Fannie and Freddie Fall Down Go Boom

It's been terrifying to watch the financial markets unravel these past weeks and months. Decades of bad decisions, bad policies, and bad legislation are paying off. The government is enacting a bail-out plan on a scale never before contemplated, let alone seen, with hundreds of billions of dollars in extra spending suddenly piled onto our already unbalanced budget. Debt, debt, and more debt. This money will come from where? Will be paid back how?

The bottom line is simple, gentle reader: I don't trust the buffoons in Washington to get this right. They are, in my estimation, going to make the crisis much, much worse than it needs to be with their hasty and ill-considered "rescue" plans. We are looking into an abyss. What may be on the other side is hard to determine. America could and probably will lose its preeminance in the world economic order. We're already the largest debtor nation by a huge margin. Loss of economic strength virtually ensures loss of military strength, and the Pax Americana will go the way of the Pax Britannica before it. We may be looking at several decades of world chaos.

Here's an interesting little video regarding Fannie and Freddie. While the presidential campaigns play out, the whole situation is even more politicized than it would normally be, and that's saying something. Altho there's no shortage of blame to go around for this fiasco, somehow the Republicans in general and McCain in particular are catching the worst of it. While I calculate that it's too late for anything as mundane as facts to influence the elections, I nevertheless present this for your edification. Go ahead and watch while I run out for MREs and ammunition to stock the bunker.

It's Been Such a Long Time . . . It's Been Such a Very Long Time

Quite a while since the last post. Well over a month. Much has happened.

Barack Obama is of course the presumptive Democratic nominee for President. I believe he will win. McCain has a good record of service but he feels old and tired. His moment was 2000, not 2008. Obama is putting out a message of "change" which, even tho it's not actually defined very well, is bringing people into his camp. And since he is relatively young and not fully assimilated by the Washington political culture, he may be able to deliver. We'll see in November.

Oil prices have skyrocketed. The economy, already battered by the housing industry implosion, is looking like it's headed towards a recession. President Bush announced the opening of formerly-restricted areas to oil drilling and that's having a somewhat calming effect on prices, at least for the moment. Realistically, the only long-term fix to this problem is to move off of the oil standard entirely. There are measures that can be taken, and we're seeing some stuff already happening as the market adjusts itself. The big American car manufacturers are scaling back or ceasing production of oversized, inefficient vehicles like SUVs and there are plans for more hybrids. Small cars are coming into demand again as short-sighted American consumers finally have reason to think about fuel efficiency. At least one manufacturer has announced a hydrogen-powered car for near-future production.

Of course, the more government interferes with the market, the worse things will get. One has only to look at the ethanol subisdy business to see how easily good intentions can fall victim to the Law of Unintended Consequences.

The situation in Iraq continues to improve. Only the most foaming-at-the-mouth of the reality-impaired can now deny the success of the "surge" strategy. Afghanistan, meanwhile, is not going so well. Too many resources being directed to the Iraqi theater means not enough is being done in Afghanistan. Still, the situation remains controllable. One hopes that the next President doesn't suffer an attack of extreme foolishness leading to a precipitous action like a sudden withdrawal from Iraq before things are sufficiently stable.

The recent Heller decision by the Supreme Court, altho flawed, nevertheless established the Second Amendment as an individual right. Of course, this was patently obvious to anyone with more than a sixth-grade command of the english language all along, but it's nice to have it made official. The DC government, as is the habit of entrenched liberals, is trying its best to ignore or circumvent the court's decision. I forsee several more legal challenges to DC's grossly unconstitutional gun laws in the near future. Meanwhile, it seems likely that several other cities with such rubbish on their books will also see their attempts to trample the rights of their citizens challenged on the basis of Heller.

The FISA legislation was passed by Congress. This of course is damaging to our freedoms, being yet another short-sighted attempt to provide security at the cost of essential liberties, and we all know the famous quote regarding such things. I believe it's time to show Congress that We The People aren't going to tolerate their nonsense any longer and vote the lot of them out of office. However, I have no realistic expectation that this will happen. There are too many knee-jerk voters out there who would vote for Satan so long as old Scratch had the right letter in front of his name. And everyone always seems to think that, altho Congress is doing a poor job, their own guy is just fine and they keep sending him back.

No profound insights this time, I'm afraid. Just some random thoughts and observations.

A Little Economic News

Just briefly, it seems that Bush's economic policies are paying off (so to speak). One of the few things going right for this hapless administration.

Since it looks like the Republicans have adopted the Democrats' "watch us self destruct!" election playbook this year, it's likely that the Dems will take back at least the House this election. I personally expect both House and Senate to switch hands, given the Foley/Hastert meltdown, the successful media effort to portray the Iraq war as a lost cause, and the general malaise affecting the Republicans. This of course means that the Bush tax cuts will be undone, taxes will go up (because that's one of the unchanging ground truths of the Democratic Party - they like higher taxes. Only on "the rich" of course, but strangely it's always the middle class and small business that takes it in the shorts when the Dems get to pass their tax bills. But I digress), revenues will go down, spending will continue to spiral out of control and the deficit will balloon again. All of which will be blamed on Bush's "failed economic policies" once Bush is out of office.

History shows that lower taxes stimulate the economy, bringing increased revenue and sustained growth. But, as always, the reality-impaired are not interested in the lessons history has to teach, but in enacting their flawed theories. Really, how many more times does "higher taxes=poor economy" have to be proven before the lesson finally sinks in?