Pwning the Wall Street Journal Editorial Page

As any astute media watcher knows, the Wall Street Journal was taken over by News Corp. (Rupert Murdoch’s news manufacturing company) a couple years back and has been headed for “Hannity-Quality Thinking” ever since.

I’m pretty sure it has reached that level when a simple RobotPirateNinja can completely obliterate the economic arguments of their editorial staff.

Let’s start this off where I did, with this WSJ Editorial about Barack Obama’s selection of Larry Summers to lead his Councel of Economic Advisors.

Take Larry Summers, the economist who will run Mr. Obama’s National Economic Council at the White House. We have our differences with the former Harvard President, in particular on the incentive effects of high taxation and the growth impact of government spending. Mr. Summers thinks marginal tax rates can rise significantly — above 50% — before they deter risk-taking and reduce federal revenues. But at least he thinks that taxes matter at some point.

That’s their emphasis and snark.  Yes, the Wall Street Journal editorial page is written like a blog.   I was watching the local news last week, and they kept showing YouTube clips.  It seems that instead of elevating myself to the higher eschelons of media production, they have instead lowered themselves to mine.

Whatever, as long as people realize that it’s a lot more level playing field than previously assumed.  With that in mind, we’ll continue…

As for spending, Mr. Summers is one of those economists who believes in the Keynesian “multiplier.”

[Citation needed.  -ed]

Why is a citation needed?  Because I’m having a hard time finding Summers published works on the topic that state exactly what the article says.  This is a common tactic is bullshit political rhetoric and it’s called the “straw man” attack.  Essentially the process is as follows; one ascribes a political position to an opponent that they may or may not actually hold, and then attack them for holding onto it so dearly. [bonus points: find two posts where I do that]

This quaint notion [see? -ed] holds that every dollar of federal spending yields something like 1.5 times that in economic growth. This ignores the fact that the $1 in spending has to come from somewhere, which means it is taken from the private economy in higher borrowing or higher future taxes. We thought we’d buried this Keynesian money illusion 30 years ago, but it’s now coming back to justify a half-trillion dollars in new spending.

I’m at something of a loss here, since it was about 30 years ago that Reagonomics and Laffer-nomics took over, and we decided that we can cut taxes and increase spending and run up a huge debt and everything will be fine.   We’ve seen the results of that now, and I’m just wondering how the WSJ could have missed it.

On the other hand, Mr. Summers understands that government decisions can do real economic harm.

How could anyone who has watched Bush closely not understand how government decisions can do real economic harm?  I’m pretty sure we’re all on the same page here in that our actions have actual results in the real world, and our government even more so.  Why this is news to the WSJ is a question left for the reader.

They then go into a quote from Summers about how Fannie Mae and Freddie Mac walked the fine line of a private company and government mandate.  What this has to do with overall economic meltdown is something of a question, unless you buy into that “it was poor people who stole your money” claptrap.  If you do, read that link and disabuse yourself of that notion. [ I also did a bit about “Big Poverty” here.]

Then they get to the part that set this post in motion…

Mr. Summers also helped to pass the Gramm-Leach-Bliley financial “deregulation” of 1999. His predecessor at Treasury, Robert Rubin, had resisted the necessary compromises. But upon taking the Treasury chair, Mr. Summers pressed ahead and agreed to changes in the Community Reinvestment Act, among other things.

In the loopy left telling, Gramm-Leach-Bliley caused the current mess by allowing commercial and investment banks to merge. Bill Clinton has himself debunked that myth (see “Bill v. Barack on Banks“), and in fact the reform has helped in the current panic by letting the likes of J.P. Morgan and Bank of America buy ailing investment banks.

As a “loopy-lefter” who told it exactly like that and explained why it was like that, I kinda took offense here.

Unlike the Reagan-fluffers at the WSJ, however, I have no problem pointing out this mistake by Slick Willie.  Clinton most certainly does try to “debunk” the notion that it was partly his fault [with a “prove me wrong” caveat that I will exploit], but I think we’ve all seen how far his denials of doing wrong can go.  Big ego is a pretty consistent mark of Presidents of all flavors.  There’s a simple reason for this, if you don’t have a big enough ego to think you should be sitting in that big chair, there is no way in hell you will ever do what it takes to get there (Gerald Ford being an obvious exception).

But I digress, let’s get back to the WSJ’s two reasons why the “loopy left is wrong”.  The first is that Bill Clinton, his own bad self, debunked it.  More on that in a second.

The second reason they offer is that deregulation allowed the barely surviving banks to buy the totally screwed ones.   [I “debunked” that over here as well.]

So what *exactly* was Clinton’s debunking?

In BusinessWeek.com, Maria Bartiromo reports that she asked the former President last week whether he regretted signing that legislation. Mr. Clinton’s reply: “No, because it wasn’t a complete deregulation at all. We still have heavy regulations and insurance on bank deposits, requirements on banks for capital and for disclosure. I thought at the time that it might lead to more stable investments and a reduced pressure on Wall Street to produce quarterly profits that were always bigger than the previous quarter [1].

“But I have really thought about this a lot. I don’t see that signing that bill had anything to do with the current crisis. Indeed, one of the things that has helped stabilize the current situation as much as it has is the purchase of Merrill Lynch by Bank of America, which was much smoother than it would have been if I hadn’t signed that bill [2].”

[full load of fertilizer]

So his first reason that he wasn’t wrong is that it would “reduce pressure on Wall Stree to produce [growing] quarterly profits.”   That’s an asinine statement and Maria should have laughed at him.   How does reducing government regulation lower private profit pressure? 

Clinton’s second reason is, you guessed it, the exact same as the WSJ editorial page.  They both even cite the same transaction [BoA eating Merrill].

Yup, the WSJ Editorial Staff gave two reasons why Clinton wasn’t wrong: Clinton’s reason and Clinton’s reason.

That, my friends, is complete and total political pwnage.

 —

But back to Slick Willie for a moment.  And here, dear readers, is why you should keep reading this site if you want actual political analysis and not party-line bullshit….I have no problems sacrificing sacred cows when it’s time to eat.  I’m actually not all that into Sacred Cow political theory any way.

Clinton went on to say this….

One of the writers of that legislation was then-Senator Phil Gramm, who is now advising John McCain, and who Mr. Obama described last week as “the architect in the United States Senate of the deregulatory steps that helped cause this mess.” Ms. Bartiromo asked Mr. Clinton if he felt Mr. Gramm had sold him “a bill of goods”?

Mr. Clinton: “Not on this bill I don’t think he did. You know, Phil Gramm and I disagreed on a lot of things, but he can’t possibly be wrong about everything. On the Glass-Steagall thing, like I said, if you could demonstrate to me that it was a mistake, I’d be glad to look at the evidence.”

Hmm…evidence….evidence you made a mistake…hmmm….evidence that allowing the two very different types of wealth to mix and intermingle….evidence that allowing the real estate bubble to kill the stock market was a bad idea….hmm….what can we find….

Oh, I got it!   How about if we look for what we can’t find?

Per a statement released by the Fed last night, the independent investment banking era is dead:

(From the Federal Reserve):

The Federal Reserve Board on Sunday approved, pending a statutory five-day antitrust waiting period, the applications of Goldman Sachs and Morgan Stanley to become bank holding companies.

To provide increased liquidity support to these firms as they transition to managing their funding within a bank holding company structure, the Federal Reserve Board authorized the Federal Reserve Bank of New York to extend credit to the U.S. broker-dealer subsidiaries of Goldman Sachs and Morgan Stanley against all types of collateral that may be pledged at the Federal Reserve’s primary credit facility for depository institutions or at the existing Primary Dealer Credit Facility (PDCF); the Federal Reserve has also made these collateral arrangements available to the broker-dealer subsidiary of Merrill Lynch. In addition, the Board also authorized the Federal Reserve Bank of New York to extend credit to the London-based broker-dealer subsidiaries of Goldman Sachs, Morgan Stanley, and Merrill Lynch against collateral that would be eligible to be pledged at the PDCF.

The above was followed very quickly by another press release, announcing that the Goldman Sachs (GS) and Morgan Stanley (MS) transactions could proceed immediately, without the five day waiting period.

(From the Federal Reserve):

Based on consultation with the Department of Justice regarding the applications of Goldman Sachs and Morgan Stanley to become bank holding companies, the Federal Reserve Board announced on Monday that the transactions may be consummated immediately without the application of the five-day antitrust waiting period.

[full post]

I dunno, Bill, but I kinda have to think that a policy change that led directly, within a decade, to the deaths of companies that existed since the 1800’s and indeed an entire segment of the banking industry, would probably count as evidence that what you were trying to do failed miserably.

Dammit man, you screwed us all here, not just your intern.  Admit your mistake and beg for forgiveness. 

You remember how to play that hand, right?

—–

note: good additional reading here.

Space Urine is Good

This will be a fun anecdote to tell the grandkids.

HOUSTON (AP) — After several days without luck, astronauts finally ran a successful test on equipment that turns urine into drinking water — a necessity for supporting the international space station’s crew, which will soon double.

“Not to spoil anything, but I think up here the appropriate words are ‘Yippee!'” space station commander Mike Fincke told Mission Control early Tuesday morning, shortly before bedtime.

“There will be dancing later,” Mission Control replied.

[full story]

I had to say, I can’t think of a more profound bonding experience with a group of people that dancing around in free fall and drinking each other’s reprocessed piss.

I Come From a City Full Of Terrorists

It turns out I have a lot closer ties to terrorism than even I thought.   You might too.

If you have ever given money to a hospital, you might be a terrorist.

If you have ever helped the poor, especially some of the poorest in the world, you might be a terrorist.

If you have ever given money, or donated services, to a school, you might be a terrorist.

Even if you have never advocated a violent action, or done one, or given money to someone who does, you STILL might be a terrorist.

And this is considered one of the greatest “victories” by Bush in the Global War on Terror.  

U.S. District Judge Jorge A. Solis announced the guilty verdicts on all 108 counts on the eighth day of deliberations in the retrial of the Holy Land Foundation for Relief and Development, once the nation’s largest Muslim charity. It was the biggest terrorism financing case since the attacks of Sept. 11.

The convictions follow the collapse of Holy Land’s first trial last year and defeats in other cases the government tried to build. President George W. Bush had personally announced the freezing of Holy Land’s assets in 2001, calling the action “another step in the war on terrorism.”

Holy Land wasn’t accused of violence. Rather, the government said the Richardson, Texas-based charity financed schools, hospitals and social welfare programs controlled by Hamas in areas ravaged by the Israeli-Palestinian conflict.

Prosecutors labeled Holy Land’s benefactors — called zakat committees — as terrorist recruiting pools. The charities, the government argued, spread Hamas’ violent ideology and generated loyalty and support among Palestinians.

Holy Land supporters told a different story. They accused the government of politicizing the case as part of its war on terrorism, while attorneys for the foundation said Holy Land’s mission was philanthropy and providing much-needed aid to the Middle East.

They reminded jurors that none of the zakat committees are designated by the U.S. as terrorist fronts, and that Holy Land also donated to causes elsewhere, including helping victims of the Oklahoma City bombing in 1995.

[full story]

For those completely ignorant of Islam (like most of the Texas jurors in the case) “zakat” is one of the five pillars upon which the religion is based.  The word literally means “alms for the poor.”   The cultural translation to the Western world would be “tithing” (at least in those religions where tithing isn’t really optional if you want to be a member in good standing.)

Regardless, you can probably guess that “zakat communities” are composed of some of the poorest folks around.  And when you take the poorest people in one of the poorest “countries” in the world, you are talking fairly destitute.

One would think that it would be the “Christian” thing to do to help them.  Maybe try and build schools and hospitals?

Well, if one thought that, one would be thinking like an actual Christian, not an American one.   In the U.S. it is a terrorist act to help the poor.

At least in Bush’s America.

Note: This is the second trial for these folks.  The first was declared a mistrial.  Why?   Hmmm, how to explain this….ah here we go….23% of Texans still thought Obama was Muslim before the election.  Understand what I’m dealing with here?  Good, glad that’s clear.

Here’s some excerpts from a story about the first mistrial….

October 23, 2007

The U.S. Justice Department suffered a major setback in another high-profile terrorist prosecution Monday when its criminal case against five former officials of a now-defunct Islamic charity collapsed into a tangle of legal confusion.

U.S. District Judge A. Joe Fish declared a mistrial, but not before it became clear that the government’s landmark terrorism finance case – and one of its most-costly post-9/11 prosecutions – was in serious trouble.

His decision came after jury verdicts were read to a packed courtroom indicating that none of the defendants had been found guilty on any of the 200 combined counts against them. Jurors had acquitted defendants on some counts and were deadlocked on charges ranging from tax violations to providing material support for terrorists.

However, during routine polling of the jurors to determine that their votes were accurately reflected in the findings, two said they were not. When efforts to reconcile the surprise conflict failed, Fish declared the mistrial.

The case presented to a Texas jury of eight women and four men relied heavily on Israeli intelligence and involved disputed documents and electronic surveillance gathered by federal agents over a span of nearly 15 years.

[I’m sorry, but how is foreign intelligence colllected using Mossad tactics admissable in U.S./Texas courts?  Just curious if anyone knows…]

Juror William Neal, 33, who said his father worked in military intelligence, said that the government’s case had “so many gaps” that he regarded the prosecution as “a waste of time.”

The jury forewoman, who like the other jurors was not identified, told the court she could not explain the positions of the two panelists. “When the vote was [taken]… no one spoke up” about any differences, she said. “I really don’t understand where it’s coming from… all 12 made that decision.”

The judge excused the jurors to work out the discrepancies. About 40 minutes later, they returned to court and the two female jurors both continued to maintain that their verdicts had not been tallied accurately.

As a result, Abdulqader’s acquittal on all counts was set aside, forcing him to face a potential retrial with the others.

Both women had been noted dozing off during court proceedings, and juror Neal said one of them also fell asleep during deliberations. The latter, he said, voted guilty from the beginning, was confused by the evidence and much of the time declined to participate in deliberations.

This is probably the part that kills me the most.  Some idiot racist decided by looking at the defendants they were guilty and skipped the actual trial and evidence part (and that assumption of innocence).   So the acquittal gets set aside, the government gets to play some Double Jeopardy, and do a better job picking idiots to the jury.

In 2004, the government alleged that Holy Land and its officials funneled about $12 million to Hamas through local charities called zakat committees. The government argued that from its inception Holy Land was intended to be a fundraising tool for Hamas, a contention that was never documented in court.

[full story]

So it looks like the government argument here was very similar to the Bush Administration argument for invading Iraq; “Sure, these particular people didn’t attack us and aren’t a threat to us…but they sure do look like people who are.”

It was wrong then, and it’s wrong now.

On the personal note, I grew up in Richardson, Texas, THE HOTBED OF TERRORIST FINANCING IN THE U.S.

No wonder I ended up being a flippin’ RobotPirateNinja, those were some hard streets.

Should I just turn myself in now?  Or wait for them to come get me?  After all, I am now it would seem, defending terrorists convicted for helping the poor and sickly.  

Curious world Bush gave us.

Chinese government makes “Chinese Democracy” somewhat relevant.

Here’s the story so funny it can only come from China.

Axl Rose isn’t exactly the renegade rocker he was in the late 1980s, but he’s still rock ‘n roll enough stir up a controversy.

An article in a Chinese newspaper today blasted the singer’s new album “Chinese Democracy”as a “venomous attack”on the nation and suggested the long-awaited Guns ‘N Roses release “turns its spear point on China.”

The story was printed in a publication put out by China’s ruling Communist Party, and quoted unnamed sources from Internet message boards that suggested the lyrics were inflammatory and critical of China.

Excerpts from these online chats slammed the album as a plot by Western adversaries to “grasp and control the world using democracy as a pawn,”the Associated Press reported. The new album dropped Sunday after fans held on through 17 years of myriad false starts and production delays after Guns ‘N Roses began recording in 1994.

[full story]

For those that don’t know, Guns ‘N Roses “Chinese Democracy” is the Duke Nukem Forever of the music world.

For those curious about GnR’s “new” sound…

Also as a quick note; when a whole government is reduced to quoting “unnamed sources from Internet message boards” you know they are stretching.  And you know without a doubt this is propaganda.

The funny part about this for me is that I recently ran across a far more inflammatory (ha!) bit of anti-Chinese propaganda in American pop culture.

This one comes in the form of “Liberty Prime” a giant, nuke-throwing, Chinese-hating robot.

Here you can see him in action, and set to some lovely classical music.  Listen for the robot’s voice.  He’s rather agressive in his feelings toward China and Communism (understandable, as a nuclear war with China causes all the “Fallout” in 2077).