans.
— Call for rigorously enforcing
predatory lending laws and strengthening lending practices.

Here is what the White House wants to do on point 1

"One of the key elements of Bush's plan would allow homeowners with a good
credit history, but who cannot afford their mortgage payments, to refinance into
mortgages insured by the Federal Housing Administration to keep from

There are several things wrong with this proposal. The first is that FHA loans have currently not been affected by the crisis. Is it really a good idea to take one of the few segments of the mortgage market that continue to be strong and get them involved in the areas that are littered with defaults? I say no. Furthermore, the reason that FHA hasn't been affected is their limits for debt to income is much lower than the limits for other loans. Their limits are 38% (this means if your gross income is say 5K per month that means your total debts can't exceed 1900 per month). What Bush wants is for FHA to increase the limits even though one of the reasons they have such few defaults is that their limits are as low as they are.

The second problem is the one I alluded to. If FHA begins to loan to deadbeats, and that is what almost every person about to default is, they will simply be the ones holding the bags when mortgages go bad. What he will be doing is moving the risk from the individual banks to the government, since FHA is a government agency.

The third problem should be obvious to everyone. If someone has good credit history, then they can afford their mortgage. If they can't how do we measure this? Again, the problem will be that you will be transfering a mortgage to a government agency just at the tipping point of a borrower that has bitten off more than they can chew.

On the second point, I am all for reforming tax codes, however that is not going to save a deadbeat from themselves. I have tried to do mortgages for many of these people. Their true Debt to Income ratios are as high as 100% (yes, that means their entire gross income is taken by debt)There is no saving these people short of intensive classes in money management. These people simply cannot afford their mortgages, and so unless you eliminate federal and state taxes on them entirely (and even then they won't be saved), any tax code reform will be a bandaid to a bullet wound.

The third is non sensical. Here again, he is going after the evil, evil mortgage broker. Again, Bush seems, like all other politicians, to think that fraud is allowed by law. Make no mistake folks, when politicians say that want to end predatory lending what they are saying is that you haven't signed enough paperwork at closing. Nebulus laws like, "rigorously enforcing predatory lending laws and strengthening lending practices." are exactly what Ronald Reagan said in his famous and my favorite quote, "the nine most dangerous words in the English language are 'I'm from the government and I'm here to help'".

Finally, let me end with this. How does everyone feel about subsidizing me for a while? The mortgage business has been real tough since the end of July. It is damn near impossible to get a loan approved and since I work on commission that makes it really hard for me to make money. How about if the government offers every mortgage broker three thousand dollars per month while the market shakes itself out?

We can all think of many reasons why this is a bad idea however the only reason that no one is proposing it is because mortgage brokers are unsympathetic. Hundreds of banks and mortgage companies have closed down and thousands of people were left without work. These people are struggling like anyone else, and unlike most of deadbeats, they put in years into the business and not just months. Yet, not one politician wants to help us out. The reason is that we are unsympathetic.

The root of politics is policy. Sound policy is rooted in reason and logic. It is not sound policy to pick the most sympathetic group, in this case the homeowners, and try and help them out while ignoring the unsympathetic group. Bailing out homeowners by providing a fund, like Hillary Clinton wants, or by restructuring good loans and making them bad, like George Bush wants, is not sound policy. It is responding to pressure and pandering to the obvious group, and it is a recipe for the disaster.

For other perspectives on Bush's plan go here,here, and here.

Thursday, August 30, 2007

The GAO, The Washington Post, and Iraqi Progress

Today, The Washington Post leaked a report by the Congressionally mandated GAO about progress in Iraq...

The headline is "Report Finds Little Progress On Iraq Goals". The report of this leak has become the story of the day in the media.

"has failed to meet all but three of 18 congressionally mandated benchmarks for
political and military progress, according to a draft of a Government Accountability Office report. The document questions whether some aspects of a more positive assessment by the White House last month adequately reflected the range of views the GAO found within the administration.

The strikingly negative GAO draft, which will be delivered to Congress in final form on Tuesday, comes as the White House prepares to deliver its own new benchmark
report in the second week of September, along with congressional testimony from
Army Gen. David H. Petraeus, the top U.S. commander in Iraq, and Ambassador Ryan C. Crocker. They are expected to describe significant security improvements and offer at least some promise for political reconciliation in Iraq"

The usual suspects of the left wing have also run with this report...

"Yet another report documenting benchmark failures. From the WaPo: This joins
the NIE (Report Offers Grim View of Iraqi Leaders) as official analysis of progress in Iraq, before the WH-written "Petraeus Report" is issued (and kudos for the WaPo for calling it what it)"

To say that the GAO report was a stacked deck would frankly be stating the obvious. The key word is Congressionally mandated. In other words, Congress, currently controlled by anti war Democrats, created this commission to measure progress in Iraq. They certainly did stack the deck. First, the benchmarks used by the GAO were set up over a year ago. The situation on the ground has changed. The surge is producing bottom up security and political progress. This means that most of the progress is being met on the grassroots level. The GAO report is measuring progress on the national level. Well, you know the old say, there is more than one way to get to California. Second, in order for a benchmark to be met, it must be completed. The surge is in full swing for two months, is this really fair or realistic? Is it any wonder that this commission has found a remarkable lack of progress?
Bill Kristol, at the Weekly Standard, picks it up...

"The Post reporters--both strongly anti-Iraq war--characterize the GAO judgments
as "strikingly negative." But there's nothing striking about them. The Democratic Congress ensured that the report would deliver negative "grades" for the Iraqi government by asking the GAO to evaluate whether or not the benchmarks have been met now--just two months after the major combat operations of the surge began.

For the report from the White House, Congress asked the administration to detail if the Iraqis are making "sufficient progress." But Congress asked the GAO, by contrast, to report if the Iraqis had "completed" the benchmarks. This ridiculous standard was a Congressional trap that forced the GAO to waste time and taxpayer money to come out with a pre-ordained and meaningless judgment, since no one ever promised or expected that the Iraqis would have met the benchmarks by now. And the GAO report doesn't really shed light on the key question: Are the Iraqis making progress?"

So, in other words, Congress created 18 benchmarks and in order to meet the benchmarks, the benchmarks had to be completed two months after all of the forces are in place. Now, is anyone surprised only a handful have been completed? Talk about stacking the deck. The anti-war Democrats want everything to go from chaos to completion in six months, and if not, they would consider that failure.

Kristol continues,

"And what are the benchmarks that Congress set up? Do they include criteria
that matter? No. Grassroots political progress? Not in the GAO report. The turn
of the Sunnis against the insurgency? Not in the GAO report. The stabilization
of Anbar province? Not in the GAO report. And progress against al Qaeda--the
single most vital and direct American national interest in Iraq? Not in the GAO

The benchmarks they do use are often absurd. To take one example: "Increasing the number of Iraqi security forces units capable of operating independently." This is particularly silly. No one expected that Iraqi military units would surpass the capabilities of our NATO allies, most of which are also unable to operate fully" independently" of the American military. The question, again, is whether the Iraqi Security Forces are improving. Here the GAO's portrayal of Iraqi forces as having made no progress, at least as reported in the Post, is contradicted by mounds of evidence from knowledgeable observers."

Only time will tell if this will in any way shape the debate. That said, Kristol is confident...

"Here's the good news: If this is the best war opponents have to offer, the administration is in amazingly good shape going into September."

Omar's Latest

Omar, of Iraq The Model, has his latest dispatch...

For most of the time between 2004 and 2007 taking this road was considered
suicidal behavior as the chance someone would be robbed or killed was too
high.But with the tribal awakening in Anbar that cleared large parts of the
province from al-Qaeda the highway is expected to be safer, but how much

My family returned yesterday from a vacation in Syria and they have used
this road twice in six weeks. I had tried hard to convince them not to do that
and take a flight instead but now after hearing their story I'm convinced that
my fear was not justified; the road is safe…

This is good not only for Iraq's economy and traveling but also for the
American troops who can use this road as an alternative supply route in case the
British troops withdraw and leave the strategic southern highway between Kuwait
and Baghdad unguarded.

Back to the story; there are two travel plans for passenger SUV's and buses
from Damascus to Baghdad; one includes leaving Damascus between 10 pm and
midnight, reaching the Syrian border control before dawn, entering the Iraqi
border control at 8 am and arriving in Baghdad around sunset. A total of
approximately 20 hours with 6 to 7 hours lost in waiting and passport

According to Omar, the highway between Anbar and Baghdad, once a suicide pact, is now so safe that buses stop on the side of the road to sleep. Good news and something the MSM would never want to report.

Wednesday, August 29, 2007

Hillary Clinton's Nineteen Hundreth Ethical Lapse

Larry Craig's bathroom liason has received most of the scandal attention. Yet, while Craig's scandal is not only sexual in nature but gay at that, he is an obscure Congressperson from a tiny state. What is currently still flying under the radar is the newest scandal involving Hillary Clinton.

The Wall Street Journal picks up the story...

One of the biggest sources of political donations to Hillary Rodham Clinton
is a tiny, lime-green bungalow that lies under the flight path from San
Francisco International Airport.
Six members of the Paw family, each listing
the house at 41 Shelbourne Ave. as their residence, have donated a combined
$45,000 to the Democratic senator from New York since 2005, for her presidential
campaign, her Senate re-election last year and her political action committee.
In all, the six Paws have donated a total of $200,000 to Democratic candidates
since 2005, election records show.

it continues...

It isn't obvious how the Paw family is able to afford such political
largess. Records show they own a gift shop and live in a 1,280-square-foot house
that they recently refinanced for $270,000. William Paw, the 64-year-old head of
the household, is a mail carrier with the U.S. Postal Service who earns about
$49,000 a year, according to a union representative. Alice Paw, also 64, is a
homemaker. The couple's grown children have jobs ranging from account manager at
a software company to "attendance liaison" at a local public high school. One is
listed on campaign records as an executive at a mutual fund.
The Paws'
political donations closely track donations made by Norman Hsu, a wealthy New
York businessman in the apparel industry who once listed the Paw home as his
address, according to public records. Mr. Hsu is one of the top fund-raisers for
Mrs. Clinton's presidential campaign. He has hosted or co-hosted some of her
most prominent money-raising events.

Of course, nothing in politics is obvious, however I have my suspicions about how a family of modest income affords such lavish campaign contributions. In my business, we have something called a straw buyer. This appears, to me at least, to be a straw campaign contributor. This family was used hide contributions from a contributor who wanted to remain under the radar and most likely also to circumvent campaign finance laws. Unlike Whitewater, this potential scandal can easily be followed from point a to point b to point c.

Let's see, an ex felon curries favor of a major political player. He contributes his own money and then uses a family, whose son he employs, to contribute extra cash. This family can not possibly have enough money on their own, and yet they contribute hundreds of thousands to this politician's campaign. Oh, and did I mention, that this family just happens to live at the same address that this other, murky, contributor also used to call his own residence? Gee, I wonder what happened?

What is really interesting is who is and isn't following the story. Here it is on fox news. Here it is on CNN...oh you didn't find anything, well that's because as of posting it isn't there.

Here it is at conservative blog, Redstate, and here it is at Daily Kos, oh there again, it hasn't been touched yet.

For further reference, hotair, michelle malkin, and captain's quarters.

Barack Obama Rides His Mortgag Horse to the Rescue

In these same pages, I have pointed out that the narrative of the mortgage crisis pins all of the blame on people like myself, mortgage brokers. The reason for this is simple. We are a sociopathic, scummy, greedy, and thus we are an easy target. I have pointed out what really happened...

The reason that we have a sub prime crisis is because a bunch of dead beats
bought homes they couldn't afford from banks that should have never lent them
money. The role of the mortgage broker in securing these loans shouldn't be
understated and frankly I will never miss any opportunity to take a pot shot at
my industry, however blaming this crisis on us frankly gives us too much credit.
We have always been a collective group of sociopaths.
That didn't start two years ago. That was always so. Thus, there was a new
dynamic in play in the last few years.

The truth of the situation is that banks loosened their restrictions so much that irresponsible people were able to get loans. To somehow claim that mortgage brokers pushed people to buy homes they couldn't afford, is well, something only a pandering politician would ever come up with. Yet, this is exactly what Barack Obama (following closely on the Heels of Hillary Clinton) is now saying.

This all started as a good idea – helping people buy homes who previously
could not afford to. But over time, lenders began pushing low-income buyers into
homes they could not possibly afford, abusing the system by lowering their
lending standards, making loans that required no money down and offering low,
teaser interest rates that explode after the initial grace period. Some
borrowers were also lying to get mortgages or engaging in irresponsible
Nearly everyone – from lenders to investors to borrowers –
fooled themselves into thinking that what they were doing was low risk when it
in fact involved a lot of risk.

Read Obama's statement carefully. In it, he does recognize that the borrower's played at least as big a role in the mess as the evil, evil mortgage broker. Yet, his remedy is only to punish the broker and to use the proceeds of the punishment to help the same borrowers that he himself recognizes were active players involved in fraud.

What is his solution...

That is why I have proposed a Home Score system that would create a simplified, standardised metric for home mortgages – rather like the annual percentage rate (APR), the effective interest rate a borrower ends up paying on a loan – allowing prospective home buyers easily to compare various mortgage products so they can find out whether they can afford to make the payments.

I have also introduced a bill in the US Senate called the Stop Fraud Act that would treat those who commit mortgage fraud as the criminals they are.

There are only two problems to his two solutions. The first is that the APR system is simplified. The Annual Percentage Rate takes your interest and combines it with the fees you pay and thus if someone offers you a low rate with a lot of fees that will be reflected in the Annual Percentage Rate. Now, if Obama's system is simpler then I would like to know how, but simply saying it does nothing.

Second, we already have laws on the books against mortgage fraud. Obama seems to think that mortgage brokers, like myself, can commit fraud at will with impugnity. The fact is we can, but the reason is not the lack of laws, but the lack of enforcement. The problem is that it is the banks that need to report fraud. Banks are not going to go through the trouble, usually, of reporting fraud when it has been recognized. Their remedy is normally to simply deny the loan and either put the broker on notice or terminate the relationship entirely. It is simply not cost effective for banks to get into criminal matters everytime they think there is fraud.

The ones that will report fraud are the borrowers. The problem there is that usually it isn't fraud. Usually the borrower acted as though they knew the terms of the loan, signed the paperwork, and when something went haywire then they cried fraud. Several of my friends are facing fraud charges from angry borrowers who claim they weren't told that their mortgage payment would adjust. Never mind the fact that they signed documents that did in fact say this, they are still crying fraud.

Obama knocks off everyone from his short list of demons in his proposal, and no short list of demons would be complete without an attack on lobbyists...

There is a reason why this has happened. Over the past several years, while
predatory lenders were driving low-income families into financial ruin, 10 of
the country’s largest mortgage lenders were spending more than $185m lobbying
Washington to let them get away with it. So if we really want to make sure this
never happens again, we need to end the lobbyist-driven politics that made it

There are several things that bother me about this. First, no one can force anyone to do anything. Obama, like Clinton before, him makes it seem as though evil, evil mortgage brokers forced unaffordable mortgages onto helpless borrowers. Is this really so? Is someone really so helpless that they couldn't simply refuse to take on the loan they were offered? Furthermore, it wasn't lobbyists that created the market for these loans, but rather Wall Street. That's right from 2004-2006 Wall Street had an insatiable appetite for more and more aggressive mortgage backed bonds, and they continued to want more and more aggressive mortgage backed bonds as long as the price of homes were going up. Once the price topped out, Wall Street realized these securities were bad and the money for them dried up, and we are in the mess we are in. This had little to do with lobbyists, but rather as Alan Greenspan once said, "irrational exuberance".

Anyone who has read my work knows my favorite quote, "the nine most dangerous words in the English language are 'I'm from the government and I'm here to help'". Barack Obama, and his convoluted mortgage bailout, is a perfect example of its wisdom.

Tuesday, August 28, 2007

Apples and Oranges:Kos Kids

Just two days, at Redstate a popular diary was published. It related NBC's decision to move Olberman's show to the broadcast network. It lead into the Sunday Night Football. I can only assume that NBC was looking to boost Olbermann's fan base. Well the ratings are in and Olbermann hit a "whopping" 4.1 million viewers. Just for reference, American Idol is disappointed by less than 30 million.

Well, it turns out the daily kos think this is impressive. In fact, it is so impressive because Olbermann beat O'Reilly's audience share in his previous broadcast. O'Reilly hit 2.1 million households. In fact, O'Reilly averages 2.1 million households or thereabouts per night.

This diarist apparently is saying with a straight face that Olbermann really did beat O'Reilly. Let's lay out the facts folks. First, Olbermann was leading into Sunday Night Football, and just to restate the obvious, Olbermann was being shown on the broadcast NBC network, not on cable. O'Reilly's show is of course on cable, and the obvious difference is that one has to pay a monthly fee in order to watch O'Reilly, whereas this particular Olbermann program could be seen by anyone with a television. I won't even go into the fact that Olbermann was leading into the much more popular Sunday Night Football whereas as O'Reilly leads into Hannity and Colmes.
Despite, what is an obvious and blatant distortion of the facts, I couldn't find even one response that stated the obvious. In fact, the responses went something like this,

"Suck on that Bill O,It will be interesting to see if the NBC gig boosts Keith's
MSNBC airings.
In the meantime...Yee F*ing Haw"
"Everyone needs to track
this to the front pages, I have been tracking the ratings myself and Olberman is
a breath of fresh air. If he demonstrates the continuing success he has, the
other networks will be racing to find their next Olberman to gain the
Nice Job KingOneEye!!!"
here is one thick with irony,

"no matter what! I think it won't be long before he'll blow O'Reilly out of the
water from MSNBC. There's just so much of the vile spew any human can take. Just
by word of mouth, and the blogs, alone Keith's audience will continue to
You are absolutely right! Keith is a refreshing breath of air after all
the other crap we've been fed for the last six years. He really tells it like it
is. It is nice to hear truth based on facts for a change, instead of a constant
diet of propaganda and spin."

please note that currently Olbermann struggles to be second or third and averages roughly 600,000 viewers, or less than a third of O'Reilly's.

Apparently, in the world of the Daily Kos, one can compare a show, leading into Sunday Night Football no less, on the broadcast network to another show on cable and take the raw numbers at face value.

As was chronicled in the first diary, the backlash of putting someone so clearly biased to one side on the broadcast network will more than outweigh whatever boost in ratings NBC thinks this will give him. That won't stop Daily Kos from spinning this as some sort of victory for Olbermann.

Finally, you had to dig, but the truth did actually come out in the Daily Kos article...

"Olbermann, not surprisingly, benefited from this. The early results show him
with 4.1 million viewers. That only earned him a third place finish, behind "60
Minutes" and "America's Funniest Videos," but it was good enough to quadruple
his average MSNBC audience. What's more, (and this has to hurt) it is twice what
Bill O'Reilly does on an average night. And this despite having been preempted
in some fairly significant markets (i.e. Philadelphia, Baltimore) which could
adversely impact Countdown’s numbers."

That's right, folks, in an apples to apples comparison, Olbermann brought up the rear as usual. Nice coup!!! Kos Kids, I would hope that anyone ratings are better when put on broadcast when compared to cable since, you know, more people have access to broadcast.

for some sanity, check out the message boards for NBC Sports. They are unanimous. Keep Keith on cable. We don't want left wing propaganda with our football. Hmm, where else did I hear that, I think it was here...

Offending Muslims

Recently, there have been two stories that show just what lengths some Muslims will go in order to be offended. For the first story, I will give a hat tip to little green footballs

The U.S. military in Afghanistan on Monday expressed regret for a publicity
campaign aimed at winning hearts and minds that ended up offending scores of
Muslims. U.S. troops on Friday dropped dozens of free footballs for soccer-mad
Afghan children from helicopters in an area of southeastern Afghanistan, all
marked with flags of various countries.
But the balls depicted the Saudi
Arabian flag, which features the Islamic declaration of faith and includes the
names of Allah and the prophet Mohammed. The idea of kicking something bearing
their names is considered deeply offensive to Muslims.

This one confuses anyone with any sense of reason and logic. The U.S. military handed out soccer balls to kids in Kabul. In another example of no good deed going unpunished some professional victim found the soccer balls offensive. What was the source of the offense one might ask? The offense came from the flag of Saudi Arabia (the soccer balls were decorated with flags of surrounding nations) which happened to show a picture of the prophet Muhammad. This is of course blasphemous since his image is NEVER supposed to be disrespected. Michelle Malkin has more on the story including several truly blasphemous images of Jesus and the difference in the reaction to those images...

As we’ve learned from Rushdie Rage, MoCartoon Rage, Burger King Ice Cream Cone Rage, Koran Flushing Rage, Valentine’s Day Rage, Veil Rage, Pope Rage, Fallaci Rage, Miss World Pageant Rage, and Rushdie Knighthood Rage, they’re pretty damned “sensitive” (read: ready to riot) about everything.
For crying out loud:
Mullahs in Afghanistan criticised the US forces for their insensitivity, and around 100 people held a demonstration in Khost.
Afghan MP Mirwais Yasini said: “To have a verse of the Koran on something you kick with your foot would be an insult in any Muslim country around the world.”
A spokeswoman for the US forces in Afghanistan said they made “significant efforts to work with local leaders, mullahs and elders to respect their culture” and distributing the footballs was an effort to give a gift the Afghan children would enjoy.

The second story is about an Opus cartoon originally meant for publication in the Washington Post. Michelle picks it up again...

If you haven’t already been to Berkeley Breathed’s website to see the first
of two syndicated “Opus” cartoons that many of his newspaper clients are
refusing to run because they might offend members of the Religion of Perpetual
Outrage, go there
. Many blogs noted this story last week while I was traveling. See HA
for full background.
The LATimes, surprisingly, ran the cartoon yesterday,
according to LAObserved.
to Breathed’s syndicated, some 25 newspapers refused to run the strips.
Let’s have the names, shall we? If your paper regularly carried Opus, but
didn’t run yesterday’s strip, speak now.

Foxnews was on top of it from the beginning and the website even has the "blasphemous" cartoon for reference...

A popular comic strip that poked fun at the Rev. Jerry Falwell without incident
one week ago was deemed too controversial to run over the weekend because this
time it took a humorous swipe at Muslim fundamentalists.
The Washington Post
and several other newspapers around the country did not run Sunday's installment
of Berkeley Breathed's "Opus," in which the spiritual fad-seeking character Lola
Granola appears in a headscarf and explains to her boyfriend, Steve, why she
wants to become a radical Islamist.
The installment did not appear in the
Post's print version, but it ran on and The same
will hold true for the upcoming Sept. 2 strip, which is a continuation of the

There is something about a society that yawns when someone uses their religion to justify beheading someone and then proceeds to stomp their feet when a cartoon goes out of bounds or a soccer ball has an inappropriate image. Yesterday, I wrote that Middle Eastern societies are
f$%ked up and right on cue...

Monday, August 27, 2007

My Trip to Minnesota

This weekend I attended a wedding for a friend of mine from college. I hitched a ride with another buddy. My buddy is among the smartest people I know. He scored nearly perfect on his ACT's back in high school and he currently works as a researcher in the Department of Molecular Biology at Northwestern University studying the HIV virus. He has been known to be a sort of ringer in any game of trivial pursuit. He is what I would describe as cerebral and his interests run many topics including of course, politics.

Being in academia, he wound coming down as a straight down the line liberal, elitist, academic in his political point of view. Thus, this made for quite the contrast with my own social conservative, small government, free market, free trade, philosophy. On Iraq, we are at opposite ends of the spectrum and so what transpired in the car was nothing short of a bare knuckles, full contact debate that last a while, two hours by my count.
Initially, my buddy went through several rounds of standard liberal questions asked by anyone that believes that Iraq is a lost cause and only immediate and full withdrawal can do anything productive.

He first wanted me to define victory. I define victory based on a picture that Jeff Emanuel actually posted on Redstate. It was of a sign posted in some sort of a military installation. Victory was defined as an Iraq able to govern itself, at peace with itself, its neighbors and an ally in the war on terror. Satisfied with this answer he immediately querried how this could possibly be accomplished. I went through the clear, hold and build strategy that General Petraeus and how it required door to door searches and eventually spreading security throughout the neighborhoods, and also setting up quasi police stations manned by Iraqis and coalition forces.
He next asked another standard liberal question, "how do you know who the terrorists are?". This is of course another bit of liberal nonsense. This is what interrogations are for. For instance, if you ask a terrorist what they are doing in the home, unless they say they are preparing an attack, they are lying. The trick is to spot the lie.

He moved on to another standard liberal mantra. He said that the nation is ungovernable and that it could only be oppressed. He said the rivalries go back too many years and that ultimately most Shia only want to avenge the deaths of their families and are in constant plot to attack those that oppressed them. This statement struck me as truly unbelievable. What my buddy was saying was that the Iraqi society by and large was EVIL. Think about what he was saying. He thinks that most Iraqis spend their days seeking out those people that they believe had wronged them perviously and looking to murder them. Thus, he believes that Iraqis are by and large EVIL.

He became enraged by my "crude" term. Good and evil to him, and frankly most elitists, is simplistic. Their are complexities to these things. People were oppressed. They were wronged, and their family members were hurt or even killed, and thus the society made them that way. Of course, this is true, however I don't believe for one second that the overwhelming majority of Iraqis are looking to avenge their friends' and families' deaths but rather just want to live, go to work and raise their children. My friend disagreed, but mostly he disagreed with the use of good and evil.

Next, he went to another liberal mantra. The Middle East is full of religious fanatics and Saddam Hussein was one of the few secularists around and thus Iran would have made a much more inviting target to attack. This of course, disregards several things, and the most important is that Saddam was still a fanatic, secular or not, and two, had we gone after Iran, Saddam would have grown in strength the way that Iran has now.

My buddy finally went through the myriad of mistakes with the invasion, from porous borders, complicated societal schemes, other threats, the list went on and on, and finally we got to the crux of his arguement, "now can you admit that Bush is an idiot who F$%ked things up beyond recognition and that is the problem"

There it is folks. Ultimately, for a standard bearer liberal, this is what the Iraq debate boils down to. It isn't what is best for the country or how we win, or if we can win. It comes down to getting Bush. I wrote about this phenomenon earlier. Many liberals hate Bush so much that ultimately the debate becomes nothing more than proving how dumb he is. Withdrawal is their ultimate affirmation. Once we withdraw, losing, the Bush's place in history is sealed. They want nothing to do with any plans for victory because those plans also mean a totally different place in history for Bush as well.

There are many problems that I see with this philosophy. The first is the liberals have become full time critics. They spend their days criticizing Bush. They have none of their own answers. For instance, I pointed out that leaving Iraq would be leaving a hornet's nest. To this, my buddy had no answer. He had no answers on any part of the war on terror, he only had criticism. That is what the liberal mantra has become endless criticism of Bush policy on everything but especiall Iraq and the war on terror.

The problem of course is that Middle East is thoroughly messed up. They have elected a terrorist group as their leaders in Palestine, and in Lebanon, a terrorist group holds significant parliamentary power. The rest of the countries have some form of authoritarianism. Their countries are generally poor. They are almost entirely anti Semetic and anti American. Their cultures and societies have simply not progressed in the manner the West has. This creates all sorts of double edged swords when formulating foreign policy to deal with the region.
Yes, it may seem like a bad move now to invade Iraq, but is it any better to leave Saddam in power and wait for the day that he and Al Qaeda got together on an attack. Saddam may have been a secularist, and he may not have had any special love for Al Qaeda, but he frankly worked with anyone that advanced his interest, making him a free agent to terrorists of all stripes. Does this sound like a better plan?

Yet, the Democrats, usually without offering their own plan, criticize every piece of foreign policy in the region. We have such nebulus criticis as we taken our eye off the ball Afghanistan. What is their solution, the equally nebulus, let's focus back on Afghanistan. With regards to Syria and Iran, Bush has either been to conciliatory or not conciliatory enough. Some say he hasn't been tough enough and others say he should meet with them. They disregard every meeting Bill Clinton had with the Syrians that accomplised nothing. On Palestine, they say we should be more even handed, another nebulus criticism. As if listening to the grievances of terrorist ever accomplished anything.

With regard to Saudi Arabia, the relationship is too cozy. In other words, we are too cozy with the Saudis and not cozy enough with the Syrians and Iranians. Of course, if Bush had shunned the Saudis the way he has shunned the Syrians and Iranians, he would just as easily be criticized for ignoring potential allies. With regard to Pakistan, we are suddenly not stern enough. This of course disregards the precarious position of our chief ally there, Pervez Musharraf. Of course, we would all like him to more agressively go after the Taliban and Al Qaeda, but doing so may mean his job and life. Again, there are double edged swords everywhere.

I hope everyone sees a pattern here. It isn't the Bush policies that are the problem, but rather the region itself. There is no good policy with regard to this region, only double edged swords that can be exploited by critics who never feel the need to offer up anything realistic of their own. The minute Barack Obama did his policies were downright childish in comparison to anything Bush has come up with.

Look at the position Israel is in. They occupy Gaza because if they don't their border is wide open to attack. By occupying Gaza, they create resentment in the society. Either way, they are wrong. Any critic could criticize their policy no matter what they choose to do. This is what liberals choose to do. They dismiss such terms as good and evil. Those are too simplistic. They go on and on about the complex natures of societies and threats we aren't dealing with because we are in Iraq. (as if withdrawing from there makes any of those threats any less dangerous) Yet, besides withdraw and surrender, they have no plan. In fact, their one and only plan in the war on terror is withdraw and surrender. We'll see how good a campaign pillar that will be in 2008.

Divesting From Iran:An Update

Michael Barone has an article about the divestment movement today

The divestment movement has been gaining speed during the past year. In
2006, Missouri State Treasurer Sarah Steelman ordered the Missouri Investment
Trust to divest stock in companies that do business in Iran. The California
Assembly has passed a divestment bill, and it is now before the state Senate;
Gov. Arnold Schwarzenegger has promised a major signing ceremony if it passes. A
bill limited to Iran's energy sector has been passed into law in Florida. A
divestment bill has been passed in committee in the Pennsylvania House, and a
divestment resolution was passed by the Georgia Senate. In Louisiana, a bill to
set up a "terror-free international index" has been passed into law. Divestment
bills have been filed in Ohio, New Jersey, Michigan, New York, Massachusetts,
Maryland and Texas.

Many of these bills have met with opposition. Pension fund administrators,
such as those at California's giant CalPERS, have opposed them. They argue that
divesting would cost them money. But the fact is that U.S.-based companies
already are prohibited from doing business in Iran. Firms that do the most
business in Iran are French (Alcatel, BNP Paribas, Total), Italian (ENI), Korean
(Hyundai), Chinese (PetroChina) and Russian (Statoil). The potential losses to
pension funds are almost certainly minimal; a fund can find plenty of
international stocks for its portfolio without touching those who do business in

Of course, divesting from any company that does business in Iran is one of the three pillars of my own plan to bring the Iranian government down peacefully, here it is again.

For more information please visit the site According to this site, the twelve companies with the most Iranian investment are, Alcatel, BNP Paribas, Hyundai, Lundin Petroleum, Oil and Natural Gas Corporation, Total SA, Technip Coflexip, Stolt Nielsen, Statoil ASA, Siemens AG, PetroChina. These companies must be held to account first and foremost. Once investment dries up in Iran the second and third pillars must follow and the government WILL fall peacefully.

Thursday, August 23, 2007

Prme Minister Maliki: Campaign Issue

There is a saying about the weather here in Chicago, "if you don't like the weather just wait five minutes because it will change". Well, the same can be said about dynamics in Washington politics. They can change just as quickly as the Chicago weather.

Why, just in July, Democrats were all set to use August to pound Iraq over the head of Republicans. A funny thing happened in the last month though. The dynamic changed. Things improved on the ground and people started to take notice. The turn started when Michael O'Hanlon and Kenneth Pollack published this piece in the New York Times. Ever since then, every legislator that has made a visit to Iraq has been forced to admit that our military is in fact making progress. While most Democrats balance this assessment with the assessment that on the political front there is a disaster (a point that of course O'Hanlon and Pollack also made) their assessments have frankly changed the dynamic.

It is of course ludicrous to remove troops from the same battlefield in which you also see progress. Thus, the Democrats have found themselves in the perverbial pickle. Story after story has them changing their political tactics,,2933,294245,00.html

The party is fractured. Several Representatives have either come out to say they will vote against timetables or at least they are undecided. In the Senate of course, the score is actually 51-50 Republicans (with Lieberman siding with Reps on this one and Cheney a tie breaker), and thus the Democrats not only wouldn't have a veto proof majority for a timetable, but frankly, they probably wouldn't even have a majority.
At this point, the party speaks with several voices. Barack Obama and John Edwards continue to be outfront in criticizing the surge and calling for withdrawal, however the Blue Dogs are much more tempered.

Since the military end of the surge is working, and the troops wouldn't make a good punching bag for criticism anyway it appears some Democrats have found a new punching bag.
His name is Nuri Al Maliki and he is the Prime Minister of Iraq. It started when Carl Levin said this, "I hope the parliament will vote the Maliki government out of office and will have the wisdom to replace it with a less sectarian and more unifying prime minister and government". A couple days later Hillary Clinton said much the same thing, ""During his trip to Iraq last week, Senator Levin ... confirmed that the Iraqi government is nonfunctional and cannot produce a political settlement because it is too beholden to religious and sectarian leaders, I share Senator Levin's hope that the Iraqi Parliament will replace Prime Minister Maliki with a less divisive and more unifying figure when it returns in a few weeks."

Of course, this is an unprecedented move in foreign policy hubris by these two Democrats. I don't think it takes much geopolitical knowledge to understand that is only proper protocal to never meddle in the internal dynamics of another country's democracy. It is one thing for analysts, newspapers, and pundits to criticize Al Maliki, but quite another when legislators do it. I imagine that if an honest poll were done about the feelings toward Ehud Olmert by our legislators, we would find results that echo those of Clinton's and Levin's calls regarding Al Maliki. Could you imagine the uproar, though, if Hillary Clinton publicly called on the Israeli Knesset to vote out Olmert? Yet, that is exactly what she is doing here.

Obviously, I can't get inside her head, however my suspicion is that she wants to use Maliki as a campaign issue. She must know that Bush has no choice but to publicly back Maliki, and she further knows that Maliki is an incompetent with no hope of accomplishing anything. Thus, it stands to reason that she can use Bush's public proclamations of support as yet another example of Bush being out of touch. She could contrast her own perceptiveness in seeing that Maliki is a failure while Bush blindly follows this divisive, sectarian Prime Minister off a cliff. I can only assume that she figures that her own brazen and reckless statements won't be recognized. No one, I assume she thinks, will come out and say what I am saying. Whatever we think of Maliki, it is wholly inappropriate for our politicians to call for his ouster. Bush has no choice but to stand by him no matter how silly it makes him look.

For Hillary Clinton, this can become another campaign issue. Since the surge is working and it is much more difficult to criticize, she has now found a much easier target. Never mind that her criticism only becomes a self fulfilling prophecy, and only adds fuel to his already hot flame. That really isn't very important. Never mind that Iraqi politicians are no less likely to pay attention to her, than I am to vote for her. Thus, never mind that her actual proclamation does no good, and only potential harm. She has clearly found a campaign issue. She has found something that probably polls well. She can beat Republicans over the head with the incompetent Al Maliki. Never mind again that she will never have to explain what would happen if he were to be removed, or who she thinks should take his place. She is working with a utopia, an unnamed leader who isn't sectarian, while Bush has to work with reality in all its ugliness.

I can just see her on stage, "I called for Prime Minister Maliki to be removed in August while the President stood by him despite his mounting incompetence". Yes, folks, Hillary Clinton sure has found herself a priceless campaign issue. Never mind that it goes against any standards of foreign policy protocols, and that it threatens the very ally we are trying to prop up. Never mind that the only result of her statement is to help turn our military momentum into political disaster in Iraq. Never mind any of those things everyone, because clearly Hillary Clinton believes in what Vince Lombardi once said, "winning isn't everything, it's the only thing". Thus, as long as she wins the Presidency, nevermind what disasters she may cause in the process.

Wednesday, August 22, 2007

An Amazing and Humbling Story from the MNF Website

I found this amazing and humbling story on the MNF website

An Iraqi man saved the lives of four U.S. Soldiers and eight civilians when
he intercepted a suicide bomber during a Concerned Citizens meeting in the town
of al-Arafia Aug. 18. The incident occurred while Soldiers from 3rd
Squadron, 1st Cavalry Regiment, were talking with members of the al-Arafia
Concerned Citizens, a volunteer community group, at a member’s house. “I
was about 12 feet away when the bomber came around the corner,” said Staff Sgt.

Sean Kane, of Los Altos, Calif., acting platoon sergeant of Troop B, 3-1
Cav. “I was about to engage when he jumped in front of us and intercepted
the bomber as he ran toward us. As he pushed him away, the bomb went
off.” The citizen’s actions saved the lives of four U.S. Soldiers and eight
civilians. Kane felt the loss personally because he had met and interacted
with his rescuer many times before the incident. “He was high-spirited and
really believed what the group (Concerned Citizens) was doing,” Kane said. “I
have no doubt the bomber was trying to kill American Soldiers. It was very
calculated the way the bomber tried to do it. If he hadn’t intercepted him,
there is no telling how bad it could have been.” Kane believes the citizen
is a hero.

My favorite broadcaster, Bill O'Reilly, has been known none too often to question Iraqi's dedication to fight for their own freedom. In fact, O'Reilly soured on the mission because he surmised they wouldn't. This is one story of one man, however this gentleman clearly would fight for the freedom of Iraqis and he sacrificed his life doing it. Whatever your stance on the war, his family should be honored. His story should be read into public record in the Congress and anyone reading this now is encouraged to call their Congress representative and encourage them to do so.

Angry Realtors, Sellers, Attorneys and Carl Levin's Foreign Policy

Whenever there is a difficult purchase loan, and this is often, that invariably goes not according to plan, more times than not I get a call from one of three sorts of people: an angry seller, an angry realtor, and an angry attorney. The angry seller is usually screaming about everything, threatening, everything in a long diatrobe that frankly usually goes nowhere. The angry realtor usually starts to threaten to begin negotiations with another buyer that "I knew I should have worked with from the beginning". The angry attorney usually threatens some sort of a lawsuit based on their understanding that the loan was guaranteed.

Anyone who has ever done any of these things during your own purchase or sale process please take heed...You aren't helping. I don't know why people think that adding intensity to an already intense situation somehow makes things better, but threatening law suits, new deals, and any other threat doesn't actually do anything to solve the underlying problem. In fact, and this may surprise you, the underlying problem has absolutely nothing to do with the threat you pose. In other words, whatever threat one makes it has nothing to do with whatever problem there is with the loan. The way to properly resolve these situations is for everyone to remain calm. While that maybe sometimes be very difficult to do, it is the only thing everyone should do.

This brings me to Carl Levin who recently came back from a trip to Iraq. I was heartened by his honest assessment of the situation on the ground. Still, what he said regarding Iraq's political situation sounded much like the angry seller's, realtors, and attorneys I deal with daily. Before he left he said this, ""Folks, if you want a civil war in this country, that's your choice. Count us out of your civil war. We've been here four-and-a-half years". After he came back he went even further, "I hope the parliament will vote the Maliki government out of office and will have the wisdom to replace it with a less sectarian and more unifying prime minister and government"
Someone can correct me if I am wrong, however has a U.S. politician ever so brazenly inserted themselves into the internal dynamics of a democratically elected government? Have I missed something? Has anyone called for Ehud Olmert to be voted out? Did any Republican endorse one side or another in the French election? Since when do U.S. politicians call for the ouster of a Democratically elected government?

Now, no one is frankly altogether excited about Maliki. Of course, it would have been nice to see the Iraqi government working alongside our U.S. military. Of course, an oil law would have gone a long way toward progress in Iraq, That said, Levin is acting no differently than any angry seller, realtor or attorney. All he is doing is adding fuel to already hot fire.

Levin seems to think that complicated rivalries and relationships can be solved by veiled threats from outside politicians. They can't and just like in my business, his threats have nothing to do with the underlying problem. Maliki did what anyone would expect when a pompous outsider injects himself into internal politics. He lashed out

Those who make such statements are bothered by our visit to Syria. We will pay
no attention. We care for our people and our constitution and can find friends
elsewhere," al-Maliki said

Is anyone really surprised? What exactly did Levin think was going to happen? Let's see rivalries and relationships fueled by evil killers are causing all sorts of complicated problems, but here is Carl Levin saying "Folks, if you want a civil war in this country, that's your choice. Count us out of your civil war. We've been here four-and-a-half years". Why didn't he say so, now the Shia, Sunnis, Kurds, Al Qaeda, Iran, Syria, and Turkey will forgive and forget.

This reminds of that great scene in A Few Good Men,
" "I strenuously object?" Is that how it works? Hm? "Objection." "Overruled." "Oh, no, no, no. No, I STRENUOUSLY object." "Oh. Well, if you strenuously object then I should take some time to reconsider."

For the better part of two years, the Democrats have railed Bush's supposed lack of foreign diplomacy, and yet is this what we have. Our Speaker also plays Secretary of State and kow tows to an evil, vicious tyrant. One Presidential candidate not only promises to visit with every enemy no questions asked, but then threatens one of our allies with invasion. Now, we have Carl Levin "strenuously objecting".

For all the wrangling, we currently have friendly governments in France, Germany, Canada, Australia, and Mexico. We have forged new ties with much of Eastern Europe. Formed a new, though tenuous ally, in Pakistan. In Colombia, we may have found a new ally as well. While the Democrats dismiss this and call for a new foreign policy approach, we only need to look at Carl Levin and his idea of foreign policy to see what that approach would be.

Friday, August 17, 2007

Time to Make Free Trade an Issue

Among the issues in which there is a clear distinction between Democrats and Republicans, there are very few, in my opinion, that are bigger slam dunks than free trade. For the life of me, I cannot understand why Republicans have stood idly by while one Democrat after another has slammed free trade agreements while kow towing to labor unions and not hit back.
I learned the benefits of free trade in my second or third week of Economics 101. The logic is simple. Every country has resources of which they are plentiful (Brazil is stocked with sugar for instance), and other resources of which they are deficient. Free trade allows each nation to export its plentiful resource and import those resources that are in short supply. This seems so easy and basic that I was actually shocked when I first found politicians attacking free trade agreements like NAFTA.

Yet, each Democratic Presidential candidate has come out against not only NAFTA, but CAFTA and the WTO itself. They have tried to mask their obvious pandering to the labor unions by coming up with nebulus terms like, fair trade, which frankly is some utopia that they create so that no free trade agreement can ever be passed.

Here is a sample from each of them...

John Edwards

"Trade has become a bad word for working Americans for a simple reason: our
trade policy has been bad for working Americans. We need new trade policies that
put workers, wages and families first."

Hillary Clinton

"Well, outsourcing is a problem, and it's one that I've dealt with as a senator
from New York. I started an organization called New Jobs for New York to try to
stand against the tide of outsourcing, particularly from upstate New York and
from rural areas. We have to do several things: end the tax breaks that still
exist in the tax code for outsourcing jobs, have trade agreements with
enforceable labor and environmental standards, help Americans compete, which is
something we haven't taken seriously. 65% of kids do not go on to college. What
are we doing to help them get prepared for the jobs that we could keep here that
wouldn't be outsourced--and find a new source of jobs, clean energy, global
warming, would create millions of new jobs for Americans."

Barack Obama

" I moved to Chicago to work with churches that were dealing with the
devastation of steel plants that had closed all throughout the region. Tens of
thousands of people had been laid off. There was never a federal effort to come
in after those closings and to figure out how can we retrain workers for the
jobs of the future, how can we invest and make sure capital is available to
create new businesses in those communities. And so not only do we have to deal
with our trade agreements, not only do we have to eliminate tax breaks for
companies that are moving overseas, not only do we have to work on our education
system, but we also have to have an intentional strategy on the part of the
federal government to make sure that we are reinvesting in those communities
that are being burdened by globalization and not benefiting from it"

The Democrats in Congress have already been able to block several free trade agreements with Colombia and with South Korea, and of course, they are jumping over each other to propose new ways of restricting NAFTA, CAFTA and every other free trade agreement we currently have. So far, they have been relatively unscathed and have been able to pander for votes. This must stop. Free trade is simple, sound, and logical economic policy. It benefits everyone and arguing against it means arguing against logical economic principles. Thus, in any debate on free trade, we win, since we have logic on our side.
I was quite heartened to find this editorial in the San Diego Tribune, I hope I see more of this...

"If this is true, and Democrats take the White House next year while
retaining control of Congress, fear for your country. Pundits' assertions that
Sens. Hillary Clinton and Barack Obama and former Sen. John Edwards won't really
follow through on their rhetoric ignores what congressional Democrats already
have done on trade, blocking new pacts with Latin America and South Korea. It's
plain that free-trade Democrats have been routed by those spouting union talking

So what if protectionism helped keep Europe stagnant for generations; so
what if there is massive evidence that protecting jobs quickly becomes a drag on
job growth; so what if U.S. trade policy has helped make us a much richer nation
than ever. Democrats see votes to be won by lying about trade, and they're not
going to let the facts get in their way.
Their maligning of the North
American Free Trade Agreement is a perfect example. Its adoption in 1993 helped
kick off one of the great periods of sustained economic health in U.S. history.
The resulting explosion in trade with Canada and Mexico was crucial to the
creation of more than 17 million new jobs, resulting in a five-year stretch in
which the jobless rate was under 5 percent every year for only the second time
since World War II."

It isn't the job of the San Diego Tribune though to do the bidding of the Republican in a principle that I believe is the core of Conservatism, free trade. I think it is time that this becomes one of the front and center issues. I want to see Hillary Clinton arguing against her husband's own pet project in a debate with whoever our candidate is. The issue of free trade is nothing short of a huge winner for us Republicans, but it won't be if it isn't made an issue. So far, I have heard very little from any of the candidates, except maby Hunter who argues against it, on the issue of free trade. I don't understand why. Rudy has gained plenty of traction with socialized medicine and protectionism carries with it the same sort of negative connotation. I hope that as the campaign goes along Republican candidates make just as much of free trade as Democratic candidates have made of protectionism.

Wednesday, August 15, 2007

From Oil to Energy Part III

Recently, I wrote a proposal and its follow up for getting our country energy independent. To say that my conservative colleagues were hostile to the proposal and everything related to it would be to make quite the understatement. I still believe in my proposal and more importantly, I still believe that energy independence is crucial to winning the war on terror.

Let me first explain my interest in this. I don't much care about global warming or any of that. The only thing that I want to accomplish is to reduce dramatically, 90% and more, the amount of money that Saudis and countries like them make when we fill up our cars or other vehicles. If we cut off the main financial source of terror, terrorism dies quickly.

I thought about it again last night. I tried a thought experiment. I thought what would Ronald Reagan do if he were faced with getting the country energy independent. Generally, I don't like to do such hypotheticals however in a thought experiment it seemed appropriate.

I believe that Reagan would try to resolve this problem with tax cuts. I think that he would have believed in the power of the entrepeneur and would do everything to give them the incentive they need and simply keep government out of the way.

Thus, my proposal is such: cut the capital gains, income, and dividend taxes to ZERO, for any entrepreneurial endeavor that involves alternative energy. This statement carries with it serious risk right away. How do we define alternative energy? What we are trying to do is reward those entrepeneurs that look to bring products on the market that challenge petroleum. The definition must be narrow and clear, so that activist judges don't use this for any number of their own pet projects.

As such, my definition of alternative energy for this purpose is any energy source that can be used as an alternative to oil as a means of providing energy. (I welcome all in the comments section to help strengthen to definition).

I would then lower to ZERO, the capital gains, income and dividend taxes of any company or division of any company which works on any source of energy that can compete with oil in powering anything that oil currently powers. (While the overwhelming majority of these would be sources to power automobiles, I want to open this up to anything powered by oil). It must be zero because we need to provide overwhelming and intense incentive for entrepeneurs to enter the alternative energy field. For instance, if the income tax is zero on alternative energy sources, I believe even the oil companies themselves would wind up investing heavily in their own alternative energy divisions and certainly much heavier than they are now.

In fact, with this sort of incentive I believe that we would be energy independent in five years maximum.

Now, let's go through some of the political pitfalls of a real politician not only proposing but trying to implement such a proposal. First there would be the liberals who would immediately propose a series of tax increases to account for the "massive" tax cuts, and loss of revenue this would likely produce. Second, in order to pass this legislation their would need to be compromise and the first compromise would be that the tax wouldn't be zero. This must be avoided. Unless the incentive is intense, no taxes at all, the revolution to energy independence would take too long, and in the meantime there would no doubt be some or a group of politicians that would muck up the progress by introducing regulation or taxes or who knows what. In order for this to work, it needs to be so intense that the revolution would be so quick that politicians don't get a chance to screw it up.

Finally, there is the dilemma of whether or not we would make such tax cuts permanent. If these tax cuts are temporary, then the intensity of the incentive is wiped away by the uncertainty of its continuity. Entrepeneurs aren't going to have much incentive of entering a new field to enjoy significant tax incentives, if they don't know that those tax incentives are still around just when they really start to enjoy them. On the other hand, if these tax incentives are made permanent then we probably would face significant tax revenue shortfalls even after the task has been accomplished, and furthermore would artificially overemphasize alternative energy at the expense of every other industry, beyond that which we need to achieve energy independence.

My proposal is to place a ten year window on the initial tax cuts however also placing another five percent tax reduction (down to zero of course) to any company that entered the alternative energy field in the first ten years. In other words, these tax cuts would last ten years, with Congress having the power to make them permanent, and any company that entered the field in the first ten years, would be grandfathered in to enjoy 5% reduced taxes on future alternative energy income, capital gains, and dividends, over all others.

All right, that is my proposal. Have at it.

Tuesday, August 14, 2007

Hillary's Mortgage Bailout

Hillary continues to earn her socialist/communist stripes with her newly unveiled mortgage bail out plan. You can find it here
Let's take things here one at a time.

1)Require mortgage brokers to disclose to borrowers that their compensation rises when borrowers' mortgage rates and mortgage fees are high. Too many prospective homebuyers believe that the mortgage broker is acting on their behalf. In fact brokers earn more when they steer borrowers to mortgages with higher rates and fees. The broker's and borrower's interests are not always aligned. Borrowers need to be aware of this when assessing the advice brokers give them. To address this need, Hillary will require that brokers disclose to borrowers how they are paid.

Now, anyone that has every closed on a loan knows that the paperwork is overwhelming. What is Hillary planning on doing? That's right, folks, she wants all of you to sign yet another meaningless disclosure so that the process becomes even more overwhelming. Do you want to know why there is so much paperwork at a closing? It is politicians like Hillary Clinton. Hillary will introduce meaningless signed document number one hundred fifty eight. The irony is that if I understand Hillary correctly this disclosure already exists. In fact, multiple places within the closing documents disclose exactly how much the broker makes. Either Hillary is creating yet another document to say the same thing, or she is creating a new one that reveals that the higher the rate, the higher the fees, the more your broker makes (duh!!!) This document will go right next to the Equal Credit Opportunity Act Disclosure. This particular disclosure says that, me, the mortgage broker, cannot discriminate based on anything but credit worthiness. The absurdity of that disclosure is thick. Think about it folks. If you are getting a loan, does it sound as though I am discriminating against YOU. The problem with the closing process is that there are so many darn documents that the important ones, the Settlement statement, the Truth in Lending, the Note, are glossed over by borrowers that frankly just want to get it over with. Hillary's solution is to add another meaningless document to an already overwhelming process.

2)Work with states to develop strong licensing standards and require federal registration for mortgage brokers. Unscrupulous brokers have steered people into high cost mortgages, qualified them for loans they could not afford, and attached fees unnecessarily. These brokers are responsible for many of the lending abuses that occurred in recent years, but there is no single, national source for information about individual brokers. Hillary will establish national registration for brokers so that prospective borrowers can easily look up a broker's employment history, violations, complaints, and other information. As President, she will also work with the states to develop strong licensing standards to ensure that mortgage brokers are qualified and properly screened.

First, I recently read the book Freedomnomics. It is hypothesised and strongly backed up that licensing only goes to reduce qualified people from an industry. By creating a bureaucratic licensing and testing process all you really do is discourage good, bright people who don't want to hassle with meeting all of the overwhelming requirements from entering the field. What extra layers of licensing and testing really do is simply keep new competition out of industries.

Second, Hillary once again plays the populist narrative that this crisis is all the fault of those evil, evil mortgage brokers who took advantage of unsuspecting victims. It may play among the uneducated, but it just ain't true. We, mortgage brokers, are unscrupulous no doubt, however the idea that the homeowner's were just innocent victims is pure nonsense. Here is how I explained it recently

"Now, the mainstream media would have you believe that evil mortgage brokers
committed fraud on unsuspecting banks while innocent poor people stood by
helplessly and put themselves in an untennable position that they had no control
over. (This is a position that Hillary Clinton holds and one I will address
later). Stated loans are those loans in which an income is stated but no proof
is provided to verify it. They were initially created for self employed people
who have great accountants, but they filtered to other borrowers, and even
borrowers who have a simple salary. Why do you ask would someone need to go
stated if they simply make a salary? Couldn't they simply provide their taxes?
They could but then they wouldn't qualify for the house they want.

banks are not without blame here either. Stated loans were excepted regularly
with janitors supposedly making 60k per year and more, teachers making as much
as a hundred thousand, secretaries north of 50k per year. These were common
place. Now, if a bank is willing to believe that a janitor makes 60k per year in
order to approve a loan, whose fault is it if that loan goes bad? To use a crude
metaphor, this is like a girl getting naked jumping into my bed and then
wondering why I tried to f$&k her. If a bank doesn't want to take on
fraudulent loans maybe they shouldn't be so quick to believe janitors make 60k a
year, maybe they should not allow for stated loans for salaried borrowers

The borrower is not without fault by a long shot. While the
bank may think the janitor makes sixty thousand a year, the janitor knows what
he makes. He knows if the mortgage payment is eating up to sixty percent of his
monthly income. If this person goes ahead and accepts the loan anyway, is it
really the fault of the mortgage broker when they go bad on it."

3)Eliminate prepayment penalties on mortgage products. Prepayment penalties, which are often used on subprime, Alt-A, and non-traditional mortgages, are a problem for borrowers. These penalties can lock borrowers into loans until the rates and monthly payments escalate. Families should not be discouraged from responsibly paying off their mortgages early, particularly when this would allow them to avoid balloon payments or high floating rates. Studies have shown that loans with prepayment penalties have a 52% greater risk of default than those without. Hillary will restrict the use of prepayment penalties.

Now, Hillary demonizes a specific loan that has no doubt been abused. This is just fine and dandy however, what Hillary doesn't realize is that there are plenty of good reasons to take on a prepayment penalty. For instance, everything else being equal guess which loan has the lower rate? In other words, if you the borrower are confident you will still be in the loan after the specified pre payment period it only makes sense to take on a pre payment penalty. Finally, wouldn't you the borrower at least like to have the option available to you just in case there is a reason. Not in Hillary's world, she wants to make sure to slash the mortgage product portfolio for the banks.

She says this for instance,"Families should not be discouraged from responsibly paying off their mortgages early, particularly when this would allow them to avoid balloon payments or high floating rates."

Those borrowers should simply take on a loan with a smaller amortization, 20 year as opposed to thirty, or one without a pre payment penalty. Remember folks pre payment penalties are optional not mandatory. Yet, Hillary wants to eliminate them entirely.
She follows with this, "Studies have shown that loans with prepayment penalties have a 52% greater risk of default than those without. Hillary will restrict the use of prepayment penalties."

This maybe so, however what if a study showed that red cars, or sports cars, have a 52% higher incident of deadly accidents, would Hillary be in favor of banning such cars? If not, why does she ban loans with similar high degrees of danger.

4)Require mortgage lenders to include the cost of taxes and insurance in the underwriting assessment of higher-risk mortgages. Many borrowers fail to consider taxes and insurance costs when weighing whether they can afford a particular mortgage. Sometimes, lenders exclude those costs from the underwriting assessment, and in the process qualify people for mortgages they cannot afford. Hillary will require that taxes and insurance costs be included in the underwriting assessment so that prospective homeowners can properly determine whether they can afford a particular house. This requirement would apply to subprime mortgages, Alt-A mortgages, and non-traditional mortgages like interest-only, no-money-down, and payment option ARMs.

Here, Hillary is off her rocker. There is no such loans. There are loans where the taxes and insurance aren't included in the payment (escrow), but there is no bank in the world that doesn't factor in taxes and insurance into the monthly payment. In fact, it is on page 3 or 4 of any application that anyone signs. In fact, here in Illinois (and I am certain in every state) it is required by law to be listed there. I don't know what Hillary wants but it is likely that she wants to make escrows mandatory.

Let me tell you how escrows work. The bank collects enough money, and usually an extra two months worth, of taxes for the escrow account at the time of the closing. In other words, let's suppose that you are closing in June and your next tax payment is September 1. In this case, your next payment would be August 1. This means that you will make two payments before your taxes are due. You would be required to come up with six month's worth of taxes at the time of closing (four extra necessary to cover the payment and two more just to be safe). That means that there would be an extra six months worth of taxes required to be held in the account at the time of the loan. If I understand Hillary's plan correctly, escrows would no longer be optional. This means that every loan would now require significantly more in settlement costs. It is exactly those borrower's strapped for cash that Hillary wants to save that would struggle to come up with the extra money.

5)Establish a $1 billion fund to assist state programs that help at-risk borrowers avoid foreclosure. Hillary will establish a $1 billion fund to support state programs that help at-risk borrowers avoid foreclosure. Some state programs help borrowers make the single payment necessary to become current on their loans; others help borrowers renegotiate their loan terms, or simply provide financial counseling. These foreclosure mitigation efforts are more important than ever right now. Federal assistance for state programs that assist at-risk borrowers supplements Hillary's call earlier in the year for "foreclosure timeout." At-risk borrowers and lenders should be encouraged to work out alternatives to foreclosure
This is the ultimate throwing good money after bad approach. The people about to go into foreclosure are deadbeats. Here is how I described it...

"Let's examine this. First, let's remember the overwhelming majority of people about to go into foreclosure are dead beats, and the Senator wants to use public funds to extend even more credit to these dead beats. Yes, this certainly sounds like a good populist proposal, but let me tell you how it will work in the real world.

Here is an example of a dead beat I ran across. This couple was struggling to pay their mortgage, and they should have, since it was eating up almost 70% of their total income. The only thing they weren't paying was the taxes on the home. In the middle of the loan, they went and bought a car. Yes, that's right. They couldn't afford to pay their taxes, their mortgage ate up 70% of their budget, and they saw fit to buy a car. You think this is out of the ordinary, not that much, and Senator Clinton proposes that we extend one billion dollars in public money to exactly these types of dead beats."
hat's right, Hillary wants to establish a fund so that irresponsible borrowers can get access to even more money. Brilliant.
Finally, she says this...

Expand Fannie Mae's and Freddie Mac's Foreclosure Prevention Efforts. Hillary would expand the goals of Fannie and Freddie, the government sponsored enterprises (GSEs) that help stabilize the mortgage markets, to include helping a larger number of at-risk homeowners avoid foreclosure. This would be consistent with Fannie's and Freddie's existing goals that promote home ownership. The GSEs already help mitigate foreclosures by enabling some borrowers to swap into less risky, lower-cost loans. Fannie also helps homeowners arrange payment forbearance, financial counseling, and loan restructurings. Hillary will expand those initiatives to make foreclosure mitigation a greater priority.

The absurdity of this proposal is just overwhelming. Fannie Mae and Freddie Mac are the only loans that Wall Street still likes. Now, Hillary wants Fannie and Freddie to take on problem loans so that Wall Street stops buying mortgage bonds entirely.

Saturday, August 11, 2007

Who is John Mearsheimer?

John Mearsheimer is a faculty member of the Committee on International Relations at the University of Chicago. He has been employed at the University since 1982. He is a proponent of the theory offensive realism. He summed it up as such,

Given the difficulty of determining how much power is enough for today and
tomorrow, great powers recognize that the best way to ensure their security is
to achieve hegemony now, thus eliminating any possibility of a challenge by
another great power. Only a misguided state would pass up an opportunity to
become hegemon in the system because it thought it already had sufficient power
to survive

Mearsheimer gained prominence (or maybe noteriety) when he published the paper, The Israeli Lobby and U.S. Foreign Policy, along with partner, Stephen Walt. The thesis of the paper was,

"No lobby has managed to divert U.S. foreign policy as far
from what the American national interest would otherwise suggest, while
simultaneously convincing Americans that U.S. and Israeli interests are
essentially identical".[2]
They argue that "in its basic operations, it is no different from interest
groups like the Farm Lobby, steel and textile workers, and other ethnic lobbies.
What sets the Israel Lobby apart is its extraordinary effectiveness." According
to Mearsheimer and Walt, the "loose coalition" that makes up the Lobby has
"significant leverage over the Executive
," as well as the ability to make sure that the "Lobby's perspective
on Israel is widely reflected in the mainstream media." They
claim that AIPAC in
particular has a "stranglehold on the U.S. Congress," due to its
"ability to reward legislators and congressional candidates who support its
agenda, and to punish those who challenge it."

It went on to claim that the invasion of Iraq was influenced if not orchestrated by the same Israeli lobby. To say this was controversial is to make quite an understatement. Of course, the Israeli lobby is there among the boogeymen of the netroots along with such groups as PNAC, the Council on Foreign Relations, the Foundation for Defense of Democracies, to form the Neoconservative movement that the netroots blame for much of the evil of the world.

With this paper, Mearsheimer became a rock star in the circles of the netroots. His foreign policy beliefs go beyond simply blaming Israel for much of the evils of the world. For instance, he believes that the U.S. should play a more even handed role mediating between the Democratic state of Israel and the territory of Palestine currently government by Hamas, one of the State Department's terrorist groups. He thinks of course that we should withdraw from Iraq, and also from the Middle East entirely.

It is however some of his thoughts on Iran that this diarist found most interesting. Why don't I let Mr. Mearsheimer speak for himself though... hat tip to John Hinderaker at Power Line

To summarize, Iran is not at war with the United States. Iran is NOT responsible for most of the alphabet soup explosives currently killing U.S. soldiers. Whatever their responsibility in Iraq it is only done because they are concerned that if the U.S. succeeds Iran will be next. Iran reached out in 1990's to the U.S. If the U.S. had reached back well then relations would be better now. Ahmadinejad is did not say the Israel would be wiped off the face of the Earth, but rather that the only Democracy in the Middle East is doomed for failure.

Now, what is of course important is not merely the kooky ideas that Mearsheimer expouses but where he expoused them. He was recently invited to lead a foreign policy forum at the Yearly Kos Convention. That would be the same convention that each of the Democratic nominees for President also attended.

Now, their excuse for much of the nasty and incendiary commentary on the Daily Kos is that it was only a fringe part of the site. This man is not some fringe character. He was invited to lead the Foreign Policy forum. He expouses everything that the Kos Kids and much of the nutroots in general believe in the area of foreign policy, and by showing up at the same convention these same candidates gave his views at least tacit approval.

Friday, August 10, 2007

Kos Spins Media Spin

I have to say that irony and surreal are two of my favorite things, and for that Daily Kos is starting to become a fun if dangerous and delusional site to visit. Kos lieutenant McJoan has the spin on media spin on progress in Iraq. Here it is

She first starts out by impugning O'Hanlon and Pollack because they did in fact support invasion in the beginning. (Pollack even wrote a full book on it). This is true and never hidden by anyone. They also became fierce critics and are self admitted left of center thinkers. No one doubts that the Brookings Institute is left of center, not far left mind you, like Daily Kos, but left of center. (Thus, maybe that is where the confusion comes in) Still, McJoan spends an awful lot of time laboring over this ceded point by everyone.

Which is out and out false. It all started with the ridiculous Times op-ed by the Brookings Institute's Kenneth Pollack and Michael O'Hanlon, who positioned themselves as "harsh critics" of Bush's war and the escalation, despite their long and wrong history of support for it (see Glenn Greenwald, Think Progress, and Greg Sargent for the gory details). See, they're war critics, but they spent 8 days in a few areas of Iraq, talking with the troops that O'Hanlon's long-time friend Gen. Petraeus had ready to meet them. Credible?

Notice, how she dimishes their trip by mentioning it was only eight days. Hey, Joan, that's eight more days than you have spent there so exactly what is your point? Furthermore, this is not the first trip for either and these eight days were spent comparing the situation to previous trips. Finally, these are two serious men who only want the best for their country. They gave their honest well researched, and most importantly, from the ground, opinion. McJoan seems to think that far left bloggers with clear agendas like Think Progress are more authoritative than these two guys who have spent most of their adult life studying, debating and researching these exact issues.

Second, she moves on to a piece Anthony Cordesman who was in the party with O'Hanlon and Pollack. He was decidedly less enthusiastic about progress.

I did not see any dramatic change in our position in Iraq during this trip. Many
of the points, the problems which exist there are problems which have existed
really since late 2004, if not earlier. I didn’t see a dramatic shift in the
ability of the Iraqi’s to reach the kind of compromise that is almost the
foundation of moving forward. [...]
But I also want to stress another thing.
I did not see success for the strategy that President Bush announced in January.

She then goes on to excoriate the media for spinning his statements.

The piece strongly stressed Cordesman's view that we could conceivably
succeed in Iraq if this, that or the other fluke took place -- without noting
that Cordesman himself said he differed with O'Hanlon and Pollack's assessments
of the situation in Iraq. Just a stunning omission. Even better, WaPo described
Cordesman's "optimism about the war" -- even though he wrote: "From my
perspective, the U.S. now has only uncertain, high risk options in Iraq." That
strike you as optimistic?

Now, as you'll notice she isolates most of Cordesman's criticism for that of the political end. This is really no different than O'Hanlon, Pollack or anyone else that has been over to Iraq. Everyone agrees that the Iraqis are falling woefully short on the political end. What McJoan omits herself is a very important part of Cordesman's piece...

In his 25-page analysis -- titled "The Tenuous Case for Strategic Patience
in Iraq" -- Cordesman wrote that the United States "does not have good options
in Iraq and cannot dictate its future, only influence it," and that it is up to
the Iraqi government to make strides toward stability. A precipitous withdrawal
of U.S. troops probably would not help matters, he wrote, but if the Iraqis make
progress, then Congress and the U.S. military need to work toward gradual troop
reductions that reflect realities on the ground.

Whatever Cordesman feels about progress in Iraq, he is clear that a precipitous withdrawal from there is not the answer. This is of course something McJoan doesn't happen to put into her piece, and of course it is a piece about spin, ah, the surreal irony of Daily Kos.

Thursday, August 9, 2007

Nutroots Declares War on Everyone

Everyone that they have any disagreement with that is. Hey, as long as you tow the line they won't go after you: Bush is evil, we must not confront Iran, Israel is evil, warrantless wiretaps are evil, Gitmo is evil, the Patriot Act is evil, The ACLU will protect us all, have I missed anything. These are a lot of things to tow the line on.

Of course, their hatred for Bush is long and distinguished and needs to links or further exposition. Their first Democratic target was of Senator Joseph Lieberman. Their first television network was FoxNews, and their first foreign ally was Israel. Now, they have set their their sites on some segments of the Democratic that they don't see eye to eye with.

While for now, they have only given mild criticism of the Democratic leadership, I think that will change if in September the troop surge is ACTUALLY given more time. In the meantime, though we have some delicious political theater right now.

The wrath of the netroots right now is the Blue Dog Democrats and the Democratic Leadership Conference. Now, as much as I love watching political theater, this is even better because there is nothing like watching the other party in an all out civil war. Harold Ford Jr. did something sacreligious last night, at least according to the netroots. He showed up on FoxNews. To make it worse he criticized Daily Kos.

“I would have gone to DailyKos (mispronouncing the name and getting the
name of the YearlyKos conference wrong, too) and told them, ‘I think you’re
wrong the way you go about practicing your politics. If you’re serious about
winning the war and bringing the country together, get another message and
another set of tactics.”

To me this is frankly mild criticism, but maybe as the old saying goes, "you can dish it out but you can't take it"

On another front, the Daily Kos is now in all out hissy fit over the Blue Dogs supporting the warrantless wiretapping program. They are ready for an all out war come the primaries in 2008,

Some are already talking about primary challenges for Democrats whom they
consider enablers of Mr. Bush, like moderate Blue Dogs who formed the core of
Democratic support for the eavesdropping proposal in the House. On the Web site
Open Left, the blogger Matt Stoller accused the Blue Dogs of one of their
“standard betrayals.”

Right now, this is all just political theater in my estimation, however it will take on extra significance if the surge continues beyond September. I predict Kos et al to go into full out scorched Earth upon anyone that they consider to enable the surge. Let's remember that all but Joe Biden came to the Yearly Kos convention and no one went to the annual convention of the DLC. Thus, we know where the people running for President are in the fight.

Can the supposed disciplined, pragmatic, and intelligent, Hillary Clinton really be so politically blind. Yeah, it sure makes sense to kow tow to Daily Kos during the primary season but it is literal political suicide during the general election. Does Hillary really think that a group that hates Israel, hates the war on terror, hates any measure that protects us, hates everyone but themselves...does she really think that getting into bed with this group will win in the general election.

Bill O'Reilly has already declared war against Daily Kos et al, and in war he is, I am betting on him. Here is what he said recently

All the Democratic candidates failed to show up at a moderate Democratic
meeting in Tennessee, yet they kiss the feet of the hateful radicals.
election time, independent voters will remember that if the far left ever comes
to power in this country, you can kiss the USA as you know it good bye.
it's interesting to note that Congress just passed a law giving the National
Security Agency more latitude to monitor calls from the USA to suspected
terrorists overseas. Obviously, that's the major terror fighting tool.
But it
is vehemently opposed by the far left. Read the lead editorial in Tuesday's New
York Times if you want their point of view.
Senator Clinton voted against
that new law, as did Barack Obama -- another mistake. Again, come election time,
pandering to the far left will be a factor in how independent Americans
The reason the Democratic candidates are making these foolish decisions
is that they see the mainstream press actively rooting for the far left to
succeed in America. Talking Points could not find one media account of the Kos
convention that even criticized their vile postings, grossly insulting people
like Senator Joseph Lieberman. The bias is disgusting.
On CNN, Howard Kurtz,
again, loaded up his discussion of the convention with anti-O'Reilly guests. Not
one supported exposition of the hate site -- not one. Now Kurtz knows this is
unfair, but he continues to do it.
This entire thing is simply out of
control. Just because you run a Web site doesn't mean you can't defame and
injure people. Every Jewish person in the world should be marching against the
Kos for all the hate Israel stuff posted on it.
Senator Clinton and the
others may think that the far left approval will help them, but it will not. You
just wait and see.

I think he's right. We will see but I will take bets in the meantime.