Sanity Injection

Injecting a dose of sanity into your day’s news and current events.

Archive for September, 2008

The Cult of Global Warming

Posted by sanityinjection on September 29, 2008

According to their website,

“The We Campaign is a project of The Alliance for Climate Protection — a nonprofit, nonpartisan effort founded by Nobel laureate and former Vice President Al Gore. The goal of the Alliance is to build a movement that creates the political will to solve the climate crisis — in part through repowering America with 100 percent of its electricity from clean energy sources within 10 years. Our economy, national security, and climate can’t afford to wait.”

The following is the test of an e-mail sent to The We Campaign by yours truly:

If one defines a “religious cult” as an organization that:

1) Follows its leader blindly and without question

2) Holds a system of beliefs that is not supported by scientific fact

3) Expects the world to change to conform with its beliefs

4) Believes that the end of the world is coming

Then you, my friends, are a religious cult.

Have a nice day.

Posted in Politics, Religion | Tagged: , , , , | 2 Comments »

Final take on the bailout bill

Posted by sanityinjection on September 29, 2008

Congress is voting today on the revised financial bailout bill. The new bill reflects compromises made over the weekend as the result of bipartisan negotiations involving both the House and Senate.

After a lot of thought, I have decided that if I were a legislator, I would vote for this bill. This is not because I think it is a great piece of legislation, or that I am convinced that it will do what Treasury Secretary Paulson says it will do. Regardless of how you spin it, we are talking about the government taking over a bad investment.

However, the bill has been greatly improved by the bipartisan efforts. (Which, by the way, is how government is *supposed* to operate all the time.) Democrats and Republicans, despite their differing views, came together and tried to put the good of the country ahead of politics for a change – working throughout the weekend even as many members would prefer to be out on the campaign trail. That is to be encouraged. Both sides made concessions – Republicans on the $700 billion size and the principle of government purchasing the debts, Democrats on bankruptcy revisions and using any and all profts for debt relief (stripping out the noxious giveway to ACORN, La Raza and other left-wing groups.)  Additional oversight provisions and protections for taxpayers have been added. The result is something that nobody loves but most can live with.

The only alternative at this point seems to be to do nothing. Whether the economy could technically survive this crisis on its own without government intervention, I don’t know. However, it seems clear that to fail to act after all this discussion would have a very negative effect on investor confidence. Like it or not, our financial markets depend more on investors’ impressions of economic conditions that the reality of those conditions. If everyone starts pulling their money out, the system will collapse even if there’s nothing fundamentally wrong with it.

Economic policy is not a certain science, and economists differ widely as to the value of this action. Much like the stock market, this is a calculated gamble. Congress is genuinely trying to do the right thing, so in the absence of hard evidence that their course is disastrous, I think we should back their play.

Meanwhile, non-interventionists should really be up in arms about the auto bailout that just passed the Senate – $25 billion in loans for automakers to make capital improvements. This dwarfs the size of the Chrysler bailout of the 80s, and it was rushed through with very little public debate. Just because there is a $700 billon elephant on the other side of the room, doesn’t mean we can afford to let $25 billion rats run loose on the other.

Posted in Domestic News, Politics | Tagged: , , , | 1 Comment »

This is *not* the Great Depression

Posted by sanityinjection on September 29, 2008

As Congress votes on the financial bailout legislation, the media continues its coordinated hysteria campaign to convince us that we are on the verge of a second Great Depression. Irwin Kellner at MarketWatch.com chimes in with the economic facts that suggest the sky is not falling, at least not yet:

  • In the crash of 1929 the Dow Jones industrials  plunged 40% in two months; this time around it has taken a year to fall 22%.
  • The jobless rate jumped to 25% by 1933; it is little more than 6% today.
  • The gross domestic product shrank by 25% during the early 1930s; it is up over 3% during the past year.
  • Consumer prices fell by about 30% from 1929 to 1933; and the last time I looked they were still rising.
  • Home prices dropped more than 30% during the Depression vs. about 16% today.
  • Some 40% of all mortgages were delinquent by 1934 compared with 4% today.
  • In the 1930s, more than 9,000 banks failed compared with fewer than 20 over the past couple of years.
     Remember also it was policy errors, not the stock market crash, that caused the Great Depression:
  • Instead of increasing the money supply, the Federal Reserve of that era reduced it by one-third.
  • Instead of lowering taxes, Herbert Hoover raised them.
  • And to channel whatever demand was left into U.S.-made goods, the government enacted the Smoot-Hawley Tariff Act to keep out foreign products; this only provoked our trading partners to do the same.
Add to this today’s automatic stabilizers such as unemployment insurance and Social Security, the FDIC to insure bank deposits and circuit breakers to keep stocks from falling too quickly, and you can see why this is not a depression in any way shape or form.

 

Full article is here: http://www.marketwatch.com/news/story/dont-call-bailout/story.aspx?guid=%7B0A2E0398%2D2E89%2D4F7F%2DB8C7%2D4150783B1B2E%7D

Posted in Domestic News, Politics | Tagged: , , , | 1 Comment »

Analysis: The first Presidential debate

Posted by sanityinjection on September 27, 2008

I don’t think there is any question about the winner of last night’s first Presidential debate: Barack Obama. Not because he was so much better than McCain, but simply because he held his own in an area (foreign policy) that was supposed to be McCain’s strong suit.

Obama came across as confident, reasonable, and dare I say, Presidential. He sounded like he knew what he was talking about. He was obviously very well prepared. By contrast, McCain came across like your cranky grandpa. He seemed to jump from one thought to another before finishing a sentence and got bogged down in details most viewers would have a hard time following. McCain appeared stiff, which he can’t really help since he’s partially unable to move his arms, but the contrast with Obama’s body language was not a good one. It seemed like McCain was winging it, relying on his knowledge and experience to carry him through. He didn’t seem prepared rhetorically, and he tripped over his own tongue a number of times.

Neither candidate had a memorable line or made any serious mistakes. So I don’t think this debate represents a slam dunk, but with Obama regaining some momentum in the polls, McCain needed a boost, and he didn’t get one from this performance. Obama’s performance helped to rebut the charge that he is inexperienced and unready – he did not come across that way. McCain needed to hammer home those charges, but every time he started to he got sidetracked by policy details.

The next debate will be between the VP candidates, but I don’t expect it will have a major impact on the race despite the high level of interest in how Sarah Palin will perform, unless she really wallops Biden, which is unlikely. After that, the second Presidential debate will probably have the lowest viewership. So between now and the final Presidential debate, McCain is going to have to find some other source of momentum to stay in this race.

Posted in Politics | Tagged: , , | 2 Comments »

Why are House Republicans opposing the bailout?

Posted by sanityinjection on September 26, 2008

It seems that House Republicans are the main group opposed to the proposed financial bailout bill. Why are they being obstructionists? Don’t they understand the severity of the crisis?

One might logically assume that House Republicans, who for the most part represent the more conservative elements of the GOP, are opposed in principle to any government intervention. Actually, that does not seem to be the case. The alternative plan the House GOP is proposing would if anything involve *more* regulation of the financial sector. Rather, their main concern seems to be the government’s purchase of mortgage debt from the troubled Wall Street firms, which is the centerpiece of the main bailout proposal.

There are two potential problems with this. First, if the financial firms couldn’t handle all that bad debt, how is the government going to handle it? Treasury Secretary Paulson’s plan assumes that over time, these debt assets will rise in value as the market heals, and can then be sold for a profit. What nobody seems to want to remember is that the reason the debt is bad is that the borrowers are either already in default or at risk of defaulting. Who wants to take over a loan that won’t be repaid? How do you sell that for a profit?

The second problem is what to do with those profits if they actually come into being. You would assume that the  money would go to defray the public debt we are creating by borrowing the money to pay for the bailout, right? Nyet, comrade. The Democrat-drafted bill under discussion would cut out 20% of the profits and give them away through a government program called the Housing Trust Fund. The recipients? Left-wing activists groups such as ACORN and La Raza, which spend as much time championing political causes as they do helping anyone find housing.

So in fact, although it seems like the House Republicans are playing politics with the economy, the Democrats are too – they’re just better at hiding it, with the help of their friends in the news media who choose not to look too closely at the details.

That said, I’m not sure the GOP plan, which would not involve the government purchasing the bad debts, goes far enough in addressing the problem, either. Further compromise is needed.

WashPost has a good article explaining the difference between the two proposals:

http://www.washingtonpost.com/wp-dyn/content/article/2008/09/25/AR2008092500268.html?hpid=topnews

Details on the Housing Trust Fund/ACORN/LA Raza connection: http://hotair.com/archives/2008/09/26/the-democratic-acorn-bailout/

Posted in Current Events, Domestic News, Politics | Tagged: , , , , | 5 Comments »

The politician who has gained most from this week’s events is…

Posted by sanityinjection on September 26, 2008

Here’s a hint: It won’t make any difference who wins tonight’s debate, if it happens.

The political figure who comes out of this week as the biggest winner is…Iranian President Mahmoud Ahmadinejad. Consider the following points:

  • While normally US sanctions would prevent him from setting foot on US territory, because the UN is meeting in New York, this avowed enemy of America gets to live it up in New York City for a week with full diplomatic immunity.
  • As he has in the past, Ahmadinejad gets to slander the US and Israel before the whole world from the UN podium at length  with absolutely no repercussions.
  • Ahmadinejad’s government openly gave the international community the symbolic finger over the issue of its nuclear program, refusing to cooperate and making a mockery of the sham “negotiations” it has been pretending to conduct while moving full speed ahead in its drive to build a bomb.
  • Ahmadinejad was a featured guest on Larry King, where Larry was deferential almost to the point of fellating the Middle Eastern dictator.
  • Ahmadinejad spent a couple of hours having his feet kissed by members of the American “peace movement”, including the co-founder of the anti-war group Code Pink. (There is no Iranian “peace movement” because Iran jails and tortures dissidents.) Meanwhile, Sarah Palin was barred from a protest rally against Ahmadinejad when national and local Democrats refused to participate if she was allowed to attend, which would have attracted much more media attention to the rally.
  • Back at home, the Iranian regime has just released a new book full of cartoons and essays denying and making fun of the Holocaust, to help indoctrinate a new generation of anti-Semites in the Muslim world.
  • Ahmadinejad has enoyed the rare treat of being asked by Western reporters to comment on the US financial crisis, which he gleefully portrayed as the beginning of America’s ultimate downfall. Never mind that this is the man who has almost single-handedly ruined Iran’s own economy despite record oil prices.

I am still mulling over this financial bailout, but one argument in favor of doing something would be that the longer this crisis drags out, the more time our nation’s enemies such as Ahmadinejad have to frolic unchallenged on the world stage.

Posted in Foreign Affairs, Politics | Tagged: , , , , , , , | Leave a Comment »

First crack at the big bailout

Posted by sanityinjection on September 25, 2008

Canadian David Warren points out that those who are blaming capitalism and free markets run amok for the financial crisis couldn’t be more wrong:

http://www.realclearpolitics.com/articles/2008/09/bailout_blues.html

In fact, one of the major factors that led to the creation of the dubious subprime loans was *anti-capitalist* pressure, from governments, non-profits, and discrimination lawyers, on financial institutions to ignore credit math and create programs to help poor people with bad credit buy homes. We were told that home ownership was a basic human right – but that means that the financially irresponsible have that right, too. Not that this excuses deceptive, fraudulent, and manipulative practices by the firms in question and their CEOs. But it does suggest that maybe regulation of the industry by people with agendas other than the smooth sailing of the economy isn’t the best solution.

Posted in Current Events, Domestic News, Politics | Tagged: , , , , , , | 6 Comments »

The mini-bailout no one is paying attention to

Posted by sanityinjection on September 25, 2008

All political eyes are currently on the $700 billion financial bailout proposal currently being negotiated in Washington. And understandably so, as it’s an extremely important issue. I am waiting to see exactly what the legislation is going to look like before weighing in. I have concerns, but I also know that the mortgage sector is *very* complex and there are factors you and I as laymen don’t understand.

However, at the same time there is another bailout going on, which is not gathering much attention, and this one is a bad mistake. It comes in the form of a stopgap spending bill which has just passed the House and is expected to be taken up by the Senate shortly. You may recall this is the bill House Republicans threatened to hold up – which would shut down much of the government – if the Democrats insisted on keeping an extension of the offshore oil drilling ban in the bill. The Democrats gave in on that issue and took the extension out, meaning that the ban will expire, and the Republicans in turn voted to pass the bill. (The Democrats know they can pass a new law limiting offshore drilling in the new Congress after they pick up more seats.)

The problem is that there is something else stuck in this bill that does not belong. It contains a $25 billion loan program for automakers, to allow them to modernize their plants which will supposedly help them stay competitive and preserve jobs. The language is crafted to exclude most foreign auto companies even if they have plants in the US. So what this amounts to is a bailout for American auto companies. When did Ford, GM, and Chrysler become federal charities? You may remember in the 1980s the Feds bailed out Chrysler. That didn’t stop the company from being sold to the Germans twenty years later. Similarly, this bailout will do nothing to preserve auto industry jobs or make American car companies more competitive. It’s a reward to these companies for failing. And there is no argument that the risk of failure of these companies approaches what we are talking about with the financial sector. So why is the House perpetrating this corporate charity?

Because it can. The spending bill has to pass, and the Congressmen from Michigan and Ohio have the clout to put this provision in. It is possible the Senate could strip the program out of the bill (and I have asked my Senators to do just that), but more likely they will just let it go under the radar while everyone is focused on the bigger bailout bill. So we, the taxpayers, will lose about $7.5 billion, the cost of offering these loans to the automakers at below-market rates. That my friends, is corporate welfare, and Democrats and Republicans alike should be aghast at it.

http://www.ft.com/cms/s/0/83bfe68c-8a8f-11dd-a76a-0000779fd18c.html

http://politicallydrunk.blogspot.com/2008/09/house-passes-no-strings-attached-25.html

Posted in Politics | Tagged: , , , , , , , , | 2 Comments »

I think I agree with the Muslims on this one.

Posted by sanityinjection on September 24, 2008

News media around the world have been captivated by the story of the arrest and trial of two Britons for having sex on a beach in Dubai, the cosmopolitan capital of the oil-rich United Arab Emirates. (Except in the US, where we are too busy with our political navel-gazing to pay attention.)

The story is being played out as another example of the conflict between secular, liberal Western culture and religious, conservative Islam. The UAE is an Islamic Arab nation not unlike its neighbor Saudi Arabia. Unliek the Saudis, however, the UAE has used its oil wealth to attract Western business and tourism to Dubai, but along with the money comes Westerners who behave like, well, Westerners.

In fact, Dubai has gone to some lengths to accommodate the lifestyle of its Western visitors. In the tourist areas, hotels and resorts cater to Western tastes. Alcohol can be easily purchased and consumed even while it is forbidden to the country’s Muslim citizens. Western ladies can sunbathe in bikinis that would be considered evidence of prostitution in other Arab countries.

The one thing the Emirates don’t want to budge on though, is public displays of affection. That can mean anything from public sex acts to simply kissing. These are considered immoral and scandalous in most of the Arab world and Dubai is no exception. And this is where our British friends ran afoul of the law. Apparently, they met at a hotel champagne breakfast, got good and drunk, and proceeded to fool around on the beach in public view. They are now facing possible jail terms.

Having given it some thought, I cannot muster up much sympathy for these people. The local government bent over backwards to accommodate their lifestyle, but they just had to push it too far. In fact, sex on public beaches is illegal in many secular countries including the United States. Even in Provincetown, Massachusetts, one of the most liberal communities in the US and a place where homosexual lifestyles are celebrated, it is still illegal to have sex on the public beach.

If these two idiots had simply returned to their hotel rooms to bang each other silly, no one would have known or cared. Instead, they decided to behave boorishly, and now they are facing the consequences. One of the accused has let it out that he came to Dubai to start a business, which he is no longer inclined to do. Boo-hoo! I’m sure the local Chamber of Commerce will cry its eyes out.

http://in.reuters.com/article/worldNews/idINIndia-35626920080924?pageNumber=2&virtualBrandChannel=0&sp=true

Posted in Foreign Affairs | Tagged: , , , | 1 Comment »

Just the thing to cut through the BS of the campaign…

Posted by sanityinjection on September 23, 2008

Thanks to reader Ken. A. for tipping me off about this one. Now you can get your very own custom pocketknife designed especially for the Presidential candidate of your choice – either the McCain “Maverick” model or the Obama “Change” model!

Be sure to click the links to read the detailed descriptions of each, but be forewarned, this is humor that cuts to the quick:

http://www.onlyknives.com/obama-mccain-pocket-knife

Posted in Politics | Tagged: , , , , | Leave a Comment »