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9/30/2008: Bailout marks Karl Marx's comeback By Martin Masse

Marx’s Proposal Number Five seems to be the leading motivation for those backing the Wall Street bailout

In his Communist Manifesto, published in 1848, Karl Marx proposed 10 measures to be implemented after the proletariat takes power, with the aim of centralizing all instruments of production in the hands of the state. Proposal Number Five was to bring about the “centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.”

If he were to rise from the dead today, Marx might be delighted to discover that most economists and financial commentators, including many who claim to favour the free market, agree with him.

Indeed, analysts at the Heritage and Cato Institute, and commentators in The Wall Street Journal and on this very page, have made declarations in favour of the massive “injection of liquidities” engineered by central banks in recent months, the government takeover of giant financial institutions, as well as the still stalled US$700-billion bailout package. Some of the same voices were calling for similar interventions following the burst of the dot-com bubble in 2001.

“Whatever happened to the modern followers of my free-market opponents?” Marx would likely wonder.

[Read More]

9/30/2008: Commentary: Bankruptcy, not bailout, is the right answer

By Jeffrey A. Miron, Special to CNN

Editor's note: Jeffrey A. Miron is senior lecturer in economics at Harvard University. A Libertarian, he was one of 166 academic economists who signed a letter to congressional leaders last week opposing the government bailout plan.

CAMBRIDGE, Massachusetts (CNN) -- Congress has balked at the Bush administration's proposed $700 billion bailout of Wall Street. Under this plan, the Treasury would have bought the "troubled assets" of financial institutions in an attempt to avoid economic meltdown.

This bailout was a terrible idea. Here's why.

The current mess would never have occurred in the absence of ill-conceived federal policies. The federal government chartered Fannie Mae in 1938 and Freddie Mac in 1970; these two mortgage lending institutions are at the center of the crisis. The government implicitly promised these institutions that it would make good on their debts, so Fannie and Freddie took on huge amounts of excessive risk.

Worse, beginning in 1977 and even more in the 1990s and the early part of this century, Congress pushed mortgage lenders and Fannie/Freddie to expand subprime lending. The industry was happy to oblige, given the implicit promise of federal backing, and subprime lending soared.

This subprime lending was more than a minor relaxation of existing credit guidelines. This lending was a wholesale abandonment of reasonable lending practices in which borrowers with poor credit characteristics got mortgages they were ill-equipped to handle.

Once housing prices declined and economic conditions worsened, defaults and delinquencies soared, leaving the industry holding large amounts of severely depreciated mortgage assets.

The fact that government bears such a huge responsibility for the current mess means any response should eliminate the conditions that created this situation in the first place, not attempt to fix bad government with more government.

The obvious alternative to a bailout is letting troubled financial institutions declare bankruptcy. Bankruptcy means that shareholders typically get wiped out and the creditors own the company.

Bankruptcy does not mean the company disappears; it is just owned by someone new (as has occurred with several airlines). Bankruptcy punishes those who took excessive risks while preserving those aspects of a businesses that remain profitable.

In contrast, a bailout transfers enormous wealth from taxpayers to those who knowingly engaged in risky subprime lending. Thus, the bailout encourages companies to take large, imprudent risks and count on getting bailed out by government. This "moral hazard" generates enormous distortions in an economy's allocation of its financial resources.

Thoughtful advocates of the bailout might concede this perspective, but they argue that a bailout is necessary to prevent economic collapse. According to this view, lenders are not making loans, even for worthy projects, because they cannot get capital. This view has a grain of truth; if the bailout does not occur, more bankruptcies are possible and credit conditions may worsen for a time.

Talk of Armageddon, however, is ridiculous scare-mongering. If financial institutions cannot make productive loans, a profit opportunity exists for someone else. This might not happen instantly, but it will happen.

Further, the current credit freeze is likely due to Wall Street's hope of a bailout; bankers will not sell their lousy assets for 20 cents on the dollar if the government might pay 30, 50, or 80 cents.

The costs of the bailout, moreover, are almost certainly being understated. The administration's claim is that many mortgage assets are merely illiquid, not truly worthless, implying taxpayers will recoup much of their $700 billion.

If these assets are worth something, however, private parties should want to buy them, and they would do so if the owners would accept fair market value. Far more likely is that current owners have brushed under the rug how little their assets are worth.

The bailout has more problems. The final legislation will probably include numerous side conditions and special dealings that reward Washington lobbyists and their clients.

Anticipation of the bailout will engender strategic behavior by Wall Street institutions as they shuffle their assets and position their balance sheets to maximize their take. The bailout will open the door to further federal meddling in financial markets.

So what should the government do? Eliminate those policies that generated the current mess. This means, at a general level, abandoning the goal of home ownership independent of ability to pay. This means, in particular, getting rid of Fannie Mae and Freddie Mac, along with policies like the Community Reinvestment Act that pressure banks into subprime lending.

The right view of the financial mess is that an enormous fraction of subprime lending should never have occurred in the first place. Someone has to pay for that. That someone should not be, and does not need to be, the U.S. taxpayer.

The opinions expressed in this commentary are solely those of the writer.

9/30/2008: Celebrating The Bailout Bill's Failure--And Looking Ahead

David Cay Johnston, who won a Pulitzer Prize for his innovative coverage of our tax system, retired this year as a investigative reporter for The New York Times. He is the author of Free Lunch: How The Wealthiest Americans Enrich Themselves at Government Expenses (and Stick You with the Bill).

Whether you favor the $700 billion bailout or not, the House vote today should make you cheer--loudly.

Why?

Because the majority vote against it shows that Washington is not entirely in the service of the political donor class, by which I mean Wall Street and the corporations who rely on it for their financing. These campaign donors, a narrow slice of America, have lobbied and donated their way into a system that stacks the economic rules in their favor. But faced with as many as 200 telephone calls against the bailout for every one in favor, a lot of House members decided to listen to their constituents today instead of their campaign donors.

...The Dow Jones Industrial Average, a measure of just 30 companies out of millions, closed down just under seven percent. Back in 1987 the Dow fell 22 points in a single day, and it was not the end of Western Civilization or even investing.

...Questions abound: Do we believe in markets, which can be volatile--or only in managed markets biased by government policy to the upside? Or do we believe in corporate socialism?

...What assurance do we have that borrowing $700 billion will not make things worse? None.

Keep in mind a paper released last week by two economists at the International Monetary Fund, who studied 42 banking crisis over the past 37 years. Their conclusions (not the IMF's) are: bailouts often do not work, they often result in more bad practices, and they distort economies by transferring wealth from taxpayers to bankers and their customers.

...Maybe we will also get answers to some hard questions. Like:

Why was the CEO of Goldman Sachs in the room when government officials decided to bailout the insurer AIG, especially since Goldman has about $20 billion, half of its shareholder equity, at risk on AIG? Keep in mind that Treasury Secretary Paulson is the immediate former CEO of Goldman.
Why was Lehman Brothers, a Goldman competitor, the only Wall Street firm in trouble so far left to collapse on its own? The Wall Street Journal reports today that it was the collapse of Lehman (which because of its structure may not have been an attractive firm for purchase) that "triggered cash crunch around the globe."
Has Treasury obtained from every bank the amount of its illiquid assets, which would tell us if the problems are concentrated at a few banks or are pervasive?
Would a temporary provision in the bankruptcy code, allowing people with toxic mortgages to get their loans rewritten or pursued to foreclosure, be a cheaper and better alternative?

Disclosure, transparency, options--those should be the issues in the next few days.

[Read the entire article]

9/29/2008: Close Down the Federal Reserve by: Avery Goodman

During a 2002 speech given for the 90th birthday party of the famous economist Milton Friedman, Ben Bernanke admitted that the Federal Reserve caused the Great Depression. He said, and I quote:

“Let me end my talk by abusing slightly my status as an official representative of the Federal Reserve System. I would like to say to Milton and Anna: Regarding the Great Depression. You're right, we did it. We're very sorry. But thanks to you, we won't do it again.”

So, now we all know the dirty truth… the Fed caused the Great Depression. But, apparently, that’s not the end of it. Having created artificial 1% interest rates, early in the 21st century, it proceeded, under the Chairmanship of Alan Greenspan, to create the biggest asset bubble in history. That has set the stage for Great Depression II, Great Hyperinflation I, or a repeat of the type of severe stagflation we saw 1970s, depending on what decisions are made now. The events in progress, whatever their ultimate outcome, are clearly a direct result of repeated attempts by the Federal Reserve to micro-manage the economy. We must stop them from continuing to do that. Because of the existence of the Federal Reserve, we have widespread systemic problems that cannot be cured simply by throwing $700 billion dollars around. The problem is not one purely of money, and errors by big banks, but, rather, arises out of the fundamental manner in which our financial system is constructed. One thing is sure. In this mess, all roads lead back to the Federal Reserve.

Many politicians, most notably Treasury Secretary Henry Paulson, have stated that they want to confer more regulatory power on the Federal Reserve. This a serious mistake. The over-concentration of economic power, in the hands of a few unelected men and women, is the root of our troubles. The Federal Reserve does not need more power. It needs less. It has had more than ample regulatory power for many years to have done everything needed to prevent the crisis that we are now experiencing. Yet it did nothing. It could issued banking rules that would have stopped the creation of toxic mortgage instruments, including, but not limited to, CDOs, CDSs, subprime mortgages, Option-ARM mortgages, Alt-A, etc. Instead, it encouraged banks to create them. The Fed allowed banks to do as they pleased.

[Read the entire article]

Congress should pass groundbreaking reform legislation. However, it should reject the $700 billion dollar bailout for billionaires. On the contrary, we need legislation that will allow the Federal government to send out an army of auditors. The auditors must use their government authority to carefully examine the books of, and shut down all insolvent and shaky savings, commercial and investment banks, as soon as possible. The process of shutting them down should be handled much like the shutdown of Washington Mutual. The assets of the banks that are closed must be immediately sold to the highest bidder, with the government absorbing some of the shortfall. This will cost money, but not $700 billion. In the course of selling WaMu, for example, the government incurred no loss at all. Meanwhile, Congress needs to revoke the charter of the Federal Reserve. The Fed must be closed down before it can do more damage.

9/29/2008: Various Thoughts on Democracy

"Remember democracy never lasts long. It soon wastes, exhausts, and murders itself. There never was a democracy yet that did not commit suicide." ~ John Adams [From a letter to John Taylor, 15 April 1814) Reference: Original Intent, Barton (335); original The Works of John Adams, C.F. Adams, ed.

As democracy is perfected, the office of president represents, more and more closely, the inner soul of the people. On some great and glorious day the plain folks of the land will reach their heart's desire at last and the White House will be adorned by a downright moron. Democracy, too, is a religion. It is the worship of jackals by jackasses. ~ H.L. Mencken

Democracy is the antithesis of a free republic. In a democracy there is no law...only the opinion of the majority on any given day. In a free republic...there is an organic, stable, body of law...to which standard everyone is held accountable. In a democracy there is no freedom or rights for anyone...it is a dictatorship of an ever shifting majority. Only in a republic, where government is shackled by the chains of law, can their be rights and freedom for individuals. ~ Henry "Jake" Morgan

"Under democracy, one party always devotes its chief energies to trying to prove that the other party is unfit to rule. Both commonly succeed and are right." ~ H.L. Mencken

"Democracy consists of choosing your dictators, after they've told you what they think it is you want to hear." ~ Alan Corenk

Democracy: Two wolves and one sheep voting on what to have for breakfast.

9/28/2008: “Sometimes bipartisanship is grounds for celebration, but more often it is cause for tears. Last week, congressional leaders from both parties went into a room to hammer out a plan that would put taxpayers on the hook for $700 billion. But they assert that the investment is essential to the health of the economy. And they insist that if we make this investment, we’ll get all or most of it back. This promise would be more believable if the federal government had a long record of using tax dollars responsibly. In fact, it’s the equivalent of the guy who raids his kid’s piggy bank to feed the slots. The most notable impulse of our leaders is spending money the Treasury doesn’t have, piling up bills that future Americans will have to cover.” —Steve Chapman

9/27/2008: Conservatives Should Oppose Corporate Welfare by Robert Murphy

Although they are just playing the hand that Alan Greenspan dealt them, Fed Chairman Ben Bernanke and Treasury Secretary Henry Paulson have been working overtime to discredit the capitalist economy. The $700 billion bailout of Wall Street, as well as other measures such as a ban on short-selling financial stocks, are a repudiation of the free market principles which the Bush Administration claims to champion. Besides forcing taxpayers to fund a massive dose of corporate welfare, the latest measures will make the financial crisis worse.

The SEC’s ban on short-selling is a terrible idea, and will endanger the very financial stocks it is allegedly helping. For one thing, the ban can’t last forever, and any pent up shorting passion will be unleashed the day it is lifted. By making speculators unsure about the rules of the game going forward, the whole episode may paradoxically concentrate selling pressure when the ban is first lifted, leaving the attacked firms worse off than they were originally.

The ban on short-selling also cripples an important mechanism through which experts reveal their inside information to other investors. Before the ban, speculators had an incentive to do their homework, and discover which financial institutions were holding dangerous amounts of mortgage-backed securities. The “vultures” then attacked these sickly firms, just as in the animal kingdom.

[Read the Entire Article]

Robert Murphy has a Ph.D. in economics and is the author of The Politically Incorrect Guide to Capitalism (Regnery 2007).

9/24/2008: Fred Throws Sombrero in Ring [Fred on Everything]

I see that I shall have to come out of retirement and become President. It is the only hope for the country and the world. That I am willing to undergo the humiliation of the office is a measure of the depth of my sense of duty. Though perhaps I will do it under an assumed name...

Put a bounty on members of the teachers unions. The season will start with a week for bow hunters and black powder and then be open to all. No bag limit, Think stuffed heads over the mantle. “Ah, yes, Miss Grundy. I knew her well.”...

I will support a constitutional amendment requiring that Congress declare all wars. (I know, but it doesn’t work.)... Under my guidance, the military will assume a new mission of defending the United States rather than being a presidential hobby. I know: This is radical, but radical times require radical solutions...

There are three levels of military stupidity: stupid, really and truly stupid, and war with Russia. Right now we’re going for the brass ring. I will bring the GI's home from Korea. If South Korea wants to defend itself, it easily can. If it doesn’t, I don’t care. Further (I’m really getting into this), I will bring the GI's home from Europe. There’s nobody there we need to fight. As for Bosnia and suchlike geographic trash, last time I looked they were in Europe. Europe can worry about them. The US is not Europe’s mother...

The entire membership of NOW will be sent to Bangladesh to work in a jute factory. Since most of them look like fire plugs with leprosy, on their return they will be required to wear burqas...

[Read it All]

9/26/2008: "WaMu Recognized as Top Diverse Employer--Again," reads the headline on a Wednesday press release:

Washington Mutual, Inc. (NYSE:WM), one of the nation's leading banks for consumers and small businesses, has once again been recognized as a top employer by Hispanic Business magazine and the Human Rights Campaign.

Hispanic Business magazine recently ranked WaMu sixth in its annual Diversity Elite list, which names the top 60 companies for Hispanics. The company was honored specifically for its efforts to recruit Hispanic employees, reach out to Hispanic consumers and support Hispanic communities and organizations.

The Human Rights Campaign, the largest national gay, lesbian, bisexual and transgender (GLBT) civil rights organization, also awarded WaMu its second consecutive 100 percent score in the organization's 2009 Corporate Equality Index (CEI), which measures progress in attaining equal rights for GLBT employees and consumers. WaMu joins the ranks of 259 other major U.S. businesses that also received top marks in the annual survey. The CEI rated a total of 583 businesses on GLBT-related policies and practices, including non-discrimination policies and domestic partner benefits.

In both surveys, WaMu earned points for competitive diversity policies and programs, including the recently established Latino, African American and GLBT employee network groups, all of which have a corporate executive sponsor and champion.

WaMu's next press release, dated today, is titled "Washington Mutual, Inc. Announces Conditional Exchange of Preferred Securities." That's rather cryptic, but the news headlines are pretty clear, such as this one: "Fed Takes Over WaMu in Largest Bank Failure in American History."

Well, at least it was diverse. Death really is the great leveler.

9/26/2008: “To take from one, because it is thought his own industry and that of his fathers has acquired too much, in order to spare to others, who, or whose fathers, have not exercised equal industry and skill, is to violate arbitrarily the first principle of association, the guarantee to everyone the free exercise of his industry and the fruits acquired by it.” —Thomas Jefferson

“Financial institutions are not being bailed out as a favor to them or their stockholders. In fact, stockholders have come out worse off after some bailouts. The real point is to avoid a major contraction of credit that could cause major downturns in output and employment, ruining millions of people, far beyond the financial institutions involved. If it was just a question of the financial institutions themselves, they could be left to sink or swim. But it is not.” —Thomas Sowell

“The credit crunch and foreclosure problems are failures of government policy. In fact, what we see now is a market correction to foolhardy government policy. Congress’ move to bail out lenders and borrowers who made poor decisions will simply create incentives for people to make unwise decisions in the future.” —Walter Williams

“[A]s lawmakers debate buying up hundreds of billions in assets, they should realize that the government’s aggressive meddling in financial decision-making is what got our economy into this mess in the first place. The long-term answer isn’t more federal control, it’s a return to free-market principles.” —Ed Feulner

“Crisis is the friend of the State. The politicians are desperate to be seen as ‘showing leadership,’ so we’re surely in for a new round of government interventions.” —John Stossel

“When the Forbidden Fruit was handed to Adam and Eve, they were allowed the moral choice to accept or decline. I know people who have refused to feast on the money tree. They live simply, within their means, and seem far more content than those who are trying to horde their wealth while clinging to the ladder of ‘success,’ terrified to let go. That isn’t real living. The Puritans rightly saw that as covetousness.” —Cal Thomas

“Every new regulation concerning commerce or revenue; or in any manner affecting the value of the different species of property, presents a new harvest to those who watch the change and can trace its consequences; a harvest reared not by themselves but by the toils and cares of the great body of their fellow citizens. This is a state of things in which it may be said with some truth that laws are made for the few not for the many.” —James Madison

9/22/2008: From Mullings: On the night of October 28, 1980 Ronald Reagan finished the one and only debate against the incumbent President Jimmy Carter by saying this:

Next Tuesday all of you will go to the polls [to make a decision]. I think, when you make that decision, it might be well if you asked yourself: Are you better off than you were four years ago?

No one was better off in 1980 than they had been at a similar time in 1976 when Democratic Georgia Governor Jimmy Carter narrowly beat the incumbent-but-unelected Republican President, Gerald Ford.

Reagan won.

Given the total collapse of the American financial/credit system over the past few months, it is not surprising that Sen. Barack Obama has stolen that line from Ronald Reagan (an irony which has gone all but unnoticed by the ever-vigilant national press corps).

National Democrats were all over TV this weekend blaming Wall Street's problems on the Administration of George W. Bush. John McCain blamed the chairman of the Security and Exchange Commission Chris Cox. The McCain campaign, instead of blaming Cox, should be looking to McCain's Democratic colleagues on Capitol Hill.

Two years ago, the Democrats, with great fanfare and much spiteful mirth, took control of both the U.S. House and the U.S. Senate promising great changes and great advances. Are you better off …?

Just to review the bidding. On January 5, 2007 (just about the time Nancy Pelosi and her cronies took control of the House):

The Dow Jones Industrial Average closed at about 12,400.
The New York-based Conference Board said its consumer confidence index was at 110.3.
The Bureau of Labor Statistics had the unemployment rate at 4.6%
According to CNN gasoline a gallon of gasoline, in January 2007, averaged about $2.20.

That was then. This is now:

Last Thursday at about 1 pm Eastern, the Dow had hit a bottom of about 10,500 before Secretary of the Treasury Henry Paulson and the Chairman of the Federal Reserve Ben Bernanke intervened. That is a drop of about 15% in the Dow from two years ago.
The Conference Board's latest take on the pulse of consumer confidence had it at a very thready 56.9 in August - a drop of about 48%
The unemployment rate in August was reported at 6.1% by the BLS an increase of 33%.
Gasoline prices are at about $3.70 a whopping 68% jump.

What's changed?

Rep. Barney Frank (D-Ma) and Sen. Chris Dodd (D-Ct) took control of the House and Senate Banking Committees.
Rep. George Miller (D-Ca) and Sen. Ted Kennedy (D-Ma) took over their respective Labor Committees.
Rep. John Dingell (D-Mi) and Sen. Jeff Bingaman (D-NM) became chairs of the Energy Committees.

The McCain campaign should be pointing the finger where it belongs: On the appalling lack of oversight exhibited by the Democrat-controlled Congress of the United States.

According to the Congressional Research Service of the Library of Congress: "Throughout its history, Congress has engaged in oversight of the executive branch - the review, monitoring, and supervision of the implementation of public policy."

The U.S. Congress takes its oversight responsibility seriously. So seriously that it found time to hold hearings into whether baseball players were using "performance enhancing" substances. I am not chiding the Congress over that, but using it as an example of how wide and deep is the Congress' reach.

So, in the nearly two years since the Democrats have taken control of the Congress what have they been spending their time on? Largely trying to find some way to maneuver Karl Rove into a situation where they can accuse him of ignoring a Congressional subpoena so they can vote a criminal charge of Contempt of Congress.

It should be a criminal offense for anyone not to hold this Congress in contempt.

Memo to the McCain campaign: Have the candidates and all your surrogates repeat this question at every stop:

Are you better off than you were TWO years ago?

9/10/2008: Jim Rogers: US Is "More Communist than China"

The nationalization of Fannie Mae and Freddie Mac shows that the U.S. is "more communist than China right now" but its brand of socialism is meant only for the rich, investor Jim Rogers, CEO of Rogers Holdings, told CNBC Europe on Monday.

"America is more communist than China is right now. You can see that this is welfare of the rich, it is socialism for the rich… it's just bailing out financial institutions," Rogers said.

Stock markets jumped after the U.S. government's decision to launch what could be its biggest federal bailout ever, in a bid to support the housing market and ward off more global financial market turbulence.

But Rogers said in the long term the move spelled trouble.

"This is madness, this is insanity, they have more than doubled the American national debt in one weekend for a bunch of crooks and incompetents. I'm not quite sure why I or anybody else should be paying for this," Rogers told "Squawk Box Europe."

9/10/2008: Running Alaska Wall Street Journal: Page A14

One rap on Sarah Palin's qualifications to be Vice President is that she governs one of our least populated states, with a budget of "only" $12 billion and 16,000 full-time state employees. On the other hand, it turns out that the Governor's office in Alaska is one of the country's most powerful.

For more than two decades, Thad Beyle, a political scientist at the University of North Carolina, has maintained an index of "institutional powers" in state offices. He rates governorships on potential length of service, budgetary and appointment authority, veto power and other factors. Mr. Beyle's findings for 2008 rate Alaska at 4.1 on a scale of 5. The national average is 3.5.

Only four other states -- Maryland, New Jersey, New York and West Virginia -- concentrate as much power in the Governor's office as Alaska does, and only one state (Massachusetts) concentrates more. California may be the nation's most populous state, but its Governor rates as below-average (3.2) in executive authority. This may account in part for Arnold Schwarzenegger's poor legislative track record. The lowest rating goes to Vermont (2.5), where the Governor (remember Howard Dean) is a figurehead compared to Mrs. Palin.

In Alaska, the Governor has line-item veto power over the budget and can only be overridden by a three-quarters majority of the Legislature. In 1992, the year Arkansas Governor Bill Clinton was elected President, his state budget was $2 billion and among the smallest in the country. Compared to that, Sarah Palin is an executive giant.

9/10/2008: Yes, Palin Did Stop That Bridge By JIM DEMINT Wall Street Journal Page A15

"But, you know, when you've been taking all these earmarks when it's convenient, and then suddenly you're the champion anti-earmark person, that's not change. Come on! I mean, words mean something, you can't just make stuff up." -- Barack Obama, Sept. 6, 2008

In politics, words are cheap. What really counts are actions. Democrats and Republicans have talked about fiscal responsibility for years. In reality, both parties have a shameful record of wasting hundreds of billions of tax dollars on pork-barrel projects.

My Senate colleague Barack Obama is now attacking Gov. Sarah Palin over earmarks. Having worked with both John McCain and Mr. Obama on earmarks, and as a recovering earmarker myself, I can tell you that Mrs. Palin's leadership and record of reform stands well above that of Mr. Obama.

Let's compare.

Mrs. Palin used her veto pen to slash more local projects than any other governor in the state's history. She cut nearly 10% of Alaska's budget this year, saving state residents $268 million. This included vetoing a $30,000 van for Campfire USA and $200,000 for a tennis court irrigation system. She succinctly justified these cuts by saying they were "not a state responsibility."

Meanwhile in Washington, Mr. Obama voted for numerous wasteful earmarks last year, including: $12 million for bicycle paths, $450,000 for the International Peace Museum, $500,000 for a baseball stadium and $392,000 for a visitor's center in Louisiana.

Mrs. Palin cut Alaska's federal earmark requests in half last year, one of the strongest moves against earmarks by any governor. It took real leadership to buck Alaska's decades-long earmark addiction.

Mr. Obama delivered over $100 million in earmarks to Illinois last year and has requested nearly a billion dollars in pet projects since 2005. His running mate, Joe Biden, is still indulging in earmarks, securing over $90 million worth this year.

Mrs. Palin also killed the infamous Bridge to Nowhere in her own state. Yes, she once supported the project: But after witnessing the problems created by earmarks for her state and for the nation's budget, she did what others like me have done: She changed her position and saved taxpayers millions. Even the Alaska Democratic Party credits her with killing the bridge.

When the Senate had its chance to stop the Bridge to Nowhere and transfer the money to Katrina rebuilding, Messrs. Obama and Biden voted for the $223 million earmark, siding with the old boys' club in the Senate. And to date, they still have not publicly renounced their support for the infamous earmark.

Mrs. Palin has proven courageous by taking on big spenders in her own party. In March of this year, the Anchorage Daily News reported that, "Alaska Sen. Ted Stevens is aggravated about what he sees as Gov. Sarah Palin's antagonism toward the earmarks he uses to steer federal money to the state."

Mr. Obama had a chance to take on his party when Senate Majority Leader Harry Reid offered a sham ethics bill, which was widely criticized by watchdog groups such as Citizens Against Government Waste for shielding earmarks from pubic scrutiny. But instead of standing with taxpayers, Mr. Obama voted for the bill. Today, he claims he helped write the bill that failed to clean up Washington.

Mr. Obama has shown little restraint on earmarks until this year, when he decided to co-sponsor an earmark moratorium authored by Mr. McCain and myself. Mr. Obama is vulnerable on this issue, and he knows it. That is why he is lashing out at Mrs. Palin and trying to hide his own record.

Mrs. Palin is one of the strongest antiearmark governors in America. If more governors around the country would do what she has done, we would be much closer to fixing our nation's fiscal problems than we are.

Mrs. Palin's record here is solid and inspiring. She will help Mr. McCain shut down the congressional favor factory, and she has a record to prove it. Actions mean something. You can't just make stuff up.

Mr. DeMint, a Republican, is a U.S. senator from South Carolina.

9/10/2008: Palin Energizing Women From All Walks of Life By Anne E. Kornblut

LEBANON, Ohio, Sept. 9 -- Susie Baron is a Republican, a mother of two and a home-schooler. She voted for Mike Huckabee in the Ohio primary, but now -- because of Sarah Palin -- she thinks she is part of something much bigger.

"I wouldn't even call it a Palin movement, I'd call it a sleeping giant that has been awakened," Baron, 56, said at a rally here Tuesday. She described its members as a silent majority of women in Middle America who "are raising our families, who work if we have to, but love our country and our families first."

"And until now, we haven't had anyone to identify with," Baron said, adding that traditional feminist groups such as the National Organization for Women do "not represent me."

[Read the entire essay]

9/10/2008: Camille Paglia: Is the Obama campaign shooting out to sea like a paper boat?

...Perhaps Palin seemed perfectly normal to me because she resembles so many women I grew up around in the snow belt of upstate New York. For example, there were the robust and hearty farm women of Oxford, a charming village where my father taught high school when I was a child. We first lived in an apartment on the top floor of a farmhouse on a working dairy farm. Our landlady, who was as physically imposing as her husband, was another version of the Italian immigrant women of my grandmother's generation -- agrarian powerhouses who could do anything and whose trumpetlike voices could pierce stone walls.

...Conservative though she may be, I felt that Palin represented an explosion of a brand new style of muscular American feminism. At her startling debut on that day, she was combining male and female qualities in ways that I have never seen before. And she was somehow able to seem simultaneously reassuringly traditional and gung-ho futurist. In terms of redefining the persona for female authority and leadership, Palin has made the biggest step forward in feminism since Madonna channeled the dominatrix persona of high-glam Marlene Dietrich and rammed pro-sex, pro-beauty feminism down the throats of the prissy, victim-mongering, philistine feminist establishment.

[Read the entire essay]

9/09/2008: [California State] Board of Education sued over eighth-grade algebra testing

A controversial decision that requires all California eighth-graders to be tested in algebra has started a court fight between groups representing local schools and the State Board of Education.

Two organizations that advocate for hundreds of school districts and thousands of school officials are suing the board over its July 9 vote to require eighth-grade algebra tests.

Gov. Arnold Schwarzenegger had urged board members in a letter to make the change. Others opposed it because they said not all 13- and 14-year-olds were ready for the abstractions and unknowns of algebra.

[Read the entire story]

9/08/2008: Taking the gifted down by Charles Murray

College is usually pretty easy for the gifted who go into the humanities or social sciences. Those who major in mathematics, engineering and the hard sciences have to pass a tough curriculum, but all the other gifted can readily find undemanding courses in today's colleges that allow them to get a degree without approaching their intellectual limits.

...As matters stand, many among the gifted who manage to avoid serious science and math never take a course from kindergarten through graduate school so tough that they have to say to themselves, “I can't do this.” Lacking that experience, too many gifted graduates are not conscious of their own limits. They don't know, as an established fact, that there are some things they just aren't smart enough to figure out...

[Read the entire article]

9/08/2008: “Unlike Barack Obama, who thought so highly of himself that he wrote two autobiographies before he accomplished anything, Mrs. Palin has raised a family, run a business, managed a city and governed a state. She took on corrupt members of her own party, toppled a sitting Republican governor and said ‘no’ to Alaska’s infamous ‘Bridge to Nowhere.’ She is pro-life, pro-family, pro-Second Amendment and pro-free enterprise. She is the governor of America’s most natural resource-rich state and is an advocate of oil drilling in ANWR. (Perhaps she can talk some sense into McCain on that issue.) Oh, and she has an 80 percent approval rating among Alaskans.” —Doug Patton

9/08/2008: “Frankly, what the tank ride did for Michael Dukakis, the plywood Parthenon just might do for Obama. Then again, this entire event, seemingly a miscalculation of epic proportions, could have been an example of perfect political acumen. For example, before becoming transfixed by Temple Obama, I was reading up on Obama’s relationship with ex-Weather Underground member and unrepentant Capitol- and Pentagon-bomber William Ayers—news of which the Obama campaign has been eager to downplay if not squelch entirely. I was also trying to unravel the ties between Obama, Obama’s unsavory fundraiser Antoin ‘Tony’ Rezko, and Rezko’s unsavory money source Iraqi-British billionaire Nadhmi Auchi. (This is another story journalists are being pressured not to cover, as Andrew Walden at Accuracy in Media has shockingly and extensively documented, in this case by Auchi’s legal eagles.) And who knew Obama’s veep nominee Joe Biden had Rezko connections through a longtime associate named Joseph Cari Jr., who admitted involvement in a Rezko kickback scheme? And on it goes. But then, suddenly, Temple Obama went up, and with it, like incense in the fire, all patience for hard news.” —Diana West

9/08/2008: “Currently, the United States has the second-highest corporate tax rate of all industrial societies, after economically anemic Japan. The U.S. federal rate of taxation is 35 percent, and when the average state and local corporate tax rates are added, American corporations pay, on average, a 39.27 percent tax on their incomes. China is at 25 percent; Mexico is at 28 percent; socialist Sweden is at 28 percent; and prosperous Ireland is at a mere 12.5 percent. If these comparative rates continue for much longer, the United States economy will mortally bleed jobs and prosperity to a world—both nominally socialist and free market—that has learned the low corporate tax lesson from Reagan’s America that current Washington has forgotten. Obama’s solution to the problem of jobs and industry going offshore is to lean toward protectionist policies (renegotiate NAFTA, oppose new free trade treaties, etc.). When one combines Obama’s plans to tighten international trade, create carbon trading regulations that will be the equivalent of a further $100 billion corporate tax, raise taxes generally on business, as well as his mind-numbingly counterproductive ‘windfall’ profit taxes on petroleum product companies (full disclosure: as a rational person, I support and provide professional advice to the petroleum industry), one has a formula for economic catastrophe not seen since Herbert Hoover’s similar Depression-inducing policy in 1929.” —Tony Blankley

9/04/2008: 'Stop! Or We'll Say Stop Again!' Wall Street Journal: September 3, 2008; Page A22

[Once again, we see that the Europeans have forgotten the lessons of their own history and are appeasing unmitigated evil. If the people of South Ossetia and Abkhazia want to secede from Georgia and join with Russia, I have no problem with that (although San Pedro wanted to secede from Los Angeles and was not allowed to even vote). To the Europeans, what's the big deal about sacrificing a small country who wanted to be allied with the West?]

With apologies to comedian Robin Williams, that's the line that comes to mind when weighing the European Union's declaration Monday on Russia's continued occupation of Georgia.

At a special meeting in Brussels, EU national leaders told Russian President Dmitry Medvedev to abide by the terms of a French-brokered cease-fire, including a pullback of Russian troops to their preconflict positions. If he doesn't do so, they warned they will hold another meeting.

It's been almost three weeks since Mr. Medvedev signed the cease-fire, and five days since Moscow broke with the world by recognizing the self-declared independence of Georgian provinces South Ossetia and Abkhazia. Yet European leaders evidently need more time to ruminate over the situation in the Caucasus.

The European leaders did make one concrete gesture. The EU said it would freeze negotiations with Moscow on a new economic cooperation agreement if Russian forces haven't pulled back to their pre-August 7 positions by next Monday. But this is meaningless. It had taken the Europeans months to agree among themselves to begin the talks, and even before Russia's Georgia invasion Eastern European leaders had signaled they were unlikely to sign off on a deal anytime soon. Nor was Moscow pushing very hard for it.

During a postsummit press conference, French President Nicolas Sarkozy, who holds the rotating EU presidency, got the obvious question: Is the EU a "paper tiger"? Mr. Sarkozy, visibly angered, responded that "Demonstrations of force, verbal aggression, sanctions, countersanctions . . . will not serve anyone."

Mr. Sarkozy also insisted that his efforts to reach a cease-fire had borne fruit. The Georgians might disagree. Russia has used the agreement's vague language to justify a continued presence in Georgia far beyond the original conflict zone. The cease-fire called for international talks about the separatist regions, but that didn't stop Mr. Medvedev from recognizing their independence.

The most cynical comment of the day was Mr. Sarkozy's attempt to use the conflict to bully the Irish over their rejection of the EU's Lisbon Treaty in June. "This crisis has shown that Europe needs to have strong and stable institutions" like those it would have gotten under Lisbon, Mr. Sarkozy said.

No, what Europe needs is political will. Rather than scolding Irish voters, Mr. Sarkozy would do better to name and shame those member states whose desire to curry favor with Moscow keeps the EU from taking a firmer stand.

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9/03/2008: From UseNet: Sarah Palin is the mirror of Margaret Thatcher!

Anyone who thinks Palin cannot handle the job or deal briskly and efficiently with ANY issue, including foreign governments ... well, they haven't met our Sarah <grin>. She is not "just a woman", she is not "just a way to get votes", and if anyone expects her to smile, simper and be sweet - they don't know Sarah. She is more than qualified for the job and the best possible choice McCain could have made.

As an Alaskan resident as well as a resident of Wasilla, AK, where Sarah Palin was at one time Mayor ... I can speak with confidence. Governor Sarah Palin of Alaska is exactly what she portrayed during her introduction this morning and exactly what our US Government needs. She is ethical to a fault (if there is such a thing), a refreshing change to the status-quo and as smart and determined a PERSON (gender really isn't an issue here as far as I'm concerned) as anyone could ask for at the head of government.

Sarah is no na�ve "small town mayor" - she just started out there. Btw, as Mayor of Wasilla, she brought this "small town" through a lot of GOOD changes and left it at the end of her term having grown to the 4th largest CITY in Alaska - a lot of growth and a stronger economic base than ever before.

She has EXECUTIVE experience running a government (something NONE of the other candidates can actually boast, even John McCain <g>) as Governor of Alaska and got there by defeating the incumbent Republican Governor, who was definitely part of the "old school" and who WAS very much in the pocket of the big oil companies. We in Alaska wanted change - and we got it in the person of Sarah Palin!

Sarah Palin is everything she looks to be and more. Her approval rating as Governor of Alaska has been as high as 95% and is currently leveled out consistently in the upper 80 percentile throughout the state (and in both parties) - the HIGHEST approval rating of ANY sitting Governor in our history.

Sarah has been turning around corruption in the Legislature of Alaska - turning things on their ear for that matter; cutting spending in spite of the increased income the state is currently receiving due to the high oil prices - she has insisted on putting a huge amount of the "windfall" into savings for the future rather than spending, spending, spending - and has insisted from the get-go on what she refers to as "honest, ethical, and transparent governing" - no more closed door meetings and dealings - the big oil companies thought she would be a pushover and have learned better to their chagrin.

She understands the "real people" and the economic issues we all face (Alaskans along with the rest of the country) - she was one of "us" not long ago. Rather than passing useless "laws" or throwing money at pet projects, she (most recently) temporarily suspended the state gas tax (on gasoline at the pumps, fuel oil and natural gas for homes, etc.) and has ordered checks issued to ALL residents of Alaska this fall in an attempt to assist with the burden of high fuel costs for the upcoming winter. I could go on and on, but that's enough for now <smile>. She isn't doing these things to be popular - she is doing them because her constituents are HURTING financially and she is in a position to help.

She became Governor of Alaska by defeating the Incumbent Republican Governor and doing it without the money or the support of the Republican Party, which was amazing in itself - and she won by a landslide. The "powers that be" at that time totally underestimated Sarah and learned better the hard way. Let's hope Obama does the same. Sarah has done exactly what she claimed she was going to do when elected and is just as popular today as the day she was elected - perhaps more so since even the Democrats up here seem to like her - she works well with both sides in the Legislature here.

Sarah "belongs" to us (Alaskans) ... and although we are going to be terribly sorry to see her leave before she finishes the job she started here (two years ago) straightening out OUR State <grin> ... we understand she is needed for a bigger purpose and hopefully her Lt. Governor will be able to fill her shoes here and continue the job.

As for worrying about what would happen if McCain were to die or step down or whatever ... here in AK we've only been wondering how long we would be able to KEEP Sarah in Alaska and have seen her as our first woman President of the USA from the start. It's always been a matter of whether she would wait until the end of her TWO terms as Governor (no doubt at ALL that she would be re-elected if she ran for a second term at the end of her current term) ... or end up in Washington sooner. She could do the job TODAY.

Personally, I feel a lot better about McCain now that I know he has someone as savvy, as strong, as ethical, and as steady as Sarah at his back. She will be an excellent Vice President ... and my guess is will be our US Republican Presidential candidate in four years - AND by then the country will KNOW her, and will love and respect her as we do here - and she'll win by as much of a landslide as she did here in Alaska. I only wonder if McCain has a clue what he is unleashing on the US of A <grin>. She is going to be a fresh wind, but also a strong wind.

Is that enough of an endorsement? If not, I'll add this ... Jerry and I have for many years felt the best "vote" was to vote for the lesser of two "evils" and hope they didn't do too much damage. Two years ago during our State Governor's race was the first time EVER that we actually asked for not just a little sign to put in our yard showing our support of our candidate (something we've never felt the desire to do at all before) - we asked for a full 4' x 8' "SARAH PALIN FOR GOVERNOR!" sign and were proud to have it. She hasn't let us or Alaska down. She will do the same for the USA if given the opportunity.

Feel free to pass this on to anyone who may be interested (and spam those who aren't!).

--- Deb in Alaska

9/03/2008: Palin versus Obama: Here is video of Newt Gingrich, following speeches by Joe Lieberman and Fred Thompson, on MSNBC giving his reaction. MSNBC's Ron Allen asks Gingrich about the speeches and then makes the mistake of asking him about the experience of Sarah Palin. Newt Gingrich absolutely unloads with a masterpiece comparison of the experience of Sarah Palin and Barack Obama.

9/02/2008: Add It Up: Math Matters: From arithmetic to algebra and beyond, mathematics absorbs a huge amount of class time. Students are pushed to learn more math than ever, and sooner. Today, staff writer Daniel de Vise gives an overview of math education issues. Look for more on math in coming weeks from Washington Post education reporters.

9/02/2008: Sarah Palin is NOT a Libertarian, but she IS a libertarian-leaning Republican, and based on her actions while in office, perhaps even more so than (former Republican Congressman) Bob Barr, the Libertarian Party's 2008 presidential candidate. Her personal history and her policies as governor of Alaska demonstrate a belief in personal freedom, individual rights, and self-sufficiency. She is honest, forthright, and direct, qualities totally absent from Obama, Biden and both Clintons, all of whom lie, obfuscate and mislead every time they speak.

"She's the real deal -- very, very smart, accomplished, results-oriented, and a totally self-made woman who never set out to 'make it' so much as found herself compelled to fix what was wrong, change what needed changing, and hold people to account. Sarah Palin is no Hillary Clinton. And that's a [very] good thing." [Columnist Cheri Jacobus]

For the first time since Ronald Reagan, I may vote for a major party presidential candidate with complete confidence that the person who will be a heartbeat away from President McCain will be true to the principles upon which the United States of America was founded. Samuel Adams, Thomas Jefferson, George Washington, and (especially) Benjamin Frankin would be proud!

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From the Candidate: “I never really set out to be involved in public affairs, much less to run for this office... I was just your average hockey mom in Alaska... busy raising our kids. I was serving as the team mom and coaching some basketball on the side. I got involved in the PTA and then was elected to the city council, and then elected mayor of my hometown, where my agenda was to stop wasteful spending, and cut property taxes, and put the people first.

I was then appointed ethics commissioner and chairman of the Alaska Oil and Gas Conservation Commission. And when I found corruption there, I fought it hard, and I held the offenders to account. Along with fellow reformers in the great state of Alaska, as governor, I’ve stood up to the old politics as usual, to the special interests, to the lobbyists, the big oil companies, and the good-ole-boy network. When oil and gas prices went up so dramatically and the state revenues followed with that increase, I sent a large share of that revenue directly back to the people of Alaska. And we are now... embarking on a $40 billion natural gas pipeline to help lead America to energy independence.

I signed major ethics reform. And I appointed both Democrats and independents to serve in my administration. I championed reform to end the abuses of earmark spending by Congress. In fact, I told Congress... ‘Thanks, but no thanks,’ on that bridge to nowhere. If our state wanted a bridge, I said we’d build it ourselves.

Well, it’s always... safer in politics to avoid risk, to just kind of go along with the status quo. But I didn’t get into government to do the safe and easy things. A ship in harbor is safe, but that’s not why the ship is built. Politics isn’t just a game of competing interests and clashing parties. The people of America expect us to seek public office and to serve for the right reasons. And the right reason is to challenge the status quo and to serve the common good. Now, no one expects us to agree on everything, whether in Juneau or in Washington. But we are expected to govern with integrity, and goodwill, and clear convictions, and a servant’s heart.” —Alaska Governor and Republican VP Nominee Sarah Palin

9/02/2008: Nearly two months ago, Bill Kristol, chief of the neo-conservative movement, predicted that McCain would pick Sarah Palin as his Vice Presidential candidate.

Little Known Facts about the Alaska Governor, culled from PalinFacts.com

Sarah Palin is not affected by global warming, evolution or gravity.
Sarah Palin is so HOT that God had to send a hurricane to cool America off.
Sarah Palin wears glasses lest her uncontrollable optic blasts slaughter everyone.
Sarah Palin's enemies are automatically added to the Endangered Species List .
Sarah Palin was not flown to Ohio in charter jet - she ran there as part of her morning workout.
Sarah Palin uses French Canadians as bait to catch giant king salmon.
When Sarah Palin booked a flight to Europe, the French immediately surrendered.
Sarah Palin's finishing move in the VP debate will be pulling Biden's still beating heart from his chest & taking a bite.
Sarah Palin isn't allowed to wield the gavel at the convention because they're afraid she'll use it to kill liberals.
Sarah Palin can divide by zero.

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