Posted by
flagwaver on Thursday, September 18, 2008 10:18:33 AM
The big stories of the week (so far) have been the collapse of Lehman Brothers and the federal bailout/takeover of AIG. Now I am no economics expert, but with all of the talk about why these institutions collapsed, it seems obvious to this novice that much of the problem comes from the past doings of Allan Greenspan when he ran the Fed, in addition to the usual stupidity of Congress. The way I see it, this whole industry collapse is based in the way Fannie Mae and Freddie Mac were run as a quasi-independent company, with heavy backing from the federal government. Freddie and Fannie were able to underwrite huge amounts of mortgage loans to people who were very high risk because a) the government was pressuring them to and b) because they knew the government would guarantee the loans they made. The idea of a “society of home ownership” is nice, but it has to be based on the ability of the borrowers to repay the lenders, and when the Congress started pressuring Fannie and Freddie to make loans to help low income earners get into their own homes, that opened the door to the collapse that we a couple of weeks ago. The part that Greenspan played in this was his decision to lower interest rates over and over, which made money and capital cheap, which in turn induced more people to take on loans that they could not pay back at any reasonable rates. When the rates began to raise again, as was inevitable, suddenly you have a situation where the people with the mortgages found themselves overextended and unable to pay; voila, instant crisis. As for Lehman in particular, they were caught up in this mess after having bought a bunch of mortgage based securities, and when people started defaulting on their mortgages right and left , Lehman was left holding the bag. Finally, I am no big supporter of the G taking over private enterprises, but I can understand why they took over AIG; as large as that company is, a failure of AIG would be devastating to the overall economy, since AIG has their fingers in so many pies. Hopefully the G will be able to find a way for AIG to get back into private hands and pay back the $85 billion in “loans” they were extended.
On the campaign trail things have really begun to heat up, with both the Obama and McCain camps accusing the other of running misleading ads. The Obama camp complains that McCain’s ads stating that the junior Senator from Illinois voted for a bill that advocated teaching “comprehensive” sex education classes starting in kindergarten was “false” and “misleading”, and that the bill was actually about protecting children from sexual predators. The only thing is that the bill was exactly what the McCain camp purported it to be, a sex education bill! While there is some languages about helping children protect themselves against molesters, the bill is obviously a rewriting of an older state sex-ed law to reflect the current liberal attitudes in the legislature. In response, the Obama campaign launched an ad that portrays McCain as being out of touch because the Senator from Arizona “doesn’t use email”. The only problem with that is that McCain doesn’t use email because the injuries he suffered in the “Hanoi Hilton” makes it almost physically impossible for him to use a computer. Boy, that Obama is really a class act, eh? And finally, the Obama camp…which is changing the tone and running a post-racial campaign…rolled out an ad that portrays John McCain as a racist! The ad is aimed at Hispanic voters and tries to link John McCain’s stance on immigration to that of Rush Limbaugh, and incorrectly portrays El Rushbo as calling Hispanic immigrants “stupid” and telling them to “shut up and go home”. Rush has fired back, and Jake Tapper has exposed the lies and distortions in the ad on his blog at ABC. So much for that “new tone”, huh?
In sports, Dallas Mavericks forward and Winston-Salem, NC native Josh Howard made the news this week because of comments he made during the playing of the National Anthem at a charity flag football game in July. Howard was caught on camera saying that he doesn’t “celebrate that s**t” because “I’m black”. Now notwithstanding the fact no one is asked to “celebrate” the Anthem, this simply goes to show that no matter where you go to school (in his case Wake Forest) or what you do for a living, a twit is still a twit. I am sure that Wake Forest was so proud to have this dumbkoff standing right with guys like Rusty LaRue, Ricky Proehl, Chris Paul, Muggsy Bogues, and Tim Duncan as exemplars of the type of people their sports programs produce.
And that’s the roundup of the most important news of the week. So in the immortal word of Dan Rather…Courage.