Stromata Blog

The State of the Union: A Query and a Comment

The President relegated foreign affairs to a secondary position, as if we were living happily at peace. What little he did say was on the lines of, “Every day in every way, things are getting better and better”. My question: What foreign country or leader that wishes ill for America is in a worse position today than one year ago?

I even have the answer: Manuel Zelaya. If there’s another, he or it doesn’t come to mind.

That the President dislikes the outcome of the Citizens United case is his right, but he has no right to stoop to the blatant falsehood that the decision will –

open the floodgates for special interests — including foreign corporations — to spend without limit in our elections. Well I don't think American elections should be bankrolled by America's most powerful interests, or worse, by foreign entities.

The Court did not hold have foreigners have a First Amendment right to influence American electoral campaigns. As former Federal Election Commission chairman Bradley A. Smith points out, the law prohibits foreign nationals, specifically including foreign corporations, from making campaign contributions or engaging in independent expenditures in behalf of candidates. Citizens United didn’t overturn those prohibitions.

Ironically, it is the Obama Administration that has shown an affinity for extending Constitutional rights to foreigners, at least if they are enemy terrorists. And the Obama Presidential campaign’s Web site disabled routine security measures, making it possible for foreign nationals to contribute without detection, if they were so inclined.

Professor Smith says that the President’s statement is “either blithering ignorance of the law, or demogoguery of the worst kind”. I don’t see that those explanations are mutually exclusive.

Hebdomas Mirabilis

Any political analyst who had known a week ago that the Massachusetts Senate election would draw 75 percent of the ballot total of the 2008 Presidential election would also have known that Martha Coakley was going to win by at least ten points. On the other hand, one who had heard from an angel that Republican Scott Brown would get half the union vote – well, he would have converted to atheism.

Winning an election in Massachusetts would have delighted folks like me even if Boston had been shut down by blizzards, turnout had been the lowest in history, the entire Republican vote had come from suburban businessmen, and candidate Brown had campaigned as a RINO. What actually happened is beyond delightful.

What’s more, the surprising voters of Massachusetts threw the Democratic Party’s plans for the nationalization of health care into a tailspin. It wasn’t just that Harry Reid lost his sixtieth vote for cloture. All of a sudden, quite a few of his Senate and House colleagues noticed that Obamacare isn’t a popular cause. They now wish that it would go away. Yet the President has bound himself to this stake and cannot flee. Thus his party finds itself in a dilemma: Pressing ahead risks driving moderates into their opponents’ arms; giving up risks demoralizing liberals and miring themselves in impotence.

Then, the day after the “Massachusetts miracle”, the Supreme Court held that a movie denouncing Hillary Clinton has as much First Amendment protection as Debbie Does Dallas. A few liberals agreed; the ACLU had filed an amicus brief supporting the film makers. Most were appalled. The President issued a statement that sounded not unlike a Southern governor in 1954 calling for massive resistance to Brown v. Board of Education.

Whatever happened to maximalist interpretations of Constitutional rights? Where are the liberals who have instructed us that the Bill of Rights is more important than public safety, even if terrorists must go free and Americans’ lives be placed in jeopardy? One might almost suspect that their devotion to liberty stops the instant that liberty interferes with the forward march of progressivism.

Also this week, the UN’s Inter-Governmental Panel on Climate Change, the Nobel Prize winning outfit that lobbies relentlessly for the economic strangulation of the Western world, confessed that one of the alarming predictions in its latest report – that the Himalayas are warming so fast that their glaciers will be melted within 25 years – was nothing but junk science. True, it was just one error, but falsus in uno, falsus in multis. Why shouldn’t we wonder whether the IPCC’s “science” is similarly slipshod elsewhere?

Just coincidentally, the United Nations waived the first “deadline” set by the Copenhagen climate change conference, the one that President Obama dropped in on so that he could enjoy a second great triumph in that fine city. In the words of the pertinent UNocrat, “You could describe it as a soft deadline.” Sort of like the ones that the Administration periodically issues to Iran.

Which reminds me that today, January 22, 2010, is another “soft deadline”. By no later than today, the Guantanamo Bay terrorist prison was supposed to be shuttered. Happily, keeping that commitment proved beyond a former community organizer’s executive abilities.

One final bit of good news for the Right cheers me less: Air America has run out of money and fallen silent. I’ll hold my applause for two reasons. First, its financial backers may now channel their money in ways that will do more harm. (Washington Post, “Since last summer, Air America has been heard in the Washington area on WZAA (1050 AM). Its audience has been so small that Arbitron, which compiles radio ratings, was unable to detect any listeners for WZAA during several weeks in December.”)

Second, “Freedom of speech makes it much easier to spot the idiots”, and Air America was a water cooler around which the idiots gathered. Life will now be harder for snarky conservatives in search of left-wing imbecilities to lampoon.

Yet, despite that, it was a pretty good week.

The President’s Glass(-Steagall) House

Whatever merits separating banking from other economic activity might have, it would not have prevented or lessened the 2008 financial crisis. What sparked the meltdown was imprudent mortgage loans. Would banks have refused to make those loans if they had been forbidden to trade for their own accounts? We know the answer, because lots of bad loans originated with small banks, untainted by any significant nonbanking business, that then sold them to larger institutions.

Would a new Glass-Steagall Act have kept purchasers of bad loans away? Of course not. Mortgage-back securities offered what looked like high yields at little risk. The buyers would merely have been different.

When the housing market crashed and defaults soared, would a Glass-Steagall world have escaped a credit crisis? No, because nonbanks, which would have held all of the toxic assets, are major sources of credit. Their collapse would have been calamitous. Long-Term Capital Management wasn’t a bank, yet its bankruptcy in 1998 led to a “too big to fail” bailout. Massive losses by nonbanks in 2008 would have led to the same decisions as losses by bank-nonbank hybrids. Only the identities of the rescued parties would have differed.

The President’s announcement of Glass-Steagall 2.0 offered no rationale. His point, as he makes more than clear in the last few paragraphs, in which he denounces “soaring profits”, “obscene bonuses”, high credit card fees and pass-throughs of taxes to consumers, is to pick a fight with “industry lobbyists from Wall Street”.

Explaining yesterday why the last day of his first year in office was marked by a Republican victory in Massachusetts, the President offered a pair of mock-worthy thoughts that help us understand what he said today. First,

If there’s one thing that I regret this year is that we were so busy just getting stuff done and dealing with the immediate crises that were in front of us that I think we lost some of that sense of speaking directly to the American people about what their core values are and why we have to make sure those institutions are matching up with those values.

Yeah, The One was virtually incommunicado, limiting himself to 158 interviews and 411 “speeches, comments and remarks”. That’s not even two a day! Now he’s going to shout louder and more often.

Second, voters elected Scott Brown, because they’re still mad at George W. Bush:

Here’s my assessment of not just the vote in Massachusetts, but the mood around the country: The same thing that swept Scott Brown into office swept me into office. People are angry and they are frustrated. Not just because of what’s happened in the last year or two years, but what’s happened over the last eight years.

Therefore, let the last Presidential campaign continue! Today’s bit of demagogy isn’t the last we’ll hear. No one doubts that the 2008 meltdown exposed risks in the world’s financial system. Analyzing them dispassionately and fashioning protective measures ought to be a high priority. The President, though, will be busy frying fat cats.

Addendum: Nicole Gelinas:

Obama needs to explain how, exactly, such a prohibition would have prevented or alleviated the financial crisis in any significant way. Consider:

* Bear Stearns did not rely on FDIC-insured deposits. Yet the government had to bail it out in March 2008 (indirectly).

* AIG did not rely on FDIC-insured deposits. Yet the government had to bail it out in September 2008 (directly, and often).

* Lehman Brothers did not rely on FDIC-insured deposits. Yet the government's failure to bail it out in September 2008 set off a mass-scale panic.

* Non-bank money-market funds (by definition!) do not rely on FDIC-insured deposits. Yet the government had to guarantee them against losses in September 2008 to avert a run.

Obama’s proposal would be brilliant — save for the needling inconvenience that it has nothing to do with reality.

Lessons from Massachusett(e)s

It’s been a while. First, I was busy with “real life”. Then I felt overwhelmed by the quantity of news that had piled up while I wasn’t paying attention. Then I had the horrible presentiment that if I wrote a single word about the Massachusetts special election, Scott Brown would be fatally jinxed.

The first two are still considerations, but the last is no longer a big worry, as by my rough calculation Marcia Murtha Monica Martha Coakley needs 115 percent of the remaining ballots in order to take the lead. Here, then, are the lessons that I gather from this more than astounding result:

Mrs. Coakley ran a pretty inept campaign, and the Official Progressive Line is already that her flaws are to blame for the outcome – nothing to do with Obamacare, the limp reaction to the undiebomber, cap-and-tax, the prospect of a KSM trial in New York et al. But that convenient spin leaves one big question unanswered: Why did Marcitha turn into a bumbler? She looked like a pretty smooth operator when she swept the Democratic primary. Did a GOP agent then slip stupidity pills into her white wine?

No, what undermined the Coakley campaign was the need to stand up as the proponent of an Administration that has sharply diverged from what it promised a year ago. As soon as voters – even Massachusetts voters who have been sending Kennedys to the Senate for over half a century – thought about the nationalization of health care and the treatment of enemy combatants as criminals entitled to Miranda warnings, what was there for a party line Democrat to do but flail? A different candidate would have flailed in different directions (presumably not picking quarrels with Curt Schilling or misspelling the commonwealth’s name), but it simply wasn’t possible to run a competent-looking race under such circumstances. Creigh Deeds, another hopeful who sailed through the primary, had the same insurmountable challenge.

The form that the flailing took was striking – and a bit disturbing. There were two elements: first, the personal invective (most shockingly evident in a flyer accusing Mr. Brown of wanting hospitals to turn away rape victims); second, the sharp left turn. In the final weekend, the Democrats, most notably the President himself, didn’t so much as try to present a case for their health care scheme. All their rhetoric was aimed at fat cat bankers and their evil bonuses. No effort to win over the center; just non-stop agitprop.

If that is how the President and his party intend to fight the next election, we’re in for a very long, exasperating year. The only consolation will be the size of the Republican majorities in the 112th Congress.

Tidbits: As of 10:27 p.m. EST, according to the Associated Press, the vote tally was complete throughout the state, except for Paxton’s one precinct and 32 of Cambridge’s 33. I guess those Harvard fellas have trouble counting.

Scott Brown carried 62 percent of the vote in Braintree. John Adams is standing up and cheering in his grave.