Word for the day, if not year: "Deleveraging"

The Wall Street Journal offers up a very good effort at explaining what's happening in financial markets today, and it's worth a read. As reporters John Hilsenrath, Serena Ng, and Damien Paletta point out:

Lingering hopes that the damage could be contained to a handful of financial institutions that made bad bets on mortgages have evaporated. New fault lines are emerging beyond the original problem -- troubled subprime mortgages -- in areas like credit-default swaps, the credit insurance contracts sold by American International Group Inc. and others. There's also a growing sense of wariness about the health of trading partners.

The buzz word that I hadn't heard or read before: "Deleveraging":

Fed and Treasury officials have identified the disease. It's called deleveraging, or the unwinding of debt. During the credit boom, financial institutions and American households took on too much debt. Between 2002 and 2006, household borrowing grew at an average annual rate of 11%, far outpacing overall economic growth. Borrowing by financial institutions grew by a 10% annualized rate. Now many of those borrowers can't pay back the loans, a problem that is exacerbated by the collapse in housing prices. They need to reduce their dependence on borrowed money, a painful and drawn-out process that can choke off credit and economic growth.

That's the term being used to describe what is happening to America's major financial houses, as well as a host of other businesses across the globe. Of course, underneath it all, driving the cascading failures, is the mortgage debacle, but even that is a symptom of a greater problem: way, way too much debt at every level.

It's going to take a long time to crawl out of this mess, and we're all going to learn to live on less as sources for credit dry up. I honestly think that's a good thing, however; the U.S. has been living on borrowed time for far too long, including the government itself. If tightening belts points to weight loss, a leaner, meaner U.S. economy coming out of the other end of this disaster would be a good thing.

How not to share the Gospel: No. 4,112 in a series

Here's how you reach the urban downmarket with the message of the Gospel:

... or not. What on earth are people thinking?

The importance of the individual

I could, admittedly, go on at some length about what I absolutely love about this country. Being an American is an undeserved privilege, and I thank God for that privilege. By the same token, I rue what we are losing in this nation, and have been letting go of for some time -- the sense of the individual's absolute centrality in our national identity. This nation was founded on the principles of individual rights and individual liberty as God-given, "inalienable rights."

Oh, for what was ...

Historian Louis Rene Beres muses upon the loss of the individual's importance in our nation, and his words are stern warning to us all ...

No nation can be “first” that does not hold the individual sacred. Once, after Emerson and Thoreau, a spirit of personal accomplishment did earn high marks. Young people, especially, strove to rise meaningfully, not as the embarrassingly obedient servants of crude power and raw commerce, but as proud owners of a distinct Self.

Keeping liberty alive involves a certain tension between the importance of democratic participation in civil society, and the clarity not to dumb down democracy so far that any striving to stand out as an individual is broadly viewed as a negative. Sadly, the United States has drifted far in that direction ... thus the utter indifference to the gutting of the Fourth Amendment under the Bush administration, the general tendency to applaud ourselves even though we're now a debtor nation with a government-managed economy best described as national socialist, and a willingness to go to war (and continue in that mode) indefinitely, so long as some threat hovers on the horizon (and of course, it always does).

On the Left, that same tendency across in hate speech laws, myriad bad policies that make the problems they're meant to solve even worse, and a naive belief in the "goodness" of government (in spite of all evidence to the contrary). Modern liberalism is every bit as bankrupt, morally and intellectually, as modern "conservatism"; both distrust the individual, and to the extent they do, they love tyranny.

Foreign policy under Obama vs. McCain: Same difference?

Leon Hadar has an interesting post on the foreign policy consensus between the two major parties and their nominees. For a guy who ran as the antiwar candidate (initially, less so as he became the nominee-apparent), Obama is sounding an awful lot like a Bushie of late. Hadar:

It’s clear to me that since getting chummy with Petraeus in Iraq and on Iraq, Obama has gradually been co-opted by Washington’s foreign policy consensus whose members succeeded in creating the impression that we were witnessing the evolution of a foreign policy convergence and there isn’t really much difference between McCain and Obama on Iraq.

Hadar points to a July editorial by Walter Russel Mead that goes into some detail to sketch out this consensus. Mead's point was that Obama's position had been co-opted by the D.C. foreign policy establishment, and his trip to the Middle East had only further positioned Obama in the mainstream. As Mead writes:

But the irony is we have a presidential contest between Obama, whose entire primary candidacy was driven by his unshakable position as the toughest and most pessimistic critic of the war, and John McCain, an unrepentant supporter of the war who called for the surge at a time when the rest of the establishment was running for cover.

Yet during Obama’s visit to Iraq last week, it was the presumptive Democratic nominee who was enjoying a love fest with embattled Iraqi Prime Minister Nouri Maliki, who told the world—including U.S. voters—that Obama’s timetable was on the right track and that the quicker U.S. forces got out of Iraq, the better.

The net result, ironically, is that the antiwar candidate who predicted failure is benefiting most from the war’s success. Thanks to the surge he opposed, the policy Obama championed—a relatively swift and steady withdrawal of U.S. combat forces over 16 months, conditions permitting—no longer looks dangerous, irresponsible or an invitation to defeat.

Of course, Obama is hellbent on a surge in Afghanistan. While I agree that we missed the opportunity there to deal a serious blow to al Qaeda in the early phases of the Afghanistan invasion, I don't think even bringing AQ's senior leadership to justice would sound any sort of death knell for the Taliban or al Qaeda in Pakistan. This is a cellular movement, after all -- not a centrally controlled guerrilla movement.

Afghanistan has traditionally shown an unwillingness to be governed in anything other than a tribal way. It's hard to see a surge there having the same pacifying effect as it has had in Iraq, particularly given the absence of a major bloc of sympathetic guerrillas willing to switch sides, a la the Awakening among the Sunnis, in Afghanistan. Afghanistan is even more fragmented.

For those of us anxious to see our imperial nation-building incursion into Central Asia and the Middle East come to an end, neither major party candidate holds out any hope. Those who believe Obama is in any way an "antiwar candidate" are deceiving themselves only.

The Leviathan feds: bigger than ever

The Wall Street Journal is reporting that yesterday's release of the Congressional Budget Office report on the size and scope of the federal government puts the

The real news in yesterday's Congressional Budget Office semiannual report is that federal expenditures on everything from roads to homeland security to health care will on present trends reach 21.5% of GDP next year. That's a larger share of national output than at anytime since 1992. If the cost of the federal takeover of Fannie Mae and Freddie Mac prove to be large and are taken into account, next year federal outlays could be higher as a share of the economy than at anytime since World War II. In this decade alone, federal spending has increased by almost $1.2 trillion, or 57%.

Think about that for a moment. The Republican Party -- allegedly the party of smaller federal government, greater local control, etc., etc. -- has presided over the single greatest period of federal growth since World War II. Not even LBJ at his most egregious could top George W. Bush.

Can we now dispense with the canard that the GOP has anything to do with fiscal responsibility? They're at least as bad as the Democrats when it comes to liberty and prosperity -- although nobody spends like a Democrat, as the CBO report makes clear:

The real runaway train is what CBO calls a "substantial increase in spending" that is "on an unsustainable path." That's for sure. The nearby chart shows how much some federal accounts have expanded since 2001, and in inflation-adjusted dollars. This year alone, federal agencies have lifted their spending by 8.1%, with another 7% raise expected for 2009. There's certainly no recession in Washington. The CBO says that, merely in the two years that Democrats have run Congress, federal expenditures are up $429 billion -- to $3.158 trillion.

And there is truly no end in sight.

Obama, the community organizer

John Judis has an excellent piece on Obama's years as a community organizer in Chicago in the current New Republic. It's worth reading the whole thing, but a particular point of emphasis bears some highlighting:

Certainly, Obama has good reason to tout his community organizing experience. After graduating from an Ivy League college, Obama passed up more lucrative jobs to devote three years to organizing low-income African Americans in Chicago. That choice tells us something about his values, and his pride in it is understandable.

But his campaign has taken the point a step further, implying that Obama the politician is a direct descendant of Obama the organizer--that he has carried the practices and principles of community organizing into his campaign, and would carry them into the White House as well. This is the version of Obama's biography that most journalists have accepted.

In truth, however, if you examine carefully how Obama conducted himself as an organizer and how he has conducted himself as a politician, if you consider what he said about organizing to his fellow organizers, and if you look at the reasons he gave friends and colleagues for abandoning organizing, then a very different picture emerges: that of a disillusioned activist who fashioned his political identity not as an extension of community organizing but as a wholesale rejection of it. Indeed, the most important thing to know about Barack Obama's time as a community organizer in Chicago may not be what he gained from the experience--but rather why, in late 1987, he decided to quit.

Just as McCain is inventing and reinventing the past as he goes along, Obama is concocting mythology from his own history. It's what politicians do, after all: Spin what really happened into a bite-sized morsel of (at best) half-truths and baldfaced lies. Judis' portrait of Obama is not a hit piece; it's not even all that critical. Rather, it's a look at the necessary tension between being a community organizer in the Saul Alinsky mold (where Obama cut his teeth), and being a politician. Barack Obama left community organizing behind more than 20 years ago, and what he learned from it has nothing to do with his work as a politician. That's fine, of course. But let's drop the mythology for once.

Why we get the candidates we deserve

Rick Shenkman, associate professor of history at George Mason University, has an excellent blog and book (Just How Stupid Are We?). Shenkman's focus is on we the people, particularly in our capacity as voters and participants in a constitutional republic with a representative democratic vote (er ... allegedly). Shenkman offered up a quick rundown of five of the most commonly held myths about we the people in The Washington Post, and it bears reading. For starters, Shenkman points out, we're just plain dumb, by and large:

But by every measure social scientists have devised, voters are spectacularly uninformed. They don't follow politics, and they don't know how their government works. According to an August 2006 Zogby poll, only two in five Americans know that we have three branches of government and can name them. A 2006 National Geographic poll showed that six in ten young people (aged 18 to 24) could not find Iraq on the map. The political scientists Michael Delli Carpini and Scott Keeter, surveying a wide variety of polls measuring knowledge of history, report that fewer than half of all Americans know who Karl Marx was or which war the Battle of Bunker Hill was fought in. Worse, they found that just 49 percent of Americans know that the only country ever to use a nuclear weapon in a war is their own.

Shenkman pokes holes in several other myths, including the fallacious notion that liberals and Democrats are better informed than their conservative counterparts; that given the facts, people will draw the right conclusions; that voters are smarter now because they're better educated; and that young voters are better informed than their older counterparts.

Wonder why we get the government we deserve? Because we don't care enough to educate ourselves to do any better. Thus, those lazy sound bites get mouthed repeatedly by the talking-head press, and believed by the idiot-stick public. It's amazing to me how many people still -- still -- believe that Iraq had something to do with 9/11, to this day. And that's just one example.

As de Tocqueville pointed out in the 19th century, "In the United States, the majority undertakes to supply a multitude of ready-made opinions for the use of individuals, who are thus relieved from the necessity of forming opinions of their own."

The Fannie/Freddie boondoggle: socialism for the rich

Just as a previous Republican administration, Ronald Reagan's, presided over a taxpayer-funded bailout of corrupt businesses in the savings-and-loan scandal back in the late 1980s, the Bush administration proves yet again that when Republicans talk about free markets, it's nothing but talk -- and they're perfectly happy to use your money to help their rich friends avoid paying the price for their malfeasance.

The federal bailout of Fannie Mae and Freddie Mac -- the largest of any institution in U.S. history -- is socialism, pure and simple. As William Norman Grigg points out ...

Solicitude of this kind is routinely displayed toward those who had helped generate hundreds of billions of dollars in perfectly rotten mortgage loans as part of a corrupt scheme to boost executive compensation through dishonest accounting methods. Fannie and Freddie practiced Enron-onomics and Arthur Andersen-style accounting on steroids, in the serene confidence that the taxpayers would eventually have to absorb the costs and that nobody of any consequence in those agencies would suffer significant repercussions.

That confidence, as we can see, was entirely justified.

The announcement of the takeover was timed to assure foreign bondholders in Asia, Russia, and elsewhere that they wouldn't have to eat hundreds of billions' worth of bad paper issued by Fannie and Freddie. That foul feast will be served to the taxpayers who had no stake in that nasty business, but whose earnings will be plundered in order to keep foreign domestic political criminals comfortable, and foreign central bankers happy.

Financier Jim Rogers, CEO of Rogers Holdings, put it well on CNBC:

“America is more communist than China is right now,” Rogers told CNBC Europe’s “Squawk Box Europe” September 8. “You can at least have a free market in housing and a lot of other things in China. And you can see that this is welfare for the rich. This is socialism for the rich. It’s bailing out the financiers, the banks, the Wall Streeters."

Just as Bear Stearns was bailed out thanks to its uber-powerful connections (with taxpayer money, again, of course), Fannie and Freddie will be filled with golden parachutes as the men who perpetrated this massive fraud will skate on to cushy jobs as "punishment" for their sins.

Broken Africa: Poverty-stricken Swaziland's ultra-rich king

The next time the crisis du jour afflicting the African continent gets paraded before you by well-heeled celebrities and various socialist guilt-mongers, remember King Mswati III of Swaziland. Worth an estimated $200 million (which puts him at only 15th on Forbes.com's list of wealthy monarchs), Mswati III presides over a nation that is best known for its utter failure as a state. Even as Mswati celebrated his 40th birthday and his nation's 40th anniversary of independence, The New York Times reports that ...

The angriest of [the protesters] went so far as to insist that the nation had little to celebrate. Yes, Swazis have enjoyed decades of peace and are proud of their culture. But poverty has entrapped two-thirds of the people, leaving hundreds of thousands malnourished. And these days death casually sweeps away even the strong. The country has one of the worst rates of H.I.V. infection in the world. Life expectancy has fallen from 60 years in 1997 to barely half that now. Nearly a third of all children have lost a parent.

“How can the king live in luxury while his people suffer?” asked Siphiwe Hlophe, a human rights activist. “How much money does he need, anyway?”

That question was as confounding as it was impertinent. In the government’s latest budget, about $30 million was set aside for “royal emoluments.”

But there just isn't anything the king can do about his nation's pathetic standard of living:

Corruption is bleeding the treasury, but His Majesty’s exalted status has complicated the work of law enforcement. The finance minister has publicly estimated that $5 million — and maybe as much as $8 million — is siphoned off each month. Various anti-graft bureaus have failed to exact justice. ...

...

With the ways of the royal family so often misunderstood, the king agreed to cooperate with an American filmmaker on a documentary, perhaps presuming a flattering portrayal. Instead, the movie, “Without the King,” directed by Michael Skolnik and released last year, juxtaposed the gilded furnishings of a royal palace with scenes of the Swazi destitute eating animal intestines scavenged from a dump site.

In the film, Mswati III acknowledged the poor: “It’s always very sad when you see a lot of them sick about their lives, how difficult it is, how difficult they are coping, looking after their families and so on. And then you see sometimes that you wish to help them but the funds are always not enough.”

Why this 'conservative' doesn't support GW Bush

I have been working for some time on a post describing why I view myself as a conservative, yet am mostly opposed to the policies of George W. Bush, which are not conservative by any means. Then I read Lew Rockwell's article today. No need for me to bother!

Mr. Rockwell ticks off several reasons why Bush is no conservative (he's developed that argument in greater depth in his past columns), including this tidbit from Bush's early days, as speechwriter David Frum recounted:

Just after Bush took office, David Frum, then a White House speechwriter, was part of a policy meeting with the new president. They were discussing the energy policy of the new administration. Recall that in those days, gasoline cost less than a dollar a gallon. Frum had the idea that it would be a political victory to drive down the price. He suggested the Bush use the phrase "cheap energy" to describe his goal.

Frum writes in his memoirs about what happened next. Bush "gave me a sharp, squinting look, as if he were trying to decide whether I was the very stupidest person he had heard from all day." He might have added that profits in the oil business – which is the business that this government cares most about – were growing thinner.

Cheap energy, he answered, was how we got into this mess.

What mess? Bush explained to Frum that regular Americans were buying too many SUVs and using too much gasoline and not paying enough for it. His answer was not to make energy cheaper, but to make it more expensive.

Congratulations, Mr. President. Your wars, your regulations, your disruption of the international economy, and your failure to open up the industry to anyone other than your friends has resulted in quadrupling the price of gasoline!

Of course, those rising gas prices hurt the poor the worst. They don't have the room in their budget to shift priorities to afford the gas they need.

The "Right's" continued embrace of Bush and his policies is the symptom of the deeper disease: a belief that government holds the solution to all of our problems. The only real debate between Republicans and Democrats is which particular branches of government, which bloated agencies, hold the answers. As Rockwell and others have pointed out, Democrats believe in the socialist economic model, and Republicans believe in the fascist economic model -- never mind that history has shown both to be resounding failures in the face of the marketplace.

So, that makes me a libertarian? Not entirely. I am not convinced that the marketplace can deliver affordable health care for everyone, and I do not believe that health care is a luxury that the wealthy are entitled to more of by dint of their wealth. Sorry, that's amoral, and I cannot countenance that. I believe government has a role in health care, or should have one, at least. Because health care is a supply-driven market, the usual market forces that collaborate to keep prices low and quality high simply don't work.

So on I go, trying to figure out where I fit in. It does get lonely out here ...

Georgia and Russia: War of words escalating, WWI style

Columnist Eric Margolis tersely distills the ratcheting tensions in Georgia to its historical precedent: the pre-World War I saber-rattling over otherwise-inconsequential Balkan fiefdoms. As Margolis notes:

This crisis over a mere 70,000 South Ossetians and 18,000 Abkhazians could have been quietly resolved by diplomacy. Instead, the Bush administration turned it into a major confrontation by accusing Russia of aggression. Washington, which rightly recognized the independence of Kosovo’s Albanians from Serb repression, denounced Russia’s recognition of Abkhaz and South Ossetian independence from Georgian repression. Meanwhile, Moscow, which crushed the life out of Chechnya’s independence movement, piously claimed to be defending Ossetian independence.

Things may get worse. The US is pressing Ukraine to join NATO, though half of its 48 million citizens oppose doing so. Ukraine’s constitution mandates a neutral state. Russia allowed Ukraine to decamp from the Soviet Union with the understanding it would never join NATO, and allow Russia’s Black Sea Fleet operate from Crimea.

From a realpolitik POV, I disagree with Margolis on official recognition of Kosovo -- not that I have any sympathy for Serbia, mind you, but Kosovo is little more than a narco-state with a known thugocracy (the KLA) running the black-market economy. (Further, I support the idea of an independent nation for Kosovars; I just wish it weren't what's now being called Kosovo, and I wish the U.S. had thought its position through a bit more, given Russia's strong feelings on the subject.

Poking Russia with a stick at a time when our military is bogged down in Afghanistan and Iraq is very bad policy. It's also apparently official policy for both major parties, with McCain and the GOP picking up the Bush administration's aggression and Obama continuing to show a pervasive sense of cluelessness about Central Asia. As Margolis concludes:

Not only did the clumsy US attempt to expand its influence into Moscow’s backyard backfire badly, Washington’s childish, petulant response is as inflammatory as it is powerless. The Georgian crisis and empty threats against Russia have aroused strong nationalist passions in Russia, which sees itself increasingly isolated and surrounded by the US and NATO.

Nationalist hysteria, jingoism, and fevered rhetoric are coming from both sides. We saw such lunacy before: in August 1914, and September 1939.

Here's hoping that cooler heads prevail, and soon.

Thinking about Judas Iscariot

Our pastor preached on Judas, "one of the twelve," this Sunday and I was quite taken by the message. For what precious little the Bible tells us about Judas, his role in Jesus Christ's death on the cross and subsequent victory over death and hell is profound. As our pastor pointed out, Judas is repeatedly identified as "one of the twelve" when he is identified, even when his identification centers on his betrayal.

As our pastor pointed out, Judas presents a cautionary tale to any of us: Being raised in the church is a guarantee of absolutely nothing where one's heart is concerned, for one thing. Judas was fully an apostle, fully involved in the teaching and healing ministries that the apostles undertook in following Jesus Christ. Yet his heart was dark, and apparently grew darker with time. Judas' response to Mary's washing Jesus' feet with expensive oil reveals much about his duplicity and greed; we are told his motivation is not the welfare of the poor, but a missed opportunity to skim off fresh treasury receipts.

And so it goes, familiarly. But Matthew 27:3-10 offers a particularly penetrating account of Judas' last moments:

Then when Judas, his betrayer, saw that Jesus was condemned, he changed his mind and brought back the thirty pieces of silver to the chief priests and the elders, saying, "I have sinned by betraying innocent blood." They said, "What is that to us? See to it yourself." And throwing down the pieces of silver into the temple, he departed, and he went and hanged himself. But the chief priests, taking the pieces of silver, said, "It is not lawful to put them into the treasury, since it is blood money." So they took counsel and bought with them the potter’s field as a burial place for strangers. Therefore that field has been called the Field of Blood to this day. Then was fulfilled what had been spoken by the prophet Jeremiah, saying, "And they took the thirty pieces of silver, the price of him on whom a price had been set by some of the sons of Israel, and they gave them for the potter’s field, as the Lord directed me." (ESV)

Judas' despair at betraying Jesus is profoundly moving to me. Obviously, he has nothing to gain by confessing to the Pharisees; their reaction to him makes that clear. His is not the guilt of the cornered, as our pastor pointed out. It's heartfelt.

Now, what that means with regard to Judas' standing before God is difficult to say. Certainly we can infer he saw no hope for himself, which led him to take his own life. But we can't infer from that anything further about the fate of his soul; the Bible doesn't tell us, and we must remain silent where the Bible is silent. Was Judas's repentance genuine? We simply don't know.

Nevertheless, it is impossible for me not to be moved by Judas's confession and repudiation of what he "gained" by betraying the Lord. I, too, have betrayed Him again and again by leading a life that utterly rejected Him for so long, by harboring hatred toward Him and His flock for so long. And yet, He redeemed me by His own grace and mercy.

As our pastor reminded us, Judas also shows us the danger of the unguarded heart, of drawing away from our shepherd to pursue our own ends. It leads nowhere good, and it leads there inevitably. The devil does indeed prowl about like a lion, seeking the unsuspecting to devour. We are all wise to heed that warning.

Photo (c) Ian Britton | FreeFoto.com