E!! The True Conservative Story™

I highly recommend this long but excellent piece, “Wall Street Lays Another Egg,” by Niall Ferguson in Vanity Fair. You’ll be smarter if you read even half.

Hat Tip: Ralph Hancock on the Postmodern Conservative blog @ Culture11

I think this will be the E!! last word on the GM thing:  what Jim Manzi says.

David Frum urges us not to bailout automakers on Marketplace.publicradio.org.

And then on NRO, he posts this:

Time was when General Motors alone ranked among the largest employers in the United States.

Today, UPS employs almost four times as many people as the two big U.S. companies, Ford and GM, combined. While the Big Two decline, Toyota USA, Nissan USA, BMW, KIA are all expanding — and not asking for any bailout.

The Big Two remain important employers. Their troubles are felt up and down the manufacturing supply chain. But of course that is true for every industry.

Last week, the stock of Las Vegas Sands Corporation collapsed. Bankruptcy seems a real possibility. Indeed, the whole casino gambling industry in Nevada is facing the worst crisis in at least a generation, maybe ever. Casino gambling directly employs more people than the domestic automobile industry. Add in the supply chain for both industries, and casinos still employ almost half as many people as the automobile sector.

So what about a bailout for the casino industry? Ridiculous! Right? But why right?

Unfreakinbelievable.

Brace yourself and then then read Larry Kudlow’s post on Paulson today, various bailout stuff, and the auto industry.

Setting aside the fact that Paulson has changed the whole bailout game, is Obama’s first policy decision really going to be a GM bailout? Maybe, because apparently a UAW rescue is favored by Pelosi and Reid.

Before you decide what you think, consider this amazing stat:

Total compensation per hour for the big-three carmakers is $73.20. That’s a 52 percent differential from Toyota’s (Detroit South) $48 compensation (wages + health and retirement benefits). In fact, the oversized UAW-driven pay package for Detroit is 132 percent higher than that of the entire manufacturing sector of the U.S., which comes in at $31.59.

At $73 per hour, GM ain’t gonna be competitive no matter what is done. Let them cut their wages to industry norms.

Blood Pressure Threat Level:  Extreme

On the heels of the financial and credit market bailout and the approval of federally backed loans for U.S. auto makers, the already heavily subsidized ethanol industry – yes, I said ETHANOL – may soon be receiving a bailout as well.

U.S. Agriculture Secretary Ed Schafer said the feds are considering payouts of as much as $25M to help ethanol plants.  Seems they are struggling since the price of corn has spiked

I agree with NM Congressman J. Flake:  Not only should we not give them money, all tax breaks and credits for ethanol producers should be repealed.

Using crops for fuel on any sort of large scale is a bad, BAD idea.

H/T:  Iain Murray on The Corner

From a Newt e-blast today:

To give you a sense of how failed the current [financial] strategy has been, consider this: This summer a $300 billion housing bailout was passed with a $500 million a year payment to a radical, anti-free market group called ACORN and other left-wing organizing groups.

ACORN is a left-wing, political extortion racket. It’s currently busy bussing people to vote early in Ohio and elsewhere…these are your tax dollars at work.

You get taxed to send a left-wing group money to use to elect left-wing predatory politicians to raise your taxes to give more money to groups who help them get elected…etc.

It was suicidal for a Republican president to sign that housing bailout bill and any bill that contains funding for groups so radically opposed to the values and interests of the vast majority of Americans.

If you aren’t in the loop on all this, in Ohio and other swing states ACORN has been bussing poor and homeless people to voter registration stations where they sign up, and vote, same day, in some cases without providing proper proof of residency/address.  In many cases, it’s being reported that election monitors are not present at these stations.

Will these thousands of same-day registrations/votes be properly examined and rejected if invalid?  Who knows?

I’m doing some research here in Nevada, where ACORN is also active, and will report back with any findings. 

 Just received a press release (statement) from the Titus campaign.  Here are some excerpts:

Titus: Bailout Package Is One More Example of How Washington Is Broken

1.  Titus fails to mention that the government policies which birthed the Fannie/Freddie financial crisis were enacted in the Carter and Clinton administrations with the approval of both Ds and Rs in Congress, so she’s either uninformed or being deliberately dishonest.

2.  Titus says Bush and Porter are to blame for the lack of oversight when nearly everyone including the present Democratic leadership was complicit in looking the other way, so she’s either uninformed or being deliberately partisan.

3.  Titus rips Porter for being in favor of the imperfect bailout bill, but then says “with so many critical tax breaks” for Nevada she would have “reluctantly” voted for the inadequate bill also, so she’s either very confused…or being hypocritical.

Porter voted for the bill.  Titus bloviates at length – and then says she would have voted for the bill.  When all the ranting and raving is done, what in Sam Hill is the difference?!

Neither the guy who’s in, nor the gal who wants to BE in, has the gumption to stand on principle and fight for good policy when there are special tax credits to be had.  Of course:  how else could they ingratiate themselves to the voters?  Just look at all they’ve done for you!!

That’s a REAL example of how Washington is broken – and Nevada, too. 

E!! sends enthusiastic kudos to Nevada Congressman Dean Heller.  He voted against the bailout bill earlier this week AND voted against the dressed-up version again today. 

Two thumbs down to Nevada Congresswoman Shelley Berkley who switched her earlier “no” to a “yes.”  Ditto downers to NV Senator Ensign and Rep. Porter who also voted “yes.”

See this post at Politico for a list of vote switchers in other states.  The vote was 263-171.

It sickens me to think this bill was the best Congress could manage to give us after working on nothing else for over a week.

Economic expert John Lewis (D-GA) said about his ‘yes’ vote, “I have decided that the cost of doing nothing is greater than the cost of doing something.”

So comforting to know we have geniuses like Lewis looking out for us in Washington.

“I understand the impulse to obsess over the pain and potential catastrophe staring us in the face, but what if the wages of drastically altering the capitalist system that has been our engine of freedom are decidedly worse?” — Andy McCarthy

NOTE:  There is nearly NO commentary about this on conservative/libertarian blogs yet.  I surmise everyone has logged off and is headed to their favorite bar to drown their sorrow (and disgust).

Double Ketel One and cran, please.

The sky’s been falling on Wall Street, and now hell is officially freezing over: Harry Reid is defending the same tax cuts that he once opposed and blasted as being “for the rich.”

So says Susan Jones of CNS News, who is reporting on the Senate debates of the “rescue bill” (still an Obama-ism, still smacks of false victimology, still hate it).

In an attempt to grease the Senate wheels on this bill, Reid now says he supports an Alternative Minimum Tax relief: $8 billion for natural disaster victims, and $78 billion in renewable energy incentives and extended tax breaks.

Reid’s commentary included statements like “we’ve got to get this done” and “it would be a blight on this Congress not to pass these tax extenders” and “tens of thousands of jobs will be created.”

How wonderful that liberal Democrat Harry Reid has finally admitted that tax cuts help businesses and create middle class jobs.

Pigs, commence flight.

Update:  George reminds us that Obama had a revelation on taxation also:  when he said that as president he would delay rolling back the Bush tax cuts if the economy was weak…essentially acknowledging that tax hikes hurt the economy.

From the CNN op-ed page (emphasis mine):

Commentary: Bankruptcy, not bailout, is the right answer

I’m borrowing my post header from P.J. O’Rourke.  (VERY funny book if you have never enjoyed it.)

I do wish names would be Named, no matter the party affiliation:  who started and voted for all of the federal legislation, who harassed the lenders to conform, which lenders not only conformed but went above and beyond the call, and who made big bucks.

It won’t happen, of course, because they are all in bed together to some degree.

As Anne of Idaho quipped, “Someone needs to go to Washington and Wall Street and close down the whorehouses.”

If no bailout bill is passed and no other/better solution can be agreed upon, I am just fine with having us (and the rest of the world) go into a recession where everyone becomes more financially conservative and/or moderate. 

If I personally have to lose a little in the short term, so be it.  It’s what is best and wisest in the big picture that matters.  “Principle over pain.”

(Note to Chris Matthews on his statement that Dems “overwhelmingly” voted for the bailout bill:  sixty percent is not overwhelming.  In fact, I’d say it’s rather underwhelming.)

Roll Call is reporting that the House “voted 228-205 to reject the financial sector bailout bill crafted over the weekend by a bipartisan group of House and Senate negotiators. Speaker Nancy Pelosi (D-Calif.), Majority Leader Steny Hoyer (D-Md.) and Minority Leader John Boehner (R-Ohio) all had urged Members to support the bill. But House Republicans rejected it by a 2-1 margin, and more than 90 Democrats voted no.”

 I keep reading commentary, even in respected conservative forums, that Paulson’s gigantic bailout plan is bad, and admittedly un-conservative, but that we must do “something” and the alternative is too dreadful to contemplate.

 As Colonel Potter used to say, “Horse-hockey!”  

  Protecting the long-term value of the American dollar is more important than a quick fix.  So is teaching our bankers, traders and lawmakers that the government is not going to bail them out of future messes.  If there’s a pot of government gold at the end of every financial rainbow, what’s to stop everyone from chasing the green leprechaun again?

  Federal action is warranted, but the focus should be less on debt and more on protecting present and future capital.  If we go about this rationally and take this opportunity to promote pro-growth policies and tax reform, investors will respond to the prospect of higher future returns.  It’s that simple.

  Conservatives:  we cannot abandon our principles in times of crisis. We must remain steady at the wheel.

I had the honor of meeting and assisting Pat Toomey last week at the Conservative Leadership Conference here in Las Vegas.  This morning, Club for Growth says/releases the following (excerpted):

Eighteen months into the credit crunch, many largely capitalized financial services firms are experiencing serious difficulties but the overall economy continues to grow.  GDP growth over the past 12 months was 2.25 percent and 3.5 percent when excluding the drag imposed by the housing sector.  Even within the financial sector, many banks are doing well.  Regional bank indices had risen significantly since the lows of last July—prior to the bailout announcement—and thousands of community banks are thriving.  It is extraordinary that a massive government intervention in the economy is considered inevitable when the economy is not even in a recession.

Indeed it is.  On what is the panic of Wall Street types based?  Could it be fear that lack of liquidity and credit in the market will affect their own bank accounts?

At the same time, socializing economic risks come at a great cost to the American economy by misallocating capital, inviting political manipulation, and putting taxpayers on the hook for possibly a trillion dollars.  Such a large takeover by the government will surely be accompanied by adverse, unintended consequences.  Already, other companies and industries are lining up at government’s door asking for their own bailout.  And if the government incurs $700 billion in debt to finance the purchase of bad bank assets, the danger that it will eventually monetize that debt and trigger dramatic inflation is very worrisome.

“Unintended consequences.”  This concept is one of the great underlying tenets of conservative thought.  The idea is that when one makes broad, sweeping changes there are always unplanned effects, and they are often worse than the problem with which you began.

Our Do Nothing Congress should, in this case, do nothing (other than what Newt said yesterday).  We ought to free things up where we can, allow the market to self-correct, and let those who must (and should) take their proverbial Lumps. 

Access to unlimited cash and credit is not a “human right,” and we should stop behaving as if it is.

Well, as a writer/journalist/blogger, there is nothing like reading something you strongly disagree with to wake you up and get your day started right.  Such is the case with Treasury Secretary Paulson’s statement before the Senate Banking Committee.

Since hearing word of widespread support (Paulson, Congress and the President) for the latest, greatest Bailout I’ve been feeling increasingly dejected.  And concerned.  And angry.

Treasury Secretary Henry Paulson has a “plan” which will “shift” $700 billion in obligations from private companies to the American taxpayer.  Apparently he sees this as the only Way and has 9,000 wizards on stand-by to make it so.  (The same Wall Street wizards that got us into this mess, no doubt?)

And evidently most members of Congress are spellbound and preparing to waft more money New York’s way.

One can only imagine what Banking Committee Chairman Chris Dodd (the largest beneficiary of political funds from Fannie & Freddie) will dream up as he joins hands and sings Tra La La La La with Reid and Pelosi.  I’m not sure how it ends, but I’m pretty sure the working title is Nightmare on Wall Street and that we are barely ten minutes in.

Setting the typically wrong-headed Paulson aside for a moment, how is it that Bush and Congress care so little about protecting the American taxpayer?

And why all the insistence on a quick solution?  This mess was not created in a week, yet Paulson and our illustrious Congressional geniuses think they can solve it by this Thursday?  Does it not occur to anyone that we need to take a deep breath, wade in, and calmly and pragmatically work our way through our many economic and financial problems in a careful and measured manner?

As Newt blogged today (thank God for Mr. Gingrich), between the crisis of liquidity on Wall Street, the crisis of bad energy policy that transfers $700 billion a year to foreign nations, the crisis of Sarbanes-Oxley that cripples entrepreneurs/start ups and drives banks and businesses from New York to London, and the crisis of a high corporate tax rate…we are in some very deep Doo Doo.

Newt proposes a ”non-bureaucratic solution that would stop the liquidity crisis almost overnight and do it using private capital rather than taxpayer money.”  He suggests four reforms that would do the trick without the bureaucracy and additional tax burden.  I suggest you read his blog post as it is well worth the time, but in summation they are:

#1  Stop the mark-to-market rule which is forcing companies into unnecessary bankruptcy. If short selling can be suspended on 799 stocks, the mark-to-market rule can be suspended for six months and then replaced with a more accurate three year rolling average mark-to-market. 

#2  Repeal Sarbanes-Oxley. It failed with Freddy, Fannie, Bear Stearns, Lehman Brothers, and AIG. It is crippling our entrepreneurial economy. One San Jose firm told Newt they would bring more than 20 companies public in the next year if the law was repealed. It’s Sarbanes-Oxley’s $3 million per startup annual accounting fee that is keeping these companies private.

#3  Go to a zero capital gains tax like China and Singapore.  Private capital will flood into Wall Street (at no cost to Joe Taxpayer) and lead to an increase in federal revenue through a larger, more prosperous economy.

#4  Pass an “all of the above” energy plan designed to bring home $500 billion of the $700 billion a year we are sending overseas. With that much energy income, our economy would boom.

E!! endorses these proposals (a fact I’m sure Newt is happy to hear) and strongly advises against implementation of the Paulson plan which by all reasoned accounts is going to be a total Mess.

In closing, I’ll be waiting to see what McCain says and does about all this.  If he doesn’t reject the Paulson/Bush/Congressional plan and closely align himself with much of what Newt said here, I may not be able to vote for him after all.

(Note:  To those who have heard me joke that I am going to “get drunk and vote for McCain,” consider this my semi-official back-peddle…pending the outcome of this mess and McCain’s stand on things.  Let’s see how Maverick-y the self-proclaimed maverick is when it really counts.) 

Here’s Andy McCarthy today:

The mainstream press mindlessly repeats the mantra that Fan and Fred perform a “vital” role in making the dream of home ownership a reality for the lower middle class — increasing market liquidity and thus keeping mortgage rates low. In fact, these quasi-government entities have what is at best a marginally depressive effect on mortgage rates. To create such an artificial effect — however imperceptible — is not a good idea at all; but even if you think it is arguably beneficial, the benefit is palpably not worth $5 trillion in liabilities. And if the mortgage crisis has taught us anything, it is that: without any government intervention, lenders and borrowers will innovate mortgage arrangements; borrowers shouldn’t be encouraged to buy homes they can’t afford; and private/public entities are apt to pour gasoline on a fire.