Free marketers hoisted by own petard…

September 30, 2008

(Copyright 2008)

The WALTHER REPORT

By Tony Walther

Something occurred to me. If we really do have a free market economy then government would have nothing to do with it. It would make no difference who is president of the United States. Well we must not have had a free market economy since I have been alive because it seems as if the economy is usually the number one issue in presidential races, sometimes trumped by war. And if the economy is good, the president gets the credit.

An exception might be Bill Clinton’s presidency. He was re-elected, but then because he could not by law serve a third term, Al Gore ran. Even though the economy had been great by all accounts, Gore ran a super close race with George W. Bush (you’d of thought he should have won by a landslide with the good economy under his party’s presidency). Although Gore did receive more votes, due to a quirk in our election laws, namely the Electoral College, and some questionable ballots, and finally a Supreme Court ruling, Bush won. However, the economy was showing signs of weakening in the waning days of the Clinton presidency, as I recall.

And while this time we have the housing bust, at the end of the Clinton terms it was the Dot Com bust. Both the result of a runaway economy and wild speculation.

What I am trying to get at here is that it is apparent that we have a fairly free economy, but government involvement for most of our memories and especially since 1929, has always been there.

For most of the last four decades, since the time of Barry Goldwater, the Republicans have been led or led around by the conservatives, who pretend to want as little government involvement in the economy as possible. Of course they like special tax favors for their investments and they like various other “incentives” for their investments, but they somehow don’t see that as government intervention. They do see environmental controls for such silly things as clean air and clean water as government intervention. And don’t even talk about good working conditions for employees, such as provided by health and safety regulations.

Then when it looks like the economic freight train is going to derail, suddenly George W. Bush, who had practically claimed himself as the mother of all conservatives, through his treasury secretary calls for the most massive government intervention in history, a $700 billion bailout for Wall Street. That kind of caught everyone by surprise. The hard corps conservative Republicans in the House didn’t know what to think, I suppose. It sounded like something that might be called for by a Democrat. Then to add insult to injury a plan was pushed through, over a weekend as I recall, without even consulting them. But I wonder if they would have not voted for it nonetheless, I mean Republicans don’t usually turn down what I would call corporate welfare (not to be confused with welfare for folks who need it – that’s the realm of the Democrats). But then the e-mails and phone calls came in from the constituents, and in a rare sign of power to the people (something that sounds left wing) they, the right wing, found themselves for political reasons forced to vote no, even after they had supposedly gotten major reforms from the original draft, and their own leadership told them to vote yes.

Now we are in the interesting and kind of amusing position of seeing a split among the Republican ranks. There’s also a rift in the Democratic ranks over the issue too. But could it be that the Republicans are now being hoisted by their own petard of free market economy and no government intervention? And why are they accusing the Democrats of defeating the bill, when Republicans failed to deliver enough votes themselves?

I think the naysayers on both sides of the aisle are hoping that something awful will happen, and maybe Monday’s stock market plummet was awful enough or only the beginning of that something awful. Each party wants to blame each other for the woe and misery and then feel like they are forced to vote for the bill or a revised bill, and then get the credit. That’s the trouble. A lot of lawmakers are more worried about credit for something than saving the populace from major financial calamity.

There’s duplicity among both the Democrats and Republicans in Monday’s defeat of the bailout bill. I’ve already mentioned the position of the Republican holdouts. But now I just saw an interview with Democratic congresswoman Sheila Jackson of Texas. She said she voted no because there was not enough relief in the bill for folks on Main Street. But she blamed the Republicans who promised to deliver yes votes for the bill’s defeat (what about her no vote and the no votes from her own Democrats?). So, she wants the cover of voting no on something seen as a giveaway to Wall Street, then be able to blame the Republicans if things really do go as bad as predicted without a bill.

There is an interesting article in Time online by two economists who say the bailout is the wrong approach.

Before the vote, Speaker of the House Nancy Pelosi gave heck to the Republicans for the mess that had been caused under their administration. Now of course that was politics, making sure the taxpayers knew that the Democrats were forced to vote for such an extraordinary and costly measure by Republican mismanagement and noting the hypocrisy of free marketers (Bush and Co.) demanding government intervention. The Republican holdouts in the House claimed afterwards that they were insulted, using that as cover for their deed. It gave them an excuse to vote no, as if they were calling Pelosi’s bluff and saying no we don’t want government intervention, and look like they were standing up for the taxpayers at the same time, probably knowing they would eventually vote for a bill. Or, for all I know the bailout as proposed just goes against their grain.

It’s pretty apparent that in looking for who is at fault for the wild speculation and overdrawing and over extension of credit there is plenty of blame to go all around, from the profligate ways of individual citizens to the irresponsible business practices of the investment community. And certainly both Democrats and Republicans have contributed. For example, both parties wanted Fannie Mae and Freddie Mac to dole out mortgages big time to keep the economy flying high. The Republican constituency was primarily among those who lent the money and the Democratic constituency was both those who lent and borrowed. Well, let’s face it, both parties really serve the interests of money, but they have different philosophies or approaches.

Many economists are saying that some type of bailout bill must go through and go through ASAP and at least one economist I read said that the whole idea of a bailout in wrongheaded, that the market needs to correct itself. He said that bankruptcies will be part of that correction, that often companies are taken over by other companies in bankruptcies. One flaw in that logic is that often when a business goes bankrupt jobs disappear and never come back.

We are in the unfortunate position of having all this happen with a lame duck president, who as you can see is powerless – it’s a pitiful sight. He deserves this. But we as a nation don’t (or maybe we do). And we are a little more than a month before an election and a few months more until new leadership takes over.

Maybe we just need emergency action by the Federal Reserve to pump liquidity into the system and the FDIC to protect bank deposits in the interim and allow the time that might be needed for truly better legislation to repair and reform the economy.

No one seems to know what will happen in the meantime. We probably have to almost experience total disaster before we know what to do. Kind of an economic Pearl Harbor. But we can’t depend upon the leadership of Bush. Been there, done that.

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Bail fail, VP debate, rebuilding America…

September 29, 2008

(Copyright 2008)

The WALTHER REPORT

By Tony Walther

Could this be the beginning of another Great Depression? The $700 Billion Wall Street bailout bill went down to defeat today in the House of Representatives and stocks plunged and there have been bank failures across the globe just preceding this. Apparently there will be no more action on this until tomorrow and maybe not even till Thursday.

My last blog was headlined: Democracy altered bailout, can it kill it? Guess I got my answer. Actually it was democracy and politics. No one wants to take the blame; everyone wants the credit, and there is no way to know what will happen if the bailout (or rescue)  ultimately passes or fails. Leadership is needed, but who can lead?

That was a new lead and now back to my blog as written hours earlier:

The bailout bill is said to be posted on the House Financial Services Committee website, and I know it is posted elsewhere on the web, along with summaries or news stories about it. I only quickly read over a summary on the LA Times site and listened to reports on TV.

As it now stands, the $700 billion would not all be allocated all at once. In some cases the government would buy up bad assets and in some investors would purchase government underwritten insurance on questionable assets. There are also provisions for the government to gain an equity stake in companies benefitting from the program in order that if the market turns around the government can actually make money on the deal. There are also to be curbs on executive pay for firms that take part. All that was from a summary I read in the LA Times.

…. It looks like the upcoming vice presidential debate on Thursday promises to be more exciting than the presidential candidate one this past Friday. How Sarah Palin could possibly stand up to Joe Biden is a wonder to me, but then again, I am often surprised at the outcomes of things (like that borefest last Friday). But let’s pray that Sarah does surprise us all. We can’t afford even the possibility that she would become president some day if her past performance, especially before Katie Couric, is any example of her knowledge and abilities. Just poor Sarah’s luck that Katie would finally start acting like a news person again and she, Sarah, was her first victim. I don’t care for Mrs. Palin’s politics. I think, however, she is a well meaning person catapulted into something that is way out of her league. It’s a little sad, and a lot embarrassing. The word is that she is sequestered down at the McCain Sedona spread in Arizona cramming for the big test. My guess is that she will bend pre-programmed talking points into an answer for each question whether it fits or not. 

… Something strangely left out of Friday’s foreign policy debate between John McCain and Barack Obama was what is going on down Venezuela way. Russian war ships are set to exercise with that country’s navy in November and Venezuelan president Hugo Chavez claims his country may work on a nuclear power deal with Russia. As I wrote in a previous blog, that would have been a cause for alarm and amounted to a threat to start World War III back in the Cold War days, i.e. , the Cuban Missile Crisis of the early 60s. And what about the Monroe Doctrine?

… And back to the economic thing. From what I am reading I do see the signs that life in America is not going to be the same with or without the latest bailout bill. My hope is that while there could be some discomfort it will serve as a kind of catharsis and then we will forge ahead with a new and more prudent but still vibrant way of doing business that will eventually lead to a new prosperity.

We really need to find some way to declare victory in the Middle East and come home.

Four thousand plus dead, thousands more wounded, and as much as a trillion dollars invested so far to help nations that fight internally among one another instead of working together to be free. And Iraq keeps its oil money and forces us to spend our own treasure. In my opinion we should get the oil revenues because we invested in it with our money and blood.

There was no reason to go into Iraq other than the oil. And as far as Afghanistan goes, why do we have to send a whole army to get one man? Originally we went into Afghanistan because they apparently were harboring Osama bin Laden, the admitted master mind of 9/11. It seemed as if Iraq had essentially by its actions put itself at a state of war with us. But after all this time it seems foolish to use an army to hunt one elusive man. Everyone knows that we are trying to create by blood sweat and tears a Middle East that is friendly to us. It’s not worth it.

Some say it is better to fight “them” over there than to fight “them” here. I don’t know. I think we need to rebuild our own country and that we are running out of money to fight “them” over there. I say let’s put our resources into the job that needs to be done at home and by God if “they” want to fight us here we’ll be ready.


Democracy altered bailout, can it kill it???

September 28, 2008

(Copyright 2008)

The WALTHER REPORT

By Tony Walther

While a compromise has been reached in the $700 Billion Wall Street bailout bill and it may go to the House as early as Monday, I would think that the same public outcry that caused it to be delayed and reworked could kill it outright, although the pressure from money experts who have a vested interest in a system that up until now has been working quite well for them may win out nonetheless. This stuff is so complex that few, if any, seem to fully understand this global market and highly sophisticated finance (the basics reamin simple, though).

I believe you can get a full text of the bill via your usual news sources, such as CNN online, and I know that Huffington Post online has it too (I have not read it).

I recommend you read the comment from Susan at the bottom of this blog. Personally, I do not pretend to have the answer for all of this, but I do have thoughts. My old lead and previous, but related blog follows (and please read the comment):

Today, Sunday, it looks as though some type of compromise has been reached in the $700 billion Wall Street bailout bill and I think it proves that democracy is alive and well in America.

And not a minute too soon, this is happending, for the second richest man in America, Warren Buffet, has reportedly warned congress that if it does not get something done ASAP that there will be a complete “economic melt down” across the nation. While I wonder on that, who can argue with Warren Buffet?

But the reason I say that democracy is alive and well is that last weekend the Bush administration tried to push through a one-way no questions asked bill that would have simply given $700 billion in taxpayer money to the Secretary of the Treasury to hand out to reckless speculators. But there was an outcry among the public with e-mails (and thank God for e-mail) and phone calls flooding the offices of congress. That alerted congressmen and senators that they needed to pay attention to the public will. So now a compromise is in the works, that while extraordinary will hopefully be a more prudent, sober, and reasonable approach.

The question in my mind remains as to whether this is all necessary and whether the free market should be allowed to work. On the other hand, it is probably inaccurate to say we simply have a free market. There are government controls, but sometimes they have not been enforced and we may need a little more oversight, to say the least.

An interesting thing about language —  a senator was telling reporters of the problem and I think he gave an example why poor English often heard in everyday speech is misleading. People often use the double negative, such as “it don’t have no value.” I already forgot how the senator actually expressed himself, but he awkwardly said something about mortgage-backed securties the government proposes to buy up “don’t have no value.” Actually, as he went on the explain, that doesn’t mean they do not have value, it means just what he said, they don’t have no value, instead they have value, but the problem is no one knows what it is. He said the governmnet will set a value on them. Now I am not exactly sure how that works, and he indicated he did not totally understand it either, but he said that eventually when (and if) the markets stabilize, the government (and in turn one hopes the taxpayers) stands to make a profit, but it could also only break even or worse yet, lose. (I did not mean that the senator was inarticulate, he was just making a statement in an impromtu fashion.)

The underlying problem is that the bubble burst in the housing market and along with it mortgage- backed securities, and something not realized by many of us, our total economy from Wall Street to Main Street has been riding on these securities. And now there is a lot of paper out there which is either worthless or at least the market does not know its value, so the credit market has come to a standstill at the higher levels, at least, and stocks are expected to tumble if the uncertainty remains.

The following is an already-posted blog on the same theme:

…I’m reading that the powers that be are still hoping to get some version of the $700 billion Wall Street bailout bill into law or all-but into law over this weekend. And I have read in a couple of places where people have reminded the public that it was not just Wall Street who got carried away but anyone who is over-extended on their credit or who went into a mortgage and should have realized they had no ability to keep it up. It all adds to the mound of bad debts that have clogged our financial system. I still say just cancel everyone’s debt and let us start over again – but then I suppose that would make everything worthless, I don’t know.

As little as I know about economics, I have written a lot this past week or so. I have noticed that nearly a week after we were told the world would come to an end if congress did not pass Bush’s bailout with no strings attached for Wall Street everything is still standing, okay a couple of banks have gone under. I still say, take it a step at a time and along the way let’s revamp the system, not perpetuate the problem.

For some strange reason, business people, who often or usually consider themselves conservative, have over these past many decades pushed folks to charge things up on credit cards and the real estate industry, abetted by Wall Street financiers, and yes Democratic (and Republican, I think) politicians pushed for everyone to get in on home ownership and either dropped qualifications or looked the other way as to the probability that folks could really pay back their mortgages.

The old timers were right. They shied away from credit and saved back, putting their money out at interest, knowing that better a lender than a borrower be (although someone has to borrow for someone to lend).

And the inflation in housing caused by easy credit hurt renters too. They have to pay high rents for landlords who don’t own property free and clear and may be behind on their own payments and property taxes.

I’m so far out of my league in economics that probably no one would want to pay attention to me, but I think there is something to be said for a cash society. In capitalism, there does need to be capital, and in order for there to be capital (at least the kind with any liquidity), there needs to be savings so financial institutions can take those savings and lend them out at interest. If there is caution and careful rules, such as requiring sufficient reserves, things can work out fine.

And now I’m really getting in too deep. But I think that for the most part capital should be used to invest in things such as the production of food and durable goods, and the provision of services, all of which, along with jobs created in the process, make up our quality of life. But when you reduce the whole thing to some type of gambling game in which you just borrow money and lend it out and then turn around and borrow money on the money you lent out and so on, that can lead to too much wealth in too few hands and a reduction in the quality of life for the nation as a whole. I know that some of the financial trading has the utility purpose of I think they call it adding liquidity to the market. There has to be safeguards, though, in order to prevent the near catastrophe we are told we are facing.

I apologize or beg forgiveness to anyone who has read this far and understands this whole thing far better than I and feels he or she has just suffered a fool. But don’t get too haughty, I think I get it better than you may realize.


The debate, Newman death, credit woes…

September 27, 2008

(Copyright 2008)

The WALTHER REPORT

By Tony Walther

It’s the morning after the great and flat debate (yawn), but I interrupt this blog to note that I just read that actor Paul Newman died at the age of 83 on Friday of cancer.

I think the first time I ever saw him on screen was in “The Hustler” in 1961. I had just recently reached the age of puberty and I was at the movie theater in the old downtown of Yuba City, Ca. I went to the show by myself and saw this incredible black and white movie – and I interrupt myself here again to note that once when my granddaughter was younger she was watching TV and asked, “why is it (a movie, not The Hustler) in black and white?” Well, I don’t know why they chose to shoot The Hustler in black and white, but then again I know that it would not have had the effect if it was in color. And I don’t even know if it was considered a great movie. But both Jackie Gleason playing legendary pool player Minnesota Fats and Newman playing a young hot shot hustler “Fast Eddie” Felson were at their best.

Newman had his boyish good looks (nearly all his life) but he also had what great actors all have, that certain something that made him unique, otherwise he’d just be another pretty face (and I hope I’m not sounding gay here – hey, I have a wife, two children and two grandchildren). And he could really get into character, method acting, I think they call it.

Gleason of course was a comedian primarily, but a natural-born actor, who you got the impression just automatically went into a roll without effort – he certainly did so in The Hustler, with only a few short lines, a puff or two on a cigarette and gestures.

Fast Eddie was addicted to gambling via pool, and booze and would forsake all, even his girl friend, for it.

But a great thing about Mr. Newman, the real person, is that unlike many in his trade, he stayed with his wife, actress Joanne Woodward, since 1958. They had acted together in the movie “The Long Hot Summer.”

….. I’m still reading debate reactions (I gave my own immediate reaction as soon as the debate was over in my last blog). And I’m trying to scan the web to see what the polls suggest as to the outcome. So far I get the sense that it was, as I initially concluded, a draw. But if you were for Obama going in, you may have felt he won and if you were a McCain partisan, you probably thought he won (in my immediate reaction blog I gave the edge to McCain and I’m definitely not a McCain partisan, just different I guess). I think the Wall Street Journal concluded McCain won on foreign policy and Obama on domestic policy. Although I definitely favor Obama, I don’t think he gave a knock out performance (one thing I read was that McCain was too mean, and Obama too nice).

And I think one of the problems is the debate formats they use nowadays. It’s been so long since I have seen what I would consider a real debate – seems like the last one I saw was William F. Buckley vs. I don’t know who on whether we should give up the Panama Canal (we did under Carter).

Correct me if I’m wrong, but in a debate, shouldn’t both contestants be given a topic and then each one presents his case, with each getting a rebuttal (with the moderator’s only function being to begin and end it and make sure rules are followed)? I think that gives the listener a more coherent and complete message and forces the debater to lay out a case and support it with evidence. Some might think that unfair because it might give a polished debater an advantage. But I suggest that if you are running for President of the United States, you don’t have to be a silver tongued orator, but you ought to have to be able to give a full explanation of your position and be able to support it. There was far too much bickering back and forth between the two on semantics more than anything, or on whether one or the other voted on some version of a bill. The multi-multi question back and forth and back and forth method to me is too confusing and lacks focus and serious discussion. And this is serious.

We’re not looking for details here candidates; we want your broad policy outlook, even though of course you may have to make some references to individual actions to state your case.

I’ll move on – maybe I’ll do a full day after or two-day after debate review later (or not).

…I’m reading that the powers that be are still hoping to get some version of the $700 billion Wall Street bailout bill into law or all-but into law over this weekend. And I have read in a couple of places where people have reminded the public that it was not just Wall Street who got carried away but anyone who is over-extended on their credit or who went into a mortgage and should have realized they had no ability to keep it up. It all adds to the mound of bad debts that have clogged our financial system. I still say just cancel everyone’s debt and let us start over again – but then I suppose that would make everything worthless, I don’t know.

As little as I know about economics, I have written a lot this past week or so. I have noticed that nearly a week after we were told the world would come to an end if congress did not pass Bush’s bailout with no strings attached for Wall Street everything is still standing, okay a couple of banks have gone under. I still say, take it a step at a time and along the way let’s revamp the system, not perpetuate the problem.

For some strange reason, business people, who often or usually consider themselves conservative, have over these past many decades pushed folks to charge things up on credit cards and the real estate industry, abetted by Wall Street financiers, and yes Democratic (and Republican, I think) politicians pushed for everyone to get in on home ownership and either dropped qualifications or looked the other way as to the probability that folks could really pay back their mortgages.

The old timers were right. They shied away from credit and saved back, putting their money out at interest, knowing that better a lender than a borrower be (although someone has to borrow for someone to lend).

And the inflation in housing caused by easy credit hurt renters too. They have to pay high rents for landlords who don’t own property free and clear and may be behind on their own payments and property taxes.

I’m so far out of my league in economics that probably no one would want to pay attention to me, but I think there is something to be said for a cash society. In capitalism, there does need to be capital, and in order for there to be capital (at least the kind with any liquidity), there needs to be savings so financial institutions can take those savings and lend them out at interest. If there is caution and careful rules, such as requiring sufficient reserves, things can work out fine.

And now I’m really getting in too deep. But I think that for the most part capital should be used to invest in things such as the production of food and durable goods, and the provision of services, all of which, along with jobs created in the process, make up our quality of life. But when you reduce the whole thing to some type of gambling game in which you just borrow money and lend it out and then turn around and borrow money on the money you lent out and so on, that can lead to too much wealth in too few hands and a reduction in the quality of life for the nation as a whole. I know that some of the financial trading has the utility purpose of I think they call it adding liquidity to the market. There has to be safeguards, though, in order to prevent the near catastrophe we are told we are facing.

I apologize or beg forgiveness to anyone who has read this far and understands this whole thing far better than I and feels he or she has just suffered a fool. But don’t get too haughty, I think I get it better than you may realize.


Warrior McCain on his game (I thought)…

September 27, 2008

(Copyright 2008)

The WALTHER REPORT

By Tony Walther

I just got finished watching the first presidential debate between John McCain and Barack Obama.

My immediate reaction is that on substance it was a draw.

On style, I give it to John McCain. And that is not to say I support him. In fact I have not.

Also that is not to say that I did not think Obama handled it well. He did a good job and made his points, but so did McCain.

And one thing I noticed is that as a listener you get caught up in the yes I did, no you didn’t conflict and you have no way to instantly verify the truth of what each man said.

McCain never stumbled, except maybe once on the name of Iran’s president, Ahmadinejad — and who wouldn’t? And even then he made a mocking gesture, as if he did it on purpose out of his own rightful disdain for that crazy and dangerous man, and as is his style, he was to the point, he was blunt, and he was confident (well maybe arrogant is a better word).

I don’t recall that Obama stumbled, necessarily, but he did seem to be on the ropes momentarily a few times.

The startling thing about it all was, in my view, that for the most part both men seem to basically agree, with their only differences at times being in how to arrive at something, if that makes sense.

Although the debate was officially on foreign policy, about the first half was on economic policy, which moderator Jim Lehrer said fit, because he said that the debate was on “foreign policy and national security” and that economic policy was part of national security.

Neither man would commit to whether he supported a particular version of the $700 Billion Wall Street rescue plan. Both agreed that a plan must include help for those on Main Street as well as Wall Street and that Wall Street executives should not be rewarded for their failures with bonuses after getting government help when they were the ones who made the disastrous investment decisions in the first place.

In talking military issues, McCain took advantage of the fact that he is a veteran and was much older and even bragged that he was much wiser. At one point toward the end, he charged that Obama was not up to handling things. In fact, on foreign policy, McCain was outright condescending many times, even though, both men seemed to agree for the most part.

The debate was contentious at moments, but for the most part civil.

And now my wife comes in and tells me that the television commentators were amazed at how knowledgeable McCain showed he was in foreign affairs, names, places, people (just think how Sarah Palin would have done – it’s scary). I think going in, although it was expected McCain might have some advantage on foreign affairs, it was thought that he was not going to be a good debater.

Well that was wrong. He made his points forcefully and well.

McCain in what I thought was reminiscent of Richard Nixon said something to the effect that under his leadership we would have, well I wrote down his exact words, he said about Iraq: “We will come home with victory and honor.” I recall that Nixon always said we would only have “peace with honor” in Vietnam. Interestingly, McCain poignantly noted that he had seen “an army in defeat” in Vietnam (he of course was a POW and Navy flier) and that he would not let that happen again.

Obama called for more attention to the war in Afghanistan.

I’m not going to go over the debate point by point here.

But now that I have written this much, I think I will say I kind of went into watching the debate thinking and hoping Obama would, well, clean McCain’s clock. He didn’t. McCain was prepared.

Here’s another thing, toward the end, McCain assured listeners that he “loves” veterans and they know “I will take care of them.” ( Now I have read where he has voted against some veterans benefits. One time he said he voted against a bill because it would have given too much incentive for military personnel to leave the service with the war still in progress.)

Obama was at his weakest – my opinion – in his closing. He told of his father from Kenya, the father from whom he got his name. Hey it’s a good story, but this is America and I am sorry, although we embrace the melting pot, you just don’t talk about places such as Kenya and mention you have a strange sounding last name (he already spends a lot of time convincing folks he’s not Muslim) when you’re running for president of the United States (and my apologies to the good people of Kenya).

One more thing, with the present financial uncertainty, I looked for Obama to throw a knock-out punch, since a lot of what has happened has been the result of activities on the Republican watch (McCain Republican, Obama Democrat). But that did not happen. McCain deflected the blows quite effectively by criticizing the current president, George W. Bush, and others. In an oft repeated line by McCain, he said: “The Republicans came to Washington to change government, and government changed them” (He’s a maverick, he says). McCain criticized both Republicans and Democrats and Obama included for massive over spending. McCain even said he’d reduce defense spending by cutting out what I recall him referring to as “cost plus” projects, giving an example of one I think in which he said started out as $4 million but wound of being $40 million or was in $400 million, well you get the idea.

Leher forced Obama into a kind of admission that he would not be able to enact all the social programs or reforms he might want to because of the current economic crises, but Obama noted that the important thing is that he has a priority for them as money permits, nonetheless.

Typically McCain accused Obama of wanting to raise taxes and Obama in turn accused McCain of wanting to cut taxes on the rich. And we all know that Republicans typically want to cut taxes on the wealthier folks and Democrats see the need for taxes to finance what people want government to do.

Okay, even though I am not a McCain fan, I am going to go out on a limb and say that he won the debate (even though the two basically agreed on things, except for the basic difference between Republicans and Democrats on taxing the so-called wealthy).

P.s. Now my wife comes in and tells me that the instant polling is giving the win to Obama. Well, that’s good, I guess, but I also guess I don’t see things the way others do. Or it could be the public wants change and came ready to listen to the new guy. Works for me.

P.s. P.s.  And another thing, Obama at least eight times (according to a New York Times count, and I thought it was more) said “John (McCain) you’re right,” maybe not such a good rhetorical device in a debate, unless followed by some ironic point, and they weren’t. I think the McCain ads are already out with Obama admitting (seemingly) that McCain was right.


Readying for great debate…

September 27, 2008

(copyright 2008)

The WALTHER REPORT

By Tony Walther

Just waiting for the great debate and expect to  blog afterwards if this computer works right. It is supposed to be on foreign policy, but I certainly think what with all that is going on they will have to address economic policy.

On the other hand, our foreign policy is falling apart around us, what with Paskistan our supposed ally in the War on Terror or hunt for Osama bin Laden, acting like it is at war with us.

And it seems the fact that Russian war ships are taking part in naval exercises in our hemisphere, with Venezuela, one of our top oil suppliers, is largely going unnoticed and is going unchallenged. Once upon a time such a move would have brought us to the brink of nuclear war, ala the Cuban Missle crisis.

I’ll blog more after debate.


Mr. Wall Street: ‘Your money or your life!’

September 26, 2008

(Copyright 2008)

The WALTHER REPORT

By Tony Walther

The word this morning is that John McCain will take part in the debate this evening and apparently those pushing the $700 billion Wall Street bailout bill are hell bent on getting it done today (tonight).

 I find myself in the strange position of being on the side of those House Republicans who yesterday were holding out for some different type of bill that would use private money (government guarateed, I guess) instead of the straight bailout. I don’t know what the status of all that is now and whether they were sincere or just making a show for the folks back home who are skeptical.

I thought the political cartoon in my local newspaper this morning said it all: A big fat cat Wall Street tycoon was sitting up against a wall and begging to a little older couple with a sign that reads: “Please get me out of debt, or I’ll be forced to ruin us all.” The little slender old man is standing there with his hands in his pockets while the wife hands the sobbing tycoon some cash from her purse. I think we are all asked to be that lady.

It is hard to swallow that a whole society can be dependent upon those who borrow and leverage and borrow on what they borrowed and leverage and anyway, make money on money they never had in the first place (and pardon me if I don’t tell this is strict or correct financial language, I’m a layman).

Perhaps as a society it is our collective fault for not paying enough attention to the inner workings of our economy and letting ourselves be misled by leaders who don’t understand it themselves and that goes for those in both major parties.

And I am still scratching my head trying to figure out what the urgency is in this bailout thing. I realize it would not be a good thing to let the financial market go down the tubes in a panic because it thought phony money was not available anymore. But folks, if it is all that bad, we need to fix the system. That should be the urgency, and that may take a little more time.

And by the by, I plan to watch the debate tonight. I think this could be the most important presidential debate that has ever taken place. I plan to blog on it afterwards. And now for anyone who is interested, my previous blog follows:

I now recall seeing an earlier tape – was it Monday? – of Republican Alabama Sen. Richard Shelby asking Treasury Secretary Henry Paulson and Federal Reserve Chairman Ben Bernake if they had thought of an alternative to the $700 billion Wall Street bailout plan. I don’t think Paulson answered – he seemed to just sit there bewildered and speechless (maybe he did mumble something), anyway I didn’t think much of it.

But a self-satisfied Shelby, chairman of the senate banking committee, came out of the specially-called Bush meeting Thursday afternoon before anyone else and told reporters: “There’s no deal.”

Where it all stands today, who knows? It’s like a Howie Mandel Deal- No Deal game.

What will Wall Street, picked up Thursday by hopes for a deal, think today?

This $700 Billion giveaway plan for Wall Street is one of the most bizarre, implausible and maybe even frightening turn of events ever. A Republican president proposed to bail out gambling investors on Wall Street, threatening that failure to do so would be the near instant ruination of the whole nation’s economy, with implications world wide.

(No one argues that there is not something terribly wrong right now with the economy. No one, not even the administration, though, is claiming to know exactly how to fix it.  Supposedly, the government might eventually recoup losses – make money, I don’t know – in the plan to buy up bad debt. While the official price tag is put at $700 Billion, the $1 trillion figure is often used, especially when the already-approved bailouts are counted.)

And it gets stranger all the time. Now we have Democrats seemingly pushing for a quick movement on a bill, but one with “safeguards” and help for some distressed homeowners who can’t make their mortgages and provisions to prevent Wall Street executives from getting multi-million dollar perks after receiving tax-payer dollars to bail them out. Some Republicans are on board too, but reportedly some 100 House Republicans are not.

A poll I heard on Thursday said that one third of the voters are against it, one third for it, and one third undecided.

The latest is that the objecting Republicans are proposing that it all go back to the drawing board and that a plan that would use private capital (probably much less than $700 billion), with some government incentives, such as tax breaks, be presented. And actually, that in principle, sounds reasonable to me.

It’s hard to tell what the motivations by the various parties are.

I suppose the original idea just to hand over $700 billion with no questions asked was never popular with most Republicans, let alone Democrats, especially since it was from a Republican president. On the other hand, they might have supported it if they really thought the world would come to an end otherwise. And some Republicans may have deviously thought, well at least it will help business and if the Democrat Barack Obama is elected it will tie his hands somewhat in getting social legislation through.

Then came the outcry from the constituency. Especially staunch conservatives or just citizens with a sense of fair play. You can’t just say when the man on the street makes a poor or unfortunate financial decision that it is his problem, don’t go crying to government, but when Wall Street investors make a bad or a just plain reckless move, the taxpayer must bail them out.

Meantime, Democrats saw the hypocrisy of the bailout and the cost, but thought, oh well, if it must be done let’s at least tack on some programs we want – and that was good politics.

Republican presidential candidate John McCain did not know what to think. But now he seems to be pushing some type of bailout (he was against it before he was for it), what type, we don’t know. And of course, meantime, he has suspended his campaign and threatened not to take part in tonight’s (Friday) presidential debate. Many think this is all a ploy. I suspect for the most part it is. It is a rather weak argument to suggest one cannot run for president and make decisions at the same time. Isn’t that after all, making decisions, pretty much the job of the president? Why even George W. Knows that – “I’m the Decider” (although not-so-much now).

Both presidential candidates were at Thursday’s meeting at the invitation of Bush. Actually McCain apparently was the one who came up with the idea to drop everything and put the debate on hold so he could run back to Washington to play hero (he didn’t seem to get anywhere Thursday). Obama reluctantly agreed. And in a statement late in the day, long after Shelby made his “no deal” announcement, Obama implied that he and McCain due to the politics of the whole thing may have actually been a distraction (of course they are politicians). McCain for his part said he was hopeful something (what?) could be passed soon.

P.S. That Hillary might replace Biden as VP thing I inserted as a new lead in my last blog came out of the Drudge Report (as reported somewhere else) and the report said that while it was just a rumor, the usual myth debunkers, such as Snopes and one the Obama campaign has set up, are neither confirming nor denying it. I usually would not bother with something so thin, but I couldn’t pass it up. It seems plausible (if a little Eagleton-like risky). It’s hard to know where the presidential race stands now with polls contradicting each other. Some say McCain is falling on his face, others say he’s made some crafty or clever moves, such as the suspending campaign move and picking Palin – and then there’s always the race card.  And if Obama says he’s “behind Biden one hundred percent”, don’t quit your day job Joe.