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Friday, October 31, 2008

Barack Obama: Liberal Governance Vs. Moderate Rhetoric

Stuart Taylor has an interesting piece in today's National Journal laying out the two possibilities of the Obama administration. On the one hand, he sees a far left governing nightmare in which every far left whim is granted by an Obama administration and the far left Congress lead by Nancy Pelosi and Harry Reid.

This Obama has endorsed a long list of liberal restrictions on free enterprise that could end up hurting the people they are supposed to help, along with the rest of us: statist remedies for our broken educational system; encouraging unionization by substituting peer pressure and an undemocratic card-check process for secret ballots; raising the wages of women or lowering those of men who have dissimilar jobs that are declared by bureaucrats to be of comparable worth; renegotiating NAFTA; and more.

I wonder how far Obama wants to go down the road suggested by his lament in that 2001 radio interview that the civil-rights movement had failed to engineer "redistribution of wealth" and "economic justice." Would he be content with the moderately redistributive, Clintonesque increase in taxes on high-earning Americans that he proposes now? Or would he end up pushing for confiscatory taxes that could stifle entrepreneurship and job creation?

Taylor goes into a long standing far left voting record including being voted by his own magazine, the National Journal, the most liberal Senator in the Senate in 2007. He lists a long line of radical associates like Reverend Jeremiah Wright, Frank Marshall Davis, and William Ayers. He also points out a voting record in the U.S. Senate and the Illinois Senate. Furthermore, he points out that he's never reached across the aisle on any issue of substance.

Stuart started his piece by pointing out the nightmare far left governing scenario as he saw it. He also made a strong case, at least to this partisan. I was curious how Taylor saw the potential of a bi partisan Obama. Here is what gives Taylor hope.

The pragmatic, consensus-building, inspirational Obama who has been on display during the general election campaign is a prodigious listener and learner. He can see all sides of every question. He seems suffused with good judgment. His social conscience has been tempered by recognition that well-intentioned liberal prescriptions can have perverse unintended consequences. His tax and health care proposals are much less radical than Republican critics suggest.

This Obama has surrounded himself not only with liberal advisers but also with mainstream moderates such as Warren Buffett and former Fed Chairman Paul Volcker. He has won the support of moderate Republicans, including Colin Powell and Susan Eisenhower, and conservatives, including Kenneth Adelman and Charles Fried.

Now, bi partisan rhetoric and some bi partisan adivsors is not much of an argument, given that Senator Obama has had a long history of associations with far left radicals, a lifetime of a far left voting record, and absolutely no history of bi partisanship. It's very easy to make bi partisan rhetoric. It is only slightly more difficult to put a few non liberals on your advisory staff. There is one dynamic that Taylor didn't address that will affect his governance.

Obama will govern with both Houses of the Congress. As such each and every proposal he wants will pass. As such, you can bet we will have redistribution of wealth because that's what he has been campaigning on the whole campaign. You can bet we will have a quasi socialist health care system because that's what he has been campaigning on. You can bet we will have a new "windfall profits tax" because that's what he has been campaigning on. You can bet we will see a plethora of new spending programs, new corporate tax cuts, and a dovish foreign policy because that's what he has been campaigning on. We WILL have another stimulus package costing over $100,000,000,000 because that's what he has been campaigning on. You can bet that we will leave Iraq on a timeline and attempt to meet with vicious dictators ASAP because that's what he has governed on. You can bet we will have a plethora of new business regulations because that's what he has been campaigning on. We will have a plethora of new far left judges because that's what he has campaigned on.

The only questions remain are whether or not the far left will take full control. The question remains whether or not the Fairness Doctrine will be re instituted. The question remains whether or not we will remove secret ballots for union voting and force unions upon WalMart. The question remains whether or not laws like ENDA will be implemented. The only place where Senator Obama is in line with conservatives is on some education issues. It remains to be seen whether or not there will be merit pay and more funding for Charter Schools. It also remains just how much pork there will be in the budgets for the first two years.

Even if Senator Obama had a Free Trade epiphany, the liberal Congress would never allow any new free trad pacts. The only question is whether or not he follows through with his primary rhetoric of re negotiating old ones, or he is the more moderate of the general election. The question is not whether or not terrorists will receive more rights but how many. We will seriously revisit don't ask don't tell for our military, and both the Congress and Senator Obama have made promises to cut military spending. None of this is a battle between moderate and liberal ideology. Rather it is a battle between liberal ideology and far left ideology.

The idea that Barack Obama will stand up to the far left on the Fairness Doctrine would be welcome to anyone that believes in free speech. That said a bloated budget, where health care is socialized, income is redistributed, Iraq is lost, and our enemies are met with, that also doesn't include a new Fairness Doctrin and ENDAbut does include new merit pay and more funding for charter schools, is not exactly governing as a moderate.

Huckabee Vs. Obama: A Thought Experiment

As I have watched the campaign unfold, I can't help but get a troubling feeling out of my head. Did the GOP choose the wrong guy to face off with Barack Obama? Would another candidate have changed the dynamic and likely beat Obama as badly as he appears to be beating Senator John McCain. Now, unfortunately, at the beginning of the year, when the Republican primary effectively ended, the nature of the way in which the race appeared to be is NOT the way in which the race wound up being. It appeared that national security would share the spotlight with the economy. One of the reasons that John McCain wound up grabbing the nomination is the tragic irony of the timing of the killing of Benazir Bhutto. With national security grabbing headlines right around the vote in New Hampshire, John McCain had the election timed on issues relating to his best traits.

Mike Huckabee has four things that John McCain doesn't: charisma, no discernible connection to President Bush, a consistent economic populist message, and opposition to the bailout. Watching John McCain debate Barack Obama, I couldn't help but wonder just how Huckabee would have handled Obama. McCain missed several opportunities in debates to point out that Barack Obama's tax policies were nothing more than income redistribution. It took Joe the Plumber to do it. I don't think that it would have taken an unlikely surrogate for Mike Huckabee to do it. John McCain also missed many opportunities to point out that Barack Obama's tax policies would include tax cuts for 40% of the population that currently pays ZERO in federal income taxes. This is yet another opportunity that Mike Huckabee wouldn't have missed. In fact, anyone that saw Huckabee debate knows that he would have fared far better than McCain did.

The other thing is that Huckabee ran on an economic populist message from the beginning. He didn't come late with a message in fighting for the little guy. He was talking about the pinch of the middle class, foreclosures, and high health care bills. In fact, Huckabee's message was so populist, economically, that his opponents effectively painted as liberal. Of course, this was a bit of a distortion. In fact, Huckabee had the innovative conservative idea of the fair tax. Putting Huckabee's fair tax against Obama's income redistribution proposal would have been the kind of contrast that would have made a real distinction. Rather than fumbling through an explanation of why we need to cut corporate taxes, we would have had a charismatic salesman selling an innovative tax idea. Rather than a debate over who should and shouldn't get tax cuts, we would have a debate over a change in a failed tax code and a revolutionary change to the tax code.

Where Huckabee would have wound up with the most traction is the bailout. He is one of the few politician to come out against the bailout. I believe John McCain lost the election when he supported the Bush bailout. This was an opportunity to distance himself from Bush and instead, John McCain doubled down on "a bi partisan proposal". Rather than running away from President Bush while Obama was siding with Bush, McCain took the easy way out and signed onto the bailout. Furthermore, he doubled down on his own quasi socialism when he proposed a massive bailout of borrowers. Neither of these are small government, fiscally conservative ideas, and neither would be supported by Huckabee. It muddies the waters when you call your opponent quasi socialist when you yourself propose quasi socialist ideas. Imagine the debate as the bailout was being debated. Imagine Mike Huckabee firmly saying that bailing out the irresponsible is not something he would sign onto. Now, on the single most important issue it would have been Senator Barack Obama that was allied with President Bush, and it would be Mike Huckabee that ran against President Bush. The bailout is overwhelmingly rejected. By running fiercely against the bailout, Huckabee would have pulled off the greatest political jujitsu. He would have hung the President Bush noose around Senator Obama. The centerpiece of Senator Obama's current attacks would wind up being used against him.

I believe for these four reasons mean the Republicans picked the wrong candidate and had they picked Mike Huckabee we would see a Republican in the White House.

The Indictment of William Cellini and Illinois' Shadow Government

Yesterday, the Federal Prosecutor for the Northern District of Illinois, Patrick Fitzgerald handed down several indictments for one William Cellini. Who is William Cellini? Even if you reside in Illinois Cellini is likely a name you weren't aware of until reading this piece. Yet, according to the indictment, Cellini, and other power brokers like Anton Rezko and Stuart Levine, made up a shadow government that really made the shots in the state government. These power brokers made decisions based on one motivation only...their own pocket books. It should also be noted that Cellini is a life long Republican. He got into bed with Democrats like Rezko and Levine to make up this shadow government that was really calling the shots behind the scenes of the Blagojevich administration.

How did all of this work? First, folks like Cellini and Rezko became top fundraisers for the likes of Governor Rod Blagojevich (and one former State Senator now on the cusp of being President). Once they became indispensable allies of the man in charge, they used that influence to influence most of the political apparatus of the state government.

For instance, one of the charges that Cellini is facing is influencing the Teachers' Retirement System. After raising millions for Governor Blagojevich, Stuart Levine, one of Cellini's associates, became a member of the board of the TRS. Then, Levine, Rezko and Cellini worked behind the scenes to put as many of their cronies on the board. Then, the TRS doled out contracts and other monies to Levine, Rezko, Cellini and their friends.

This was the modus operendi for Rezko, Levine, Cellini and other political insiders. They bought influence by becoming top fundraisers for politicians like Governor Blagojevich. Then, they used that influence to put themselves and their own cronies in as many influential places as possible throughout the State Government apparatus. Once in place, the shadow government was in a position to dole out as much State government money as possible to themselves and their friends. This Boston Globe report shows exactly how the likes of Tony Rezko used this same shadow government and its results.

The boon on this scheme for Rezko and his friends was about $200,000,000, and so was the tab to the Illinois tax payer. The result was low income housing that is no longer livable.

This shadow government even attempted starting in 2004 to remove Patrick Fitzgerald from his post. The indictment yesterday speaks for itself and should tell everyone why they were so gung ho to remove him. That's how this shadow government works. Put cronies in friends in a position of influence and power and remove all nuisance and opponents.

This sort of shadow government is not new to Cellini. Today's Chicago Tribune describes how Cellini used his influence in the Jim Edgar administration to give his own firm a sweetheart deal for a hotel/casino in Alton, Illinois. This was a deal that was a boon to his firm and wound up being wasted millions for the tax payers.

That's how it works. Get close to the top of political power in the state government by buying influence. Then, use that influence to infect as much of the government apparatus as possible with cronies and friends. Then, those cronies and friends dole out government money back to the same cronies and friends. It's like any other business. There is an investment and there is a return on investment. The investment is hundreds of thousands or even millions in campaign contributions. The return on investment is hundreds of millions, and so is the tab to the tax payers of Illinois.

Thursday, October 30, 2008

Reckless Fed Action and the Corrossive Effect of Partisanship

Back in 2002, the Fed Chairman Alan Greenspan lowered the Federal Funds Rate to .75%. The Federal Funds Rate is the rate at which banks borrow from each other. At the time, we were still recovering economically from the internet bubble popping. The pop of the internet bubble eventually cost three trillion Dollars in paper lost. The bubble burst was topped by the economic devastation of 9/11. About one million jobs were lost in October, November, and December of 2001. Then, this was followed by the revelations of accounting malfeasance at Enron et al. I bring this context because when Greenspan lowered the Federal Funds Rate this low so called experts justified it as an appropriate response to extreme economic weakening.

Greenspan wanted banks to borrow and then to lend to stimulate the economy out of its rut. He accomplished his goal. He accomplished it so well that banks borrowed so much that they had more money than they had loans. Since they still had money after tapping all the loans they had, they created more loans, and the rest was history.

Now, new Fed Chairman Ben Bernanke has lowered the Fed Funds Rate to 1%, just .25% higher than Greenspan lowered it to. The reason no one is crying bloody murder is once again so called experts believe that Ben Bernanke is responding with aggressive action to an unprecedented economic weakness. The reason this is happening is that most people don't blame Alan Greenspan for even starting the mortgage crisis.

The reason for this is that there is no partisan angle for blaming the Federal Reserve. Instead, liberals blame deregulation while Conservatives blame social engineering created by ACORN and the Community Reinvestment Act. As such, most of the media has totally disregarded Alan Greenspan's role in starting this crisis. As such, no one has noticed that Ben Bernanke has done nearly the exact same thing. As such, the media has allowed the new Fed Chairman to act just as recklessly as Greenspan himself acted only six years later.

Six years ago, Alan Greenspan lowered rates furiously because his rate drops weren't working. Because his aggressive Fed action was impotent, Greenspan continued doing it until the Federal Funds Rate was below one percent. We have the exact dynamic here. Bernanke dropped rates furiously and the economy only got worse, and so he has dropped them even more. Now, the Federal Funds Rate is at 1%. Why has no one noticed that the same mistakes of history are repeating themselves? It appears to me that most of the media is much more concerned with hammering their own partisan message than trying to figure out the truth. As such, even though we have the exact same reckless behavior repeating itself. Once again the Fed is allowed to act recklessly with impugnity and no one seems to notice. I have no doubt that in several years we will be picking up the pieces on this mistake, and I have no doubt that partisans from both sides will find their own partisan boogeyman to blame for that economic crisis.

Wednesday, October 29, 2008

The Ticking Clock Meets the Perfect Storm

There are now five days left until election day and Barack Obama is up by about 6 percentage points. As such, he has a nearly insurmountable lead with little time left. Barack Obama is now in a position to try and run out the clock. Is he about to face a perfect storm of negative campaign news that will jeopardize his election? Let's examine the details.

1) The natural glow of being in the lead.

Most analysts say that at the end of any campaign the race tightens. What they almost never do is explain why. The reason this happens is that the candidate in the lead also receives the bulk of the media attention. Most candidates don't do as well when all the spotlight is on them because each of their policies and proposals is put under a microscope. Once any policy is shown in full view, warts and all, it almost never looks as good as it does when it is presented merely with talking points. As such, Barack Obama, and all his policies, will be put under the proverbial microscope and that will hurt the campaign.

2) Spread the wealth...Socialism...Wealth/Income Redistribution

Ever since Joe the Plumber, exposed Barack Obama's affinity for income redistribution, it has given the McCain campaign a new talking point. Watch any cable news show with McCain or his surrogate and they are on message. McCain and his surrogates will hammer Obama with the "income redistribution" label over and over. As a McCain supporter, this is actually frustrating. Barack Obama hasn't hidden his desire for income redistribution. Had McCain used this line of attack earlier the race would likely look a lot different. That said, in the last days of a campaign it is always important to come up with something new. McCain has a new message while Obama continues to hammer at old themes. Furthermore, the income redistribution attack was given new credence with the release of this audio.

If McCain is wise, he would also make issue of this statement Barack Obama made to the Democratic Socialists of America in Chicago in 1996.

The first is “human capital development”. By this he meant public education, welfare reform, and a “workforce preparation strategy”. Public education requires equality in funding. It’s not that money is the only solution to public education’s problems but it’s a start toward a solution. The current proposals for welfare reform are intended to eliminate welfare but it’s also true that the status quo is not tenable. A true welfare system would provide for medical care, child care and job training. While Barack Obama did not use this term, it sounded very much like the “social wage” approach used by many social democratic labor parties. By “workforce preparation strategy”, Barack Obama simply meant a coordinated, purposeful program of job training instead of the ad hoc, fragmented approach used by the State of Illinois today.

The state government can also play a role in redistribution, the allocation of wages and jobs. As Barack Obama noted, when someone gets paid $10 million to eliminate 4,000 jobs, the voters in his district know this is an issue of power not economics. The government can use as tools labor law reform, public works and contracts.

This would be the final verdict on Barack Obama's plan to redistribute wealth in America. Income redistribution is overwhelmingly unfavorable in the U.S. A Gallup poll in March showed that it was disapproved by 84-13. McCain is on message and he finally has one that is effectively corroding Obama's support.

3) Joe Biden

The Vice Presidential candidate has become a magnet for gaffes and controversy. It first started with this interview with Diane West.

The Obama campaign already shunned the station that employs West and now it appears they are banning a second station. This sort of contentious attitude toward any media that they don't like is frankly downright chilling.

This became an internet sensation and furthermore it turned West into a bit of a national celebrity for a couple days. By doing so, it attracted attention to not only very un Presidential behavior by Biden but also lingering questions about Obama's Marxist tendencies.

The second controversy came right on the heels of this one with West.

Finally, Biden had this interview...

in which he suggested that Obama would cut taxes to those that make $150,000 and less. Of course, the campaign has insisted it is only those making $200,000 and less. This lends more credence to McCain's contention that Obama is not being totally truthful when he says that his tax cuts will only be for the very wealthy. Since these gaffes, Biden has become incognito. As such, the campaign realizes that Biden is a disaster that needs to be muzzled. That's not a good place to be.

4) Rashid Khalidi

Yet another radical associate of Barack Obama's has emerged in the last weeks of the campaign. Now, Khalidi would be more of an issue if the L.A. Times released a tape in which Barack Obama praises Khalidi at an event, attended by among others Bill Ayers, while others at the same event condemn and spew venom at Israel. Still, one other radical associate of Barack Obama is not a good thing. Khalidi is the radical, now professor, and former spokesperson for the PLO, when that organization was deemed a terrorist group by the United States. Barack Obama was a colleague of Khalidi's at the University of Chicago. It's unclear if only partisans care about this. There is certainly a lot of buzz about this in the right blogosphere, however I don't know how many independents care. They would care a lot more, however, if they saw on tape Barack Obama singing praise to this man at an event in which Israel was demonized.

5) Campaign donation fraud.

This is likely the most important scandal and also the one that will have the least impact. Here is what the Washington Post said.

In September, according to the campaign, $1.8 million in online contributions was flagged, and $353,000 was refunded. Of the contributions flagged because a foreign address or bank account was involved, 94.1 percent were found to be proper. One-tenth of one percent were marked for refund, and 5.77 percent are still being vetted.

But clearly invented names have been used often enough to provoke an outcry from Republican critics. Donors to the Obama campaign using false names such as Doodad Pro and Good Will gave $17,375 through 1,000 separate donations, with no sign that they immediately tripped alarms at the campaign. Of more concern, Cairncross said, are reports that the campaign permitted money from 123 foreign nationals to enter its accounts.

Obama officials said they have identified similar irregularities in the finance records of their Republican rival, Sen. John McCain. "Every campaign faces these challenges -- John McCain's campaign has refunded more than $1.2 million in contributions from
anonymous, excessive and fraudulent contributors -- and we have reviewed and
strengthened our procedures to ensure that the contributions the campaign accepts are appropriate," said Ben LaBolt, an Obama spokesman.

McCain's contributor database shows at least 201 donations from individuals listing themselves as "anonymous" or "anonymous anonymous," according to Obama's
campaign. In one particularly embarrassing episode, the McCain campaign mistakenly sent a fundraising solicitation to the Russian ambassador to the United Nations.

Now, it's unlikely that mos of the public will even know about Senator Obama's troubling lack of oversight of credit card donations. The campaign has removed many safeguards that normally guard against fraud. It accepts pre paid cards, and it has accepted donations from those that clearly have made up names. The campaign says that they have plenty of safeguards on the "back end". That means that they have safeguards to insure that fraudulent donations are caught after they have been received, but they collected $150,000,000 last month alone. Furthermore, how in the world can they spot fraud from a pre paid credit card? Unfortunately, I believe that Barack Obama will take no political hit for this but he should.

There you have it. Five days left and a lead that is nearly insurmountable, but there is also a perfect storm of campaign trouble. An irresistable force meets an immovable object. Which will win? We'll find out on November 4th.

In Defense of Trickle Down Economics

Senator Obama is fond of saying that the current financial crisis is the final verdict on the last eight years of the Bush administration's economic policy. I think that is far too simplistic, however, one of the unfortunate ideological victims of this financial meltdown is the concept of trickle down economics.

Trickle-down economics" and "trickle-down theory" are terms of political rhetoric that refer to the policy of providing tax cuts or other benefits to businesses and rich individuals, in the belief that this will indirectly benefit the broad population.[1]
The term has been attributed to humorist Will Rogers, who said during the Great Depression that "money was all appropriated for the top in hopes that it would trickle down to the needy."

Because the Democrats and the MSM have been gung ho in demonizing everything that President Bush has done, they have blamed his tax cuts, and the theory behind it...trickle down economics.

In order to make this claim, the Democrats and their MSM allies have bemoaned the stagflating wages under the Bush administration. Of course, bemoaning stagnating wages distorts what happened. As you can see, wages declined in a very steep way for the first two years of Bush's Presidency, and then they have increased on just as large a slope since. They have in fact risen slightly over the course of his Presidency but especially since 2003.

What happened to make the drop so much? It was the perfect economic storm of the internet bubble, 9/11. and the revelations of accounting malfeasance at Enron, Worldcom, et al.

Furthermore, the tax cuts occurred in 2001 and 2003. Tax cuts normally take at least a year and a half to take effect. Bush inherited an economy that eventually wound up in a recession, a dynamic set in motion by the popping of the bubble (and perpetuated by 9/11 and the accounting scandals). Yet, not only was the recession fairly mild but we entered a period of economic boom (one not recognized or acknowledged by the opponents of Bush)

As to the current meltdown, that has nothing to do with the tax cuts. It has everything to do with a speculative market caused by loose monetary policies of the Federal Reserve. As such, the current meltdown has nothing to do with the tax cuts, and thus, the meltdown is NOT a referendum on trickle down economics.

In fact, the worthiness of trickle down should have been set in stone from the results of the 1980's. Reagan created similar tax cuts and that lead to a nearly unprecedented economic revival that lasted for the better part of the next twenty five years. For another example of the power of trickle down economics, Ireland cut their corporate tax rate to 12.5% and this lead directly to an unprecedented growth in its economy.

Trickle down economics works under this simple principle. The wealthy, small businesses, and corporations are the ones that create jobs. The less you take from them, the more jobs they can create. It is a private industry pro growth philosophy. It is the exact opposite of the way in which Barack Obama views the world. His populist message has caught on, and unfortunately, it's because the concept of trickle down economics has been unfairly demonized.

Why We Should Be Worried About an Obama Presidency

In today's Chicago Tribune, Charles Madigan, professor at Roosevelt University, attempts to defend Barack Obama by proclaiming that Socialism doesn't really exist and thus, Obama can't be a socialist.

What exactly is socialism? I actually lived for a couple of years in a socialist state called The Soviet Union, which, if I recall, viewed socialism as being kind of a stopping off point on the way to true communism.Production would be in the hands of the masses, society would be egalitarian, money would be slathered around like peanut butter on toast. Everyone would be jolly.

That is one definition of socialism. There are dozens.There was only one problem. It didn't work. There may well be some societies that view themselves as socialist, but my guess is they aren't. They may have some socialist-type icing, but there will always be another shadow system at work down below, a self-interest cake, if you will. That's where you get what you want.


Which brings me to my socialist experience and why we capitalists have nothing to fear from Sen. Barack Obama, despite much boogah-boogah-boogah-boo arm-waving from his Republican opponents.


The only way to survive in Russia under socialism was to tap the vast underground network of influence that actually achieved things. My new Russian car broke. An engine valve snapped in its first week of life.No problem, I thought, it's guaranteed. No. Big problem! The guarantee was just for show. You could take your car back and wait. As soon as hell froze over (an annual event in Russia) they might actually get to your car.

Or, you could bribe someone.

Now we're talking! Bribery in the Soviet Union was only a problem if they wanted to catch you. If they did, even if you didn't bribe anyone, they would make it look like you did. So you just might as well. Everything worked that way. It was wonderful.To replace the engine of my new Zhiguli sedan (the car was the color of butterscotch pudding and about 10 percent heavier than any car of its size I have ever seen) it cost me two cartons of Marlboro cigarettes, two bottles of vodka and three boxes of Champion spark plugs, with the spark plugs being by far the most valuable commodity in the exchange. There are no good socialist spark plugs.


But the truth attached to the experience is eternal. Capitalism is a good system. It just gets out of whack every couple of generations because people become swinish about money.You don't need Karl Marx to fix that. Maybe you need a big, angry federal regulator to straighten out your bank. Maybe you just need a little help from the government you have been funding all these years.

It's not too much to ask. And it most certainly is not socialism.

Now, to me at least, Madigan's piece makes me more scared of an Obama Presidency not less. Madigan is right. Even in societies that fancy themselves Socialist, the only things that work are actually capitalistic in nature. How exactly should that re assure me about Obama? He dismisses Capitalism's winner take all philosophy as faulty, and he wants to create an economy in which wealth is spread. Madigan himself has seen first hand that this philosophy won't work. Senator Obama dismisses market principles in health care in favor of quasi socialist health care. In Canada, their socialized model works "so well" that a Member of Parliament was forced to come to our own "flawed" market system because she couldn't wait any longer to get treated.

In Madigan's own example it wasn't the government run system that worked but rather the market system created by the black market which was responding to the failures of the government's system itself. How is Madigan's example of fixing his car on the black market supposed to make me feel better about Obama's quasi socialist health care plan?

There's more. I also lived for sometime in Communist Soviet Union. My parents told me how they went about getting a job. Each job was assigned to them by the government. Because they were both Jewish, they were immediately assigned worse jobs than non Jews. My dad had a second problem. His father had spent the better part of two decades in a Soviet gulag. What was the reason? My grandfather had run a successful corner store and was deemed a threat by Joseph Stalin. As such, he was imprisoned on the eve of WWII. For this, not only did my grandfather spend twenty years in a gulag, by my father had more difficulty as well being given work. The Soviet experience is a great example of why we don't want the government leading the way in providing jobs.

How does Barack Obama plan on creating jobs?

Democrat Barack Obama said Wednesday that as president he would spend $210 billion to create jobs in construction and environmental industries, as he tried to win over economically struggling voters. Obama's investment would be over 10 years as part of two programs. The larger is $150 billion to create 5 million so-called "green collar" jobs to develop more environmentally friendly energy sources.

Sixty billion would go to a National Infrastructure Reinvestment Bank to rebuild highways, bridges, airports and other public projects. Obama estimated that could generate nearly 2 million jobs, many of them in the construction industry that's been hit by the housing crisis.

So, you say it is unfair and provocative to compare Barack Obama's job creation idea to the Soviets. Fine compare his government lead job creation idea to his previous government lead job creation idea. Take a look at this report from the Boston Globe.

Is anyone feeling more comfortable about an Obama presidency yet?

Finally, Mr. Madigan proclaims that all the capitalistic system needs is more regulation of banks. I take issue with anyone that ever makes that proclamation. What the system needs is more oversight of the most basic regulation, fraud. That's what is at the heart of this crisis. It wasn't a lack of regulations, but rather a lack of enforcement. What this system needs is someone divorced of influence from the banks. If you believe that Barack Obama is that person, you haven't been paying attention.

Ben Bernanke Vs. the Housing Market

Yesterday, I got this internal email that does an excellent job of explaining the short term movement of mortgage bonds. (they have exploded up over the last week or so)

The activity in MBS markets - and other financial markets - has been very unusual this month. The Fannie Mae Required Net Yield has already made two round trips from about 5.70% to 6.60% over the past few weeks, displaying a level of volatility rarely seen. Under normal market conditions, the vast majority of the significant rate movements are the result of fresh economic news. This month, however, it has been common to see large rate movements unconnected to any news announcements, for reasons discussed below.

One reason is that the credit crisis has forced many investment funds and financial institutions to reduce their leverage and raise capital. In many cases, these big holders of MBS are selling assets across their portfolios. This explains why MBS, stock, oil, and other markets have frequently all been falling on the same days. The fundamental economic data clearly supports lower mortgage rates. Global economies are slowing, oil prices are down, and expectations for future inflation are moving lower. As long as these investment funds are forced to sell assets, however, there will continue to be upward pressure on mortgage rates. How long it will last is one of the biggest questions facing investors today.

Now, the short term movement of mortgage bonds, and by extension the rate on mortgages, is certainly something that only mortgage professionals care about. That said, the long term movement of mortgage rates is something everyone should be concerned about. What this email essentially says is that the economic crunch has forced major institutions like investment funds to cash out of Mortgage Backed Securities, like those backed by Fannie/Freddie, and turn that into cash. As such, this has caused the price of these bonds to go down and by extension the interest rate on them to go up. (the price and the rate have an inverse relationship) Now, this is all short term and certainly there is a good chance that once this dynamic has ended the rates will come back down.

The fed is once again expected to cut its central rate. The expectation is that the Federal Funds Rate will be cut to 1.00%. That will be only .25% over what it was at the worst of the recession back in 2002. (I have long held this dramatic cut in rates as the catalyst for the eventual mortgage crisis) Now, Bernanke is clearly attempted to provide short term stimulus to stabilize the economy.

Here is the rub. The central rate is a short term rate. It is used for borrowing for short term money, one day, one week, one month, three months. Mortgages are long term, thirty years. Right now, we have no inflation fears. Mortgages don't respond to short term fears but rather long term fears.

Why does all of this matter? Mortgage rates are once again approaching 7%. If Bernanke cuts the central rate, they will likely cross above 7%, at least in the short term. Each and everytime Bernanke has acted to create short term liquidity what that has done is exploded rates upward in the short term as well. They eventually came back down each and everytime however never as much as they came back up.

Now, everyone agrees that our economy isn't going to come out of this rut until housing stabilizes. What are the chances of a stabile housing market if the 30 year fixed mortgage is sitting at over 7%? Most good borrowers are currently holding onto mortgages in the low six's, high fives, and sometimes even lower. The chances that someone is going to sell in order to replace a 5.5% mortgage into a new mortgage of 7.5% is very unlikely.

What we currently have is a Fed drunk on action, and possibly power. In other words, the Fed is addicted to Fed action. Of course, each and every fed action is viewed by the market as inflationary in the long term. It should be. Cutting short term interest rates this low only floods the market with money. That is inflationary. We are already running up troubling deficits and we're about to add $750 billion to that. The Congress wants an immediate stimulus and so we'll add another $150 billion to that. All of these are inflationary in the long term. All of these are bad for mortgage rates. The only opportunity for the housing market to stabilize is for mortgage rates to get low enough to cause good borrowers to act. With rates over 7% it causes borrowers to do the exact opposite. As such, whatever short term stimulus Bernanke provides, it will be at the expense of the long term health of the economy.

Tuesday, October 28, 2008

The Perversion of the Bush Tax Cuts: The Unholy Alliance of the Democrats and the MSM

There is an old saying, if you say a lie enough times it becomes the truth. If you were only paying attention to the Democrats and the MSM over the last nearly eight years, you would think that the only people that got a tax cut under the Bush tax proposal were those making seven and six figures yearly. Not only is this a distortion but it is frankly a flat out lie. Yet, this lie has taken on a life of its own and because it has been repeated often enough by both the Democrats and the MSM it has become the truth.

Here is the real truth of the Bush tax cuts. Prior to the Bush tax cuts, the marginal tax rates were, 15, 28, 31, 36, and 39.6%, depending on your income, familial status and other matters. After the Bush tax cuts, those margins were cut to 10, 15, 25, and 33%. Furthermore, the President eliminated the inheritance tax, increased certain child tax credits, and cut other minor taxes. In other words, if you paid anything in federal income taxes, your income tax rate went down. In fact, on a percentage basis, the poorer folks got a much bigger cut than the wealthy (from 15% to 10% compared to 39 to 33).

Now, what the Democrats didn't like about the Bush tax cuts was that he didn't give a cut to those that paid ZERO IN FEDERAL TAXES. President Bush correctly recognized that you can't cut someone's taxes if they already pay zero. That wouldn't be a tax cut but rather a welfare check. Yet, because Bush didn't include those roughly 40% of the population in his tax cuts, his tax cuts have been referred to as "for the rich" ever since. That's despite that Bush's tax cuts would affect those that made as little as $27,000 yearly. As such, if you are a Democrat or in the MSM, if you pay any income tax at all, you must be "rich".

In fact, the Democrats continue to do this...

Here again, Joe Biden claims that millionaires will get about $87 billion in tax breaks. That's true, but there will also be hundreds of billions in tax breaks to those that aren't millioniares. That's because under Bush's tax cuts, each and every person that pays income taxes had their income tax rate cut.

The irony of ironies is that under Barack Obama's plan no one will have their marginal rate cut. Barack Obama will cut people's tax burden through a series of tax credits. On the other hand, he will raise the top two marginal tax brackets to what they were prior to the Bush tax cuts. Since the bottom 40% of the population already pay nothing in federal income taxes, their tax burden will be lowered by the series of tax credits Senator Obama is proposing. This is how Senator Obama claims that Bush cut taxes for the wealthy only while he will focus on the middle class.

This total distortion of reality could only happen because the Democrats repeated over and over "tax cuts for the rich" and the MSM never corrected them.

Con/Con Yes/NO?

In the whole of the United States of America, the big question on November 4th will be whether John McCain or Barack Obama will be President. In Illinois, the big question maybe whether or not to have a Constitutional Convention come 2010. For instance, former Governor Jim Edgar has spoken out.

The question of whether or not a Constitutional Convention is a good idea or not is one layered in nuance and double edged swords. As such, let's lay out what is not disputable. First, the current Constitution of Illinois is a giant mess. It allows for such rights as the right to a clean environment, the right to be free from discrimination, all persons with a physical or mental handicap shall be free from discrimination in the sale or rental of property and shall be free from discrimination unrelated to ability in the hiring. As such, we have here a lot of well meaning rights that are nebulous at best and at worst a potential litigation nightmare. Just imagine any enterprising attorney suing a smoker for inhibiting on an other's right to a "clean environment".

Furthermore, the Constitution has other nebulous statements like this.

To promote individual dignity, communications that portray criminality, depravity or lack of virtue in, or that incite violence, hatred, abuse or hostility toward, a person or group of persons by reason of or by reference to religious, racial, ethnic, national or regional affiliation are condemned.

While this is a good thought, it's very unclear just how this is supposed to be enforced. Finally, the Constitution has other rights that then become totally infringed by municipalities. Let's look at this right.

Subject only to the police power, the right of the individual citizen to keep and bear arms shall not be infringed

So, while the 2nd Amendment right of the U.S. Constitution is reinforced in our own Illinois Constitution, it doesn't seem to do much to stop the city of Chicago from creating a ban on handguns. I could go on and on, and I have only delved into the Bill of Rights so far. So, believe me when I tell you, the Illinois Constitution is a mess.

On other indisputable truth is that a Constitutional Convention will cost a bunch, $80 million. Furthermore, the state of Illinois is is drowning in debt.

Thus, we have layers of arguments. Is it worth it to spend $80 million to hammer out a new Constitution? Furthermore, there is another nuanced argument first given to me by Tony Peraica, the Republican candidate for Cook County State's Attorney. Illinois is currently a far left state. Creating a Constitutional Convention now will only select a plethora of new far left delegates that will likely make it even worse. Many of those opposed to the Constitutional Convention say that the problem isn't the Constitution itself but rather the current crop of politicians. Rather than a costly Constitutional Convention, they say, just vote the bums out.

Dennis Byrne, a Chicago area columnist, tackles all of these arguments.

The organized opponents of a constitutional convention—representing many of the same business, labor and political interests that have steered us to the brink—insist that constitutional change isn't what we need. The way to change government is to elect new people, they say. Sure, that has worked so well.

Then, after telling us that the way to reform government is to elect better people, the anti-con-con forces warn us a convention would be dangerous because voters would elect the same kind of convention delegates that they already elect to run state government. This argument is at war with itself. If we can't elect true reformers to a con-con, then how are we going to elect true reformers to man the helm of state government?

The anti-con-con forces could have made a better case for themselves if they had said: To reform government, we need to elect better people, and we're creating a coalition of the reform-minded to do just that. Our coalition will cross party lines and back a consensus slate of candidates for the 2010 election, in which the governor and all leading state officers are elected. That they haven't shown any interest in that demonstrates that in opposing a convention they are mainly interested in tamping down reform efforts.

Certainly, some opposition is reasonable and well-intentioned, based on fears, for example, that the convention would draft a worse constitution or fall into the hands of single-issue delegates, such as those who want to write into it protections against global warming or for traditional marriage.

After giving it some thought, I am with Byrne. Ultimately, it comes down to this. The current Constitution is bad, really bad. No one can know what a new Constitutional Convention will bring, but the threat that things might get worse is no reason to sit by and accept the status quo.

Unfortunately, from my perch inside the Chicago area politically active community, I have seen little interest in this topic. I have had no conversations about a potential constitutional convention. I have attended one grass roots meeting about a new convention, however even that was sparsely attended. While I believe a Constitutional Convention is necessary, I am not hopeful it will have enough support to happen.

Some Context on Barack Obama, the Supreme Court and a Living Breathing Constitution

Several months ago, I was very troubled by Barack Obama's description of the type of Supreme Court justice he was going to choose.

Ninety-five percent of the time the law is so clear that it's just a matter of applying the law. I'm not somebody who believes in a bunch of judicial law-making.

What you're looking for is somebody who is going to apply the law where it's clear. Now there's gonna be those five percent of cases or one percent of cases where the law isn't clear. And the judge has to then bring in his or her own perspectives, his ethics, his or her moral bearings. And In those circumstance what I do want is a judge who is sympathetic enough to those who are on the outside, those who are vulnerable, those who are powerless, those who can't have access to political power and as a consequence can't protect themselves from being being dealt with sometimes unfairly, that the courts become a refuge for justice. That's been its historic role. That was its role in Brown v Board of Education.

First of all, it is a total distortion of the Supreme Court's actions to say that 95% of the cases are obvious. They aren't obvious to the justices themselves, because nowhere near 95% of the cases are decided 9-0. In fact, a very small minority are decided overwhelmingly. As such, this statement is absurd and totally without context.

What's more troubling is the manner in which Senator Obama wants justices to decide those cases where the law isn't clear.

Now there's gonna be those five percent of cases or one percent of cases where the law isn't clear. And the judge has to then bring in his or her own perspectives, his ethics, his or her moral bearings. And In those circumstance what I do want is a judge who is sympathetic enough to those who are on the outside, those who are vulnerable, those who are powerless, those who can't have access to political power and as a consequence can't protect themselves from being being dealt with sometimes unfairly, that the courts become a refuge for justice.

In other words, where the law is unclear, Senator Obama wants Justices to dismiss the Constitution entirely and instead focus on protecting the weak over the powerful. He sees the Supreme Court as the last refuge for the little guy in their struggle against more powerful forces.

Now, let's look at the infamous tape of his 2001 interview.

Here is the important part again.

If you look at the victories and failures of the civil rights movement and its litigation strategy in the court. I think where it succeeded was to invest formal rights in previously dispossessed people, so that now I would have the right to vote. I would now be able to sit at the lunch counter and order as long as I could pay for it I’d be o.k. But, the Supreme Court never ventured into the issues of redistribution of wealth, and of more basic issues such as political and economic justice in society. To that extent, as radical as I think people try to characterize the Warren Court, it wasn’t that radical. It didn’t break free from the essential constraints that were placed by the founding fathers in the Constitution, at least as its been interpreted and Warren Court interpreted in the same way, that generally the Constitution is a charter of negative liberties.


I’m not optimistic about bringing about major redistributive change through the courts. You know, the institution just isn’t structured that way.

Given what Senator Obama previously said about 95% of the cases being obvious, everything starts to make a lot of sense. The courts aren't structured in a manner to bring "distributive change" because he believes most cases have clear case law. In those places where the case law isn't clear, what Barack Obama wants is a judge that will act as a social engineer. He wants a Supreme Court justice that will even the playing field in the court, because outside it is terribly uneven. That's what he means by a living, breathing Constitution. Where the case law and Constitution is clear, you follow that. Where it isn't, you use the courts as a means of "social and economic justice". In other words, if someone kills a poor six year old, and the search, key to the arrest of the perpetrator, may or may not have violated the fourth amendment, then the case should be decided not by examining the merits of the evidence in the context of the fourth amendment, but rather by how the little boy can get justice.

In fact, this philosophy is completely in context with his philosophy of income redistribution. The wealthy have an unfair advantage in this world, and so Senator Obama sees his own role as attempting to even the playing field. That's of course rank Socialism, Marxism, and social engineering, and it's clear that the sort of Supreme Court justices he wants will believe that the Supreme Court is the proper venue for such philosophy, where the case law is not clear.

Barack Obama, Rashid Khalidi, Election 2008, the MSM...A Thought Experiment

Let's pretend for a minute that suddenly the MSM woke and decided to no longer be in the tank for Barack Obama. Let's just imagine what would happen with the story of the relationship between Rashid Khalidi and Barack Obama. Let's even assume that everything in the past happened exactly as it did.

First, let's review. Rashid Khalidi is currently a professor at Columbia University. He was once a professor at the University of Chicago where he was a colleague of Barack Obama's. They had some sort of a relationship though it is unclear just how close that relationship is. The L.A. Times published a story in which the author, Peter Wallsten, talks about a going away party thrown in the honor of Mr. Rashidi in which this occurred.

During the dinner a young Palestinian American recited a poem accusing the Israeli government of terrorism in its treatment of Palestinians and sharply criticizing U.S. support of Israel. If Palestinians cannot secure their own land, she said, "then you will never see a day of peace."

One speaker likened "Zionist settlers on the West Bank" to Osama bin Laden, saying both had been "blinded by ideology."

Among the attendees were none other than Mr. and Mrs. Khalidi, Mr. and Mrs. Obama, and Mr. and Mrs. William Ayers. According to Gateway Pundit, the L.A. Times has a copy of a tape of this soiree but they won't release it. Here what Little Green Footballs produced regarding the L.A. Times' response to readers asking for release of the tape.

The Times did write about the tape, so I’m not sure what you mean about suppressing the video or information from the video. Here is a copy of the
report about the video.Thanks again for writing,

Jamie GoldReaders’ Representative
If that is the case, then release the video that you have of the event and don’t merely report it. Why is the Los Angeles Times sitting on a videotape of the 2003 farewell bash in Chicago at which Barack Obama lavished praise on the guest of honor, Rashid Khalidi - former mouthpiece for master terrorist Yasser Arafat?
Thanks for your note back. It sounds as if you don’t find “mere reporting” to be enough, but The Times is not suppressing anything.Just the opposite — the L.A. Times brought the matter to light. Thanks again for taking the time to

Jamie GoldReaders’ Representative

Now, there is no reason either journalistically or business wise not to release the tape. We've all heard the saying "a picture is worth a thousand words". Well, here an audio would also be worth a thousand words. There is no way for the reader to get any proper context without hearing the audio. As such, the L.A. Times' refusal to release the tape is another example of the MSM being in the tank.

Now, let's just imagine they weren't. What would happen? The first thing that would happen is that the Times website would approach records for number of hits in a single day. Those in sales, advertising, and marketing would have a field day trying to figure out ways to make money in banner advertising on that particular page. The L.A. Times would be linked by everyone from this blog to the government website of Kenya and everyone in between. The Times would go from scourge of the Conservative community to heroes. Their circulation would explode as Republicans and Independents would see the Times as a "courageous newspaper" and forgive all prior transgressions. The banner ad from this page would fetch fifty to one hundred times what they would normally fetch. (given their current struggles the extra ad revenue couldn't come at a better time)

They would become the scourge of the left wing establishment of the likes of Daily Kos,, and Media Matters. Their circulation would drop among the more liberal readers, but not nearly as much as it would pick up by Conservatives. Furthermore, the massive attention it would receive would also explode circulation.

The Times would be wise not to allow embed of the video and to warn You Tube et al ahead of time that the video is the Times' property and so it can't be downloaded in their sites. As such, they would be the one and only holders of the most talked about thing in the world.

The Obama campaign would call them a lackey for the McCain campaign and call it a coordinated plot between McCain, Fox News, and the L.A. Times. Then, all their reporters would be banned from interviewing the campaign. Obama's spokespeople would be on every airway calling this a distraction from the real issues. They would say this is a desperate attempt by the McCain campaign to to distract the public from the failing economy. Surrogates would becry this tape as guilt by associations. Sean Hannity would begin repeating: Chickens come home to roost, the first time in my life I am proud of my country, Bill Ayers unrepetent terrorist, and the crook Tony Rezko (though frankly that would be no different than what he does now) over and over.

Politically, the tape would then run as the so called loop for the next several days. Eventually of course, that tape would begin to run in a loop with some other well known tapes.

The Khalidi relationship would then be examined in the prism of the relationship that Barack Obama had with the likes of Bill Ayers. In other words, it would be the death knell of the Obama campaign. The inflammatory nature of this tape especially combined with the inflamatory nature of the Wright tapes, would send chills down the spines of most voters. I would take a bet as long as I got the "reasonable" 3 to 2 (in other words I bet two dollars to win 3) odds that Obama loses Illinois. The Democrats might not gain any seats. They might even lose seats. Barack Obama and the Democrats would suffer a stunning loss just as they were tasting victory.

All of this would happen merely by releasing a tape that any basic journalism student could tell you should be released regardless of the impact.

Monday, October 27, 2008

Will the Tape Be a Game Changer

Definitely...maybe. First here is the tape again.

There are many ways to examine its effect. First of all, you go to the source. So far, it has had just over 1.5 million viewings on Youtube and approaching fifteen thousand comments. That is a stunning amount. Clearly, it has had an immediate impact. What remains to be seen is just how many viewings it will have in a week. If the video has had its run and we seen only a small gain from here then its impact from this angle will be limited. The magic number for me is ten million and one hundred thousand. If it gets ten million viewings and one hundred thousand comments, then it will have a serious impact on the campaign from the You Tube angle.

That's just one way to look at it though. The other way is how does this tape affect the news cycle. Let's take a look.


Here is a sampling of the media coverage on the net. Finally, here is some anecdotal evidence. I wrote this piece comparing Barack Obama to Karl Marx. Since this tape has come out I have had about three hundred looks at that piece. I normally get anywhere from one to ten. In other words, there is enormous interest in the idea that Barack Obama is like Karl Marx. Of course, what I don't know is if all the interest is coming from the right. Still, clearly this tape has an immediate effect and it has now dominated the media coverage.

That won't be enough to be a game changer. So, what John McCain needs to do is continue keep making this an issue. McCain has a them upon which to attack Obama incessently for the next seven days and he must take it. Joe the Plumber opened up this attack, and that's what makes this tape so potentially devastating. What it really does is reinforce a major vulnerability. By reinforcing his initial gaffe, the idea that Barack Obama wants to redistribute our wealth becomes that much clear to the voters. The rest of the campaign will be spent dissecting Barack Obama because that's what happens when you are in the lead.

Now, a couple of days ago, I suggested that John McCain repeat over and over this quote.


Now after a couple of days, I think that is likely too loaded a line of attack. Openly comparing Barack Obama to Karl Marx (the author of this quote) is something that might make some sense for a provocative blogger, but it is likely too provocative for a Presidential campaign. Rather the McCain campaign should continue to attack using the same line they have been using.


That frankly is one of the most important concepts in Socialism or Marxism and so frankly it's much the same as calling him a Marxist only doing it in a more tactful way.

The most important thing the McCain campaign needs to verbalize in interviews, on the stump, and in commercials is this. Each and everytime a Democrat defends the Obama tax cut they proclaim that giving a tax cut to the middle class is not income redistribution. Cutting taxes for 95% of the people is not income redistribution.

The McCain campaign needs to make crystal clear that Barack Obama intends on getting the money for all of these tax cuts by raising taxes on those that are wealthy. This isn't merely raising the income tax. It is raising the capital gains tax, the corporate tax, the inheritance tax,
and a brand new payroll tax on the wealthy only (to go to fund the Social Security income of those that aren't as wealthy)

What Senator Obama believes is that those that already pay about 40% of their incomes toward don't pay enough and should pay more like 50%. Meanwhile those that pay ZERO in federal income taxes pay too much and they will pay less. That's the definition of income redistribution. If Senator McCain that point forcefully and does it over and over, he will make the sale that Senator Obama's plans are nothing more than income redistribution. (something that polls 84-13 against).

Jon Burge and Chicago's Culture of Corruption

In my post on Jon Burge, I received this comment.

Good for Fitzgerald, but has anybody looked into why the US Attorney at the time did nothing? People are remembering that Daley didn't prosecute Burge when he was State's Attorney, but a police officer's torturing a confession out of a suspect is also a federal crime under 18 USC 242.

This is very little, very late, and people should understand that convicting Burge of perjury in this case will not help those who were wrongly convicted overturn their convictions. Because the law makes that virtually impossible, their only hope remains a pardon from the governor.

The observation this commentor makes is at the heart of this story. Jon Burge was both a police officer and eventually a police commander that, starting in 1972, began torturing confessions out of suspects. As a police commander, he made torture a standard operating procedure for the police under his command. He continued to do this until in 1993 he was finally removed from his position and forced into early retirement upon which he drew a police pension that continues today.

At the heart of this story is the simple questions of how and why. How does a police commander get away with systematic torture? Why did no one ever stop him?

It is both an open secret and a running joke that the politics of the city of Chicago is corrupt. After all, our fair city is NOT called the Windy City because it is windy, even though it is. It's called the Windy City because our politicians are corrupt. After all, the most apt saying to describe Chicago politics is

vote early and vote often

said famously by Richard J. Daley, who many credit with handing the White House to JFK with thousands of phantom ballots. Of course, Chicago political corruption is treated as a bit of a joke, but torture is no joking matter. In this case, it is the systemic corruption that explains the how and the why for the story of Jon Burge.

Why didn't the U.S. Attorney never prosecute Jon Burge prior? It's the same reason that Peter Fitzgerald lost his political career for naming Patrick Fitzgerald the current U.S. Attorney for the area covering Chicago. Before Patrick Fitzgerald, we could count on the U.S. Attorney here to be a political insider. That political insider had no reason to investigate or prosecute police corruption like torture. Our current mayor, Richard M. Daley, was the Cook County State's Attorney from 1981-1989 and he did absolutely nothing to investigate the corruption that lead to systematic torture. Now, Anita Alvarez, who has spent the last twenty plus years in the very Cook County State's Attorney's office that has done nothing, is the favorite to be the next Cook County State's Attorney. The corruption only begins there though. The entire hierarchy of the Chicago Police Department did absolutely nothing while all of this was going on. These weren't isolated incidents. This was systematic. Estimates have at least 200 prisoners currently in jail that got there through confessions that were a result of torture. Then, there is the Chicago area media. You'll find scant attention to this story for the nearly two decades that it went on. In fact, it was the artsy newspaper, the Chicago Reader, that lead the way in breaking this story. The establishment media in Chicago, the Chicago Tribune and Sun Times, didn't have much interest in systemic torture. The local news stations were also asleep while this went on.

So, it went. The entire Chicago political class either didn't care or something worse. The entire Chicago media class either didn't or worse. The systemic torture of Jon Burge got so bad that eventually George Ryan had to put a moratorium on the death penalty here because far too many of his cases were winding up on death row. So, for about twenty years Jon Burge continued his reign of terror. We'll never know just how many suspects wound up in jail as a result...several hundred or maybe even several thousand.

Even today, no one seems to care. No one is asking the tough questions. How did this happen? Who is responsible for covering it up and looking the other way? One person who is at the center is now mayor of the city. Most of the players around the torture have grown in stature and power. Some have retired or moved on. No one, though, absolutely no one, has been held to account including Jon Burge. Burge, after all, has now finally been charged but not with torture. Rather, he has been charged with perjury and obstruction of justice relating to testimonly from a civil suity. Presumably he lied about torturing people. Even now, the case continues to be swept under the rug by a corrupt Chicago political class that likely would rather not have the secrets that are most certainly associated with it see the light of day. An equally corrupt Chicago media is happy to oblige the corrupt Chicago political class in keeping all these secrets.

Sometimes corruption is something to snicker at and make jokes about, but most of the time, it leads to tragedy, like when a cop conducts systematic torture of suspects and no one does anything about it. Jon Burge, and everything that surrounds his case, is what the systematic corruption that infects Chicago politics has bred, and no one, still, seems to care at all.

The Definitive Dossier on Obama's Marxism

The latest craze on the right blogosphere is this interview first dug up by Matt Drudge.
Hot Air, Michelle Malkin, and Stop the ACLU also have details.

The most important quote is right here.

If you look at the victories and failures of the civil rights movement and its litigation strategy in the court. I think where it succeeded was to invest formal rights in previously dispossessed people, so that now I would have the right to vote. I would now be able to sit at the lunch counter and order as long as I could pay for it I’d be o.k. But, the Supreme Court never ventured into the issues of redistribution of wealth, and of more basic issues such as political and economic justice in society. To that extent, as radical as I think people try to characterize the Warren Court, it wasn’t that radical. It didn’t break free from the essential constraints that were placed by the founding fathers in the Constitution, at least as its been interpreted and Warren Court interpreted in the same way, that generally the Constitution is a charter of negative liberties.

The reason that this is the most important quote is that it's the first time that Senator Obama has been quoted as believing that it is the duty of the Supreme Court to impose income redistribution. With up to four new Supreme Court Justices to be chosen in the next four years, this should send chills up the spines of all those that believe in limited government and the Judeo Christian founding of our nation.

Still, besides making this bold remark about the Supreme Court imposing income redistribution, nothing that Senator Obama says in this interview is new. In fact, he has frankly been rather open about his Marxism. As such, here is the full dossier of his Marxism.

1) From those with means to those with needs.

This is the center piece of Karl Marx' economic philosophy. It is the philosophy behind income redistribution. It is the philosophy behind his belief in Socialism. Capitalism, in the opinion of Marx, was flawed. It gave far too much to those at the top and left the workers, the proletariat, with the scraps of the economy. Marx believed that a better philosophy redistributed the wealth more fairly. As such, he created the economic philosophy of Socialism.

Barack Obama believes in this tenet. He said as much when he said, "when we spread the wealth it's better for everyone".

Beyond what he told Joe the Plumber, it's the center piece of his economic policy. He's said as much. He wants to raise taxes on the 5% that are most wealthy, those with means. In fact, when he defends his plan, he says "I want to raise taxes on the wealthiest Americans like Warren Buffet and myself, those with the ABILITY TO PAY." It isn't as though he is hiding his philosophy. He is flat out saying that he wants to take from THOSE WITH MEANS. Keep in mind that he doesn't merely want to raise income taxes on those making $250,000 and more. He wants to raise the capital gains tax, the corporate tax, and re institute the inheritance tax. He even wants to create a whole new payroll tax on those making $250,000 to pay for the Social Security benefits of those that are poorer. He wants to raise taxes on all traditional groups associated with wealth. Again, he is making no bones about his intention on taking "FROM THOSE WITH MEANS".

Then, he wants to use the higher taxes from "THOSE WITH MEANS", and cut taxes on everyone else. This includes giving tax breaks to 40% of the country that pays no federal income tax. He will give these folks all sorts of tax credits. In other words, he wants to give to "THOSE WITH NEEDS". Again, there is nothing hidden about his philosophy. No one should be stunned by Obama's Marxism. That has been the center piece of his economic philosophy since he first ran for President. He will take from the top 5%, THOSE WITH MEANS, and give that money to everyone else, THOSE WITH NEEDS.

2) New rights and other government policies.

In the second debate, Barack Obama created a right found nowhere in the Constitution, the right to health care. This is also classic Marxism. In fact, he follows the same "from those with means, to those with needs" philosophy in health care. How does he plan on providing health care to those that can't afford it on their own? He will mandate that corporations and successful small business HAVE TO PROVIDE IT or face a penalty. Once again, he is following the "from those with means to those with needs" philosophy. It is a short step from making health care a right, to making a living wage, housing, retirement, and all sorts of other things a right as well.

There's more. Barack Obama has stipulated that he wants to create a new regulatory framework. Why? It's because he believes we have a "winner take all economy". He wants to use government regulation to even the playing field. Again, this is not new. The new regulatory framework and an end to the "winner take all economy" have both been the center piece of his economic agenda since the beginning.

How does he plan on creating new jobs? He wants the government to lead in creating them.

Democrat Barack Obama said Wednesday that as president he would spend $210 billion to create jobs in construction and environmental industries, as he tried to win over economically struggling voters. Obama's investment would be over 10 years as part of two programs. The larger is $150 billion to create 5 million so-called "green collar" jobs to develop more environmentally friendly energy sources.

Sixty billion would go to a National Infrastructure Reinvestment Bank to rebuild highways, bridges, airports and other public projects. Obama estimated that could generate nearly 2 million jobs, many of them in the construction industry that's been hit by the housing crisis.

Having the government lead in creating new jobs is not new in his platform. It's also the way jobs are created in Socialist societies. Government spends money, consolidates more power, and they are the ones doling out the jobs. That's classic Marxism, Socialism, and its what Barack Obama has proudly said he wants to do as President.

3) Class Warfare.

I believe the Democrats themselves have perfected class warfare but Barack Obama especially. How often have we heard that Bush's tax cuts FOR THE RICH have cosolidated wealth in the few, stagnated wages for WORKERS, and has created an economy that passed most people by. Now, Bush cut the marginal tax rates on everyone THAT PAYS TAXES, and so when Barack Obama refers to the cuts as for the rich, what he is really saying is that anyone that pays federal income taxes is rich.

How often does he scoff at McCain's proposal to cut corporate taxes as a tax cut for wealthy corporations like the oil companies? Instead, he wants to create a windfall profits tax. If a company makes too much, he will tax that more than he taxes normal profits. Then, he'll take that extra tax and distribute it to those that aren't as well off. This is classic Karl Marx class warfare. Demonize the greedy capitalists, punish them, and distribute the punishment to the workers. Again, he has made absolutely no bones about this intention.

He does it on health care as well.

There have been over 400 health care mergers in the last 10 years, and just two companies dominate a full third of the national market

....In the interview, for example, he argued that his proposals on health care and the economy, which call for a stronger government role and more regulation, were really about what works.

Attacking the capitalistic idea of mergers and demonizing it for creating the struggles of the workers is also classic Marxist class warfare. He even goes so far as to proclaim that he wants more government to solve it. Karl Marx, himself, couldn't have written the script better. Attack the system as favoring the big guy, and propose more government to solve it. It's classic class warfare followed by classic Socialism.

It's no different when discusses mortgages.

Here, in Nevada, we see how so many people are fighting for their American Dream. Because in so many ways, Felicitas and Francisco have lived the American Dream. Their story is not one of great wealth or privilege. Instead, it embodies the steady pursuit of simple dreams that has built this country from the bottom up

....Yet a predatory loan has turned this source of stability into an anchor of insecurity. Because a lender went for the easy buck, they are left struggling with ballooning interest rates and monthly mortgage payments. Because Washington has failed working people in this country, they are facing foreclosure, and the American Dream they sought for decades risks slipping away

the common folk were taken advantage of by the vultures of a naked capitalistic system that ran wild. That is the message, and of course, his solution will be a plethora of new government regulations. In other words, naked capitalism caused the crisis, and government regulations will resolve it. Laced throughout his economic proposals, is first the narrative that the system as it is now takes advantage of the little guy in order to benefit the big guy. Of course, the solution is always more government. Once again, it is classic class warfare politics.

4) His radical association.

You want to find context to the plethora of radical associations that Barack Obama has. It is in his Marxist philosophy. Is it any surprise he spent six years as a member of the Socialist New Party? Is it any surprise that his mentor growing up was the Communist Frank Marshall Davis? Is it any surprise that he has ingratiated himself with the Communist and Anarchist William Ayers? Look at the main page for the group ACORN, a group that Barack Obama has had a two decade plus year relationship with.

They want the government to mandate health care, affordable housing, and a living wage. This is all on their site. This group is quasi Marxist itself.

Furthermore, Barack Obama has had associations with radicals like Father Pflegger and Reverend Wright. He's also spent a decade in academia where Marxism is accepted as a legitimate economic philosophy. Again, none of this is new, and so frankly, to say that Barack Obama part and parcel a Marxist is to merely explore the record that is available to the public.


Now then, let me counter several of the points that Liberals are like to make. First, they will point out that the PROGRESSIVE TAX SYSTEM is not new. That's true, however Barack Obama wants to specifically make it more progressive to those at the top in order to make it less progressive to those at the bottom. Barack Obama thinks that those that already give about 40% of their income to taxes aren't paying enough, while those that pay no income tax are paying too much. A progressive tax system is one thing, but mandating a redistribution of wealth is something totally different.

Second, is Barack Obama a Marxist? No, he is not totally a Marxist. Liberals will point out that it is ludicrous to point out he is a Marxist since Marx believed in the nationalization of industry, total government control, and a totalitarian state. That's true. Barack Obama pays lip service to the free markets from time to time. He doesn't want to create a totalitarian state. He doesn't want full nationalization of industry. He does however subscribe to the philosophy of wealth redistribution. He does want to partially nationalize health care. He does want the government playing a much more significant role in job creation and in regulation. The point is not to make Barack Obama an exact replica of Karl Marx. The point is how close do we want our President to be to Karl Marx. I reject everything that Karl Marx believed in. I want a President that is as far away from Marx as possible. Liberals seem to believe that if someone only believes in some of Marx' teachings that it is no longer an issue. It would be beyond the pale to compare Barack Obama to Karl Marx if our "only evidence" was his belief in wealth redistribution, government creation of jobs, more government role in regulation, and the partial nationalization of health care. I think that is far too much resemblance to Marx myself.

Sunday, October 26, 2008

Is the Constitution a Living, Breathing Document

One of the biggest shames of most Presidential campaigns is the total lack of attention that the Supreme Court and judges in general receive. The Supreme Court is the most lasting legacy of any President. Earl Warren became one of the most liberal jurists in history and yet he was chosen by the Republican President Dwight Eisenhower.

In this election, we have two very different philosophies. Senator Barack Obama believes that the Constitution is a living breathing document to be updated and refined by the Justices on the Supreme Court. John McCain believes that the Constitution is a static document to be strictly constructed and interpreted by the Justices.

I firmly believe that the Constitution is NOT a living breathing document, and that Justices should construct the Constitution strictly. My biggest problem with those that believe the Constitution is living and breathing is that it is position that comes from hubris. After all, you aren't going to find one person that wrote the Constitution itself that believed that this document would update and change unless amendments were added. Worse than that, those that believe that the Constitution should be living and breathing then also believe that their judgment is better than that of the folks that wrote the Constitution. After all, how else can you explain that these folks want the Constitution to live and breathe and thus be updated as they see fit? It's only because they don't believe the Founding Fathers were wise enough to construct a document that could stand the test of time. Instead, they believe that it is their duty to update it and make it better. This, to me, is hubris of the highest order. Finally, the founding fathers created the amendment system for all those that believed in a living, breathing Constitution. In order to change it, one must go through the amendment process. Those that believe in a living, breathing Constitution also think that unelected judges should usurp the role of everyone involved in amending the Constitution.

Those that believe that the Constitution is a living and breathing document also fail to appreciate the nuance and sophistication of the Constitution. In fact, the Founding Fathers were plenty wise enough to construct a document, in its original format, that could itself adapt to the future. That's because the Constitution was to be precise where the Founding Fathers believed that a principle needed to stand the test of time. On the other hand, it was vague in other areas where the Founding Fathers couldn't predict the future.

Let's look at an example of each. First, let's look at a place in the Constitution where it was precise. Let's take a look at the first amendment

Congress shall make no law respecting an establishment of religion, or prohibiting the free exercise thereof; or abridging the freedom of speech, or of the press

Now, this particular part of the constitution is extremely specific. It says that Congress shall make no law respecting an establishment of religion. This means that Congress, and Congress only, is prohibited from making any law respecting an establishment of religion. It doesn't prohibit the states from doing as much. In fact, the tenth amendment gives all powers not enumerated in the Constitution to the states. By both of these portions, the Constitution allows for the states to do as they please regarding the Constitution.

A great example of a jurist that believed the Constitution was a living and breathing document, as it relates to the first amendment, was Everson V Board of Education

The 'establishment of religion' clause of the First Amendment means at least this: Neither a state nor the Federal Government can set up a church. Neither can pass laws which aid one religion, aid all religions or prefer one religion over another. Neither can force nor influence a person to go to or to remain away from church against his will or force him to profess a belief or disbelief in any religion. No person can be punished for entertaining or professing religious beliefs or disbeliefs, for church attendance or non-attendance. No tax in any amount, large or small, can be levied to support any religious activities or institutions, whatever they may be called, or whatever form they may adopt to teach or practice religion.

Neither a state northe Federal Government can, openly or secretly, participate in the affairs of any religious organizations or groups and vice versa. In the words of Jefferson, the clause against establishment of religion by law was intended to erect 'a wall of separation between Church and State.

Now, it's interesting that Justice Hugo Black, who wrote this opinion, referenced Thomas Jefferson. That's because Jefferson was in France when the Constitution was written. Furthermore, Black used Jefferson's interpretation of the establishment clause rather than simply interpreting it himself. There is no separation of church and state in the Constitution. It was put in there by someone that believed that the Constitution was "living and breathing". As such, a matter of state's rights turned into a matter of the separation of church and state even though the founding fathers never meant it as such.

Now, let's look at another portion of the Constitution. Let's look at the Commerce Clause.

The Congress shall have power . . . To regulate commerce with foreign nations, and among the several states, and with the Indian tribes

This portion is precise in that it enumerates the powers of regulations of Commerce to Congress and Congress alone. Just as the Constitution forbids the Congress, and the Congress alone, from making any law establishing religion, it also gives the Congress, and the Congress alone, the power to regulate commerce. The regulation of commerce though is a vague and nebulous concept that can change and evolve as time goes on. As such, as the country evolves, so to will the Congress' role in regulating commerce. As such, while the Founding Father could never have imagined a force like the internet, they were smart enough to give the Constitution enough foresight to give the Congress the power to regulate something as vague as Commerce which includes the internet and many other forces the Founding Fathers could never have imagined.

The Constitution doesn't need to be living and breathing as the Constitution is vague enough, in those places where it needs to be, to allow those that follow it to adapt with the changing environment around them. It's full of the nuance and sophistication that you can find in both the first amendment and the commerce clause. If we are faithful to its original intent, we can find that it is an ingenius guide that allows just enough flexibility where it is necessary, and also, it provides strict guidelines where they are necessary.