Elkhorn Creek Lodge

Sitting On Your Hands

Posted in economics by Eugene Podrazik on September 30, 2008

As a general proposition, when told by unanimous elites that a particular course of action is urgent and necessary to avoid disaster, there’s a lot to be said for going fishing*. If the entire global economy is so vulnerable that only the stalwart action of Barney Frank stands between it and ten years of soup kitchens, can it, in fact, be saved? 

That’s a quote from Mark Steyn at the Corner.

Sitting on your hands, or going fishing is not a bad idea, sometimes.  Sometimes the more you massage a problem, the worse it get.  So, those thin-skinned GOP representatives, offended by Nancy Pelosi, voted down the bailout package; and, Nancy is offensive.  But, the sun rose this morning.  People shaved and showered and went to work.  And, oh, that record stock market tumble yesterday?  The Dow’s back up 485 points.

One point is going to have to be hammered home is the fact that there is nothing wrong with our free market economy.  The crisis is has its roots in governmental interference in the free market; greatly larded by corruption on steroids.  Once upon a time, the house you lived in came with a thirty-year fixed-rate mortgage that required twenty percent down and a monthly payment that did not exceed twenty-five percent of your net monthly income.  

And, in the end, the crisis 700 billion dollars worth of corruption will be solved by the free market.  That is by you and I putting our pants, one leg at a time, and going to work. 

Barney Frank stands between you and ten years of soup kitchens; what a laugh.  Probably the biggest argument in favor of term limits is the egoistic self-regard some of these elected representatives have on the basis of getting a committee chairmanship on the basis of seniority from job-for-life re-elections from safe districts.  Peter Principle (no pun intended)?  Frank, Pelosi, Obama, Dodd, Reid; the pantheon of the Colossi; Masters of the Universe!  

Some how, despite the lack of an urgent rescue, the world survived.  How vital these people really are. De Gaul once  remarked that cemeteries are full of indispensable men.

The Sallie Mae/ACORN Tax Increase

Posted in democratic party, economics, gop, main stream media, mccain, obama, politics by Eugene Podrazik on September 30, 2008

Yesterday’s failure of the bailout in the House doesn’t end the crisis. But, the crisis and the cause, Democratic party corruption, still remain. In the long run, this crisis will redound against the Democrats, but the time is too short for it to have an effect on this election. Yesterday’s vote probably cost McCain the election.

Pelosi’s role in engineering the bailout’s defeat (she didn’t “whip” the vote) was very shortsighted. The Republican caucus knew that Pelosi wasn’t pushing party discipline and loyalty to get a winning vote. Pelosi’s venom in the speech just prior to the vote only served to confirm the fact that she was going to use this crisis to partisan advantage. And, long after the finger pointing, what will be remembered is that the coming recession, and possibly depression, is Pelosi’s and Obama’s.

But, this crisis remains a creature of the Democratic party. It is the creature of the likes of Dodd, Frank, Reid and Pelosi.  The longer the problems remains unsolved the longer it festers. The MSM can hide the problem only so long. Then the corruption underlying the problem will come out.

Obama and the Democrats, with the help of the MSM, are trying to run the clock until November 4th. In the long run, no amount of ACORN slush funds will hide the reality of the damage that corruption emanating from a badly mismanaged Fannie Mae and Freddie Mac. 700 billion dollars of corruption will, in some way, wash through our economy. Whatever plans the Democrats had for their triumphant re-entry in January 2009 will be very badly constrained by that fact.

Obama got his wish for a tax increase; a 700 billion tax increase. A 700 billion tax increase courtsey his friends from Sallie Mae and ACORN (you know, he used to work for the latter). The problem is that his friends at ACORN have already spent the money. And, there’s no more money. The slack that Reagan’s economic policies engendered is gone.

There’s no more money for any more of his social programs he’s promised. We’re already in for a recession; at the very least. And, it will be Obama’s, not Bush’s, recession. His options will be constrained by the reality that any move he takes could turn his recession into a depression. This is the knife edge that Obama’s presidental legacy will reside.

Remember, Hoover got tagged with the Great Depression because is was his from 1929 to 1932. This recession (and perhaps depression) will coincide with Obama’s assumption of power in 2009. The economic conditions will squarely be associated with the man who occupies the Oval Office as of January 2009. Even now, Bush is a faded memory.

Yes, Obama, to his own detriment can listen to his loony-left supporters and proceed with all sorts of taxing and spending–above and beyond the 700 billion tax and spend by his friends at Fannie Mae and ACORN. And, the Democratic party will come to a sudden halt in November 2010. I think that even Pelosi isn’t that crazy

Yes, Obama can toe the line with the fringe global warming crowd. But, very soon, he’s going to start hearing about the high price of home heating oil from the Blue State Northeast. That’s above and beyond four dollar gasoline. And, California actually has offshore oil that can come on line in under a year. Obama better start really leaning on the California Congressional delegation.

And, despite the venom Pelosi directed at Bush yesterday, Obama better start, right now, making real nice with Bush. Because Obama is going to need a really big favor from Bush–bombing Iran before January 20th.

But, McCain still has a very important job to do. That is to continue to help the GOP maintain strength in both houses of Congress. Win or lose, he is the head of the GOP. He has a responsibility, in the next thirty days to campaign as hard as possible to keep this election close because, for the sake of this country and his party, he needs to maintain a viable opposition. In particular, he needs to deny the Democrats a filibuster-proof Senate.

McCain needs to concentrate on one mantra for the next thirty days: Democrats-corruption-Sallie Mae. Regardless of the questions asked on the remaining three debates; Democrats-corruption-Sallie Mae.

 

Where’s Obama; Where’s Pelosi

Posted in uncategorized by Eugene Podrazik on September 29, 2008

The contrast is so stark.

On one hand, McCain comes to Washington to encourage the House GOP to stay in the game and come up with a rescue plan. He knows it will not make everyone happy. But, he did it in the name of serving country, placing partisanship on the back burner. Also, knowing there were delicate negotiations going on, he pulled his punches in the debate last Friday night.

What was the response?

First, is Obama AWOL. Obama, as presidential nominee is the leader of the Democratic party. Had he publicly said so, he could have easily gotten the votes needed for the passage of the financial rescue plan by the House. But, he did nothing. Once again, Obama was “present.”

Then we have Pelosi. There’s no sugar coating her speech just before the vote. It was blatant partisan attack. It did what it was designed to do; cause the rescue bill to fail. And, I suspect that her speech was well orchrestated with the Democratic leadership.

Its obvious was the play is. Pelosi feels that she will retain a majority in the House, regardless, and is confident that the Senate will retain a Democratic majority too. So, she’s got nothing to lose. 

Rather, she’s trying to prolong the crisis and even worsen it so as to saddle the GOP with the blame while keeping Sallie Mae and Freddie Mac intact as Democratic favor machines.

Damn the long term consequences; no matter if we descend into another depression. It is now clear this crisis is being used to re-create the conditions of the 1932 election and to relive the New Deal glory days. 

 

 

The McCain Rescue Plan

Posted in democratic party, economics, gop, mccain, obama by Eugene Podrazik on September 29, 2008

The importance of McCain’s intervention in the financial rescue plan cannot be overly emphasized. It was the catalyst that made this plan that will address the financial crisis cleanly and without the pork and favors that the Frank-Dodd plan had. Or, the no strings attached that the Paulson plan had. And, it makes provision for transparent bipartisan oversight:

 

          

Side-by-Side Comparison of Rescue Legislation           

 

Issue

Paulson Plan

Frank-Dodd

Final Bill

$

700B

700B – Delivered in 150B traunches that can be delayed by  Congressional disapproval (and a Presidential signature)

250B – Immediately available to the Secretary.

100B – Available upon report to Congress.

350B – Available ONLY upon Congressional action.

 

Insurance (HouseRepublican Mode)

 

 

Requirement to establish mandatory insurance/guarantee program at no expense to the taxpayer.  “Pay to play” for participating companies, based on risk.

 

Executive Compensation

 

Far reaching executive compensation standards that would affect companies not even involved in this financial crisis.  Additionally, the bill lowered the deduction on executive pay to $400,000 for ALL companies.

Workable prohibitions on executive compensation to ensure bad actors are not rewarded. In a total takeover (like what happened with AIG), there will be no golden parachutes or severance pay.  For equity participation, over $300M total ban for top 5 executives on golden parachutes and tax deduction limit on compensation above $500,000.

 

Oversight/Transparency

 

Onerous, unworkable and repetitive reporting and oversight requirements, hindering proper implementation of program. 

Establishment of bipartisan oversight commission, split evenly between minority and majority.

Practical reporting requirements to ensure proper reports to Congress and the public.

 

If after 5 years the government has a net loss of taxpayer funds as a consequence of the purchase program, the President will be required to submit a legislative proposal to recoup such funds from program beneficiaries.

 

“Say on Pay”

Union Take Over of Corporate Boards

 

So-called “say on pay” or “proxy access” which propose to mandate a nonbinding shareholder vote on proxy access and other corporate governance issues for all companies in which the Treasury Department buys a direct stake in certain assets. 

 

OUT

Affordable Housing Slush Fund (ACORN Fund)

 

Included a giveaway that would force taxpayers to bankroll a slush fund for ACORN – an organization fraught with controversy for, among other scandals, its fraudulent voter registration activities on behalf of Democratic candidates. 

 

OUT

Bankruptcy “Cramdown” (aka, trial bar give-away)

 

Included so-called “cramdown” provisions allowing bankruptcy judges to reduce mortgage principal under the guise of helping those at risk of foreclosure.  If enacted into law, the provision would be a bonanza for trial lawyers and undercut the effectiveness of any economic recovery effort by making it even harder to value mortgage-backed securities.

 

OUT


          

Mark-to-Market Accounting

 

 

GAO study on the impacts of mark-to-market accounting standards and effects on the banking crisis.  Restatement of existing authority to suspend mark-to-market.

 

Equity/Warrants

 

Mandatory equity interest in all participating firms. 

Mandatory equity interests in total takeover scenario.  Proportional equity interest based on percentage of assets sold if deemed appropriate Secretary.

Tax benefits for community banks

 

 

Ability for community banks to take capital losses on GSE assets against ordinary income.

 

 

 

 

 

 

 

 

 

 

 

 

Remember, going in last Thrusday, all we had was the Democrats holding the economy hostage to a plan that would have taken the corruption that had lead to the original financial mess, saddled it on the GOP and then further used the bail out to reward their friends and extend their influence into the economy. The Frank-Dodd plan had the “cramdown provision to allow judges to modify the original terms of the mortgage contract, a slush fund for ACORN, and provisions for Union interference in Corporate governance.”  The Frank-Dodd plan was part of the Democrat game plan for a 1929 redux; Market crash, depression, big election gains and the glory days of the New Deal.

McCain, by going to Washington, rallied the House GOP and turned the tide on the Frank-Dodd plan that would have been the opening shot of the New Deal II of the incipient Obama administration. It has also stopped the “October Surprise” in its tracks and kept the GOP viable for November. McCain can still win his election. The GOP can still deny the Democrats a filibuster-proof Senate. Pelosi will still need to seek political cover from the GOP because the margin of her House majority will come from competitive seats that the GOP can plausibly threaten for 2008 and in the future.

Now, however, is the time to shed the bi-partisanship and to insure that the Democrats are held fully accountable. There’s only thirty days to make the point.  McCain and the GOP must make the following very clear:

First, this financial meltdown was the direct result of corruption. This meltdown can be traced to Fannie Mae and Freddie Mac. It was the result of purposeful Democratic inaction to protect favors to its favored constituencies and sources of campaign contributions that led to this disaster. 

Second, McCain, among others, saw this coming in 2005 and crafted oversight legislation that would have prevented this meltdown. The Democrats blocked this reform on a straight party-line vote. This corruption and McCain’s reform attempts must be made clear.

Third, this is not a failure of free-market economics. This disaster occurred because of governmental intervention into free-markets in trying to force the free market to take on loan obligations that were otherwise untenable. 

Fourth, governmental economic intervention has real costs. Governmental economic intervention is latent corruption. Governmental economic intervention will invariable lead to blatant corruption. It is this latent and blatant corruption that are hallmarks of Blue State governance that renders Blue State America as so many examples of “social service” economies that seek to tax and spend suffocating all economic growth. 

Fifth and finally, Obama was a cipher. An unproductive fifth wheel. In fact it was his uninformed remarks that blew up last Thursday’s White House summit meeting by causing the GOP members to walk out thinking, justifiably, they had been sandbagged by the Democrats. It was McCain, early Friday morning, who urged the House GOP members to get back in the game.

No, McCain wasn’t the only act in town. But, in this case he played a positive and central role in solving this issue. It was he, putting his prestige on the line that provided the key pressure at the right time. He, very literally, had a very critical role in preventing this crisis from further spinning out of control and devolving into a recession if not  a depression.

 

Obama, Lies and Ayers

Posted in democratic party, obama, politics by Eugene Podrazik on September 28, 2008

Obama’s been trying to bury his relationship with Ayers to the extent that his partisans have attempted to intimidate local Chicago media. There have been efforts to block Stanley Kurtz research from source papers at the Richard J Daley Library at the University of Illinois at Chicago. Ayers was more than just a guy in the neighborhood. Whether in Chicago or in Manhattan.

But to understand the relationship, one needs to follow the trail of evidence:

First, Bill Ayers has other sources of power and connections than those that stem from his younger days as a terrorist bomber. He is the son of Thomas G Ayers, former Chairman and CEO of Commonwealth Edison; now Exelon Corporation. Commonwealth Edison (ComEd) is the sole power utility for Chicago and Northern Illinois. Inasmuch as it is large, loaded with money and regularly needs to go before various commissions to justify power rate hikes, it is political. No surprise, this is the Chicago Democratic machine. As such, Thomas Ayers would have regular professional, political and social contact with the top movers and shakers in Chicago Democratic Machine politics.

Next, one of the more charming characteristics of the Chicago Democratic Machine is nepotism. Even if your offspring is one of the black sheep, there are a myriad of less than public ways your offspring can be cared for. So, after Ayers came back in from the cold, allowed some time to allow the past to bury itself, connections going back to daddy could come into play. Say, like a tenured teaching position at the University of Illinois at Chicago (UIC).

Now, we have a unique crossing of paths at Columbia University. It was here that Obama completed his bachelor degree in 1983. And, it was here Bill Ayers got a two Masters and a Doctorate degree in education at Bank Street College (in Manhattan) and Columbia University.

Years pass and both Ayers and Obama wind up in Chicago. It is, frankly, no surprise that Ayers would become a principal in the Chicago Annenberg Challenge (CAC). Despite his sordid past, a common characteristic of any Chicago Machine politician, Ayers had connections.

But, how do you explain the elevation of a young Chicago southside “community organizer” like Obama? Here’s a guy with no roots in the Chicago Machine, familial or otherwise. Yet, this then obscure machine flunky is raised to be the other principal of the CAC.

Okay, you can dismiss all of the above as coincidental or circumstantial. But, being a principal, on par with Ayers, of an organization that distributed on the order of 100 million dollars is prima facie evidence that Ayers and Obama were thick as thieves. Even in this day of 700 billion dollar bailouts, 100 million dollars is still a lot of money. To say that Ayers was just a casual relationship, just a guy in the neighborhood, is a bald faced lie. Even if Kurtz was blocked from the CAC source papers at the Richard J Daley Library at UIC and then silenced by thugs from the neighborhood local, 100 million dollars is stand-alone evidence of a close relationship, extending over years, between Obama and Ayers.

For an obscure nobody as Obama to be given the trust of 100 millions dollars meant that someone knew him. And, once on board, there is no way that you are not going to know about your fellow principals. I suspect that Obama knew all about Ayers. But, given his political proclivities and the political environment in Chicago, that background didn’t matter. Didn’t matter until he had to deal with a world outside his tight, radical political cloister, out in “bitter” America, where things such patriotism, duty and honor really do matter. 

Polls, Polls Everywhere and Not a Drop to Drink

Posted in democratic party, economics, gop, main stream media, mccain, obama, palin, politics, republican party by Eugene Podrazik on September 28, 2008

The polls have had a very unsettling effect for we McCain partisians. But, face it. The financial meltdown with a Republican in the White House and the MSM totally pushing the Democratic version of events is going to take a toll.

Frankly, it’s a wonder it isn’t worse. And, it isn’t worse because there is a blogosphere and talk radio to counter what was the MSM monopoly on information.

Also, we have to give McCain credit for using his position and prestige to come off the campaign trail and bring the glare public scrutiny on a bail out plan that was being turned into a pork barrel vehicle for even further corruption. This scrutiny has only further heightened the public disgust with this whole sordid affair. So much so that Pelosi, though she has the votes to work without the GOP, needs strong bipartisan cover to pass any bailout plan. This in turn as given the GOP in the House the leverage to re-craft the bailout to more cleanly address the specifics of the financial meltdown with out the pork such as payout to ACORN. That leverage, with his strong anti-pork and anti-ear mark bona fides, comes from McCain’s presence in Washington last week. 

While the MSM narrative is that McCain messed up a done deal, he in fact did. By messing up the deal on the table, he created the opening for the House GOP to step up and significantly alter the bailout. McCain did not receive any immediate benefit. But, the benefit will accure over the next several weeks. Fortunately, there is time before the election for McCain’s crucial role to become manifest to the electorate.

But, McCain’s got to do the following:

First, the deal, as imperfect as it may be, must be complete by this Monday. There has to be a closure so passions can cool; which is probably the real reason for Obama’s rise in the polls. Also, once the deal is complete, McCain’s role can become more evident.

Second, blame must be pinned on the Democrats. The vice-presidential debate will be a great place to do this because of Palin’s credentials as a reformer and corruption fighter. This is no time for “reaching across the aisle.” That’s being done now in cutting the bailout deal in order to prevent plunging this country into a recession or even a depression. But, once the deal is completed, it will be time to make the guilty parties take responsibility. If for no other reason to try to prevent a repeat of this whole mess. And, to demonstrate that the melt down was not a failure of free markets but of corrupt governmental meddling in the free market.

Third, McCain must use this deal to show how he is the anti-corruption fighter. He must use his role in the bailout to show that he saw this coming as participated in legislation, in 2005, to better oversee Sallie Mae and Freddie Mac. And, how this oversight legislation failed on a straight party line vote.

The third presidential debate will be focused on economics. This will be the time to pull the rug out from under Obama by showing the campaign cash Obama collected from Sallie Mae and Freddie Mac. It will be the perfect time to demonstrate the abysmal economic stewardship, on the part of the Democrats, in their role to properly supervise Sallie Mae and Freddie Mac.

Substance and Style; The First Debate

Posted in economics, mccain, obama, politics by Eugene Podrazik on September 27, 2008

I had to read to my two daughters and get them to bed. So, I only caught the briefest snippets of the first debate between McCain and Obama. Not that I really wanted to sit through ninety minutes since neither candidate was going to say something that was actually going to cover new ground. Anyway, this election is really turning into a first-class nail-biter and my narrowed coronaries really can’t handle the whole ninety minutes…

But, for anyone following this election, these debates are wholly unnecessary. They’re only a beauty contest staged for the benefit of the squishy, wishy-washy undecided voter. Like watching Miss Universe, all you really need to do is peak in and ogle during the swim suit competition. Therefore, all I really wanted was a feel for the “presence” and delivery.

And, so you have McCain winning on substance. McCain was rattling off fact and figures like a machine gun. From my days as a Navy officer, I know the type. He’d be one of those commanding officers who knew the answer before you had a chance to answer; and woe to you if you didn’t. (Hewitt) (Power Line)(Yepsen)  (Simon, Politico)

Obama was an echo chamber–“I agree, but…” or “I agree, and here’s what I said, (or meant).” But, he didn’t make a fool of himself, either. But, I’ll have to defer to William Katz on matters of show-biz and give the style points to Obama. Katz’s comment from Urgent Agenda sums it up with “Obama sounded as if he could be president.”

Now, McCain needs to be sure that the Congressional Republicans are successful in insuring that the bailout bill is not a pork-laden give away that will function as the first act of Obama’s New Deal II.

And, a well-crafted bill will give McCain the ammunition, in the last debate, to squarely lay out the blame of the financial meltdown at the feet of Obama. Then demonstrate how his bill, that’s McCain’s, did not saddle Democratic Party corruption on the taxpayer.

As unfortunate as the meltdown was to McCain’s poll standings, at least there’s time to build a case to show that this crisis occurred because of corruption. And, he, McCain, has the bona fides to demonstrate that he was on to that corruption and made substantive efforts to stop that corruption back in 2005.

 

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Who and What Caused the Crisis on Wall Street?

Posted in uncategorized by Eugene Podrazik on September 27, 2008

This is a brief post courtesy Power Line to further disseminate a very understandable video about the Wall Street Crisis.

McCain Blinking

Posted in economics, mccain, obama by Eugene Podrazik on September 26, 2008

I doubt this is a blink. Had McCain stayed in Washington DC and cancelled the debate he would have milked the situation for far much more that he could. Like a comedian wearing a joke. Of course, it would have looked better if he had struck a deal last night. But, the role McCain played will sort itself out over the weekend. Long after the partisan cheap shots have been forgotten, what will be remembered is that he took on the problem; front and center.

He made his point, rallied the conservative Republicans in the House and made Obama look like a fool. 

And, he messed with Obama’s mind. Obama was down in Florida prepping for the debate and had his game plan upset by his having to show up in Washington DC. Moreover, by Bush’s request for a summit as well as having to match McCain’s ante, he had to actually show some actual leadership with the limelight thrust directly upon him.

All the while, he wasn’t sure whether he was going to debate as scheduled. An appearance in Oxford was left up in the air until mid-morning. He got played like a drum.

And, since McCain was calling the shots, he was most likely prepping for the debate he knew he was going to do anyway. More important than prepping, McCain was mentally prepared since he knew he was going to debate anyway. Getting inside your opponents OODA loop, it’s what the old fighter jock does for a living. 

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I’m Back in The (OODA) Saddle Again

Posted in democratic party, economics, gop, mccain, obama, politics, uncategorized by Eugene Podrazik on September 26, 2008

The concept of the OODA loop–observe, orient, decide, act–in the context of McCain’s performance after naming Palin as his running mate was first brought up by Michael Barone. It’s a fighter pilot concept of anticipating and thinking ahead of your opponent in an aerial dogfight. And, Obama just discovered he’d got no clue as to how to out think the old fighter pilot.

First, Fannie Mae and Freddie Mac are political creatures that have become Democrat favor machines. They generate campaign cash for Democratic candidates and favors to favored constituencies by creating a mechanism to have the private sector provide housing at below market costs.

Second, the Democrats, ever living for the glory days of the New Deal, were planning to use this financial meltdown to recreate 1929. Markets crash, depression sets in, massive Democrat victory at polls (presidential and congressional) and on to New Deal II.

In fact, the bailout deal everyone was expecting was to be rubber stamped was just a down payment on the first act of the New Deal II with pork aplenty and scheme to massively redistribute wealth by allowing judges to rewrite the terms of a failing mortgage. The Democrats were using this bailout to protect their favor machine while having the GOP shoulder the blame. (Here’s Ed Morrissey on the Democratic ACORN bailout.)

Enter McCain. He’s completely hijacked the process and is literally holding the Democratic party, and Obama in particular, hostage. All unable to leave Washington until a deal is completed. Obama a prisoner to the process until he votes yea or nay on said deal–in the glare of the publicity that McCain created Obama can no longer vote “present.”

And, there must be a deal. Anything short is going to give McCain and the GOP the bludgeon to hammer the Democrats all the way to November. With McCain in Washington, doing the peoples business, every campaign must stop. Remember, McCain, Obama and Biden are being paid to be full-time senators, not presidential candidates. Oh, Palin isn’t a senator; she can still campaign (tee hee).

But, McCain is going even further. He’s bringing all of his maverick and anti-pork bona fides to the table. There will be a deal. It will be a clean deal to address the problem at hand. It will be his deal. Anything short will again be a club McCain’s hand to beat the Democrats over the head over waste, fraud and pork barrel spending. 

McCain is so playing with Obama’s mind. He’s so inside of Obama’s OODA loop. Here’s Obama, down in Florida, diligently cramming for the debate tonight like a college student two days before the final after having spent the entire semester partying. Here’s Obama practicing his preening to “look” presidental. Here’s Obama thinking that this financial disaster going to put him on the final glide path to a smooth landing in the Oval Office.

Then, smugly flying his fighter to victory, he checks his “six” and finds the old fighter pilot locked on for a kill. All of his best laid plans upended, he’s dragged to Washington and forced to be a bystander as McCain takes the lead and solves the problem. Before someone again makes a crack about “military intelligence” being an oxymoron, they’d better look at the candidate that lived and breathed OODA as a matter of survival.

I predict a final vote in the Senate at about 3 pm EST. Then, McCain’s going to walk up to Obama, pat him on the back, say “good work–and see you in Oxford in a couple of hours.”

 

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McCain Solves the Financial Crisis

Posted in democratic party, economics, gop, mccain, obama by Eugene Podrazik on September 25, 2008

Really. It was the threat of McCain coming to town that provided the necessary incentive to cut a deal to solve the Fannie Mae meltdown. Here’s the article from Breitbart via Drudge. The last thing the Democrats needed was McCain showing leadership and showing, by contrast, what a empty suit Obama really is.

“There really isn’t much of a deadlock to break,” said Rep. Barney Frank, D-Mass, chairman of the House Financial Services Committee.

Of course there wasn’t much of a deadlock to break. Not when McCain just robbed the Democrats of an election issue. Not when McCain was going to demonstrate what leadership really is and what Obama really isn’t.

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The Taranto Principle

Posted in democratic party, gop, obama, palin, politics by Eugene Podrazik on September 25, 2008

A hat tip to the American Spectator for the term. But, the Taranto principle, fortunately has been in operation for a lot longer than this election cycle.

There has been a liberal deceit in operation for decades. It was not as apparent in the 40’s and 50’s because the political melieu was that of big government Democrats and me-too Republicans. The debate was a difference over degree and not kind.

But, two shocks hit the world of the liberal MSM. The first was the election of Reagan in 1980. This election brought a critical mass to Washington that questioned the role of government. It was no longer the debate over how much government. And, any debate that brings free market principles to the fore will by default question whether government has a role. This was a shock that resonated all the way back to the foundations of big government philosophies that had their origins in the Progressive movement of the late 19th century.

The second shock was the Republican takeover of both houses of congress in 1994. 

The MSM responded with increasingly biased coverage that became only more blatantly partisan with each election cycle. The real problem with exposing the faults of the GOP and covering over those of their liberal fellow-travelers in the Democratic party was that the Democrats are starting to pile up with a lot useless dead wood. 

Bill Clinton, by virtue of being the only Democratic president to be re-elected since FDR, is probably the most successful Democratic politician in recent memory. And, had he played his cards right could have effected a major electoral alignment to allow a generational center-left electoral coalition. But, because of lack of vetting by the MSM, his legacy was sexual scandal.

No, it not priggish victorian morals. It was an abuse of power and public trust that extended to his days as governor of Arkansas in which he used public employees on state time to procure and facilitate these base sexual liaisons. This violation of martial fidelity carried over into all aspects of Clinton’s administration with corruption everywhere. Yet, if anyone had really looked and asked around Little Rock, the moral turpitude of Clinton was manifest.

Jimmy Carter was another example. In the pre-internet, pre-talk show era, the MSM hid the real facts of a man who was a mean, but weak leader. But, he was a closet liberal; a fact that the MSM hid with a knowing wink as he was portrayed as a conservative born-again. The man as president was a disaster. Thought few remember, Carter’s administration was the one with “bracket creep,” a double digit “misery index,” the “hollow military,” the Iran hostage crisis and the Desert One debacle.

The fact remains, that the MSM, in a very Darwinian fashion systematically scrubs all of the weaker GOP candidates. Yet, by going easy on the Democrats, dead wood piles up leaving a very shallow bench. In what should be a strong Democratic year is going to be constrained by what passes for Democratic leadership.

Reid wasn’t the first to have a one vote majority in the Senate. LBJ faced similiar constraints as majority leader; but, the cut deals and got things done. Pelosi thinks that natural gas isn’t a fossil fuel. The presidential contenders are a machine hack from Chicago, a paleo-feminist who’s rise to power came from a name acquired in marriage and an ambulance chaser who, with the cooperation of the MSM, hid his “love child” while still running in the primaries.

In the spirit of enlightened self-interest, all of these pathetic examples of Democratic leadership should have been scrubbed by the MSM with the same enthusiasm as the breathless reportage on the out-of-wedlock pregnancy of a 17 year old Bristol Palin (she can’t even vote).

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The Photo Op

Posted in economics, mccain, obama by Eugene Podrazik on September 25, 2008

What is going to be particularly delicious about the White House summit for this economic summit will be some photo of President Bush flanked by Senators McCain and Obama.

In the center, will be Bush. He’ll look resolute, but the wear of eight years of presidency will show on his face. On one side will be McCain. He’ll have his usual bulldog look.

Then on the opposite side, looking like the before picture on those don’t-let-the-bullies-kick-sand-in-your-face-Charles-Atlas ads will be Obama. Looking like a recalcitrant teenager just hauled into the principle’s office for smoking in the bathroom. Peeved that his important work as savior was interrupted by this pedestrian, bourgeoisie capitalist trifle. 

The beauty will be that such a picture will be a jarring contrast with Obama’s carefully cultivated post-partisan cool. No matter how he tries to spin this crisis, there will be a picture of him at the center of the storm; only with him documented as playing second fiddle.

And, there’ll be a picture of him making it impossible to fob off the problem on someone else. Because, next to him will be his opponent, who pushed for the very reforms of Fannie Mae and Freddie Mac that would have averted the crisis. There will be McCain who, of his own inititative dropped his campaign and came to Washington DC to wade right into the middle of the crisis; with the resolve to solve, and not talk about, this problem. 

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Country First; McCain’s Suspended Campaign

Posted in democratic party, economics, gop, mccain, obama, politics by Eugene Podrazik on September 24, 2008

It’s very likely that McCain’s suspended campaign will be viewed as a political “stunt” or “ploy.” But, this is typical McCain who is going to put important matters ahead of the personal. And, running for president, being an optional activity, is personal. But, here’s a man who prioritizes a major crisis that could plunge our country into a depression over continuing a presidential campaign. This is a crisis, of enough proportion, to be the moral equivalent of war. War, as McCain very well knows, is never convenient. 

It will give America a chance to see the spirit of Cinniantus in action. Here’s a man, at the drop of a hat, is ready to leave his plow in the field in order to serve Rome. And, if that’s a political “stunt,” it’s time we start to see a lot more of those stunts.

And, on the other side is Obama. His political world view is that of a Chicago politician; using tax and spending policies to perpetuate a political machine. Economic policy amounts to spending public funds to reward your friends and, with taxes, punish your enemies. Foreign policy and other such crises are inconvenient distractions to be papered over by all means; only to be dealt with to the extent that the crisis situation can be exploited for further power. More forceful dealings with such crises are only to be undertaken in order to prevent that crisis from degrading your power base. 

Frankly, Obama’s absence in Washington DC is entirely in character with a man who has not clue as to how to deal with this financial meltdown. His presence will only serve to display that cluelessness.  Further, given his financial coziness with Fannie Mae and Freddie Mac, I think he doesn’t want to be anywhere near the scene of the crime. 

And, so we have the measure of both men. One, McCain, is going to wade right in; putting aside his personal agenda. And, the other, Obama, is much to busy to be inconvenienced by anything in his busy schedule on the way to his coronation.

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The Cost of Democratic Party Corruption

Posted in democratic party, economics, gop by Eugene Podrazik on September 24, 2008

Here, laid bare is the source of the Wall Street Implosion. Fannie Mae and Freddie Mac. This was a straight party line vote in which the Democratic party blocked necessary reform and oversight for these two mortgage entities that, if passed, would have prevented the Wall Street meltdown of last week. 

Nor, is the “bailout” some sort of violation of free market rules. It is a tax to pay for the corruption of Fannie Mae and Freddie Mac and their enablers in the Democratic party. And, to the extent the bailout will be larded by the Democrats for their pet projects, it will be payment on further corruption. The recent mortgage “relief” bill that included funds that will be funneled into such organizations as ACORN. 

By holding the economy hostage, by threatening a depression, the Democrats manage to saddle our country with a 700 billion tax increase. And, Obama hasn’t even walked into the Oval Office. But, this matter reflects much deeper matters of the interference of politics into the free market and the cost of crony capitalism.  

Start with the relative cost of living and the overall economic health in the blue states. Comparatively, most economic growth, economic opportunity, income potential and population growth trends towards red states. And, this trend correlates with economic policies that emphasize lower taxes and regulation. Tax and regulations policies that represent the overall governing philosophies of the Democratic party that tend to dominate in blue state versus those of the Republican party in red states.

Like stellar evolution of a young blue white start that slowly degrades to a black hole,  the blue states imitate such a life cycle in a final stage of economic paralysis. The black hole stage for a blue state is a social services economy, as noted by the current governor of New York State. Here’s a state that lurches from economic crisis to economic crisis trying to find new sources of revenue, taxes, to fill yet another budgetary shortfall. And, what can’t be taxed is regulated to the point of strangulation. Perhaps blue states should be called black hole states because of their propensity to suck up revenues, in the form of hight taxation, of whatever productivity is left with out creating any discernible economic growth.

New York state is a classic example. Here was a state, a century ago that was a powerhouse of economic growth and innovation. A state of economic power by the likes of Corning, IBM, Xerox, Kodak, Westinghouse.  Now, upstate New York is a shell of itself. Economic news in places like Rochester revolve on more lay-offs from the likes of Kodak and Xerox.

Taxes make everything expensive. Taxes drag up prices because there are always sectors of the economy, with relatively inelastic demand, that will price themselves to completely discount the cost of that tax. Once those cost are factored in, the rest of the economy adjusts, in upward price pressure. It’s no coincidence that some of the highest costs of living occur in jurisdictions that have such innovations as state and, yes, city income taxes. In jurisdictions that have sales taxes hovering at almost ten percent–like Cook County, home county of Chicago.

It is in such jurisdictions that we have building codes larded with building requirements that serve to pad union payrolls. I remember the hullabaloo with the painter’s union over going from a 4 inch brush to a roller; sprayers weren’t even on the market yet. I shake my head at how much less house, for the same amount of money, you can buy in Chicago as compared to my former home town of Houston or now in Casper. I also shake my head at the almost exponential difference in property taxes between the Chicago area and Casper.

In a bustling sun belt city, you can pick up the Sunday newspaper and find full page ads for anyone of a number of new home developments; unlike a counter-part newspaper in Rochester. Or, at least you could once.

Taxes and government spending create corruption. It is a progression that starts from an the creation of bureaucracies to run the “necessary” functions of government. A progression from monopsony functions such as national defense, roads and the post office that creates an army of parties with an interest in governmental revenues soon leads to appropriation of other functions that now become “necessary” governmental functions. Such as the responsibility of feeding your children; the school lunch program. And, rapidly the implicit bribes of a government jobs or contracts become the overt bribes of campaign contributions and, well, bribes. The ultimate bribe and payoff becomes a every accelerating accretion of more governmental programs, spending and jobs. Northern Virginia is about to move Virginia from red to blue because the predominant industry of Northern Virginia is government. An industry that creates nothing and manages to spend trillions.

It goes back to William Jennings Bryan, who campaigned on the coinage of silver for the purposes of creating inflation. Economic policies specifically tilted to benefit a specific group of the electorate contra to free market discipline. And, now, what we have is a William Jennings Bryan economy that has long abandoned the market discipline of precious metals. Or, the discipline of even having to print money. Now, the Fed create money at the stroke of a pen.

By the way, gold is almost $900 per ounce. Devaluation? Inflation? FDR had set its price at $35 per ounce.

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The Palin Smears and Chicago Politics

Posted in obama, palin, politics by Eugene Podrazik on September 22, 2008

There’s news that some of the Palin smears may come from sources closely tied to the Obama campaign. Among the smears was the charge that she belonged to a secessionist party in the past. (here from Power Line and here from Jawa Report)

I’ll leave to the computer and internet pros to dissect the webs of deception that allow these smears to metastazie over the internet and into the MSM. But, I’ll certainly comment on Chicago machine politics as usual.

One of the things that you’ll never see however is a direct link between the smear sources and Obama. Never a quid pro quo or a specific exchange of money. This will probably go only to Axelrod if you follow out the trail.

But, this too is typical for “honest” graft that pervades Chicago machine politics. For example, Obama got a really sweet mortagage deal for his 1.5 million, 5000 square foot mansion he bought shortly after his election to the US Senate. How did that happen? Well it was just “understood.” A rising machine star walks into the bank offices and a nice deal just materializes. Not a word out of Obama. Not a hint of a deal. 

Then courtsy Rezko, he get half of a neighboring lot to said 1.5 million dollar home way below market. Can you pin it directly on Obama. Of course not. It just happened. It just fell from the sky.

Over on the distaff side, Michelle Obama get a promotion and her salary doubled to $300,000 per year. Oh, where oh where did that come from. Obviously the blue bird of happiness that rains down all sorts of favors on people who’s husband happens to make it into the Senate courtesy the machine.

The Chicago machine is based on favors from the public coffers. Not on governance based on a sense of the general welfare as envisioned by the Founding Fathers. It is a one-party regime that will not tolerate dissent. Dissent like why is Cook County (where Chicago’s located) running a deficit with a 9.25 per cent sales tax and we need to increase that tax further. Now this win at any cost mentality is being foisted upon the entire nation because Palin’s mere presence is asking those same questions about governance for the benefit of the office holders and their friends.

 

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The President and Race

Posted in obama, politics by Eugene Podrazik on September 22, 2008

Here’s an AP story (via Urgent Agenda) about how misgiving about race could cost Obama the election. Ohhhhhh! Because we’re raaaaaacist and biiiiiiigoted, the Messiah will be denied what was ordained in Heaven, the Oval office for Obama.

Obama’s in trouble because he’s a fraud. Post-partisan and post-racial he isn’t. 

Obama’s been in with the Chicago Democratic machine from the day he left college. Community Organizer? That’s double speak for ward heeler; for get out the vote for machine candidates. And, the rest of his Chicago career fits right in with a man who never once crossed the machine. 

His tenure as chairman on the Chicago Annenberg Challenge may be deemed a failure by virtue of doing nothing to improve Chicago’s public schools. But, from the standpoint of distrubuting fifty million dollars worth of graft to the machine’s friends, it was a smashing success.

Obama could have tipped the balance in helping to elect a reform candidate for president the Cook County Board. But, he toed the line and supported Stroger.

And, true to Chicago machine form, Obama has been rewarded. A 5000 square foot, 1.5 million dollar mansion. A seat in the Illinois State Senate. And, now the US Senate; a job for life. His actions define the word partisan and certainly don’t square with his words.

Then we get to post-racial. This guy comes out of the Harvard Law School. He could have gotten a job with just about any blue chip law firm. He could have, if it was so important, been a role model merely by being successful by virtue of hard work to get through college, law school and finally with a top law firm. But, he chose a career in politics. In particular, a career in identity politics. That included an association with a church with a particularly virulent ideology of black liberation theology. I didn’t know they used God d-mn in church.

Now, after living and breathing identity politics so long, in an environment of pre-ordained elections, he sudden realizes that he needs to actually get votes outside is identity group. But, it takes more than saying that he’s post-racial. With his paper thin resume consisting of four or five speeches, all you have to go on are his associates and friends. From, ahem, Chicago.

Then, finally, you get a sense as to how sheltered his political environment was from the Chicago south side. The first was his lame and incredibly weak response to Russia’s invasion of Georgia. Then, with his shelving his economic plan in light of a financial meltdown that could have very well have started a  depression, you get the distinct impression that were he in Bush’s shoes he have been utterly paralyzed. These are real problems that a little graft or a couple of thugs from the neighborhood local won’t any longer handle.

By contrast, there are blacks that whites, even bitter whites would have overwhelmingly supported. Colin Powell comes to mind. In fact, in Obama’s shoes, Powell would have mopped the floor with Hill’s rear end in Ohio and Pennsylvania.

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It’s the Thermodynamics, Stupid

Posted in uncategorized by Eugene Podrazik on September 21, 2008

Here’s my contribution to the debate over ways to be energy independent. And, commentary on new “carbon free” alternatives (you’ll see why I put carbon free in quotes).

First, a BTU is a BTU. It doesn’t matter what it source or how it’s used. It credits and debits much like your check book. Energy can be neither created or destroyed. I can only change form. In this case, the use of energy for the purpose of transportation, we’re talking about heat and mechanical work.

Second, transportation is a matter of converting heat to work. This conversion is subject to a number of constraints and laws of nature. And, waving a wand (or a congressional vote) isn’t going to change a thing. You simply cannot legislate water into flowing uphill. 

So, lets work through the issues:

First, as I mentioned, you need to convert heat to work. Some how you need to burn something to generate energy that can be converted to work. One of the biggest concepts that needs to be understood about this conversion is it’s not and cannot be 100 percent efficient. That is for every BTU derived from burning, you will only get a fraction of that BTU in actual work–turning the wheels on your car. This efficiency is limited by the the temperature differential between the heat source and the cold “sink.” The greater the differential, the greater the efficency in converting heat to work. The physical limitations are generally the maximium operating temperature of the materials comprising the engine and, for the heat sink, atmospheric temperature. Above certain temperatures, metals will melt or degrade, for example. For a Rankine cycle engine, the efficiency is also limited by the properties of the working fluid; generally water. That is you can only heat to certain maximum values at certain pressures. Then you have to factor such variables as wind resistance, friction and so on. To paraphrase Thatcher, real world facts are conservative.

For an internal combustion engine, you can get a 20 percent, maybe a 25 percent efficiency (theoretical maximum of about 37 percent). A Rankine cycle engine (a steam turbine engine), most commonly found in power generation plants maybe works at an efficiency of 40 percent (theoretical maximum of about 60 percent). If you got 100 percent, you’d have a perpetual motion machine (which is why the patent office requires a working model for any perpetual motion machine).

Now we come to the concept of work and its relationship to mass. Work is a function of force and distance. And, force is a function of mass and velocity (squared). The more mass, all other things being equal, the more work is required and therefore the more energy is required. That’s why the guy who installs your gourmet kitchen granite counter tops comes to your house in a full size pickup truck and not a Prius.

So, we need, in order to be portable, a portable power plant and a portable source of energy. It’s no accident that this is the reviled internal combustion engine. Weight for weight and volume for volume, a tank of gas is the most efficient was to carry around the BTU’s you need to move yourself and your stuff around. And, the internal combustion engine is the most efficient way to convert that tankful of BTU’s into work to move your stuff around.

There’s nothing magical about the Prius. Fundamentally, it is small light-weight car powered by a gasoline internal combustion engine. That is, the ultimate source of the energy for conversion to work is gasoline burned in an internal combustion engine. Other efficiencies are derived by using the kinetic energy of deceleration to recharge the batteries. But, you’re burning gas. And, your burning gas in a updated econobox (remember the Gremlin?) with the addition of batteries. 

One wonders, if fact, if you couldn’t get an equally efficient car by getting rid of the weight of the batteries and just putting in small engine and solely relying on gasoline alone (we’ll pass on the fact that now you just have an updated Gremlin without batteries–not very vogue). Thermodynamically, about the only real benefit you’re getting is turning the energy of deceleration into electrical power. Braking your car into a stop is converting work into heat; you just put some of that energy back into the batteries. You’re still at the mercy of an internal combustion engine and its thermodynamic efficiency of 25 percent. And, remember in order to get the kinetic energy of deceleration to convert to electrical charge, you have to accelerate the car in the first place–courtesy the gas engine.

Or, okay, you can get a car that charges up by plugging it in at night. But, that only means that your burning coal at a power plant to power your car. And, we all know that “clean coal” is just a Rovian catch word to get the “bitter” coal miner rubes in West Virginia to vote for Bush.

Of course, none of this considers real world issues. A small econobox probably works in urban settings for short distances. But, batteries being less efficient sources of power that a tank of gasoline–heavy and bulky–tend to fall down when you need to go farther. You need to dispose of those batteries at the end of their useful life; and batteries are full of all sorts of heavy metals that we don’t want leaching into the environment.

Weight equals safety. Yes, we could airbag our cars till the cows come home. But, pound for pound, you add another 100 pounds in structural weight, you’re safer.

We’re not a densely populated country. Our population density is about 80 persons per square mile as opposed to polulation densities of hundreds of persons per square mile in Europe. That means, on average, a typical trip for an American versus his European counterpart will be longer. It’s simple harder to make mass transit work here for that reason. Mass transit will work along densely populated corridors where there’s a high probability that a lot of people want to go to roughly the same places at roughly the same time.

But, a doctor making an emergency visit to the hospital at two in the morning is not taking the bus. Nor, did the ambulance crew pick you up on your trip to the emergency room. In fact, the ambulance is probably a converted Ford F350. Take a look in the back of a modern ambulance; there’s a lot of stuff that won’t fit into a Prius either.

Finally, there’s freedom. Freedom from being at the beck and call of transportation run at the pleasure of the government (intercity buses and light rail; Amtrak). Philosophically, if you look at every fortune amassed in America, all carry the common denominator of bringing to the common man something heretofore reserved for the rich. Henry Ford’s Model T did that in the arena of personal transportation; a coach, horses and livery was simply out of reach for all but the rich. A fact, by the way, not lost on our bi-coastal elite. 

And, contrary to every conspiracy theory, what we have on the road today is reflection of the transportation needs unique to this country and constrained by the laws of thermodynamics.

 

Crisis Over; Palin Trashing Resumes

Posted in economics, main stream media, obama by Eugene Podrazik on September 19, 2008

The markets just closed up 400 points yesterday. Its up about 300 points today. Crisis over. Obama is going to have to find a new “crisis” to try to pin on the GOP. So, its back to kicking that little upstart hillbilly from Alaska in the butt (here and here). Oh, Michelle Obama contributed as well. Here’s the contrast of competence with the empty words of Obama.

On one hand we had a financial crisis that could have, like in 1929, triggered a major recession if not depression. But, thanks to the hard work of the Treasury Department and the Fed, this crisis was averted. Were all the judgements correct? Perhaps debatable. Will there be further problems? Probably. But, for the last week we had a lot of individuals making the best of bad alternatives to try to cobble together a workable solution.

But, what occurred at the Treasury and the Fed were consummate professionals putting the resolution of a serious crisis ahead of any personal or partisan animus. I’m sure that there are many guilty parties in this whole mess. Likely,many of these same said parties actually played a role in the resolution of this crisis. And, many of these guilty parties may be prosecuted for acts of malfeasance that precipitated this crisis. But, agendas weren’t the agenda; keeping an economy going was.

This has been the hallmark of Bush’s leadership. Fix on a problem and solve it–without any grandstanding. But, don’t worry. What good work was done, since it was done on Bush’s watch will never see praise in the MSM.

Contrast that to the “change” candidate from the Chicago Democratic machine and his MSM amen chorus (on both sides of the pond). Obama was riding this crisis for the sole purpose of jacking up his poll ratings with non-stop denouncements of the “failure” of our market system and Bush’s oversight (with the implication that McCain will be more of the same). Our European “friends” were gleefully piling on about the “collapse” of America and free markets. Congress, with Pelosi in the lead, said it wasn’t their fault, couldn’t do anything and left town.

We are lucky that this problem didn’t happen with Obama in charge. There, the solution of the crisis would be to use it to further advance Obama’s and his fellow travelers’ agendas. Just like the New Deal which only managed (and did not solve) deprivation to the furtherance of a big government agenda. It was fortunate that this crisis was solved in an Obama, Pelosi and Reid free environment.

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Polls and Loathing

Posted in mccain, obama, politics by Eugene Podrazik on September 18, 2008

We’ve seen an erosion of McCain in the tracking polls. Not surprising since the events of Hurricane Ike and the Wall Street meltdown have very much dominated the news. And, of course, the news according to the in-the-tank-for-Obama MSM. Yet, there is a certain resilience to McCain since Rasmussen has the race tied and Battleground has McCain up by two. Gallup is more worrisome, but that’s with registered, not likely voters.

A resilience in spite of events and the MSM throwing everything including the kitchen sink at the McCain ticket. Events have push back against McCain but there’s no knock-out.

We’re going to have to wait for the news from Wall Street to wash out. The Democrats use economic bad new to their advantage by promising free candy. The reality is that, though not perfect, we’ve got an adult presence in the Department of the Treasury I think actually bringing order to the mess and calling the right shots in bailing out liquidity problems (AIG) and allowing problems of solvency to fail (Lehmann). I think, in another week were going to see Wall Street as news fade away; and make Obama’s bleating look foolish.

Ike’s a non-story because there’s a competent response at the local and state level; such responses that were not existant in Louisiana when Katrina struck.

The net effect is that it’s probably good that these events occurred now to allow the immediate emotional effects to die out. What will be left is a steadiness on the GOP ticket that will serve to remind the electorate that these dangerous times needs leadership that can think clearly in the face of adversity.

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