American Elephants

God Bless and Get Well Soon Mr. Cheney! by American Elephant
June 26, 2010, 3:07 pm
Filed under: Conservatism, News | Tags:

Vice President Cheney was admitted to George Washington University Hospital after complaining of “discomfort” yesterday. He is expected to stay in hospital through the weekend for observation and tests, but that’s about all that is known at this point.

We hope all is well and pray for his full and speedy recovery! And send our love to him and his family.

Update: Good news: tests show it wasn’t a heart attack. Godspeed Mr. Cheney! And take care of that ticker! We want you around for a very long time!

(h/t Michelle Malkin)

Chickens, henhouses and Barney Frank and Chris Dodd. by The Elephant's Child

Congress is soon going to vote on a final financial-regulation bill. Differences were hammered out in a closed-door conference room between the two chambers.   The authors, Representative Barney Frank (D-MA) and Senator Christopher Dodd (D-CT), were either authors of or supporters of the distortions that led to the financial crisis in the first place.  So naturally, these two foxes have been put in charge of the fencing around the henhouse.

The Democrat view of the financial crisis says that the whole thing was the fault of Wall Street fat cats who must be to blame for the credit crisis.  After all, Democrats plan, this fall, to run against corporations, business, Wall Street, and BP since they think that will be more effective than running against George W. Bush.

Republicans, who do look into the evidence rather than just address the problem emotionally, point out the endless federal incentives and mandates to offer mortgages to potential home-owners who cannot afford to repay those loans.  In spite of any recognition that mortgages were offered to unqualified individuals and families — banks will still be required by the Dodd-Frank bill to meet government-mandated quotas for lending to people who would not meet prudent banking rules for extending credit.

The legislation also ignores the role of loose monetary policy in driving the housing bubble.  Such a bubble can result only when there is cheap and plentiful credit.  When there is a negative real federal funds rate — one is essentially being paid to borrow — is there any wonder that people were buying houses to flip?

The loans made by subprime lenders were sold to Fannie Mae, Freddie Mac, or the government corporation Ginnie Mae.  Had these institutions not been there to buy these loans, most of them would never have been made — in spite of protests and pickets by ACORN.  Had the taxpayers not been standing behind Fannie and Freddie, they would not have been able to fund such large purchases of subprime mortgages.

Rather than fix the endless bailouts by Fannie and Freddie, Congress believes that it is more important to expand federal regulation and litigation to lenders who had nothing to do with the crisis.

Congress may well not understand the role of loose monetary policy, nor know what to do about it.  They surely have some slight understanding of the role of Fannie and Freddie.  They have been warned often and often that reform is needed.  But then they have been warned for years that Social Security, Medicare and Medicaid must be reformed, and they have ignored that for years and years. Congress has the unenviable choice of voting for a bill that does not address the real problems, or kicking it down the road in the hope that better leadership in the next Congress will produce a bill that actually fixes something.

Chickens, as they say, are coming home to roost — in a poorly constructed henhouse constructed by the two foxes that knew nothing about construction.

ADDENDUM: I forgot to mention that this is another 2.000 page monstrosity.  Chris Dodd (D-CT) , one of the authors of the bill, said that they would have to wait until it was passed to find out if the regulations in it would work.  (I paraphrase).  Gives you all sorts of confidence in the actions of the U.S. Congress, doesn’t it?

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