Tuesday, September 16, 2008

Reading Assignments

Lot's of interesting reading today.

First up is an interesting article from conservative David Brooks. I must admit, I have often liked reading David Brooks even if I don't agree with him much. Today, I happen to agree with him. Here are a couple of gems from his article today:

In the current Weekly Standard, Steven Hayward argues that the nation’s founders wanted uncertified citizens to hold the highest offices in the land. They did not believe in a separate class of professional executives. They wanted rough and rooted people like Palin.

I would have more sympathy for this view if I hadn’t just lived through the last eight years. For if the Bush administration was anything, it was the anti-establishment attitude put into executive practice.

And the problem with this attitude is that, especially in his first term, it made Bush inept at governance. It turns out that governance, the creation and execution of policy, is hard. It requires acquired skills. Most of all, it requires prudence.

Sarah Palin has many virtues. If you wanted someone to destroy a corrupt establishment, she’d be your woman. But the constructive act of governance is another matter. She has not been engaged in national issues, does not have a repertoire of historic patterns and, like President Bush, she seems to compensate for her lack of experience with brashness and excessive decisiveness.
Ouch. But surely not all Conservatives feel that way. Unfortunately for John McCain, Richard Cohen feels worse in his WaPost article today:

I am one of the journalists accused over the years of being in the tank for McCain. Guilty. ....

McCain has soiled all that. His opportunistic and irresponsible choice of Sarah Palin as his political heir -- the person in whose hands he would leave the country -- is a form of personal treason, a betrayal of all he once stood for. Palin, no matter what her other attributes, is shockingly unprepared to become president. McCain knows that. He means to win, which is all right; he means to win at all costs, which is not.

Ouch twice.

Enough of these conservatives. How about a look at the policies of John McCain's economic genius Phil Gramm at work:

In December 2000, Gramm furtively slipped his own 262-page bill, titled the Commodity Futures Modernization Act, into an 11,000-page appropriations bill.

Written with the assistance of financial industry lobbyists, read by few legislators, and passed without hearings by a lame-duck Congress racing to finish before recess, Gramm’s bill prevented the SEC and the Commodity Futures Trading Commission (CFTC) from regulating most over-the-counter derivatives, credit derivatives, and swaps, trading instruments that Warren Buffet called “financial weapons of mass destruction.”

One direct consequence of this legislation was the Enron debacle. In 1992, Gramm’s wife, Wendy, as chair of the CFTC, had already moved to exempt Enron’s energy-swap practices from government oversight. She then resigned her regulatory post to accept a seat on Enron’s board of directors. Gramm’s bill—specifically a section, later called the “Enron exception,” that freed energy trading from federal oversight--set off a cascade of events that destroyed the California electricity market and Enron itself, ultimately costing consumers and investors billions of dollars and tens of thousands of Enron employees their pensions.

But a far more expensive result of Gramm’s bill was the creation of a shadow banking system, a $62 trillion unregulated market managed by banks and hedge funds no longer required to have enough assets to cover potential losses. The results have been catastrophic: mortgages that “adjusted” far beyond home-buyers’ ability to pay, bundled together by banks and finance companies and resold as bonds and new jumbo securities to other banks, pension funds, and private investors and leading to bankruptcies and immense losses in the financial and housing markets that spread throughout the economy here and abroad with no end in sight. The same banks and investment companies that paid Gramm millions to free them from government regulation are now asking the government, using our money, to bail them out.

That last article is an interesting read in light of the news of the week.

Elections have real consequences. Don't be cynical enough to think it doesn't matter.

1 comment:

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