Bailing Out So-Called Professional Journalists

I just got through watching a handful of MSNBC hard news journalists cry about bloggers providing a free service--often used to talk about Paris Hilton--and thereby supposedly devaluing theirs. I switched over to CNN only to see their so-called professional journalist flounder through a short interview with Ohio congressman Dennis Kucinich.

Kuncinich wants to stop bailed out banks like Citibank from using funds to put their names on stadiums. It's a simple enough concept. The only thing CNN brought forward was someone's feeble attempt to say that banks were not using bail out money but "their own" money. Kucinich easily and correctly parried that notion by saying that money is fungible. Most people have no idea what that words means, but the money's use is so obvious the audience can probably guess that Citibank had no such reserve without seeing the question and answer. Anything else? No. On his own, Kucinich added that banks are not lending money and that Citibank is laying off 50,000 people while they concern themselves with stadiums. He said that because there wasn't a coherent second inquiry. Why can't a CNN journalist muster the common sense to ask reasonable and penetrating questions instead of collapsing into mush when a politician comes on their show?

I say to CNN and MSNBC, this free service blogger will give you something for free right now. The question should have been: Advertising is a normal part of business. It's the way television journalists make their living. How do you expect banks to recover if they cannot hold customers and seek new business through traditional business means?

Now (unless someone with access to our nation's capitol has the guts to read this blog and bring the question forward) we all have to wonder what the Congressman's answer would have been.

Since I'm handing out head starts, I'll give Representative Kucinich a possible answer to the question I've posed. Citibank tells us that the deal was made before the bailout and therefore should go forward. Tell me how a business strategy allocating a certain level of funding in any direction can make sense when the company is in free fall and living hand-to-mouth on someone else's money. They're stubbornly trying to implement an old plan in a completely new environment. If Citibank is so confident that this advertising works, why are they in a hurry to lay off such a large part of their work force? Because they know that stadium naming rights is long-term strategy and will do little for them in the short-term.

I wonder what the high salaried journalists are planning for their long-term strategy. There's a reason they are losing market share. I suggest they learn to do their jobs better than us bloggers if they ever want to be taken seriously again.

Ponzi 101

CNN and MSNBC are studded with question marks this morning. Every commentator wants to know: How could it happen? How could Bernie Madoff fool so many sophisticated investors so well?

You don't need a parade of experts to guess at why experts were fooled. All you need do is remember the origin of one word. All con games are confidence games. Nobody generated greater confidence than former NASDAQ Chairman Bernie Madoff. Who would guess that he would be willing to screw over all of his friends and family? Because that was what he required to make this work. After all, how often does such a fraud happen on such a big scale with such a pillar, nay keystone, of the community putting so much of his personal life at risk? Never.

And when everyone believed in him, all he did was take in a million dollars from A and then a million from B. With two million dollars in hand, he gave A double digit returns, and probably even let him go home with his $1.1M+. If the music stopped there, B was the chump. But along came C with his million (maybe A came back in for some more), and so on until the reported $50B figure was reached.

When the facts are in, we may find out that it didn't start out as a fraud. Surely he will argue that he meant to catch up some day, but had a mental breakdown along the way.

Most confidence men have to work much harder than he. Because Madoff was so well established, this particular Ponzi dance was actually no more complicated to run than applying the techniques of the Happy Days character Fonzi. If you had a mental breakdown and thought you were the Fonzi of Ponzi, you would have a simple two-stroke handbook to follow.

What Happens If They Praise You
"Mr. Madoff, you're a genius."
"Heyyyyy."
Analysis: A fine combination of modesty with a dose of, "Did you ever expect anything less?"

What Happens If They Question You
"Mr. Madoff, I don't see how this makes any sense."
"Whoaaaaa."
Analysis: "Do you know who are talking to? Do you wanna throw down? Do you really think you are any match for me?"

End of discussion.

The Obama-Biden Gaffeworks

While some people are feverishly working to prevent the next Great Depression, the campaign trail sounds like an episode of the Tonight Show's Jaywalking. The average aspiring entertainer on the streets of Los Angeles (or sometimes a teacher!) is asked "How many varieties of Heinz Ketchup are there?"

They promptly answer: 57.

"Now how many states are in the United States of America?"

Answer: "Um, 57…possibly 58." These people are hilarious.

Maybe Jay should be asking them if they are Democrats or Republicans, because this time it wasn't a topless dancer that showed she didn't know the first thing about the country she lives in, it was the Democrat's nominee for President of the United States, Barack Obama.

One mistake like that is usually enough to seriously damage a presidential nominee if that nominee were either a Republican or Hillary Clinton. Case in point, when John McCain made the far more common mistake of mixing up shia and sunni, a CNN anchor opined that if Joe Lieberman were not there to correct him on the spot, it would have meant the end of McCain's campaign. No one was there to correct Obama's Are You Smarter Than a First Grader answer, and yet his mistake has never been cited by the mainstream media. Like Clinton, Joe Biden told a tale of being under imaginary sniper fire just days ago, claiming his plane was forced down in Afghanistan by an enemy President Bush has failed to fight. That enemy turned out to be weather. Unlike Clinton, Biden has a free pass with the media burying what would ordinarily be a blockbuster of a story.

Now it turns out that Obama believes that the president takes office on Election Day itself rather than in January. In the wake of Lou Dobbs calling for the candidates to suspend their campaigns and take a leadership role in resolving the financial crisis, and McCain's surprise announcement to do just that, Senator Obama responded that keeping to the debate schedule took precedence. He added, "The public needs to hear from the person who, in 40 days will be responsible for taking care of this problem." No, Senator, the current president will still be responsible.

The second most obvious problem with that statement is that the scheduled debate is not about economics. It is a foreign policy debate. So not only does Obama refuse to participate in the domestic legislation of the century, but he instead wants to take that irretrievable moment and throw over discussions of economics for foreign policy. I contend that if the questions are not changed, McCain should refuse to go regardless of whether or not the bailout has passed by then.

Obama's gaffe-of-all-gaffes is one of omission. He claims he wants to change Washington, but he is on a plane to Mississippi at the most critical time in our nation's financial history, refusing to do his job with the puffy claim that if anyone needs him, he will get on the telephone. What Obama has chosen to do is use the financial crisis to politically launder his nineteen-month heel-dragging on debates, hoping to alchemically turn himself into the candidate that insists on a debate even if this revelation comes at the expense of the country. What he won't turn himself into is a leader of his party.

And that takes us back to the walking gaffe machine Joe Biden. His response to the crisis was to find a new fault with President Bush, saying, "In 1929 when the stock market crashed, President Roosevelt got right on television to explain to the American people what was happening." I agree that's quite a contrast to Bush waiting a couple of days. Biden's role model was a real can-do kind of guy. Although one Roosevelt was dead and the next would not be president for years, one of them quickly invented television, distributed millions of sets, and gave that all-important address to the nation.

The person that Senator Biden so admires that was actually in office at the time was in fact Republican Herbert Hoover in the first year of his presidency. Rather than the quick action Biden ascribes to that commander-in-chief, Hoover rejected the idea of corrective legislation until he was running for president again several years later. It is not rare but typical for Joe Biden for fire off a multi-gaffe because his opinions are supported by lies and informed by his breathtaking ignorance.

At a time when John McCain has taken the responsible path as the leader of his party, this well-documented dumbest team to ever run for president wants to sit back and mince words. Dramatic confirmation that Obama does not want to take the risk of having his fingerprints on anything. Does he think he can do that as president?

To the Obama-Biden ticket I say: When do "just words" end, and "just actions" begin?

Whadda Ya Mean 'We,' Palin-Face?

This morning, CNN's so-called "AM Reality Check" tapped into their "enormous team of experts" to provide their daily dose of Obama-is-telling-the-truth-and-McCain-is-a-liar "research." The assigned reporter conveyed to the world that she was very excited with what she unearthed for today's segment.

"You've heard the claim from Obama that McCain voted with George Bush 90% of the time? Well, it's true," she crowed. While she paused to let that sink in, I waited for her to reveal that the remaining 10% of votes (if the figures are right at all) constituted 30 or 40 % of the major issues where McCain crossed over and co-sponsored bills with the Democrats.

Instead of revealing the significance of voting and bill sponsoring, the reporter went on to play a clip of McCain saying that Obama does not support nuclear energy. In response, her crack team dug as far back as a month ago to find a clip of Obama giving a speech where he says he does support nuclear energy. CNN's source for the revelation? Obama's website rather than his voting record. Why am I not surprised? She concludes for us viewers that McCain is not telling the truth before showing us just a few of the details that could cast doubt on that conclusion.

To sum it up, the reporter says, Obama is telling the truth, and McCain is not. "CNN is doing this," she explains, "to help undecided voters make a decision."

Funny that the detractors have gone back to McCain when they were supposed to have a gold mine of material for attacking Sarah Palin. Why, I wonder, is all that gold plummeting today, while the prospectors are found panning for silver. Normally gold goes up when the stock market goes down.

At first, some Democrats found themselves in paroxysms of ecstasy that the media had swallowed their Drop Palin Express theme hook, line, and sinker. As Alaskan fisherman know, that expression refers to a very big fish that doesn't know food from all the signs of a trap. Most of the mainstream media managed to express their opinion that the McCain camp did not vet Sarah Palin and would release her from the Republican ticket when a couple more revelations came to light (or chickens came home to roost?) The pundits smirkingly explained to us that previous instances of a candidate dropping and swapping their Veep always resulted in a loss for them.

All day, every day, the media hinted that the fatal issue might prove to be about Governor Palin illegally pressuring an official to fire a state trooper just because he was going through a divorce with Palin's sister. But the information they had and hid was that this trooper tasered a ten-year-old boy, and threatened to murder Palin's father. As some of this information began to leak, some left-wing commentators angrily asserted that only the allegations about Palin's actions matter, and that the underlying facts are irrelevant.

What I believe and suspect the American public will understand is that even if the allegations about Palin's office somehow turned out to be true, the real crime is not that an official felt pressured to fire a trooper, but that the organization had closed ranks to protect a criminal with a badge. I would hope that the governor's office of any state would intervene in an egregious case of this kind, and not see that action result in a witch hunt. The public does not have a lot of patience left for expensive, phony investigations, especially if they find out it was driven in part by corrupt members of her own party disgruntled by her reform efforts. So far the polls bear this out.

What the Obama-CNN team, (and Palin's Republican enemies) have done with the manufactured "Troopergate" and all the other fluff is the same thing the Hilary Clinton campaign unwittingly did early on for Obama: inoculate Sarah Palin from future negative attacks by launching early and unfair attacks that would never stick. The same core of people who so badly wanted us to vote for John Kerry and thought they could manipulate that vote with counterfeit documents on Bush's military service, have managed once again to influence us the other way.

What Was Obama Thinking?

Joe Biden. OMG, is this man loaded with experience. Or is it time spent in a seat? And what has he made of that time spent in a seat? It's good to know that the potential Vice President will respect his commander for being a black man who is "articulate and clean." Theirs looks to be a great relationship to have behind the scenes. Even if we ratchet up the forgiveness dial to its benefit-of-the-doubtmost level, we still see Biden's effort to damn Obama with feint praise, to tag him as an empty suit. But you still have to be perplexed about that choice of words. Articulate, maybe he means well. Why is he surprised that Barack Obama is clean?

Joseph Robinette Biden, Jr, king of inexplicable racial overtone comments, is the same man who declared, "you cannot go to a 7-Eleven or a Dunkin' Donuts unless you have a slight Indian accent." He is the same man who wants to segregate Iraq along ethnic or religious lines. Why would Obama choose a narrow-minded bigot that led the race card fight against him in the nominating process? Does he think he will pick up the racist vote? I don't think it works that way.

Also shocking, in the wake of being unfairly accused of plagiarism, the Democratic hopeful takes on a man proved guilty of plagiarism, filching a speech from the British Labor Party no less. Bringing him in must be one of those questionable fight-fire-with-fire maneuvers.

How in the world could this new style pol end up with an embittered, fractious plagiarist for a running mate? Remember the old campaign: Choose to Defuse? What might that mean to Obama, and his choice of VP? If you can't stand Clinton, and must shield yourself, choose a Clintonista. Surely Hillary will hesitate to attack a nominal Biden ticket?

You know the other popular refrain—that choosing a Veep was Obama's choice and his choice alone? I don't think so. The coming days may tell us if the Clintons now think of Biden as friend or traitor.

All That Gas

Let's all sit back and enjoy that song from the economy murderer's row:

Come on babe, why don't we pay some more?

For all that gas

I'm gonna rouge my brains and throw my wallet down

For all that gas

Start the car, I know an oil slick

Where the tax is high, but the unleaded's thick

It's just a trip to the mall for which you'll nightly bawl

Over all…that…gas…

First there was Reverend Wright, then there was Louis Farakhan, and then Reverend Wright again. Now Obama is getting an endorsement from the former chairman of George W. Bush's Council of Economic Advisors. Will his tormentors never stop? As reported by Reuters, Greg Mankiw says, "Score one for Obama," while in the same breath he says, "gas prices should be higher, not lower." Yeah, that should shut up all those people who say Barack Obama is elite and out of touch with the needs of the common man.

John McCain and Hillary Clinton agree that the 18.4 cent per gallon federal gas tax should take a summer vacation while Barack Obama rationally explains that the average savings would only be $25 to $30, or half a tank of gas. While one could also do the math for the poor who take driving vacations with older cars, and would save a full tank or more, Mankiw takes the opportunity to step in and say gas prices should be made higher "in light of the side effects associated with driving." What side effects is he talking about—getting to work, getting your groceries, or getting to your doctor's appointments? What are you supposed to do for money if you cannot possibly drive less?

But Gilbert Metclaf, an economics professor at Tufts University currently working with the National Bureau of Economic Research agrees. His reason? "If we want people to invest in energy-saving cars, we need some assurance that the higher price paid for these cars is going to pay off through fuel savings." In order words, Metcalf is saying don't take an ounce of pressure off of consumers even for a short time because only when we break their backs will more expensive alternatives seem cheap.

I want to save the environment too. The problem I have with economists handing out environmental advice in response to stimulus plans is the same problem I have with aerospace engineers performing gall bladder surgery in response to a landing gear problem.

Remember, the two economists, Mankiw and Metcalf, who became "many economists" in the Reuters story while riding Obama's coattails, don't just want to preserve the gas tax, they want the price of gas increased. To those in their camp, $5 – 6 per gallon is the sweet spot, which will force you to buy a hybrid and pay for the next generation of research. At $6 you save absolutely nothing even if you get 40 mpg. And if you already drive the minimum, you do absolutely nothing for the environment. Can't that very bad idea wait for another year? Perhaps they think they are practicing an even greater form of Macro Economics than their peers. Maybe they would call it Mega Economics with an environmental twist. But as they are incompetent in both realms, I call it Megalomaniacal Economics. An economy under a mortgage swamp with soaring food prices is not the time to say you have to go buy a new car, pay more for gas, and pay an extra $3,000 for a hybrid while you're at it.

Economists riding to the defense of high gas prices: That's one thing we don't have to buy.

Find a can, we're playing fast and loose

With all that gas

Right up here is where they pluck your goose

For all that gas

Come on babe, we're gonna pump it dry

I bet the price of gold never went so high

Cause when philosophy's clear

Why would they shed a tear?

For all...that…gas

A Housing Crisis in the Land of the Blind

Apparently, the media's housing crisis is like an unsolved murder: the statute of limitations on finding out about it, and beginning the investigation never runs out. If so, this one is surely a cold case.

As we watch it "worsen" with nails bit down to knuckles, lets inject a note of sanity. Falling prices means that homes will come within reach of new buyers who could not and would not touch the unrealistic prices. New home production will slow and inventories will eventually drop. That means that there are at least two groups of people who are not hurt: new buyers and long-term holders. The latter are experiencing a normal return on investment regardless of the paper gain fluctuations. In the meantime, we can learn something.

When prices were rising to levels that would have struck Salvator Dali as too surreal, few people sounded the alarm. Instead we heard platitudes like, "Buy real estate now, the best investment in the world; they ain't making any more of it," and "Don't be left behind. Turn it over and get rich." Everyone played musical chairs to the tune of "Pop Goes The Weasel," and when that bubble popped, the last buyers were the biggest losers. Remember the lyrics, "the monkey chased the weasel." When was that ever a sensible pursuit? Yet somehow when people were being conned into thinking they could afford the enormous debt, the word crisis wasn't applied. Or at best, in 2006, we saw the following headline from Barrons, "Is a crisis approaching?" And we only got that when they noticed the first "downward surprise." Am I the only one who finds it naïve that so many money mavens were so surprised? Lenders and tiger and bears. Oh my!

The rising prices, the burgeoning bubble itself, should have been described as a housing crisis before the downturn, and it never was. The experts, including our Fed chairman, got it wrong at every turn, and are on to a new phase of getting it wrong now. How many articles today, talking about "the steepest decline ever" provide any information on how it was preceded by the steepest rise in home prices ever? None that I can find. Surely we are in a housing crisis, but in the later stages of one. It cannot reasonably be measured from the time the first wave of defaults was noticed or even when prices began their long drop. I would measure it by the start of rapid price rise, out of proportion with growth of the ability to pay, or the moment lender's standards relaxed to a state of criminal irresponsibility.

Of course it is not so much a matter of what words are used, as that the reporting is indicative of a fundamental misunderstanding. Again in 2006, the Washington Post referred to an altogether different housing crisis, the issue of affordable housing, essentially misidentifying the underlying problem with an all-over-the-map indictment of "the market," and "snob zoning," while never once mentioning unconscionable and unsustainable credit.

The falling prices of today are the harbinger of the healthy economy to come. If there was panic to be had, someone should have panicked in 2006, perhaps the congress we elected that year, after the congress of 2004 ignored it. Instead, we're panicking in 2008 when we are two to four years closer to a healthy economy. Americans understand this better than the media. That's why this congress is reviled more than the President. While that dream team was hitting the minimum wage button over and over—the only thing they saw out of order on the domestic front—the extra dollar an hour wasn't going to cover the latest hundred thousand dollars added to a home price tag.

We're not suffering because the surge won't be enough and the stimulus package won't be enough. We're suffering because the poor things—congress and the media that parrot their talking points—have their crises all mixed up.