Wednesday, October 22, 2008

Eine Andere Democrat-Ansicht

I don't, as a rule, comment publicly on civic matters. But, I have to pass on this column from a Democrat in North Carolina. He is no friend of the Republican party and has written many articles against the stands that party has taken. However, this piece should be presented far and wide and I'm posting it here because it fearlessly stabs to the heart of this election year. The columnist is a Democrat out of North Carolina writing for the Rhinoceros Times.

Would the Last Honest Reporter Please Turn On the Lights?
By Orson Scott Card

Editor's note: Orson Scott Card is a Democrat and a newspaper columnist, and in this opinion piece he takes on both while lamenting the current state of journalism.

An open letter to the local daily paper — almost every local daily paper in America:

I remember reading All the President's Men and thinking: That's journalism. You do what it takes to get the truth and you lay it before the public, because the public has a right to know.

This housing crisis didn't come out of nowhere. It was not a vague emanation of the evil Bush administration.

It was a direct result of the political decision, back in the late 1990s, to loosen the rules of lending so that home loans would be more accessible to poor people. Fannie Mae and Freddie Mac were authorized to approve risky loans.

What is a risky loan? It's a loan that the recipient is likely not to be able to repay.

The goal of this rule change was to help the poor — which especially would help members of minority groups. But how does it help these people to give them a loan that they can't repay? They get into a house, yes, but when they can't make the payments, they lose the house — along with their credit rating.

They end up worse off than before.

This was completely foreseeable and in fact many people did foresee it. One political party, in Congress and in the executive branch, tried repeatedly to tighten up the rules. The other party blocked every such attempt and tried to loosen them.

Furthermore, Freddie Mac and Fannie Mae were making political contributions to the very members of Congress who were allowing them to make irresponsible loans. (Though why quasi-federal agencies were allowed to do so baffles me. It's as if the Pentagon were allowed to contribute to the political campaigns of Congressmen who support increasing their budget.)

Isn't there a story here? Doesn't journalism require that you who produce our daily paper tell the truth about who brought us to a position where the only way to keep confidence in our economy was a $700 billion bailout? Aren't you supposed to follow the money and see which politicians were benefiting personally from the deregulation of mortgage lending?

I have no doubt that if these facts had pointed to the Republican Party or to John McCain as the guilty parties, you would be treating it as a vast scandal. "Housing-gate," no doubt. Or "Fannie-gate."

Instead, it was Senator Christopher Dodd and Congressman Barney Frank, both Democrats, who denied that there were any problems, who refused Bush administration requests to set up a regulatory agency to watch over Fannie Mae and Freddie Mac, and who were still pushing for these agencies to go even further in promoting sub-prime mortgage loans almost up to the minute they failed.

As Thomas Sowell points out in a essay entitled "Do Facts Matter?" (] ): "Alan Greenspan warned them four years ago. So did the Chairman of the Council of Economic Advisers to the President. So did Bush's Secretary of the Treasury."

These are facts. This financial crisis was completely preventable. The party that blocked any attempt to prevent it was ... the Democratic Party. The party that tried to prevent it was ... the Republican Party.

Yet when Nancy Pelosi accused the Bush administration and Republican deregulation of causing the crisis, you in the press did not hold her to account for her lie. Instead, you criticized Republicans who took offense at this lie and refused to vote for the bailout!

What? It's not the liar, but the victims of the lie who are to blame?

Now let's follow the money ... right to the presidential candidate who is the number-two recipient of campaign contributions from Fannie Mae.

And after Freddie Raines, the CEO of Fannie Mae who made $90 million while running it into the ground, was fired for his incompetence, one presidential candidate's campaign actually consulted him for advice on housing.

If that presidential candidate had been John McCain, you would have called it a major scandal and we would be getting stories in your paper every day about how incompetent and corrupt he was.

But instead, that candidate was Barack Obama, and so you have buried this story, and when the McCain campaign dared to call Raines an "adviser" to the Obama campaign — because that campaign had sought his advice — you actually let Obama's people get away with accusing McCain of lying, merely because Raines wasn't listed as an official adviser to the Obama campaign.

You would never tolerate such weasely nit-picking from a Republican.

If you who produce our local daily paper actually had any principles, you would be pounding this story, because the prosperity of all Americans was put at risk by the foolish, short-sighted, politically selfish, and possibly corrupt actions of leading Democrats, including Obama.

If you who produce our local daily paper had any personal honor, you would find it unbearable to let the American people believe that somehow Republicans were to blame for this crisis.

There are precedents. Even though President Bush and his administration never said that Iraq sponsored or was linked to 9/11, you could not stand the fact that Americans had that misapprehension — so you pounded us with the fact that there was no such link. (Along the way, you created the false impression that Bush had lied to them and said that there was a connection.)

If you had any principles, then surely right now, when the American people are set to blame President Bush and John McCain for a crisis they tried to prevent, and are actually shifting to approve of Barack Obama because of a crisis he helped cause, you would be laboring at least as hard to correct that false impression.

Your job, as journalists, is to tell the truth. That's what you claim you do, when you accept people's money to buy or subscribe to your paper.

But right now, you are consenting to or actively promoting a big fat lie — that the housing crisis should somehow be blamed on Bush, McCain, and the Republicans. You have trained the American people to blame everything bad — even bad weather — on Bush, and they are responding as you have taught them to.

If you had any personal honor, each reporter and editor would be insisting on telling the truth — even if it hurts the election chances of your favorite candidate.

Because that's what honorable people do. Honest people tell the truth even when they don't like the probable consequences. That's what honesty means . That's how trust is earned.

Barack Obama is just another politician, and not a very wise one. He has revealed his ignorance and naivete time after time — and you have swept it under the rug, treated it as nothing.

Meanwhile, you have participated in the borking of Sarah Palin, reporting savage attacks on her for the pregnancy of her unmarried daughter — while you ignored the story of John Edwards's own adultery for many months.

So I ask you now: Do you have any standards at all? Do you even know what honesty means?

Is getting people to vote for Barack Obama so important that you will throw away everything that journalism is supposed to stand for?

You might want to remember the way the National Organization of Women threw away their integrity by supporting Bill Clinton despite his well-known pattern of sexual exploitation of powerless women. Who listens to NOW anymore? We know they stand for nothing; they have no principles.

That's where you are right now.

It's not too late. You know that if the situation were reversed, and the truth would damage McCain and help Obama, you would be moving heaven and earth to get the true story out there.

If you want to redeem your honor, you will swallow hard and make a list of all the stories you would print if it were McCain who had been getting money from Fannie Mae, McCain whose campaign had consulted with its discredited former CEO, McCain who had voted against tightening its lending practices.

Then you will print them, even though every one of those true stories will point the finger of blame at the reckless Democratic Party, which put our nation's prosperity at risk so they could feel good about helping the poor, and lay a fair share of the blame at Obama's door.

You will also tell the truth about John McCain: that he tried, as a Senator, to do what it took to prevent this crisis. You will tell the truth about President Bush: that his administration tried more than once to get Congress to regulate lending in a responsible way.

This was a Congress-caused crisis, beginning during the Clinton administration, with Democrats leading the way into the crisis and blocking every effort to get out of it in a timely fashion.

If you at our local daily newspaper continue to let Americans believe — and vote as if — President Bush and the Republicans caused the crisis, then you are joining in that lie.

If you do not tell the truth about the Democrats — including Barack Obama — and do so with the same energy you would use if the miscreants were Republicans — then you are not journalists by any standard.

You're just the public relations machine of the Democratic Party, and it's time you were all fired and real journalists brought in, so that we can actually have a news paper in our city.

This article first appeared in The Rhinoceros Times of Greensboro, North Carolina

Sunday, October 19, 2008

Feen, Elfe und die Kleinen Leute in den Wollen

The current state of affairs in the financial markets have oozed their miasmal stench all the way down to the humblest levels of life. We think of the huge houses of commerce and the Gnomes of Zürich industriously brewing mercantile magic without any concern whatsoever for what may come to pass for the rest of us. It's unseemly, really.

Well, long ago things were different. Normal, everyday people had help at the mere whisper of a request. We're too sophisticated these days for the need of 'The Little People' and try to fool ourselves into thinking that we can handle it all rather well ourselves. Just this past week, across my desk came a rather odd looking book. I started to process it paying it no mind at all, but my hand would not release it and, instead, drew it back to my focused gaze.

"An Encyclopedia of Fairies, Hobgoblins, Brownies, Bogies and Other Supernatural Creatures" by Katharine Briggs - 453 pp., fully indexed : with complete bibliographic entries.
ISBN : 0-394-73467-X [$19.00]

As a spinner, weaver and knitter, I am always on the lookout for anything at all even loosely connected to those arts and, sure enough - within the pages of this wonderful collection was the patron fairy of Spinners: Habetrot. Who knew? I was aware of the American Indian legend of the old spirit of the loom that would confound a weaver's warp if the shuttle was left in the shed of the warp over night, but the spinning pixies were a revelation. Here's the entry . . . (Be patient with the language - it's in Scots but you'll soon adjust)

The name of the Border patron fairy of spinning. William Henderson in Folk-Lore of the Northern Counties (pp. 258-62) tells a story from the Wilkie manuscript about this faiy which has many points of interest.

A Selkirkshire gudewife had a bonny, idle daughter who much preferred roaming over the countryside gathering flowers to blistering her fingers with spinning. The gudewife did all that she could to make the lassie a notable spinster, but all in vain, till one day she lost patience, gave her daughter a sound whipping, threw down seven heads of lint in front of her and told her that they must all be spun up into yarn within three days, or it would be the worse for her. The lassie knew her mother meant what she said, so she set to work in earnest, and worked hard for a whole day, but she only blistered her soft little hands and produced a few feet of lumpy, uneven thread. When it grew dark she cried herself to sleep.. She woke up on a glorious morning, looked at her wretched stint, and despaired. 'I can do no good here,' she thought, 'I'll away oot into the caller air.'

She wandered here and there down the stream and at last sat down on a SELF-BORED STONE and burst into tears. She had heard no one come near, but when she looked up there was an old wife beside her, plying her spindle busily and pulling out her thread with a lip that seemed make for that very purpose. The lass was a friendly wee thing, and she wished the old wife a kind good morning. Then like the bairn she was she asked, 'Whit way are ye saie lang lipit, gudewife?' 'With drawing the thread, ma hinnie,' said the old wife, well pleased with her. '
I wet my fingers with my lips, as I draw the thread from the distaff.' 'That's what I sud be doing, ' said the lassie, 'but it's a' nae gude.' And she told the old wife her story. 'Fetch me yir lint, and I'll hae it spun up in gude time,' said the kind old wife; and the lassie ran home and fetched it.

'What's yir name, gudewife?' she asked, 'and whaur will I get it?'. But, the old wife took the lint without answering - and was nowhere. The girl sat down, thoroughly bewildered, and waited. Presently the hot sun made her drowsy and she fell asleep.

The sun was setting when
she woke, and she heard a whirring sound and voices singing coming from under her head. She put her eye to the self-bored stone and beneath her she saw a great cavern, with a number of queer old wives sitting spinning in it, each on a white marble stone, rounded in the river, called a 'colludie stone'. They all had long lips, and her friend of that morning was walking up and down among them, drecting them all, ad as the lassie peped in she heard her say, 'Little kens the wee lassie on the brae-head that Habetrot is my name. There was one spinner sitting a little apart from the rest who was uglier than all of them. Habetrot went up to her and said: 'Bundle up the yarn, Scantlie Mab, for it's time the wee lassie sud gie it to her Minnie." At that the lassie knew that it was time for her to be at the cottage door, and she got up and hurried home. She met Habetrot just outside, who gave her seven beautiful hands of yarn. 'Oh whit can I dae for ye in return?' she cried. 'Naething, naething,' siad Habetrot, 'but dinna tell yer mither whae spun the yarn.'

The lassie went into the cottage treading on air but famished with hunger, for she had eaten nothing since the day before. Her mother was in the box-bed fast asleep, for she had been hard at work making black puddings, 'sausters' they called them round there, and had gone to bed early. The lassie spread out her yarn so that her mother could see it when she waked, then she blew up the fire, took down the frying-pan and fried the first sauster and ate it, then the second, then the third, and so on till she had eaten all seven. Then she went up the ladder to bed.

The mother was awake first in the morning. There she saw seven beautiful skeins of yarn spread out, but not a trace of her seven sausters except a black frying-pan. Half-distracted between joy and anger, she rushed out of the house singing:

'Ma daughter's spun se'en, se'en, se'en,
Ma daughter's eaten se'en, se'en, se'en
And all before daylight!'

And who should come riding along but the yound laird himself. "What's that you're crying, Goodwife?' he said, and she sang out again:

'Ma daughter's spun se'en, se'en, se'en,
Ma daughter's eaten se'en, se'en, se'en
an' if ye don't believe me, come and see for yersel!'

The laird followed her into the house, and when he saw the smoothness and eveness of the skeins, he wanted to see the spinner of them, and when he saw the bonny lass, he asked her to be his wife.

The laird was handsome and braw, and the lass was glad to say yes, but there was one thing that troubled her: the laird kept talking of all the fine yarn she would be spinning for him after the wedding. So one evening the lassie went down to the self-bored stone and called on Habetrot. Habetrot knew what her trouble would be, but she said, 'Never heed, hinnie, bring your jo here and we'll sort it for ye.' So next night at sunset the pair of them stood at the self-bored stone and heard Habetrot singing, and at the end of the song she opened a hidden door and let t
hem into the mound. The laird was astonished at all the shapes of deformity he saw before him asked aloud why their lips were so distorted. One after another they muttered in hardly intelligible tones, 'With sp-sp-spinning.' 'Aye, aye, they were once bonnie eneugh,' said Habetrot, 'but spinners aye gan of that gait. Yer own lassie 'ill be the same, bonnie though she is noo, for she's fair mad about the spinning.'

'She'll not!' said the laird. 'Not another spindle shall she touch from this day on!' 'Just as ye say, laird,' said the lassie; and from that day on she roamed the countryside with the laird or rode about behind him as blithe as a bird, and every head of lint that grew on their land went to old Habetrot to spin."

This pleasant version of Grimm's tale of 'The Three Spinners' is more than a mere folk-tale, for Habetrot
was really believed to be the patroness of spinners, and it was seriously held that a shirt made by her was a sovereign remedy for all sorts of diseases. It is strange that so many of these spinng fairies had names ending in 'trot', 'throt' or 'tot'. There is TRYTEN-A-TROTEN, GWARYN-A-THROT and TOM TIT TOT. Habetrot, however, is not sinister like the others, though the over-hearing of her name suggests a similar motif which somehow got overlaid.

Fairies and their ilk seasoned Man's explanations of his universe in the best way possible for his time and experiences. Personally, I think we could use a bit of fairy dust these days to unravel the tangled Web of Woe we are currently witnessing. The good news is that we all have our own magic wand completely at our disposal, any time of day or night. The simple three-part spell of Attraction carries with it our own innate ability to create for ourselves great joy and prosperity - without the help of the Gnomes of
Zürich or the Wizards of Wall Street. It's not even necessary to dance naked 'round a fire in the forest on a full moon, fun as that may be.

Belief, Expectation, Acceptance

Wednesday, October 1, 2008

Willkommen zurück, Herr Marx

Been away for quite sometime but this seemed a good time to check in again. While things at the homefront have been in great flux, things at the national level have been at an even greater flux. I feel you'll find the following a remarkable item of note . . .

Bailout marks Karl Marx's comeback

Posted: September 29, 2008, 8:03 PM by Jeff White

Marx’s Proposal Number Five seems to be the leading motivation for those backing the Wall Street bailout

By Martin Masse
In his Communist Manifesto, published in 1848, Karl Marx proposed 10 measures to be implemented after the proletariat takes power, with the aim of centralizing all instruments of production in the hands of the state. Proposal Number Five was to bring about the “centralization of credit in the banks of the state, by means of a national bank with state capital and an exclusive monopoly.”
If he were to rise from the dead today, Marx might be delighted to discover that most economists and financial commentators, including many who claim to favour the free market, agree with him.
Indeed, analysts at the Heritage and Cato Institute, and commentators in The Wall Street Journal and on this very page, have made declarations in favour of the massive “injection of liquidities” engineered by central banks in recent months, the government takeover of giant financial institutions, as well as the still stalled US$700-billion bailout package. Some of the same voices were calling for similar interventions following the burst of the dot-com bubble in 2001.
“Whatever happened to the modern followers of my free-market opponents?” Marx would likely wonder.
At first glance, anyone who understands economics can see that there is something wrong with this picture. The taxes that will need to be levied to finance this package may keep some firms alive, but they will siphon off capital, kill jobs and make businesses less productive elsewhere. Increasing the money supply is no different. It is an invisible tax that redistributes resources to debtors and those who made unwise investments.
So why throw this sound free-market analysis overboard as soon as there is some downturn in the markets?
The rationale for intervening always seems to centre on the fear of reliving the Great Depression. If we let too many institutions fail because of insolvency, we are being told, there is a risk of a general collapse of financial markets, with the subsequent drying up of credit and the catastrophic effects this would have on all sectors of production. This opinion, shared by Ben Bernanke, Henry Paulson and most of the right-wing political and financial establishments, is based on Milton Friedman’s thesis that the Fed aggravated the Depression by not pumping enough money into the financial system following the market crash of 1929.
It sounds libertarian enough. The misguided policies of the Fed, a government creature, and bad government regulation are held responsible for the crisis. The need to respond to this emergency and keep markets running overrides concerns about taxing and inflating the money supply. This is supposed to contrast with the left-wing Keynesian approach, whose solutions are strangely very similar despite a different view of the causes.
But there is another approach that doesn’t compromise with free-market principles and coherently explains why we constantly get into these bubble situations followed by a crash. It is centered on Marx’s Proposal Number Five: government control of capital.
For decades, Austrian School economists have warned against the dire consequences of having a central banking system based on fiat money, money that is not grounded on any commodity like gold and can easily be manipulated. In addition to its obvious disadvantages (price inflation, debasement of the currency, etc.), easy credit and artificially low interest rates send wrong signals to investors and exacerbate business cycles.
Not only is the central bank constantly creating money out of thin air, but the fractional reserve system allows financial institutions to increase credit many times over. When money creation is sustained, a financial bubble begins to feed on itself, higher prices allowing the owners of inflated titles to spend and borrow more, leading to more credit creation and to even higher prices.
As prices get distorted, malinvestments, or investments that should not have been made under normal market conditions, accumulate. Despite this, financial institutions have an incentive to join this frenzy of irresponsible lending, or else they will lose market shares to competitors. With “liquidities” in overabundance, more and more risky decisions are made to increase yields and leveraging reaches dangerous levels.
During that manic phase, everybody seems to believe that the boom will go on. Only the Austrians warn that it cannot last forever, as Friedrich Hayek and Ludwig von Mises did before the 1929 crash, and as their followers have done for the past several years.
Now, what should be done when that pyramidal scheme starts crashing to the floor, because of a series of cascading failures or concern from the central bank that inflation is getting out of control? It’s obvious that credit will shrink, because everyone will want to get out of risky businesses, to call back loans and to put their money in safe places. Malinvestments have to be liquidated; prices have to come down to realistic levels; and resources stuck in unproductive uses have to be freed and moved to sectors that have real demand. Only then will capital again become available for productive investments.
Friedmanites, who have no conception of malinvestments and never raise any issue with the boom, also cannot understand why it inevitably leads to a crash.
They only see the drying up of credit and blame the Fed for not injecting massive enough amounts of liquidities to prevent it.
But central banks and governments cannot transform unprofitable investments into profitable ones. They cannot force institutions to increase lending when they are so exposed. This is why calls for throwing more money at the problem are so totally misguided. Injections of liquidities started more than a year ago and have had no effect in preventing the situation from getting worse. Such measures can only delay the market correction and turn what should be a quick recession into a prolonged one.
Friedman — who, contrary to popular perception, was not a foe of monetary inflation, but simply wanted to keep it under better control in normal circumstances — was wrong about the Fed not intervening during the Depression. It tried repeatedly to inflate but credit still went down for various reasons. This is a key difference in interpretation between the Austrian and Chicago schools.
As Friedrich Hayek wrote in 1932, “Instead of furthering the inevitable liquidation of the maladjustments brought about by the boom during the last three years, all conceivable means have been used to prevent that readjustment from taking place; and one of these means, which has been repeatedly tried though without success, from the earliest to the most recent stages of depression, has been this deliberate policy of credit expansion. ... To combat the depression by a forced credit expansion is to attempt to cure the evil by the very means which brought it about ...”
The confusion of Chicago school economics on monetary issues is so profound as to lead its adherents today to support the largest government grab of private capital in world history. By adding their voices to those on the left, these confused free-marketeers are not helping to “save capitalism”, but contributing to its destruction.

Financial Post
Martin Masse is publisher of the libertarian webzine Le Québécois Libre and a former advisor to Industry minister Maxime Bernier.

Photo: Karl Marx

From the Financial Post: