I haven't been following the obscure attack on Obama's qualification as a natural born citizen, but I'll go ahead and say that regardless of the evidence, the Supreme Court shouldn't intervene.
It seems odd to say that even if a petitioner produced irrefutable evidence that a Presidential candidate was not born to US parents nor born in the US (and no one has done any such thing) that the Supreme Court should still let them become President, but that's the fact of the matter. One of the things I found fascinating in Rehnquist's book on the Court was his assertion that, as Scalia succinctly stated in Herrera, even if the Supreme Court thinks somebody is innocent, that is not grounds for overturning their case. This isn't from some insane view that courts are never wrong. It's from a view that the Constitution vests certain rights in the Supreme Court and determining whether or not somebody is actually innocent is not among them. To put it another way, if we assert that the Court should acquit or request retrial on persons who are actually innocent then we need either to build up a huge body of law to determine the evidentiary policies of Supreme Court retrials of fact or to just let the Justices do whatever they feel is right.
This cuts to the core of the Marbury v Madison decision. Many people, including a fair number of lawyers, think that Marshall set down in that case the ability of the Supreme Court to overturn laws because they violated the Constitution. This case is, in fact, the basis for the modern court creating new rights out of strained "interpretations" of either a vague clause in the Constitution or, in the case of Griswold, a vague feeling about the overall mission of the Constitution. It doesn't really say any such thing. Marbury sought to have the Court force Madison to present a commission made by President Adams to him. There was an act of Congress that provided that the Supreme Court could do exactly that. The problem was that the Constitution only gave the Supreme Court original jurisdiction in a small number of cases, and this wasn't one of them. They did overturn a piece of legislation, but it is important to note that what that legislation did was to grant the Supreme Court power the Constitution withheld from it.
What Marshall said was not "This statute is unconstitutional and the Court has the right to ignore any unconstitutional statutes", it was "This statute grants the Court power the Constitution doesn't give it, and the Court refuses to execute power not granted it by the Constitution." This is not to say that the Court refusing to uphold unconstitutional laws is itself uncontitutional. That's a debatable issue, but it's not where I want to go. What I'm saying is that Marshall didn't actually go that far.
Where Marshall did go, though, is far enough to say that the Court shouldn't today take it upon itself, even if it's abundantly clear that Obama is not a natural born citizen, to decide if he becomes President. There is nothing in Article III that grants the Court the power to arbitrate who gets to serve at the top of the executive branch.
Friday, December 5, 2008
Monday, November 10, 2008
Against Bailouts
I was always against the mortgage bailout as a theoretical matter, but about the time it passed I decided I was against it as a practical matter as well. My biggest problem with it was that it passed almost unlimited power to the Treasury to meddle with the markets. This lack of transparency means that nobody wants to sell their damaged assets at market price because if they hold out they might convince the government to pay more for them.
One argument I didn't make, but maybe should have, was that it's a slippery slope from one bailout to another. I certainly foresaw at the time a disastrous bailout of individual mortgage holders who bought houses they couldn't afford on terms that any reasonable person could have seen would get them into trouble. I've outlined the problem with this sort of thing before, but to summarize it comes down to the fact that some people bought things they can't afford and now everybody else has to pay for it. This means that if Alice, Bob, and Charlie all make $60k and have similar lifestyles that if Alice bought a $250k house, Bob bought a $150k, and Charlie decided to hold on and wait for the market to drop, now all of them have to pay $200 a year in takes to fund Alice's house and to make matters worse the market stays high so Charlie doesn't get the deal he was holding out for (because he's now paying Alice to stay in the house he was hoping to get when the price dropped).
But I certainly didn't foresee that this would end up in bailouts for Unions, Auto makers, and state governments. I've only seen a couple mentions of state governments, but that's the real focus of this post because I can't imagine something more anathema to the original layout of our government than the bailout of a failing state. It might seem like I'm engaging in a great deal of hyperbole here, but I'm really not. Most people would probably point to Free Speech or Free Religion as the bedrock of the US Constitution, but the fact of the matter is that though it might be the first of the amendments, it's an amendment, not part of the original document. The thread that primarily holds the Constitutional together is the idea that a Federal government only has certain delegated powers and for the most part the States can operate independently. There are several reasons this is a good idea, but two of the primary ones are that it keeps administration of day to day activities closer to the people actually affected and that it creates an incentive to move toward better ways of organizing your government. If the New York law regarding health care is doing a fantastic job and people are going to New York doctors to get services, pretty soon New Jersey (and the rest of the country) will realize what a great thing they have and adopt it.
By bailing out bankrupt state governments we're doing the exact opposite. If North Dakota decides they don't like pollution so they're going to outlaw cars and build monorails for everything and this causes a huge dip in tax revenues as businesses move away and a huge increase in spending, don't worry. The taxpayers from the other 49 states will come to the rescue and subsidize the monorail so that the one state with the bad idea can keep behaving how they want.
Besides this being appalling on its face, it's also interesting with how it fits with a particular pronouncement from President Elect Obama. He was quoted once on the stump with saying that "We can't drive our SUVs, eat as much as we want, and keep our houses at 72 degrees at all times and then just expect that other countries are going to say OK." To be frank, as long as we're paying to keep the Oceans safe from piracy, funding 22% of the UN (at a rate of $1.42 per citizen), and not taking a dime from other countries, I don't care if they think it's OK. Though I don't know his stand on it, I would guess that since he normally takes the standard progressive line that he thinks bailing out California or New York for spending well beyond their actual income is fine. It's a rather odd position to think that people in Nebraska should be okay with paying for unaccountable government spending on Californians, but we need to worry about what France thinks of us spending money we earned how we want.
One argument I didn't make, but maybe should have, was that it's a slippery slope from one bailout to another. I certainly foresaw at the time a disastrous bailout of individual mortgage holders who bought houses they couldn't afford on terms that any reasonable person could have seen would get them into trouble. I've outlined the problem with this sort of thing before, but to summarize it comes down to the fact that some people bought things they can't afford and now everybody else has to pay for it. This means that if Alice, Bob, and Charlie all make $60k and have similar lifestyles that if Alice bought a $250k house, Bob bought a $150k, and Charlie decided to hold on and wait for the market to drop, now all of them have to pay $200 a year in takes to fund Alice's house and to make matters worse the market stays high so Charlie doesn't get the deal he was holding out for (because he's now paying Alice to stay in the house he was hoping to get when the price dropped).
But I certainly didn't foresee that this would end up in bailouts for Unions, Auto makers, and state governments. I've only seen a couple mentions of state governments, but that's the real focus of this post because I can't imagine something more anathema to the original layout of our government than the bailout of a failing state. It might seem like I'm engaging in a great deal of hyperbole here, but I'm really not. Most people would probably point to Free Speech or Free Religion as the bedrock of the US Constitution, but the fact of the matter is that though it might be the first of the amendments, it's an amendment, not part of the original document. The thread that primarily holds the Constitutional together is the idea that a Federal government only has certain delegated powers and for the most part the States can operate independently. There are several reasons this is a good idea, but two of the primary ones are that it keeps administration of day to day activities closer to the people actually affected and that it creates an incentive to move toward better ways of organizing your government. If the New York law regarding health care is doing a fantastic job and people are going to New York doctors to get services, pretty soon New Jersey (and the rest of the country) will realize what a great thing they have and adopt it.
By bailing out bankrupt state governments we're doing the exact opposite. If North Dakota decides they don't like pollution so they're going to outlaw cars and build monorails for everything and this causes a huge dip in tax revenues as businesses move away and a huge increase in spending, don't worry. The taxpayers from the other 49 states will come to the rescue and subsidize the monorail so that the one state with the bad idea can keep behaving how they want.
Besides this being appalling on its face, it's also interesting with how it fits with a particular pronouncement from President Elect Obama. He was quoted once on the stump with saying that "We can't drive our SUVs, eat as much as we want, and keep our houses at 72 degrees at all times and then just expect that other countries are going to say OK." To be frank, as long as we're paying to keep the Oceans safe from piracy, funding 22% of the UN (at a rate of $1.42 per citizen), and not taking a dime from other countries, I don't care if they think it's OK. Though I don't know his stand on it, I would guess that since he normally takes the standard progressive line that he thinks bailing out California or New York for spending well beyond their actual income is fine. It's a rather odd position to think that people in Nebraska should be okay with paying for unaccountable government spending on Californians, but we need to worry about what France thinks of us spending money we earned how we want.
Wednesday, November 5, 2008
McCain/Palin
I've seen several comments to the effect that McCain did the best a Republican could have done in this election cycle. I couldn't disagree more. I wholeheartedly agree that McCain did a fantastic job campaigning. Much better than I expected. He probably couldn't have done any better, but that's not the same as saying that somebody else couldn't have.
They day before Super Tuesday I vehemently opposed McCain primarily because I stated that he couldn't win the Presidency. He was great on Iraq, but horrible on everything else. And he was, in fact, so great on Iraq that after his policies were implemented in midyear Iraq became such a non-issue he had nothing to run on. My question on Super Monday was "Do we really want to stake the campaign on early support for the surge against optimism, youth, media support, and the promise of amorphous change?". It ends up I think the Republican primary voter answer was "yes, we do" (though from what I've read several of those voters ended up changing it to "yes, we can" by the time the general was finished).
I'm going to differ from conventional wisdom in that I think Palin was a great addition to the campaign. She was as much a Washington Outsider as you could get in a year when something new was extremely important. Her political inexperience and the fact that she had more executive experience than everyone else running combined should have highlighted Obama's inexperience. She drew huge crowds everywhere she went, frequently bigger than either candidate at the top of the ticket. If anything, the main problem with Palin was that she was being handled by McCain. The wardrobe fiasco, for instance, would never have happened if she had worn her normal red suits.
Obviously Obama benefited from the fact that he broke his promise to use public funds, that the major media were essentially operating as campaign adjuncts, and that he got huge numbers of donation (including huge amounts of credit card fraud and illegal donations which he intentionally didn't check into), but that doesn't let McCain off the hook.
Everybody knew going in that Obama would have the support of the media. They were practically running his primary campaign with their continual assertions that the rather close Democrat race was over and their former darling Hillary should concede. Either Romney or Giuliani would have handled that better, since they've both had to go against the media before. Most of the time when McCain comes out on a controversial issue, it's with the media and against the Republican base. He's really never had to pick a fight with the media before.
Additionally Obama raised a huge amount of money by breaking his promise to use public money. McCain would never have broken his promise, but Romney wouldn't have had to. I'll go ahead and admit that in 2000 I liked McCain's campaign finance reform idea. I've since come to my senses and realized it's both an Unconstitutional intrusion on the ability of private citizens to let their voice be heard about the election and an ineffectual way to limit campaigns, serving mainly to help incumbents and those supported by the media. As far as I know, neither Romney nor Giuliani ever supported it, so they could have entered fund raising on the same ground as Obama (and then Obama wouldn't have had to lie to the American people, since he said he would take public funds only if his opponent did).
Most importantly of all, as I pointed out nine months ago, McCain only had one solid position: Iraq. McCain is for the Constitution, but okay with suppressing political speech through campaign finance laws. He is all for limiting the wasteful purchase of $3000 projectors for some random local project, but also for spending $700 billion on an ill defined plan to buy up bad debt from corporations. He is for national security, but against a border fence. He's for strict constructionist judges, but not as strict constructionist as Alito. Like Obama, McCain is to a large extent a populist (as, unfortunately, Sarah Palin appears to be as well). He decides things not from a consistent world but from what seems to him right at the time.
There was a lot I didn't like about Romney and especially Giuliani, but they had a coherent platform and would have been comfortable fighting on any issue. I didn't hear Romney's speech at the convention, but I've heard him before and he could have annihilated Obama in the debates on healthcare, taxes, spending, and executive experience. Both Thompson and Giuliani gave far better convention speeches than any of the stump speeches (including the convention) I heard of McCain's the entire cycle. Additionally a Mayor or Governor paired with Sarah Palin would have been in a perfect position to truly eviscerate a couple of establishment Senators with no executive experience whatsoever.
This is not to say I think they could have won. Barack held all the cards in this election cycle and his Presidency was all but inevitable. I do, however, think that someone else could have done better.
They day before Super Tuesday I vehemently opposed McCain primarily because I stated that he couldn't win the Presidency. He was great on Iraq, but horrible on everything else. And he was, in fact, so great on Iraq that after his policies were implemented in midyear Iraq became such a non-issue he had nothing to run on. My question on Super Monday was "Do we really want to stake the campaign on early support for the surge against optimism, youth, media support, and the promise of amorphous change?". It ends up I think the Republican primary voter answer was "yes, we do" (though from what I've read several of those voters ended up changing it to "yes, we can" by the time the general was finished).
I'm going to differ from conventional wisdom in that I think Palin was a great addition to the campaign. She was as much a Washington Outsider as you could get in a year when something new was extremely important. Her political inexperience and the fact that she had more executive experience than everyone else running combined should have highlighted Obama's inexperience. She drew huge crowds everywhere she went, frequently bigger than either candidate at the top of the ticket. If anything, the main problem with Palin was that she was being handled by McCain. The wardrobe fiasco, for instance, would never have happened if she had worn her normal red suits.
Obviously Obama benefited from the fact that he broke his promise to use public funds, that the major media were essentially operating as campaign adjuncts, and that he got huge numbers of donation (including huge amounts of credit card fraud and illegal donations which he intentionally didn't check into), but that doesn't let McCain off the hook.
Everybody knew going in that Obama would have the support of the media. They were practically running his primary campaign with their continual assertions that the rather close Democrat race was over and their former darling Hillary should concede. Either Romney or Giuliani would have handled that better, since they've both had to go against the media before. Most of the time when McCain comes out on a controversial issue, it's with the media and against the Republican base. He's really never had to pick a fight with the media before.
Additionally Obama raised a huge amount of money by breaking his promise to use public money. McCain would never have broken his promise, but Romney wouldn't have had to. I'll go ahead and admit that in 2000 I liked McCain's campaign finance reform idea. I've since come to my senses and realized it's both an Unconstitutional intrusion on the ability of private citizens to let their voice be heard about the election and an ineffectual way to limit campaigns, serving mainly to help incumbents and those supported by the media. As far as I know, neither Romney nor Giuliani ever supported it, so they could have entered fund raising on the same ground as Obama (and then Obama wouldn't have had to lie to the American people, since he said he would take public funds only if his opponent did).
Most importantly of all, as I pointed out nine months ago, McCain only had one solid position: Iraq. McCain is for the Constitution, but okay with suppressing political speech through campaign finance laws. He is all for limiting the wasteful purchase of $3000 projectors for some random local project, but also for spending $700 billion on an ill defined plan to buy up bad debt from corporations. He is for national security, but against a border fence. He's for strict constructionist judges, but not as strict constructionist as Alito. Like Obama, McCain is to a large extent a populist (as, unfortunately, Sarah Palin appears to be as well). He decides things not from a consistent world but from what seems to him right at the time.
There was a lot I didn't like about Romney and especially Giuliani, but they had a coherent platform and would have been comfortable fighting on any issue. I didn't hear Romney's speech at the convention, but I've heard him before and he could have annihilated Obama in the debates on healthcare, taxes, spending, and executive experience. Both Thompson and Giuliani gave far better convention speeches than any of the stump speeches (including the convention) I heard of McCain's the entire cycle. Additionally a Mayor or Governor paired with Sarah Palin would have been in a perfect position to truly eviscerate a couple of establishment Senators with no executive experience whatsoever.
This is not to say I think they could have won. Barack held all the cards in this election cycle and his Presidency was all but inevitable. I do, however, think that someone else could have done better.
Obama is my President
I read a couple of comments on political blogs last night saying that Obama stole the election and "he's not my President." I've heard enough of that garbage the last 8 years; conservatives need to get over it.
I don't like Obama. To be frank I think he is going to do more damage to this country than any President since FDR. I think in the campaign he has shown himself to be extremely hostile in suppressing opposition speech, willing to intentionally turn off fraud checking on his credit card donations to abet credit card and campaign fraud in furtherance of his election, and willing to lie about his positions (I'm not sure what else to call it when he is simultaneously espousing conflicting positions, unless he's just postmodern enough to reject truth itself). But I think Americans knew what they were voting for, and they chose him.
Do I wish McCain had won? Sure, I also wish Fred Thompson or Romney had won, but that didn't happen. Do I wish voters were better informed. Absolutely. Do I wish we did a better job cutting down on voter fraud? Yes.
Was Obama elected President of the United States? Yes.
I can reject the whole idea of elected leadership, but I cannot reasonably accept America and reject Obama.
I don't like Obama. To be frank I think he is going to do more damage to this country than any President since FDR. I think in the campaign he has shown himself to be extremely hostile in suppressing opposition speech, willing to intentionally turn off fraud checking on his credit card donations to abet credit card and campaign fraud in furtherance of his election, and willing to lie about his positions (I'm not sure what else to call it when he is simultaneously espousing conflicting positions, unless he's just postmodern enough to reject truth itself). But I think Americans knew what they were voting for, and they chose him.
Do I wish McCain had won? Sure, I also wish Fred Thompson or Romney had won, but that didn't happen. Do I wish voters were better informed. Absolutely. Do I wish we did a better job cutting down on voter fraud? Yes.
Was Obama elected President of the United States? Yes.
I can reject the whole idea of elected leadership, but I cannot reasonably accept America and reject Obama.
Tuesday, October 14, 2008
CNN finally reports on what Community Organizers do
I'm shocked, shocked that the Association of Community Organizers for Reform Now is turning in fraudulent votes. Nothing like this has ever happened before. Except every previous election going back at least 12 years.
I especially like how CNN states that whomever loses the county has legitimate grounds to complain about fraud. I'm sure the organization Obama used to work for and channeled grant money to with Bill Ayers, and which endorsed Obama in 2004 is going out of their way to register McCain voters. Sure.
Thursday, October 9, 2008
Four more years
Obama's campaign (quite reasonably, since it takes the spotlight off of Obama) seems to believe the answer to every question is that McCain is associated with Bush and so if you're unhappy with where we are now then you're going to get more of the same from McCain.
Since Obama thinks associations mean so much, is it fair to assert that under Obama we can expect four years of Pelosi, Reed, Rezko, Ayers, Dohrn, Wright, Daley, ACORN...
Since Obama thinks associations mean so much, is it fair to assert that under Obama we can expect four years of Pelosi, Reed, Rezko, Ayers, Dohrn, Wright, Daley, ACORN...
Thursday, October 2, 2008
The Credit Crisis: (part 3)
I heard on the radio show this morning a political commentator thanking those Senators who voted against the new bailout bill for voting how their constituents have asked them to. It might well be true that they should have voted against it, but they shouldn't do it because that's how their constituents asked them to vote. We have a representative democracy precisely because the public is often ill informed and has a strong tendency to act in a manner contrary to the long term health of the country. The job of a legislator, and in particular a Senator (which is why they have 6 year terms and are supposed to be put in my the State government instead of direct election) is to temper that tendency by voting, after careful study of the issues, in the manner they think best serves the country.
But I'm not intending to talk about the Senate today; today I want to talk about the House. I'll start by saying that the bill that was voted down in the House on Monday was terrible. There are a million better proposals out there that would probably be cheaper and more predictable. But none of them are going to get through a Democratically controlled congress. The Republicans lost the congress in 2006 and it does no good to whine about how we can't get the perfect Conservative bill through (not that they could in 2004, either). We're going to get a bill, and now that we haven't passed the only chance we're likely to get at a clean one, it's going to be something porked up to get more votes from Democrats.
Having said that, Nancy Pelosi doesn't get to whine that Republicans didn't support this bill and that's why the market dropped. It wasn't their bill. I'm sure if you had the Republican Study Committee get together and write a bill they could get something that 90% of Republicans could vote for (though the President probably wouldn't like it). If they held the majority in the House, they could get it passed. But they don't. Democrats have the majority, Democrats get to write the bills, Democrats get to pass the bills, and if the bill doesn't pass because 95 Democrats didn't vote for it, that's their fault.
But I'm not intending to talk about the Senate today; today I want to talk about the House. I'll start by saying that the bill that was voted down in the House on Monday was terrible. There are a million better proposals out there that would probably be cheaper and more predictable. But none of them are going to get through a Democratically controlled congress. The Republicans lost the congress in 2006 and it does no good to whine about how we can't get the perfect Conservative bill through (not that they could in 2004, either). We're going to get a bill, and now that we haven't passed the only chance we're likely to get at a clean one, it's going to be something porked up to get more votes from Democrats.
Having said that, Nancy Pelosi doesn't get to whine that Republicans didn't support this bill and that's why the market dropped. It wasn't their bill. I'm sure if you had the Republican Study Committee get together and write a bill they could get something that 90% of Republicans could vote for (though the President probably wouldn't like it). If they held the majority in the House, they could get it passed. But they don't. Democrats have the majority, Democrats get to write the bills, Democrats get to pass the bills, and if the bill doesn't pass because 95 Democrats didn't vote for it, that's their fault.
Tuesday, September 30, 2008
The Credit Crisis: How we got here
There have been a lot of reasons bandied around for the current credit problem. There were a lot of causes of this, so many of them are right, but some more than others.
The preferred Democrat reason seems to be corporate greed. Certainly there is an element of that, but greed is always with us. You can't rationally claim that this whole thing was caused because the heads of some corporation are greedy and if we replaced them it would all get better. There are essentially two ways to run an economy. You can give power to the government or to business. At least with business you have to choose to give over your money. There were certainly instances out there of banks doing things like lying about the terms of a loan or preparing duplicate contracts so the buyer didn't sign what they read, but these instances were already illegal and I would imagine that they're fairly uncommon (though more common than they should be). The overwhelming majority of problem mortgages aren't people who were cheated, they are people who took a subprime ARM on a house where they could barely pay the artificially low teaser rate. It might be scummy that banks did this but it's not a surprise that a adjustable rate offered with a half point discount from the lowest rates in history is going to go up. The information that this was a bad deal has been around for ever and, as I'll show later, the government not only didn't discourage this, they actively encouraged it.
Barack also submitted the Gramm-Leach-Billey act, which he falsely claims McCain voted for (his running mate, by the way, actually did vote for it). That bill removed a restriction that "savings" banks couldn't also do "investment". The obvious problem with this in the current climate is that when Wachovia's investment side takes a hit, their savings side is also put at risk. I haven't delved very deeply into how much FDIC is impacted by the potential change in Debt-to-Equity (hereafter DE) ratios that this poses, but so far my savings at Wachovia is fine even though their investment side had problems and none of the major federal bailouts were operating as banks, so this can't possibly be the main culprit.
There are two actions by the Fed that have come up as issues. By far the most common is the assertion that Greenspan and later Bernanke lowered interest rates too much to avoid corrections. Certainly this seems valid. The dollar is very obviously weak even relative to other currencies that are themselves inflating. And when dollars are cheap the natural thing to do is to spend as many of them as you can, encouraging all sorts of speculation. In particular in this case it encourages people to buy houses they can't afford because the cost of the house and the interest rate (on an ARM) both look better than they are.
The other Fed action, which I was unaware of until this morning is something Bernanke implemented called the "Term Auction Facility". This was put in place at the beginning of the problems with credit. I don't know much about it, but at least one economist states that among other things it hides who is borrowing money from the Fed from other banks, which makes banks skittish about interbank loans. As I said, I haven't looked very far into this, but it's potentially a really huge deal. Anything that hides loans to banks is going to necessarily mean you can't tell how much the bank is worth. If you don't know how much banks are worth that's going to screw up interbank loans, and interbank loans are where a lot of credit comes from in our system.
The final potential problem I've seen is the Community Reinvestment Act of 1977. This is a bill that went after mortgage banks because they were only offering loans to relatively well off people. The bill requires brokers to make loans across the income spectrum and carries stiff penalties if they "redline", or only offer them to people who are well off. It was updated in 1995 to allow Fannie Mae and Freddie Mac to buy subprime loans, to allow subprime loans to be repackaged as securities. It was then weakened in 2004. There are those who argue, reasonably, that this did not contribute to the current debacle because 75% of subprime loans are made by banks not covered by the CRA and because subprime loans escalated after the bill was weakened. I'll admit this probably wasn't the prime mover, but a huge percentage of those loans were still almost certainly underwritten by Fannie or Freddie, which are quasi-government agencies authorized, by the CRA, to buy the loans. So yes, the loans were made by non-CRA banks who thought they could rake in the dough (and probably did) by using funds from a government sponsored entity and selling the bad loans off as equity for a profit later. But that GSE gave them money because of the CRA.
The last contributor is the existence and mismanagement of Fannie Mae and Freddie Mac. Fannie and Freddie are quasi-private companies that make a profit for their shareholders but are theoretically overseen by congress and had an implicit guarantee that the taxpayers would bail them out if they got in trouble. It was frequently argued that the taxpayers would not bail them out, because otherwise there would be a strong incentive to take huge risks since the potential profit from them is high and the loss would be insured by the taxpayer, but as we have seen in the last 2 weeks, we're going to pay the loss. We have known for at least 5 years that both of these government sponsored entities were behaving in ways that are clearly irresponsible and would be illegal for a private corporation. Their DE ratio was 65:1 (banks maintain 10:1), they frequently took actions that would have violated Sarbanes-Oxley if they weren't the government, and their management was known to manipulate accounting data to maximize bonuses. I know this because it was all brought up in hearings in 2003 and 2004. As you can find all over YouTube several congressman, most notably Barney Frank and Chris Dodd, thought this was much ado about nothing and fought hard to let Fannie and Freddie continue doing the great work they were doing securing bad loans for people at great risk to the taxpayer. After all, as Franklin Raines, Fannie CEO and Obama advisor, said "These assets are so riskless that the capital for holding them should be under 2%". The Republicans may not be free from fault for this, though. Though opposition to increasing oversight of Fannie and Freddie were Democrat concerns, the Republicans controlled the Congress in 2004. I haven't been able to find the bill number or roll call on the call to regulate them more heavily, but if it didn't pass the House it's the Republicans fault. They could have done it with no Democrat help so Democrat stupidity should not have prevented it from passing. (The Senate, of course, is another matter)
The preferred Democrat reason seems to be corporate greed. Certainly there is an element of that, but greed is always with us. You can't rationally claim that this whole thing was caused because the heads of some corporation are greedy and if we replaced them it would all get better. There are essentially two ways to run an economy. You can give power to the government or to business. At least with business you have to choose to give over your money. There were certainly instances out there of banks doing things like lying about the terms of a loan or preparing duplicate contracts so the buyer didn't sign what they read, but these instances were already illegal and I would imagine that they're fairly uncommon (though more common than they should be). The overwhelming majority of problem mortgages aren't people who were cheated, they are people who took a subprime ARM on a house where they could barely pay the artificially low teaser rate. It might be scummy that banks did this but it's not a surprise that a adjustable rate offered with a half point discount from the lowest rates in history is going to go up. The information that this was a bad deal has been around for ever and, as I'll show later, the government not only didn't discourage this, they actively encouraged it.
Barack also submitted the Gramm-Leach-Billey act, which he falsely claims McCain voted for (his running mate, by the way, actually did vote for it). That bill removed a restriction that "savings" banks couldn't also do "investment". The obvious problem with this in the current climate is that when Wachovia's investment side takes a hit, their savings side is also put at risk. I haven't delved very deeply into how much FDIC is impacted by the potential change in Debt-to-Equity (hereafter DE) ratios that this poses, but so far my savings at Wachovia is fine even though their investment side had problems and none of the major federal bailouts were operating as banks, so this can't possibly be the main culprit.
There are two actions by the Fed that have come up as issues. By far the most common is the assertion that Greenspan and later Bernanke lowered interest rates too much to avoid corrections. Certainly this seems valid. The dollar is very obviously weak even relative to other currencies that are themselves inflating. And when dollars are cheap the natural thing to do is to spend as many of them as you can, encouraging all sorts of speculation. In particular in this case it encourages people to buy houses they can't afford because the cost of the house and the interest rate (on an ARM) both look better than they are.
The other Fed action, which I was unaware of until this morning is something Bernanke implemented called the "Term Auction Facility". This was put in place at the beginning of the problems with credit. I don't know much about it, but at least one economist states that among other things it hides who is borrowing money from the Fed from other banks, which makes banks skittish about interbank loans. As I said, I haven't looked very far into this, but it's potentially a really huge deal. Anything that hides loans to banks is going to necessarily mean you can't tell how much the bank is worth. If you don't know how much banks are worth that's going to screw up interbank loans, and interbank loans are where a lot of credit comes from in our system.
The final potential problem I've seen is the Community Reinvestment Act of 1977. This is a bill that went after mortgage banks because they were only offering loans to relatively well off people. The bill requires brokers to make loans across the income spectrum and carries stiff penalties if they "redline", or only offer them to people who are well off. It was updated in 1995 to allow Fannie Mae and Freddie Mac to buy subprime loans, to allow subprime loans to be repackaged as securities. It was then weakened in 2004. There are those who argue, reasonably, that this did not contribute to the current debacle because 75% of subprime loans are made by banks not covered by the CRA and because subprime loans escalated after the bill was weakened. I'll admit this probably wasn't the prime mover, but a huge percentage of those loans were still almost certainly underwritten by Fannie or Freddie, which are quasi-government agencies authorized, by the CRA, to buy the loans. So yes, the loans were made by non-CRA banks who thought they could rake in the dough (and probably did) by using funds from a government sponsored entity and selling the bad loans off as equity for a profit later. But that GSE gave them money because of the CRA.
The last contributor is the existence and mismanagement of Fannie Mae and Freddie Mac. Fannie and Freddie are quasi-private companies that make a profit for their shareholders but are theoretically overseen by congress and had an implicit guarantee that the taxpayers would bail them out if they got in trouble. It was frequently argued that the taxpayers would not bail them out, because otherwise there would be a strong incentive to take huge risks since the potential profit from them is high and the loss would be insured by the taxpayer, but as we have seen in the last 2 weeks, we're going to pay the loss. We have known for at least 5 years that both of these government sponsored entities were behaving in ways that are clearly irresponsible and would be illegal for a private corporation. Their DE ratio was 65:1 (banks maintain 10:1), they frequently took actions that would have violated Sarbanes-Oxley if they weren't the government, and their management was known to manipulate accounting data to maximize bonuses. I know this because it was all brought up in hearings in 2003 and 2004. As you can find all over YouTube several congressman, most notably Barney Frank and Chris Dodd, thought this was much ado about nothing and fought hard to let Fannie and Freddie continue doing the great work they were doing securing bad loans for people at great risk to the taxpayer. After all, as Franklin Raines, Fannie CEO and Obama advisor, said "These assets are so riskless that the capital for holding them should be under 2%". The Republicans may not be free from fault for this, though. Though opposition to increasing oversight of Fannie and Freddie were Democrat concerns, the Republicans controlled the Congress in 2004. I haven't been able to find the bill number or roll call on the call to regulate them more heavily, but if it didn't pass the House it's the Republicans fault. They could have done it with no Democrat help so Democrat stupidity should not have prevented it from passing. (The Senate, of course, is another matter)
The Credit Crisis: An overview
This is likely the first of several parts on the current financial problems in the US Economy. I'll start by exposing my positions on this.
- We got here primarily through government interference and mismanagement in Congress, in particular Barney Frank and Chris Dodd, and in virtually every independent agency involved in finances. There was also mismanagement of private institutions, but that was a relatively minor part of the problem.
- The Democrats in the House, particularly Nancy Pelosi, bear the responsibility for the failure to pass the bailout bill on Monday and therefore the resultant Wall Street crash.
- The bill that was in the House on Monday was a terrible bill that didn't solve the problems that created this mess and probably isn't the best way to fix it, but it was the best we're likely to get this year and the Republicans should have passed it. (Honestly this is the part I'm least convinced of, but it's my current position.)
Friday, September 26, 2008
Judicial Review
The proposed bailout bill includes a provision that any actions taken by the Secretary of the Treasury should not be subject to judicial review. Why didn't congress think of that before?
- We hereby disallow guns in schools. This bill not subject to judicial review
- It is hereby illegal to burn the flag. This bill not subject to judicial review
- Congressmen or former congressmen are immune to all laws. This bill...
Thursday, September 25, 2008
The Debate Debate
Going against every conservative columnist I read, I think McCain's decision to postpone the debate was a bad one. If Congress really needs John McCain to be there debating this bill full time then he should have dropped the Clinton Global Initiative speech as well. I rather doubt that he couldn't fly out for the debate and fly back without missing a crucial point in the debate.
Unsurprisingly, though, I find Barack's response even worse. The gist of his response is "I have told the leadership of Congress that if I can be helpful then I am prepared to be anywhere, anytime" (I should note, in fairness, I can't find an original, unedited version of his statement anywhere so this may be edited). Translated from WashingtonSpeak this sounds to me a lot like "If the leaders of the Democratic Party need me to do something, I'm prepared to show up and sign something or make a statement." Even leaving that aside, though, this is not the statement of a leader. I've seen comments while looking for an original version of the speech that assert Obama really knows how to lead because leadership is about delegating. I agree that a leader needs to delegate, but that's not what he's doing.
I've spent a lot of time in the Boy Scouts as an Assistant to something and a bit of time as the guy in charge of something. I try very hard to sound exactly like Obama (without the "um"s) whenever I'm an assistant. It's the mark of someone who knows how to serve their leader that they're willing to step in and help whenever needed. As a leader, though, you don't have the option of "let me know if I can be helpful." A leader isn't helpful, they're responsible. In the recent gas shortage in Atlanta, Governor Sonny Perdue didn't tell the legislature "let me know if I can be helpful"; he went to the EPA to push them to suspend formulation requirements. I'm not familiar with Alaska state politics but I would imagine that Sarah Palin has faced issues as an executive and has responded similarly. Barack has previously voted "present", but now he's saying "I'll be present if the party needs me to."
Unsurprisingly, though, I find Barack's response even worse. The gist of his response is "I have told the leadership of Congress that if I can be helpful then I am prepared to be anywhere, anytime" (I should note, in fairness, I can't find an original, unedited version of his statement anywhere so this may be edited). Translated from WashingtonSpeak this sounds to me a lot like "If the leaders of the Democratic Party need me to do something, I'm prepared to show up and sign something or make a statement." Even leaving that aside, though, this is not the statement of a leader. I've seen comments while looking for an original version of the speech that assert Obama really knows how to lead because leadership is about delegating. I agree that a leader needs to delegate, but that's not what he's doing.
I've spent a lot of time in the Boy Scouts as an Assistant to something and a bit of time as the guy in charge of something. I try very hard to sound exactly like Obama (without the "um"s) whenever I'm an assistant. It's the mark of someone who knows how to serve their leader that they're willing to step in and help whenever needed. As a leader, though, you don't have the option of "let me know if I can be helpful." A leader isn't helpful, they're responsible. In the recent gas shortage in Atlanta, Governor Sonny Perdue didn't tell the legislature "let me know if I can be helpful"; he went to the EPA to push them to suspend formulation requirements. I'm not familiar with Alaska state politics but I would imagine that Sarah Palin has faced issues as an executive and has responded similarly. Barack has previously voted "present", but now he's saying "I'll be present if the party needs me to."
Monday, September 22, 2008
Mortgage Bailout, part 3
I really liked Krugman's column this morning, but I wanted to highlight some of the developing Paulson bailout bill. Naturally my tendency is to be against any of it because it's clearly un-Constitutional (I don't recall the "bailout dumb lenders to save the market" clause), but then so was the Community Reinvestment Act that brought us here.
I'm going to start with that statement. The media has not convinced me that Phil Gramm getting through a bill that allowed banks to issue insurance or vice versa (the Gramm-Leach-Biliey Act) had anything to do with the current problem. AIG isn't going under because it owns assets and issues insurance. It's going under because a bunch of companies put out very dumb subprime loans, securitized them, and then AIG insured them so that people wouldn't lose their money just because nobody could pay off their mortgage. Then nobody could pay off their mortgage and suddenly AIG was paying out more than they could afford. Why were banks issuing loans to people who couldn't pay? The Federal Government told them to. The Community Reinvestment Act of 1977 required that banks issue loans across the income spectrum and not just issue them to people with high income and great credit ratings (despite banks arguing that this was a dangerous practice). It was updated in 1995 (again, over vocal objections from banks) to strengthen the requirements that mortgage lenders issue loans to low and middle income people and allowing them to securitize those loans, even of subprime mortgages. True, the banks discovered that they could make a killing at this so long as house prices kept going up and a combination of cheap money created by Greenspan and phantom security granted by Fannie and Freddie helped to push them to great excess. All of these, though, are government problems. And not problems of the government insufficiently regulating banks, problems of government getting too involved.
I'm aware enough of my limitations that I'm not going to go against every economist I've read and say that not bailing out these companies would not cause the next Great Depression (and in fact it is argued that not bailing out companies caused the last one). If we have to bail out companies, I think Krugman is exactly right that in doing so we should take the companies in payment and I also think the passage of a bill giving the Secretary of the Treasury the ability to do this at any time without consulting Congress is a bit much power to give away. And I'm radically pro-Executive.
I'm going to start with that statement. The media has not convinced me that Phil Gramm getting through a bill that allowed banks to issue insurance or vice versa (the Gramm-Leach-Biliey Act) had anything to do with the current problem. AIG isn't going under because it owns assets and issues insurance. It's going under because a bunch of companies put out very dumb subprime loans, securitized them, and then AIG insured them so that people wouldn't lose their money just because nobody could pay off their mortgage. Then nobody could pay off their mortgage and suddenly AIG was paying out more than they could afford. Why were banks issuing loans to people who couldn't pay? The Federal Government told them to. The Community Reinvestment Act of 1977 required that banks issue loans across the income spectrum and not just issue them to people with high income and great credit ratings (despite banks arguing that this was a dangerous practice). It was updated in 1995 (again, over vocal objections from banks) to strengthen the requirements that mortgage lenders issue loans to low and middle income people and allowing them to securitize those loans, even of subprime mortgages. True, the banks discovered that they could make a killing at this so long as house prices kept going up and a combination of cheap money created by Greenspan and phantom security granted by Fannie and Freddie helped to push them to great excess. All of these, though, are government problems. And not problems of the government insufficiently regulating banks, problems of government getting too involved.
I'm aware enough of my limitations that I'm not going to go against every economist I've read and say that not bailing out these companies would not cause the next Great Depression (and in fact it is argued that not bailing out companies caused the last one). If we have to bail out companies, I think Krugman is exactly right that in doing so we should take the companies in payment and I also think the passage of a bill giving the Secretary of the Treasury the ability to do this at any time without consulting Congress is a bit much power to give away. And I'm radically pro-Executive.
Thursday, September 18, 2008
Progressives and Charity (part 2)
I'll start with this video from Good morning America this morning:
I don't want to harp on the connection between paying taxes and patriotism, as many other commentators have. What I'm curious about is when Joe decided it was time to step up. Is it only when the Democrats get elected and pass new taxes? I am not aware of anything prohibiting him from voluntarily stepping up to "help get America out of a rut". Yet here, courtesy of Byron York is his AGI and charitable giving for the last 5 years:
Year AGI Giving
According to Byron York's story, David Wade, an official spokesman for Biden claims, among other things, that as Biden is one of the lowest paid Senators he just doesn't have piles of money to give away. How is it that he then thinks a bunch of Americans with similar income have piles of money to seize in taxes?
I can't imagine a better example of the difference between conservatives and progressives except maybe Biden's statement that Sarah Palin may be raising a child with Down Syndrome (when 80-90% of them are aborted) but her opposition to federal funding of embryonic stem cell research shows she doesn't really care about them. There are tens of millions of people in this country who make a third what he does, give away more in a month than he gives away in a year, and still don't think Washington has any business taking more of their (or Biden's) paycheck. To many others, though, they are stingy, money-grubbing conservatives who just want to hold onto their money and don't care about the poor.
I don't want to harp on the connection between paying taxes and patriotism, as many other commentators have. What I'm curious about is when Joe decided it was time to step up. Is it only when the Democrats get elected and pass new taxes? I am not aware of anything prohibiting him from voluntarily stepping up to "help get America out of a rut". Yet here, courtesy of Byron York is his AGI and charitable giving for the last 5 years:
Year AGI Giving
AGI Charity
2003 $231,375 $260
2004 $234,271 $380
2005 $321,379 $380
2006 $248,459 $380
2007 $319,853 $995
According to Byron York's story, David Wade, an official spokesman for Biden claims, among other things, that as Biden is one of the lowest paid Senators he just doesn't have piles of money to give away. How is it that he then thinks a bunch of Americans with similar income have piles of money to seize in taxes?
I can't imagine a better example of the difference between conservatives and progressives except maybe Biden's statement that Sarah Palin may be raising a child with Down Syndrome (when 80-90% of them are aborted) but her opposition to federal funding of embryonic stem cell research shows she doesn't really care about them. There are tens of millions of people in this country who make a third what he does, give away more in a month than he gives away in a year, and still don't think Washington has any business taking more of their (or Biden's) paycheck. To many others, though, they are stingy, money-grubbing conservatives who just want to hold onto their money and don't care about the poor.
Thursday, September 11, 2008
Science and Experts
Rather amazingly, I hadn't read this post by Steve McIntyre on disclosure and auditing in climatology (which in my experience is better applied to academic research generally), but I think it and its attendant comments distill beautifully the problem with modern Science education. (Quite apart from any statement it makes on actual climatology.)
I remember a few years ago my home county of Cobb came under national attention because it started requiring a sticker in high school biology books that stated
If we blindly accept the word of experts then we have left the path of Science and entered the world of Faith which, as critics of intelligent design rightly note, has no place in Science class.
I remember a few years ago my home county of Cobb came under national attention because it started requiring a sticker in high school biology books that stated
This textbook contains material on evolution. Evolution is a theory, not a fact, regarding the origin of living things. This material should be approached with an open mind, studied carefully, and critically considered.Though I honestly don't think that rises to the level of unconstitutional, it is dumb. Particularly because of the content of the box. Science is the practice of approaching things with an open mind, studying it carefully (preferably experimentally), and critically considering it. Why distinguish evolution?
If we blindly accept the word of experts then we have left the path of Science and entered the world of Faith which, as critics of intelligent design rightly note, has no place in Science class.
Tuesday, September 9, 2008
Bush and the Iraq War
I don't normally post links to other blogs, but this post on Power Line appears to my eye to be possibly the most important blog post on the war and its prosecution I have read this year. I'll go read the WaPo articles cited, but assuming Power Line is referencing them faithfully (and I trust them to be doing so) that very much raises my respect for the President and his decisions.
Sewer systems?
In an interview this past weekend Barack Obama once again stated the fantastic job done by communist China in building up infrastructure around the Olympic site and contrasted it with America's failing sewer systems. I'm going to ignore that much of (rural) China doesn't even have sewer systems or that we did a pretty good job readying Atlanta for the Olympics (without giving up road building in California to do so).
What does the President have to do with sewer maintenance? Maybe the position Obama is looking for is Mayor.
What does the President have to do with sewer maintenance? Maybe the position Obama is looking for is Mayor.
Friday, August 29, 2008
Governor Palin
I'll start this by admitting I was less than thrilled with McCain's pick for VP. I like Governor Palin almost as much as I like Jindal, but she just doesn't have the experience to be President. That's an issue that has to be especially important given that McCain would be the oldest person ever to enter the office.
But, having said that, Obama's attacks on her experience are badly misplaced. On a scale from 0 to 10 where somebody with no experience with foreign policy, poor knowledge of history, and who has never run anything but a campaign is a 0 and somebody like Romney who has run an international business and been governor of a major state is a 10, Palin is maybe a 2. She runs a state that may not be populous, but borders on Canada. She's only been governor for 2 years, but she's done much to clean up the state in that time. I would have preferred Romney, but Obama is a 0. He has never dealt with foreign policy matters, frequently makes blatantly inaccurate historical references (such as FDR's phantom meeting with our enemies in WWII or the bomb that was dropped on Pearl Harbor), and has never run anything of substance. He's been a US Senator for 4 years, though most of that time he's spent campaigning for President instead, and he was a state senator, but he mainly voted "present". And he's not the vice presidential nominee.
But, having said that, Obama's attacks on her experience are badly misplaced. On a scale from 0 to 10 where somebody with no experience with foreign policy, poor knowledge of history, and who has never run anything but a campaign is a 0 and somebody like Romney who has run an international business and been governor of a major state is a 10, Palin is maybe a 2. She runs a state that may not be populous, but borders on Canada. She's only been governor for 2 years, but she's done much to clean up the state in that time. I would have preferred Romney, but Obama is a 0. He has never dealt with foreign policy matters, frequently makes blatantly inaccurate historical references (such as FDR's phantom meeting with our enemies in WWII or the bomb that was dropped on Pearl Harbor), and has never run anything of substance. He's been a US Senator for 4 years, though most of that time he's spent campaigning for President instead, and he was a state senator, but he mainly voted "present". And he's not the vice presidential nominee.
Wednesday, June 4, 2008
Democracy
John Stossel's latest column raises, as Stossel often does, several interesting points. The one I want to touch on though is the last one he made. He states, incredulously, "I had no idea democracy was about voting on who gets to tell you how to raise your kids."
Yes, John, that's exactly what Democracy means. That's why Plato and Aristotle both denigrated democracy and termed it "rule by the poor". That's why the Founders instituted so many checks on democratic influence. The courts are utterly non-democratic, but even in the legislative process a bill that came from the democratically elected House still had to go through a Senate chosen by state legislatures and a President chosen by a committee chosen by state legislatures. Even then the decisions they could legitimately make involved only a small number of matters outlined in Article I, Section 8.
I bring this up not because of a minor linguistic difference, but because it seems as a society many of us have concluded that we owe our freedoms to democratic elections. We see this most especially in our comments regarding foreign policy where we seem to think that setting up democracies elsewhere will lead to the same results we've had with a constitutional republic here.
In fact as we have succumbed to a pressure towards absolute democracy we have seen more and more federal invasion of our personal lives. The Constitution was not written to establish a democracy, it was written to protect us from one.
Yes, John, that's exactly what Democracy means. That's why Plato and Aristotle both denigrated democracy and termed it "rule by the poor". That's why the Founders instituted so many checks on democratic influence. The courts are utterly non-democratic, but even in the legislative process a bill that came from the democratically elected House still had to go through a Senate chosen by state legislatures and a President chosen by a committee chosen by state legislatures. Even then the decisions they could legitimately make involved only a small number of matters outlined in Article I, Section 8.
I bring this up not because of a minor linguistic difference, but because it seems as a society many of us have concluded that we owe our freedoms to democratic elections. We see this most especially in our comments regarding foreign policy where we seem to think that setting up democracies elsewhere will lead to the same results we've had with a constitutional republic here.
In fact as we have succumbed to a pressure towards absolute democracy we have seen more and more federal invasion of our personal lives. The Constitution was not written to establish a democracy, it was written to protect us from one.
Wednesday, May 14, 2008
Bobby Jindal
I'm hearing more and more rumors that Bobby Jindal might be John McCain's pick for Vice-President. Let me first say that he's absolutely perfect for the job. He's a rising star of conservatism in America; he has already done fantastic work in Louisiana; and he offsets most of McCain's weaknesses.
Having said that, he should not take the job. He has a chance to demonstrate Federalism in action in a way that I don't recall happening before in my (rather short) lifetime. He has come into one of the most publicly broken states in the nation and has the chance to show that conservative policies do work by turning things around before the inevitable next hurricane comes through. Also of importance, if he is removed from LA the next governor will be Mitch Landrieu, who will almost certainly return to something more like Blanco's policies.
Having said that, he should not take the job. He has a chance to demonstrate Federalism in action in a way that I don't recall happening before in my (rather short) lifetime. He has come into one of the most publicly broken states in the nation and has the chance to show that conservative policies do work by turning things around before the inevitable next hurricane comes through. Also of importance, if he is removed from LA the next governor will be Mitch Landrieu, who will almost certainly return to something more like Blanco's policies.
Wednesday, May 7, 2008
Justice and Taxes
A few weeks ago I was listening to an interview with E.J. Dionne about his new book "Souled Out". He made the comment that as Christians we should all favor "a more just tax system", by which I presume he means one which taxes those who have more at an even greater rate than they do now.
Christ gives us little to go on concerning how to structure a state, so in coming up with one the founders of this country applied logic in light of scripture (after all, "In the beginning was the logos (reason, often translated 'word')") to come up with foundational precepts of Christian government. If we follow the same process I submit that we will come to the same conclusion and that that conclusion, while precluding slavery (as the founders did not) will also preclude the redistribution of wealth (as the founders did). Locke stated that all men are entitled to the fruits of his labor. This is what Jefferson meant when he said "All men are created equal;" that no man is entitled by some divine ordination to the fruits of another man's labor. Given that nothing in Christianity or reason points to some men being innately entitled to the product of another's labor, I fail to see how we can escape the conclusion that the rights to labor, and thus the property resulting from it, either belong to he who creates it or do not exist at all.
I realize I'm dodging Rousseau's position, but a full exposition on that would take more room than I want to use in a blog post. To deal with that I'll merely point out that Rousseau's theory of property mainly dealt with the produce of the land and most of the produce of labor in our industrial society is not based on agriculture. It seems irrational when the overwhelming majority of income is derived from labor to assume that the product of that labor belongs to all of society.
In order to avoid the issue of capital I'm going to take up the cause of a hypothetical CEO making $10 million per year. That $10 million is issued to him for his work in running the company, not as a result of the increase on his stock, so even if we accept Marx over Smith (as I decidedly do not) it is the product of labor and not capital. If his talents, time and effort have lead him run a major company and his efforts have produced $10 million in value (often more), how is it just to take half of that from him and give it to others who did not thus labor?
I'm not arguing that we shouldn't have a safety net for those who deserve charity (though certainly I would prefer something like churches or civic organizations to the government), but this is by nature unjust. We might feel bad for the single mom of three kids who has honestly fallen down on her luck and is trying hard to get ahead, but the just response to that cannot involve the forcible taking of another man's property to rectify it.
Christ gives us little to go on concerning how to structure a state, so in coming up with one the founders of this country applied logic in light of scripture (after all, "In the beginning was the logos (reason, often translated 'word')") to come up with foundational precepts of Christian government. If we follow the same process I submit that we will come to the same conclusion and that that conclusion, while precluding slavery (as the founders did not) will also preclude the redistribution of wealth (as the founders did). Locke stated that all men are entitled to the fruits of his labor. This is what Jefferson meant when he said "All men are created equal;" that no man is entitled by some divine ordination to the fruits of another man's labor. Given that nothing in Christianity or reason points to some men being innately entitled to the product of another's labor, I fail to see how we can escape the conclusion that the rights to labor, and thus the property resulting from it, either belong to he who creates it or do not exist at all.
I realize I'm dodging Rousseau's position, but a full exposition on that would take more room than I want to use in a blog post. To deal with that I'll merely point out that Rousseau's theory of property mainly dealt with the produce of the land and most of the produce of labor in our industrial society is not based on agriculture. It seems irrational when the overwhelming majority of income is derived from labor to assume that the product of that labor belongs to all of society.
In order to avoid the issue of capital I'm going to take up the cause of a hypothetical CEO making $10 million per year. That $10 million is issued to him for his work in running the company, not as a result of the increase on his stock, so even if we accept Marx over Smith (as I decidedly do not) it is the product of labor and not capital. If his talents, time and effort have lead him run a major company and his efforts have produced $10 million in value (often more), how is it just to take half of that from him and give it to others who did not thus labor?
I'm not arguing that we shouldn't have a safety net for those who deserve charity (though certainly I would prefer something like churches or civic organizations to the government), but this is by nature unjust. We might feel bad for the single mom of three kids who has honestly fallen down on her luck and is trying hard to get ahead, but the just response to that cannot involve the forcible taking of another man's property to rectify it.
Thursday, May 1, 2008
Third Parties
I heard on the radio this morning, a host saying that it's probably about time for a third party to rise. He explained that he hears everywhere dissatisfaction with the existing parties, so if nobody likes Democrats or Republicans it's high time for somebody else to come along and capitalize on that.That's a compelling argument unless you think about it.
I am personally very disappointed with the Republican party, and as I previously noted John McCain was one of my least favorite candidates for President. But that doesn't make me likely to vote for Nader. The problem with the overwhelming disappointment with the two parties is that there isn't a huge number of people who take a single concrete position on some important issue that disagrees with the two parties.
The Republican Party was formed by an almost overwhelming desire in the Northern United States to have politicians dedicated to the "elimination of the twin relics of barbarism — slavery and polygamy." I doubt there is any issue on which a substantial minority would come together to create a new party. Lots of people dislike the current tax code, but some of them want taxes to be more socialist, some of them want them flatter, some of them want to tax something else, some of them just want less taxes, some of them want more user fees... You might be able to find a large number of people who in theory support lowering the National Debt, but some of them would want to cut programs and some of them would want to raise taxes. Nearly all of them would find another issue more important, probably even one that would end up raising the debt. I personally think the debt is unacceptably high and the unfunded future liability of Medicare even worse, but I don't accept that raising taxes is an acceptable (or effective) way to fix that.
People may disagree with the major parties, but they don't agree with each other, either. If they did then one (and probably both) of the primaries would elect candidates who pandered to their desire.
I am personally very disappointed with the Republican party, and as I previously noted John McCain was one of my least favorite candidates for President. But that doesn't make me likely to vote for Nader. The problem with the overwhelming disappointment with the two parties is that there isn't a huge number of people who take a single concrete position on some important issue that disagrees with the two parties.
The Republican Party was formed by an almost overwhelming desire in the Northern United States to have politicians dedicated to the "elimination of the twin relics of barbarism — slavery and polygamy." I doubt there is any issue on which a substantial minority would come together to create a new party. Lots of people dislike the current tax code, but some of them want taxes to be more socialist, some of them want them flatter, some of them want to tax something else, some of them just want less taxes, some of them want more user fees... You might be able to find a large number of people who in theory support lowering the National Debt, but some of them would want to cut programs and some of them would want to raise taxes. Nearly all of them would find another issue more important, probably even one that would end up raising the debt. I personally think the debt is unacceptably high and the unfunded future liability of Medicare even worse, but I don't accept that raising taxes is an acceptable (or effective) way to fix that.
People may disagree with the major parties, but they don't agree with each other, either. If they did then one (and probably both) of the primaries would elect candidates who pandered to their desire.
Obama and Mr. Wright
I've been listening to several conservative talk radio shows the last couple days and I think they've all missed the core issue with Obama's late coming repudiation of his spiritual mentor. Scott at Power Line had a post today that finally hit on what I see as the most interesting part of his statement Tuesday.
If we take Obama at his word he isn't denouncing Wright because he stated that blacks and whites can't learn in the same school because they're practically different species (the original meaning of "race" and the slave holders' intention for using that term) . He didn't denounce him because of his insults to Jews, or Italians, or whites, or America. The straw that broke the camel's back was Wright insinuating that Obama was duplicitous and said the things he did because he was a politician. Laura Ingraham this morning derisively quoted a New York Times article essentially prepared by Obama aides because it shows Obama as suddenly realizing that Wright was offensive after his Press Club interview, glossing over the fact that even that puff piece article again cites that Obama "felt dumbfounded, even betrayed, particularly by Mr. Wright’s implication that Mr. Obama was being hypocritical. He could not tolerate that."
Far from insulating Obama from future questions about his erstwhile mentor, Obama's posturing on Tuesday leaves me with the idea that it's okay to attack Israel, to claim the US government created AIDS, to claim that blacks and whites can't learn in the same school because they're so different, just don't attack Obama.
If we take Obama at his word he isn't denouncing Wright because he stated that blacks and whites can't learn in the same school because they're practically different species (the original meaning of "race" and the slave holders' intention for using that term) . He didn't denounce him because of his insults to Jews, or Italians, or whites, or America. The straw that broke the camel's back was Wright insinuating that Obama was duplicitous and said the things he did because he was a politician. Laura Ingraham this morning derisively quoted a New York Times article essentially prepared by Obama aides because it shows Obama as suddenly realizing that Wright was offensive after his Press Club interview, glossing over the fact that even that puff piece article again cites that Obama "felt dumbfounded, even betrayed, particularly by Mr. Wright’s implication that Mr. Obama was being hypocritical. He could not tolerate that."
Far from insulating Obama from future questions about his erstwhile mentor, Obama's posturing on Tuesday leaves me with the idea that it's okay to attack Israel, to claim the US government created AIDS, to claim that blacks and whites can't learn in the same school because they're so different, just don't attack Obama.
Monday, April 21, 2008
Compassion and government
You hear a lot about "compassionate conservatism", which is really itself a reaction to the phenomenon I noted earlier where people who don't want to take money from one group to help out another are seen as uncharitable. I would submit, though, that it is simply not possible for government to be positively act based on compassion.
I am not claiming that "compassionate conservatives" aren't really compassionate; compassion is simply a desire to help in others' times of distress. I'm sure both they and progressives really do want to help. One of my reasons for writing this is hearing E. J. Dionne speak on his book Souled Out, and he certainly seems to believe we should support government helping out the poor to be consistent with a Christian faith. I'm sure he genuinely feels compassion for the poor. My problem is that I first off don't think government solutions to reduce poverty actually do so. Even if I did, though, when Christ calls us to care for the poor I'm pretty sure he didn't mean to take extort money from our next door neighbor and use that to do it.
My first problem with a "compassionate" government is that a government doesn't have any money. I have heard people recently argue that the government owns everything produced in its borders, either through some hyper-socialist ideal or because it prints the currency.
In the former case they are going further than even Marx himself would have ventured. Marx agreed with Locke that a worker is entitled to his wages; he just rejected the idea that capital assets can add value to the product and thus thought that all value in excess of wages paid (surplus value) should be forfeit to society rather than held as profit to the capitalist. The Bible is quite clear that God owns everything, but it naturally follows from the fact that God owns you that He would also own the produce of your labor. For this to be true of the government we must accept that the government does not exist to serve the people but that it in fact owns the people. This argument has certainly been made throughout history by various tyrants, but I would submit that virtually no one actually believes it. To accept this you have to throw out our Constitution because limits on government are ridiculous if we believe we are wholly owned by the government. The only thing that makes sense at that point is absolute tyranny, whether by an individual, a group, or the majority.
The second case is even less substantial. This argument rests on the fact that the government printed Reserve Notes and thus owns them all. If this is true then it would seem reasonable that Dell could at any moment require me to give up the computer on which I write this, since their building it confers permanent ownership to them.
The government has two main ways of procuring money to support its various programs, it can tax or it can loan money. The latter is really a delayed way of taxing, so I'll ignore it. In the former what we're doing when we "give" money to the unfortunate we're "giving" what doesn't belong to us. If you are called to help the poor (and you are) then you should do so, but you should do so with the money you produced or that God entrusted to you, not by taking from someone else.
The second, and bigger, problem is that these "solutions" rarely work. When compassion guides our governance we like to think of the government as a parent who, caring for her children, sees them fall on hard times and helps them get back on their feet to get started again. The problem is that said parent is deeply involved and can make independent decisions on a case by case basis. To successfully administer compassion in our personal relationships we depend on being able to selectively enforce our own boundaries. We have to know the difference between a friend who recently lost their job, is trying hard to get a new one and has cut nearly all their expenses and a friend who has taken up drinking, has lost their job but is keeping up their destructive habit and wasting all of their money. To the former giving some money to help them make it through is a great blessing, to the latter this would only reinforce their destructive habits. The government is guided by policy and so it's almost impossible for it to distinguish these cases. As a result government policies intended to help people out more often than not exacerbate major problems.
An easy example of this is college tuition. We have a problem often harped on in the media that the cost of college tuition rises faster than the rate of inflation. Additionally a huge number of jobs require a college degree to get in, even if they don't use specific knowledge gained from any college program. The standard government solution to this is to provide more aid for people to go to college, but that's what caused the problem in the first place. Every college in this country except two (Grove City and Hillsdale) accept government money in the form of tuition assistance, often a substantial portion of their total tuition costs. Because of this they can charge more for tuition than they would be able to if they had to depend on people actually paying what college was worth and they can put people through college who are going to get a job when they get out that doesn't really require knowledge gained in college. Because there are so many college graduates out there, anybody who didn't got to college is looked on as basically lazy, so employers want somebody with a college degree, even if they don't need something covered by a specific degree program. Make people pay their own way and tuition would naturally come down as would attendance numbers and thus the number of employers requiring a degree.
We see similar problems all over the place whenever government tries to be compassionate. We go easy on illegal aliens and thus reduce the number of hard working people who have waited in line for years to get into this country who can get in. We provide aid to poor mothers and split up families while encouraging out of wedlock birth. I actually just read that the recent FLDS compound broken up was sustained mainly through taxpayer funding of the various wives in the form of welfare checks since they are legally single.
I am not claiming that "compassionate conservatives" aren't really compassionate; compassion is simply a desire to help in others' times of distress. I'm sure both they and progressives really do want to help. One of my reasons for writing this is hearing E. J. Dionne speak on his book Souled Out, and he certainly seems to believe we should support government helping out the poor to be consistent with a Christian faith. I'm sure he genuinely feels compassion for the poor. My problem is that I first off don't think government solutions to reduce poverty actually do so. Even if I did, though, when Christ calls us to care for the poor I'm pretty sure he didn't mean to take extort money from our next door neighbor and use that to do it.
My first problem with a "compassionate" government is that a government doesn't have any money. I have heard people recently argue that the government owns everything produced in its borders, either through some hyper-socialist ideal or because it prints the currency.
In the former case they are going further than even Marx himself would have ventured. Marx agreed with Locke that a worker is entitled to his wages; he just rejected the idea that capital assets can add value to the product and thus thought that all value in excess of wages paid (surplus value) should be forfeit to society rather than held as profit to the capitalist. The Bible is quite clear that God owns everything, but it naturally follows from the fact that God owns you that He would also own the produce of your labor. For this to be true of the government we must accept that the government does not exist to serve the people but that it in fact owns the people. This argument has certainly been made throughout history by various tyrants, but I would submit that virtually no one actually believes it. To accept this you have to throw out our Constitution because limits on government are ridiculous if we believe we are wholly owned by the government. The only thing that makes sense at that point is absolute tyranny, whether by an individual, a group, or the majority.
The second case is even less substantial. This argument rests on the fact that the government printed Reserve Notes and thus owns them all. If this is true then it would seem reasonable that Dell could at any moment require me to give up the computer on which I write this, since their building it confers permanent ownership to them.
The government has two main ways of procuring money to support its various programs, it can tax or it can loan money. The latter is really a delayed way of taxing, so I'll ignore it. In the former what we're doing when we "give" money to the unfortunate we're "giving" what doesn't belong to us. If you are called to help the poor (and you are) then you should do so, but you should do so with the money you produced or that God entrusted to you, not by taking from someone else.
The second, and bigger, problem is that these "solutions" rarely work. When compassion guides our governance we like to think of the government as a parent who, caring for her children, sees them fall on hard times and helps them get back on their feet to get started again. The problem is that said parent is deeply involved and can make independent decisions on a case by case basis. To successfully administer compassion in our personal relationships we depend on being able to selectively enforce our own boundaries. We have to know the difference between a friend who recently lost their job, is trying hard to get a new one and has cut nearly all their expenses and a friend who has taken up drinking, has lost their job but is keeping up their destructive habit and wasting all of their money. To the former giving some money to help them make it through is a great blessing, to the latter this would only reinforce their destructive habits. The government is guided by policy and so it's almost impossible for it to distinguish these cases. As a result government policies intended to help people out more often than not exacerbate major problems.
An easy example of this is college tuition. We have a problem often harped on in the media that the cost of college tuition rises faster than the rate of inflation. Additionally a huge number of jobs require a college degree to get in, even if they don't use specific knowledge gained from any college program. The standard government solution to this is to provide more aid for people to go to college, but that's what caused the problem in the first place. Every college in this country except two (Grove City and Hillsdale) accept government money in the form of tuition assistance, often a substantial portion of their total tuition costs. Because of this they can charge more for tuition than they would be able to if they had to depend on people actually paying what college was worth and they can put people through college who are going to get a job when they get out that doesn't really require knowledge gained in college. Because there are so many college graduates out there, anybody who didn't got to college is looked on as basically lazy, so employers want somebody with a college degree, even if they don't need something covered by a specific degree program. Make people pay their own way and tuition would naturally come down as would attendance numbers and thus the number of employers requiring a degree.
We see similar problems all over the place whenever government tries to be compassionate. We go easy on illegal aliens and thus reduce the number of hard working people who have waited in line for years to get into this country who can get in. We provide aid to poor mothers and split up families while encouraging out of wedlock birth. I actually just read that the recent FLDS compound broken up was sustained mainly through taxpayer funding of the various wives in the form of welfare checks since they are legally single.
Thursday, April 17, 2008
Mortgage Bailout, part 2
I had previously posted in defense of Bush's negotiated interest rate freeze. I still think that was a good idea, but the mortgage bailout in Congress really, really bothers me. I'm aware that I frequently come off as uncompassionate so let me start by stating that I feel for people who got themselves into mortgages they can't afford. I hear them all the time on the Dave Ramsey show and I wish they didn't get themselves in this situation.
Having said that here is what I see as the pros and cons of the bailout:
Pro-bailout
Real Estate values don't drop now. They're artificially high because of bad loans so they probably still drop later, but it might not be as precipitous a decline.
Some people don't lose their home.
Some people who bought mortgage backed securities (which probably includes a bunch of pension funds) don't lose value
Some mortgage banks don't go bankrupt (though most of them probably sold the securities already)
Anti-bailout
You're charging a bunch of people, the overwhelming majority of whom either don't own a home or are in a responsible mortgage, to shield a much smaller number of people from the results of their actions. This is made worse by the fact that many of the people paying are currently in a smaller house, have held off on buying a house when they could have done so irresponsibly, or have a higher interest rate than they would if they were in an ARM. This means people aren't just paying for somebody else to keep their home. They're probably at some level paying for somebody else to keep a more expensive home than they own for the same rates they're paying on theirs.
You're stabilizing house prices at an artificially high level, which means that those people who don't own a home now because they have been responsibly saving their money instead of getting a loan they couldn't afford will have to wait longer and pay more because they can't buy one sold at a discount by someone who got a loan they couldn't afford. Again this is aggravated by the fact that these people are also paying the bad loan holder to hold onto the house they would like to buy.
You're setting a precedent that the next time you hear a deal that's too good to be true on the radio and you know that a significant minority of the population is buying it, you can go ahead and take the risk because if things work out you'll get a better deal than being responsible and if they go south then you can probably get the government to bail you out if you can hold out long enough that it hits everybody else, too.
You're setting a precedent that if there are a bunch of very risky, but lucrative securities and you need to factor in the chances that the government will bail you out on the risky side to see if they're worth it.
Having said that here is what I see as the pros and cons of the bailout:
Pro-bailout
Anti-bailout
Monday, April 14, 2008
Bitterness
Unless you live under a political rock, you have probably seen Obama's comments that most of America is bitter about not having the government give them jobs and that's why they turn out gun-toting, bible thumping bigots who join the KKK and hate immigrants (not exactly his words, but that's the feeling I get from his speech, and yes I have read it in context).
Though I find the content of the speech itself and the political fallout from it, which will probably be long lasting, interesting, that's not what interests me the most this morning. There are two parts to his slander of middle America. The first is that social conservatives cling to religion, gun rights, controlled immigration policies, and limits on trade (I won't deal with his comments about "antipathy to people who aren't like them" because I think it is a misplaced stereotype) not because they are rational but because they are bitter about being jobless. I think Obama quickly realized how deep this cuts and has run away from those comments, instead characterizing the debate as being about whether or not people are bitter (or more precisely whether or not they deserve to be bitter).
What really catches my attention is the comments on various conservative blogs (one of the most exemplary can be seen on Volokh) stating that Barack is right, we should be bitter. All of them that I've seen list a litany of charges against Republicans always including involvement in Iraq. What I find interesting about these posts is that every one I've seen is very clearly written by a liberal. I can't claim to know where they stand on gun rights, religion in schools, or the border fence, and I certainly don't know where they live. I've also never really spent any time in PA, but I have spent time in small towns in GA. I have a difficult time imagining that the biggest problem of the average citizen of Altoona, PA is supply contracts being awarded to Halliburton.
What I seem to be seeing is what Psychologists call projection; big city liberals (including Barack himself) think people should be bitter, so they're quick to jump to defend comments that they are. If you go read reports actually coming out of the Alleghenies, though, the closest thing I see to bitterness is indignation that the hardworking people of small town America were so slandered. This brings me to the second problem with his statement. You will note the above linked press coverage is of people who take pride in caring for themselves through their own hard work. To insinuate that they are bitter because the government hasn't come in and taken care of them like little children is deeply insulting. Zell Miller got this, but then he thought the Democrats were "a National Party No More."
Though I find the content of the speech itself and the political fallout from it, which will probably be long lasting, interesting, that's not what interests me the most this morning. There are two parts to his slander of middle America. The first is that social conservatives cling to religion, gun rights, controlled immigration policies, and limits on trade (I won't deal with his comments about "antipathy to people who aren't like them" because I think it is a misplaced stereotype) not because they are rational but because they are bitter about being jobless. I think Obama quickly realized how deep this cuts and has run away from those comments, instead characterizing the debate as being about whether or not people are bitter (or more precisely whether or not they deserve to be bitter).
What really catches my attention is the comments on various conservative blogs (one of the most exemplary can be seen on Volokh) stating that Barack is right, we should be bitter. All of them that I've seen list a litany of charges against Republicans always including involvement in Iraq. What I find interesting about these posts is that every one I've seen is very clearly written by a liberal. I can't claim to know where they stand on gun rights, religion in schools, or the border fence, and I certainly don't know where they live. I've also never really spent any time in PA, but I have spent time in small towns in GA. I have a difficult time imagining that the biggest problem of the average citizen of Altoona, PA is supply contracts being awarded to Halliburton.
What I seem to be seeing is what Psychologists call projection; big city liberals (including Barack himself) think people should be bitter, so they're quick to jump to defend comments that they are. If you go read reports actually coming out of the Alleghenies, though, the closest thing I see to bitterness is indignation that the hardworking people of small town America were so slandered. This brings me to the second problem with his statement. You will note the above linked press coverage is of people who take pride in caring for themselves through their own hard work. To insinuate that they are bitter because the government hasn't come in and taken care of them like little children is deeply insulting. Zell Miller got this, but then he thought the Democrats were "a National Party No More."
Wednesday, March 26, 2008
Progressives and charity
I suspect there will be a lot made out of Obama's lack of charitable giving (his average from 2000 to 2004 was around 1% out of his 250k+ income). I'm (obviously) about to make something out of it, but I want first to state some things I don't care about. I don't think it makes any assertions about his character. A decade ago Bill Gates came under great scrutiny because he didn't give enough money away. I'm not going to stand in judgement about what somebody else chooses to do with the fruits of their labor. I also don't think it makes him a bad Christian. A fairly convincing case can be made that the Levitical tithe does not apply to Christians (though one does wonder where his heart is, given that his money certainly isn't going to the church).
What I do find interesting is that if you listen to his campaign promises he seems awfully generous with other peoples' money. The National Taxpayers Union estimates his promised new program cost at $307 billion. His statements even include promises of personal generosity such as "Obama will provide a $1.5 billion fund to assist states with start-up costs (to a paid leave program)." What this really means is that Obama will take 1.5 billion from Bill Gates and Warren Buffett (both of whom give huge percentages to charity) so that he can be so generous with it.
I hammer this not to pick on Barack, but because I'm constantly tired of conservatives being portrayed as stingy people who care nothing for the poor and want them to starve. Virtually every study I've ever seen shows that conservatives give more. Arthur Brooks ("Who Really Cares?") stated that conservative families give on average 30% more than liberal families. Studies of per-state giving frequently come up with statistics like 24 of the top 25 voted Republican in the last election. But I still have to deal with the absurd claim that conservatives don't care.
I'm not even saying that progressives don't care. The difference is that they think it's the government's job. If a conservative is touched by a situation that needs action they step in and do it (or start their own NGO to step in and do it); if a progressive sees a situation that needs action they send a letter to their congressman (or start their own 527 to lobby congressmen).
What I do find interesting is that if you listen to his campaign promises he seems awfully generous with other peoples' money. The National Taxpayers Union estimates his promised new program cost at $307 billion. His statements even include promises of personal generosity such as "Obama will provide a $1.5 billion fund to assist states with start-up costs (to a paid leave program)." What this really means is that Obama will take 1.5 billion from Bill Gates and Warren Buffett (both of whom give huge percentages to charity) so that he can be so generous with it.
I hammer this not to pick on Barack, but because I'm constantly tired of conservatives being portrayed as stingy people who care nothing for the poor and want them to starve. Virtually every study I've ever seen shows that conservatives give more. Arthur Brooks ("Who Really Cares?") stated that conservative families give on average 30% more than liberal families. Studies of per-state giving frequently come up with statistics like 24 of the top 25 voted Republican in the last election. But I still have to deal with the absurd claim that conservatives don't care.
I'm not even saying that progressives don't care. The difference is that they think it's the government's job. If a conservative is touched by a situation that needs action they step in and do it (or start their own NGO to step in and do it); if a progressive sees a situation that needs action they send a letter to their congressman (or start their own 527 to lobby congressmen).
Clinton and costs
I've long argued that Clinton will do anything to win this primary, even if it hurts her party's overall chances in the general. What I hadn't thought of, which I heard argued this morning, is that it's perhaps even true that if she's confident she's going to lose the primary it makes sense for her to swing even harder to ensure that the Republicans win the general.
If Barack wins the general then Clinton is finished. She won't get the chance to run in 2012 and she probably won't get the chance to run ever again. If he loses, though, then she can try again in 4 years. She can't come out and campaign for or endorse McCain because then she would be clearly going against her party, but she can do things like run campaign ads stating that she's stronger than Barack on an issue where McCain clearly trounces both of them (like, say, national security) in the hopes that the voters remember that when it comes time for the general.
If Barack wins the general then Clinton is finished. She won't get the chance to run in 2012 and she probably won't get the chance to run ever again. If he loses, though, then she can try again in 4 years. She can't come out and campaign for or endorse McCain because then she would be clearly going against her party, but she can do things like run campaign ads stating that she's stronger than Barack on an issue where McCain clearly trounces both of them (like, say, national security) in the hopes that the voters remember that when it comes time for the general.
Tuesday, March 25, 2008
Primaries
Thomas Sowell in his column today makes a fascinating argument that having primaries instead of allowing party operatives to select Presidential candidates is bad for the country. I hadn't thought of this before, but it neatly parallels my argument that the 17th amendment removed responsibility from Senators to represent their state.
Yet another reason democracy isn't really all it's cut out to be.
Yet another reason democracy isn't really all it's cut out to be.
Thursday, February 14, 2008
Why I support John McCain
It's looking like our choices at this point are McCain or Obama. It might be possible for Huckabee to prevent a McCain nomination on the first vote at the convention, but it's pretty unlikely. Even if he could I wouldn't support him in that effort. I don't like McCain, but he's the best we're going to get this cycle.
Huckabee may claim he's the most conservative candidate, but I find that claim extremely hard to accept. He's done several things that should make conservatives squirm in their seats, but what really bothers me is that I think he really believes that the Federal government is the perfect instrument for carrying out God's grace throughout the country. That's the one thing that ties his campaign together. He's for benefits to illegal immigrants because they're God's people too. He's for "working with" healthcare companies to make sure they provide what he thinks is good preventative medicine (which in Washington Speak usually means something between arm twisting and holding a gun to their head), because it's the right thing to do. About the only thing he really has going for him is the FairTax, which I think still needs some work before it's ready for prime time (Roth IRAs being my biggest complaint about it). All that being said, he has pretty much no hope of actually getting the nomination so this paragraph was a waste of your time.
The real issue is simply whether or not McCain is better than Obama (or Hillary, should she win). I stated in my previous post that there isn't enough difference between them for him to win the general. I'm still afraid that may be true, but it doesn't mean there isn't enough difference to compel me to support McCain.
He can win the war. McCain has been supporting the surge longer than pretty much anybody else. He is probably better qualified than any candidate, including all the ones that have dropped out, to wage war. He hasn't really shared a long term strategy with us, but the alternative offered by the Democrats is going to Al Qaeda and offering to sit down and sing Cumbya (or whatever the appropriate Islamic alternative is). Additionally, as Mark Steyn stated this morning, he's unpredictable, vindictive, and mean enough that he's got to bother Iran and North Korea as well. My main problem with Ron Paul was his position on the war (which ironically is almost certainly where he derived most of his popularity). We've gained and then abandoned allies in Vietnam, Cambodia, Rowanda, Somalia, and Iraq (particularly the Shia in southern Iraq, but those in Iraqi Kurdistan as well). There's only so many times you can build up a force to help you and then leave them to death and torture at the hands of the enemy before potential allies and enemies both make the rational decision that you're feckless as a friend and ineffective as an enemy and chose the correct side of any fight. Additionally, if we follow Obama's policy of pulling out this promises to be much for a Vietnam than a Somalia or the previous Iraq. Bin Laden may have taken comfort in the fact that the US was a paper tiger following our pullout of Somalia when things got tough, but it didn't bring hope to nearly as many enemies as our complete abandonment of our long term allies in Vietnam just as they were getting strong enough to survive on their own. However retreat in Iraq is sold, it will be bought as proof positive that the US can be defeated by a determined adversary.
The next President will get almost certainly get 2, and maybe as many as 4, appointments to the Supreme Court. We're on the verge of having enough seats on SCotUS to actually start making decisions that in some way resemble the Constitution. To abandon that to Obama as Scalia gets ready to retire could be disastrous.
Not as big of a reason, but still a substantial one is simple politics. When the going gets tough McCain seems to side with Democrats about as often as he sides with Republicans, but at least he's willing to come out swinging against earmarks, for instance. If Clinton is elected the political side might be a wash. She's a very divisive candidate and backlash against her might end up helping conservative. If Obama is elected, though, it would be an absolute disaster for conservative politics. He's campaigned as bringing change to Washington and heralding a new era of bipartisan politics. Don't expect the fact that his actual policies are to the left of Ted Kennedy to change the message that he seeks bipartisanship when they fail. It will be entirely because Republicans are once again being divisive sore losers, just as they were when they shut the government down under Clinton and just as they were when they prevented the Democrats from having any say under Bush. Obama will still be a great uniter, he just won't get anywhere because those selfish, stingy Republicans won't pass his totally reasonable 500 billion dollar expansion of healthcare, and think of the children...
Huckabee may claim he's the most conservative candidate, but I find that claim extremely hard to accept. He's done several things that should make conservatives squirm in their seats, but what really bothers me is that I think he really believes that the Federal government is the perfect instrument for carrying out God's grace throughout the country. That's the one thing that ties his campaign together. He's for benefits to illegal immigrants because they're God's people too. He's for "working with" healthcare companies to make sure they provide what he thinks is good preventative medicine (which in Washington Speak usually means something between arm twisting and holding a gun to their head), because it's the right thing to do. About the only thing he really has going for him is the FairTax, which I think still needs some work before it's ready for prime time (Roth IRAs being my biggest complaint about it). All that being said, he has pretty much no hope of actually getting the nomination so this paragraph was a waste of your time.
The real issue is simply whether or not McCain is better than Obama (or Hillary, should she win). I stated in my previous post that there isn't enough difference between them for him to win the general. I'm still afraid that may be true, but it doesn't mean there isn't enough difference to compel me to support McCain.
He can win the war. McCain has been supporting the surge longer than pretty much anybody else. He is probably better qualified than any candidate, including all the ones that have dropped out, to wage war. He hasn't really shared a long term strategy with us, but the alternative offered by the Democrats is going to Al Qaeda and offering to sit down and sing Cumbya (or whatever the appropriate Islamic alternative is). Additionally, as Mark Steyn stated this morning, he's unpredictable, vindictive, and mean enough that he's got to bother Iran and North Korea as well. My main problem with Ron Paul was his position on the war (which ironically is almost certainly where he derived most of his popularity). We've gained and then abandoned allies in Vietnam, Cambodia, Rowanda, Somalia, and Iraq (particularly the Shia in southern Iraq, but those in Iraqi Kurdistan as well). There's only so many times you can build up a force to help you and then leave them to death and torture at the hands of the enemy before potential allies and enemies both make the rational decision that you're feckless as a friend and ineffective as an enemy and chose the correct side of any fight. Additionally, if we follow Obama's policy of pulling out this promises to be much for a Vietnam than a Somalia or the previous Iraq. Bin Laden may have taken comfort in the fact that the US was a paper tiger following our pullout of Somalia when things got tough, but it didn't bring hope to nearly as many enemies as our complete abandonment of our long term allies in Vietnam just as they were getting strong enough to survive on their own. However retreat in Iraq is sold, it will be bought as proof positive that the US can be defeated by a determined adversary.
The next President will get almost certainly get 2, and maybe as many as 4, appointments to the Supreme Court. We're on the verge of having enough seats on SCotUS to actually start making decisions that in some way resemble the Constitution. To abandon that to Obama as Scalia gets ready to retire could be disastrous.
Not as big of a reason, but still a substantial one is simple politics. When the going gets tough McCain seems to side with Democrats about as often as he sides with Republicans, but at least he's willing to come out swinging against earmarks, for instance. If Clinton is elected the political side might be a wash. She's a very divisive candidate and backlash against her might end up helping conservative. If Obama is elected, though, it would be an absolute disaster for conservative politics. He's campaigned as bringing change to Washington and heralding a new era of bipartisan politics. Don't expect the fact that his actual policies are to the left of Ted Kennedy to change the message that he seeks bipartisanship when they fail. It will be entirely because Republicans are once again being divisive sore losers, just as they were when they shut the government down under Clinton and just as they were when they prevented the Democrats from having any say under Bush. Obama will still be a great uniter, he just won't get anywhere because those selfish, stingy Republicans won't pass his totally reasonable 500 billion dollar expansion of healthcare, and think of the children...
Tuesday, February 5, 2008
My Dad
Most of you are probably aware of this, but my Dad passed from this world on February 3, 2008. I'll start this with a link to an article on 11alive.com. If you read the article, please read the comments as well. They, more than the article itself, really tell the story of who my dad was. His trade has fallen so far from one where people did hard work to find out information of value to the public to one where people read information they got from a press release or a police blotter calculated to increase ratings and sell advertisements. My dad cared deeply about everything he did, including his work, and he did hard work chasing down sources and finding new information to publish. I'm sure there are people like that left in the business, but I don't often see them.
There was much I wish I could have done with my dad, but most of it his living longer wouldn't have changed. I know he would have loved to go backpacking or mountain biking with me. We used to go on hikes, but he hasn't been doing that for a while. Much of my love of the outdoors I got from my father, but his health has not for a long time permitted him to really enjoy it. He read Backpacker Magazine up to maybe 3 years ago, but I can barely remember a time when he could hike on unimproved trails, even without a pack.
I can't imagine the loss of the ability merely to hike in the outdoors, but he suffered the loss of so much more. Near the end he frequently couldn't carry on a substantial conversation without becoming overtaxed, yet through that all he rarely complained (except for getting stuck in a hospital). For years he has been on constant pain medication, but I never heard him mention it.
Though I didn't truly give my life to Christ until college, much of my knowledge of theology and the Bible comes from my father. He was deeply committed to the church and to service, often stepping in to do the duty of elders or deacons even when he was not himself active in service. He was twice elected as an elder in the Presbyterian Church and very active in his Sunday school class.
I'll miss him and I wish I could have enjoyed his company more, most of all I wish I had told him more often how much I love him and appreciate his love for me. After so many years of missing out on some of the great pleasures of this world, now he gets a chance to enjoy God's presence and His creation in a measure that I have barely dreamed of. I miss him, but I wouldn't wish him back.
There was much I wish I could have done with my dad, but most of it his living longer wouldn't have changed. I know he would have loved to go backpacking or mountain biking with me. We used to go on hikes, but he hasn't been doing that for a while. Much of my love of the outdoors I got from my father, but his health has not for a long time permitted him to really enjoy it. He read Backpacker Magazine up to maybe 3 years ago, but I can barely remember a time when he could hike on unimproved trails, even without a pack.
I can't imagine the loss of the ability merely to hike in the outdoors, but he suffered the loss of so much more. Near the end he frequently couldn't carry on a substantial conversation without becoming overtaxed, yet through that all he rarely complained (except for getting stuck in a hospital). For years he has been on constant pain medication, but I never heard him mention it.
Though I didn't truly give my life to Christ until college, much of my knowledge of theology and the Bible comes from my father. He was deeply committed to the church and to service, often stepping in to do the duty of elders or deacons even when he was not himself active in service. He was twice elected as an elder in the Presbyterian Church and very active in his Sunday school class.
I'll miss him and I wish I could have enjoyed his company more, most of all I wish I had told him more often how much I love him and appreciate his love for me. After so many years of missing out on some of the great pleasures of this world, now he gets a chance to enjoy God's presence and His creation in a measure that I have barely dreamed of. I miss him, but I wouldn't wish him back.
Friday, February 1, 2008
Why I don't support John McCain
With my state voting in 4 days, I'm going to go ahead and endorse Romney. I actually like Ron Paul, but I can't imagine once again abandoning our allies even if a war is undeclared.
This post, though, isn't as much about why I'm for Romney as why I'm against McCain. My biggest problem with McCain is that I never get the feeling like he makes decisions based on rational thought, which I find extremely dangerous. If you've been reading this blog long enough you know that I really admire the framers. One of the things I like so much about the Constitution is that this country was not set up as a democracy. Aristotle rightly maligned democracy (literally something like "rule by the poor", a deme was a group of non-aristocrats in ancient Greece) as a form of government where the lazy majority steals from the productive and hard working minority to meet their needs and wants. The founders agreed and set up a government where the majority could vote, but they had to elect representatives who hopefully would have the interests of the state instead of just the majority at heart as they ruled.
McCain seems to do whatever feels right without really studying it. A fantastic example of this is his statement that he would support Roberts but not Alito. I know he has denied this, but there have been quite a few people who have come out and said they were in that meeting and heard him say it, so I don't believe him. The guys at PowerLine make the fantastic point that you certainly wouldn't come to the conclusion that Alito was more conservative than Roberts based on the evidence. You come to that conclusion by buying the media narrative. That, and the fact that he spouts his mouth off and makes good copy, is why the media likes him so much.
But as bad as that is (and I think it's pretty awful), it's not the real reason I don't like McCain. The real reason is that I don't think he can win. I've been watching the Democrat campaign for a while and I think Obama might be a formidable candidate, but only McCain could lose to Hillary. I'm aware that every poll shows McCain as the only one with a favorable matchup in the general, but I don't buy it. I'm also aware of what Dick Morris says and I don't buy that either.
The polls are based on what the public sees now about the two candidates. The media has always loved McCain, but I don't think most of them really care who gets the Democrat nomination. When it comes to the general, though, I have no question about who the New York Times will endorse (except that I'm not sure who will have the D beside their name yet). The story now might be that McCain is a war hero and has the best chance to win the general, but when he's actually up against Obama or Hillary it will be that this election is about some unspecified change (as both Democrats argue their campaign is for) and McCain is a great man who has served his country for a long, long time but he's part of the establishment and would just be for more of the same old stuff. Plus, what's the real difference between McCain and the Democrats. He's for higher taxes, looser border restrictions, restrictions on development to keep climate control in line, against drilling in ANWR, against coercive interrogation, has stated he would not repeal Roe v. Wade, is for federal funding of embryonic stem cell research...
He might differ on federal health care (though economics isn't his thing and he hasn't taken a concrete position as far as I know) and he certainly differs in having supported the surge from very, very early. Do we really want to stake the campaign on early support for the surge against optimism, youth, media support, and the promise of amorphous change?
This post, though, isn't as much about why I'm for Romney as why I'm against McCain. My biggest problem with McCain is that I never get the feeling like he makes decisions based on rational thought, which I find extremely dangerous. If you've been reading this blog long enough you know that I really admire the framers. One of the things I like so much about the Constitution is that this country was not set up as a democracy. Aristotle rightly maligned democracy (literally something like "rule by the poor", a deme was a group of non-aristocrats in ancient Greece) as a form of government where the lazy majority steals from the productive and hard working minority to meet their needs and wants. The founders agreed and set up a government where the majority could vote, but they had to elect representatives who hopefully would have the interests of the state instead of just the majority at heart as they ruled.
McCain seems to do whatever feels right without really studying it. A fantastic example of this is his statement that he would support Roberts but not Alito. I know he has denied this, but there have been quite a few people who have come out and said they were in that meeting and heard him say it, so I don't believe him. The guys at PowerLine make the fantastic point that you certainly wouldn't come to the conclusion that Alito was more conservative than Roberts based on the evidence. You come to that conclusion by buying the media narrative. That, and the fact that he spouts his mouth off and makes good copy, is why the media likes him so much.
But as bad as that is (and I think it's pretty awful), it's not the real reason I don't like McCain. The real reason is that I don't think he can win. I've been watching the Democrat campaign for a while and I think Obama might be a formidable candidate, but only McCain could lose to Hillary. I'm aware that every poll shows McCain as the only one with a favorable matchup in the general, but I don't buy it. I'm also aware of what Dick Morris says and I don't buy that either.
The polls are based on what the public sees now about the two candidates. The media has always loved McCain, but I don't think most of them really care who gets the Democrat nomination. When it comes to the general, though, I have no question about who the New York Times will endorse (except that I'm not sure who will have the D beside their name yet). The story now might be that McCain is a war hero and has the best chance to win the general, but when he's actually up against Obama or Hillary it will be that this election is about some unspecified change (as both Democrats argue their campaign is for) and McCain is a great man who has served his country for a long, long time but he's part of the establishment and would just be for more of the same old stuff. Plus, what's the real difference between McCain and the Democrats. He's for higher taxes, looser border restrictions, restrictions on development to keep climate control in line, against drilling in ANWR, against coercive interrogation, has stated he would not repeal Roe v. Wade, is for federal funding of embryonic stem cell research...
He might differ on federal health care (though economics isn't his thing and he hasn't taken a concrete position as far as I know) and he certainly differs in having supported the surge from very, very early. Do we really want to stake the campaign on early support for the surge against optimism, youth, media support, and the promise of amorphous change?
Thursday, January 24, 2008
Friends
I've frequently heard that your income will rarely vary more than 10% from that of your 5 closest friends. This doesn't terribly surprise me because people tend to hang out with other people of similar income levels, but I recently realized there may be more to it than that. I was talking last night to Amanda about churches and she was repining that so many of our fellow congregants complain vocally about their financial woes and how they are struggling to live paycheck to paycheck, but don't consider selling their leased SUV, dropping cable TV, pulling their kids out of expensive childcare, or having their husbands brown bag it to work. This affects her because she finds herself wishing she could have the luxuries that they have, but also seeing the problems it causes them. I commented that we could never find a community that coincided perfectly with our beliefs and values and her response to that was "I know there's no grown up WCF (our college ministry) out there."
That wasn't what I meant, but it's a fascinating retort because it is so close to what I meant. My 5 closest friends are all people I met in college. I think our incomes probably differ a bit more than 10%, but it's the similarity of our philosophy and habits that I find so interesting. That we agree on things we dealt with in college is somewhat unsurprising, but so many of the things that we didn't are similar as well.
I'm not going to claim that my friends all agree on everything. One couple likes buying new cars, which I think is a generally bad financial decision, but none of them finance cars. Only 10% of the general population buys their cars outright. One couple has significant investment debt on real estate, but none of us have any consumer debt. We disagree on some aspects of home schooling, but we all, along with 2% of the population, plan on doing it.
What is it that brought us together that causes us 10 years later in a totally different stage of life with entirely different problems to still follow such similar paths? We are all Christian, but I've met many Christians I don't have the same philosophy as I do. We are mainly engineering type people, but again I've met other computer people who differ from me.
That wasn't what I meant, but it's a fascinating retort because it is so close to what I meant. My 5 closest friends are all people I met in college. I think our incomes probably differ a bit more than 10%, but it's the similarity of our philosophy and habits that I find so interesting. That we agree on things we dealt with in college is somewhat unsurprising, but so many of the things that we didn't are similar as well.
I'm not going to claim that my friends all agree on everything. One couple likes buying new cars, which I think is a generally bad financial decision, but none of them finance cars. Only 10% of the general population buys their cars outright. One couple has significant investment debt on real estate, but none of us have any consumer debt. We disagree on some aspects of home schooling, but we all, along with 2% of the population, plan on doing it.
What is it that brought us together that causes us 10 years later in a totally different stage of life with entirely different problems to still follow such similar paths? We are all Christian, but I've met many Christians I don't have the same philosophy as I do. We are mainly engineering type people, but again I've met other computer people who differ from me.
Friday, January 11, 2008
Can we fix it?
The other day I was working on getting my car fixed and Andrew comes up while I was under it and asked "Daddy, is your car broken?" I said yes. He said, "Can We Fix It?"
So a bit later he amused himself by flushing bar soap down the toilet. This created quite a clog and my plunger isn't up to the task. So I was sitting up there looking at it and we had the following interchange:
Andrew: Is the toilet broken?
Me: yes
A: Why don't you fix it?
Me: I need a toilet auger and I don't have the tools.
A: Go to the garage and get the tools.
How helpful.
So a bit later he amused himself by flushing bar soap down the toilet. This created quite a clog and my plunger isn't up to the task. So I was sitting up there looking at it and we had the following interchange:
Andrew: Is the toilet broken?
Me: yes
A: Why don't you fix it?
Me: I need a toilet auger and I don't have the tools.
A: Go to the garage and get the tools.
How helpful.
Thursday, January 3, 2008
Mortgage Debt, Financial Risk, and the Bible
Sometime last week I came across this post on mortgage debt and financial risk, then a few days ago at dinner my mother-in-law was talking about her conversation with a so-called "Crown Ministries Guru" who was evidently rather condescending to her about her desire to liquidate an investment account to pay off a (lower interest) HELOC. She argued that paying off the loan is the only biblical option; he argued that it didn't make sense. I find both of these positions interesting, but the case of the guru more than the blog poster.
With respect to the blog, John argues that he is reducing his risk by having a mortgage on his house and having that money invested somewhere else. Presumably he has it in a non-insured investment since most people with this theory seek to make greater returns on the investment than the interest on the house and you're not going to get a CD or insured bond with a better return than your mortgage interest or the banks would lose money (which banks don't like doing). So his theory is that if the market for your individual house drops you've lost tons of money on your house but he has his money better diversified. The first problem with this is that if his investment drops at the same time that he loses income he might lose his house; if the housing market is down at the same time he might even lose it at a loss. You will never lose a paid off house unless a judgement is delivered on some unrelated debt (or the government decides they can get more tax money from somebody else, but that's an unrelated issue). Trent (the author of "The Simple Dollar") argues that he is ignoring this personal risk but is correct about diversifying his financial risk. He's not. Lets say that John and Tristan both have $100,000 homes. John takes out $80,000 of that and puts it in a guaranteed bond and Tristan has the house totally paid off. Both of their houses are in markets that go in a huge slump and the house price drops to $60,000. Tristan now owns a $60,000 asset (a house). John now owns a $60,000 asset with an $80,000 lien on it plus a second $80,000 in the bond, bringing both of their net worths to $60,000. It may be true that John makes more money because his outside assets he leveraged the house to buy make more money than the interest on the mortgage, but it is never true that he has reduced his risk. The same thing goes for any investment made with other peoples' money. You can make huge money buying commodoties on margin, but you can also lose your shirt. Taking out a loan and investing it can only increase your risk because you have a loan that must be repaid and an asset that you might be able to recover. Even if it's insured you're not really guaranteed you'll collect in a timely manner.
Now we get to my mother-in-law's question. Her assertion something along the lines of that if The borrower is slave to the lender, and You cannot serve two masters and that she should Leave no debt outstanding, except the continuing debt to love one another. Then it would seem unbiblical to keep debt, certainly when you can pay it off. Proverbs certainly teaches us it is unwise to be a man who strikes hands in pledge or puts up security for debts. I've taken Crown Ministries and considered taking the class to be a teacher and I'm pretty sure that it is totally contrary to the tenets of that program to argue that if you have given a pledge to stranger you should do anything but deliver yourself like a gazelle from the hunter or a fowl from the hand of the fowler. I asked her what biblical insight he provided and she said he only said that it would be foolish to keep put money in an account that gets less interest. My only response is that the foolishness of God is wiser than men.
Having said that, I'm probably about to put money in an investment account rather than pay off my mortgage, so I'm not saying keeping your mortgage around is always a bad idea. I'm not a die hard Ramseyite. I have personally paid off my student loans, for instance, but I can see that keeping them around at 3% interest (which I know exist) and sticking the money in an FDIC insured savings account with total liquidity and 5% interest makes financial sense. I wouldn't do it because I like my finances boring, but I don't think it's a bad idea. My situation is that I know my car is going to die and I'm going to need a new roof and new siding in the next 10 years so I need to build up enough liquidity to take those hits without having to get another loan which is almost certain to be worse than my current 5% loan on the house. Thus my money will not be going to paying off the home early, it will be going to a semi-liquid fund for pending expenses. I want to escape that house debt, but I also need liquidity and a wise man plans for the future.
With respect to the blog, John argues that he is reducing his risk by having a mortgage on his house and having that money invested somewhere else. Presumably he has it in a non-insured investment since most people with this theory seek to make greater returns on the investment than the interest on the house and you're not going to get a CD or insured bond with a better return than your mortgage interest or the banks would lose money (which banks don't like doing). So his theory is that if the market for your individual house drops you've lost tons of money on your house but he has his money better diversified. The first problem with this is that if his investment drops at the same time that he loses income he might lose his house; if the housing market is down at the same time he might even lose it at a loss. You will never lose a paid off house unless a judgement is delivered on some unrelated debt (or the government decides they can get more tax money from somebody else, but that's an unrelated issue). Trent (the author of "The Simple Dollar") argues that he is ignoring this personal risk but is correct about diversifying his financial risk. He's not. Lets say that John and Tristan both have $100,000 homes. John takes out $80,000 of that and puts it in a guaranteed bond and Tristan has the house totally paid off. Both of their houses are in markets that go in a huge slump and the house price drops to $60,000. Tristan now owns a $60,000 asset (a house). John now owns a $60,000 asset with an $80,000 lien on it plus a second $80,000 in the bond, bringing both of their net worths to $60,000. It may be true that John makes more money because his outside assets he leveraged the house to buy make more money than the interest on the mortgage, but it is never true that he has reduced his risk. The same thing goes for any investment made with other peoples' money. You can make huge money buying commodoties on margin, but you can also lose your shirt. Taking out a loan and investing it can only increase your risk because you have a loan that must be repaid and an asset that you might be able to recover. Even if it's insured you're not really guaranteed you'll collect in a timely manner.
Now we get to my mother-in-law's question. Her assertion something along the lines of that if The borrower is slave to the lender, and You cannot serve two masters and that she should Leave no debt outstanding, except the continuing debt to love one another. Then it would seem unbiblical to keep debt, certainly when you can pay it off. Proverbs certainly teaches us it is unwise to be a man who strikes hands in pledge or puts up security for debts. I've taken Crown Ministries and considered taking the class to be a teacher and I'm pretty sure that it is totally contrary to the tenets of that program to argue that if you have given a pledge to stranger you should do anything but deliver yourself like a gazelle from the hunter or a fowl from the hand of the fowler. I asked her what biblical insight he provided and she said he only said that it would be foolish to keep put money in an account that gets less interest. My only response is that the foolishness of God is wiser than men.
Having said that, I'm probably about to put money in an investment account rather than pay off my mortgage, so I'm not saying keeping your mortgage around is always a bad idea. I'm not a die hard Ramseyite. I have personally paid off my student loans, for instance, but I can see that keeping them around at 3% interest (which I know exist) and sticking the money in an FDIC insured savings account with total liquidity and 5% interest makes financial sense. I wouldn't do it because I like my finances boring, but I don't think it's a bad idea. My situation is that I know my car is going to die and I'm going to need a new roof and new siding in the next 10 years so I need to build up enough liquidity to take those hits without having to get another loan which is almost certain to be worse than my current 5% loan on the house. Thus my money will not be going to paying off the home early, it will be going to a semi-liquid fund for pending expenses. I want to escape that house debt, but I also need liquidity and a wise man plans for the future.
Subscribe to:
Posts (Atom)