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George Will’s column on a new Gettysburg memorial lets us open with a nice change of pace.

In 1863, 11 major roads converged on this town. Which is why history did, too.

The founding of the American nation was the hinge of world history: Popular sovereignty would have its day. The collision of armies here was the hinge of American history: The nation would long endure. Which is why 200 or so generous private citizens recently gathered here for a quiet celebration of their gift to the nation — a sparkling new Museum and Visitor Center that instructs and inspires.

In 1997, Bob Kinsley, a contractor in York, Pa., decided that something should be done about the decrepit facilities for explaining the battle and displaying its artifacts. His determination survived more than 50 public meetings and three congressional hearings, and two years of resistance from rival bidders, some Gettysburg merchants and people who think the private sector takes up space that the public sector should fill.

He started the Gettysburg Foundation and hired Bob Wilburn, who had administered Colonial Williamsburg. Wilburn raised the $103 million that built the new center, which includes a theater for the scene-setting film narrated by Morgan Freeman, and the Cyclorama, the circular painting that depicts Pickett’s Charge on the battle’s third and final day. Americans today are so constantly pummeled by a sensory blitzkrieg — the sights and sounds of graphic journalism and entertainment — they can hardly fathom how the Cyclorama dazzled viewers when displayed in 1884. Magnificently restored and presented, it is still stunning. …

Continuing to ignore our present political predicament, we have Walter Williams who has proposed an increase in the number of representatives in the lower house.

… Excellent research, found at http://www.thirty-thousand.org/index.htm, shows that in 1804 each representative represented about 40,000 people. Today, each representative represents close to 700,000. If we lived up to the vision of our founders, given today’s population, we would have about 7,500 congressmen in the House of Representatives. It turns out that in 1929 Congress passed a bill fixing the number of representatives at 435. Prior to that, the number of congressional districts was increased every 10 years, from 1790 to 1910, except one, after a population census was taken.

We might ask what’s so sacrosanct about 435 representatives? Why not 600, or 1,000, or 7,500? Here’s part of the answer and, by the way, I never cease to be amazed by the insight and wisdom of our founders: James Madison, the acknowledged father of the Constitution, argued that the smaller the House of Representatives relative to the nation’s population, the greater is the risk of unethical collusion. He said, “Numerous bodies … are less subject to venality and corruption. ” In a word, he saw competition in the political arena as the best means for protecting our liberties. If Madison were around today to see today’s venal and corrupt Congress, he’d probably say, “See, I told you so!”  …

John Fund introduces us to Joe the Plumber featured in last night’s debate.

Family Security Matters has an interview with Joe.

At a recent campaign appearance in Ohio, Sen. Obama was approached by plumber Joe Wurzelbacher, who has concerns about Obama’s proposed tax policies. FamilySecurityMatters.org’s Pam Meister had a candid conversation with him about his experience.

PAM MEISTER: You recently met Sen. Obama on the campaign trail in Ohio, and you asked him a question about his tax policies. What exactly was your question for him?

JOE WURZELBACHER: Initially, I started off asking him if he believed in the American Dream and he said yes, he does – and then I proceeded to ask him then why he’s penalizing me for trying to fulfill it. He asked, “what do you mean,” and I explained to him that I’m planning on purchasing this company – it’s not something I’m gonna purchase outright, it’s something I’m going to have to make payments on for years – but essentially I’m going to buy this company, and the profits generated by that could possibly put me in that tax bracket he’s talking about and that bothers me. It’s not like I would be rich; I would still just be a working plumber. I work hard for my money, and the fact that he thinks I make a little too much that he just wants to redistribute it to other people. Some of them might need it, but at the same time, it’s not their discretion to do it – it’s mine.

PM: You’re a plumber, and you’re looking to buy your own plumbing business?

JW: Correct.

PM: Would that plumbing business employ other people or would it just employ you?

JW: Eventually it would employ other people. Right now it’s a two man shop and it’s got a very good footprint and a very good reputation, so eventually I would want to put other people out there. I don’t want to get huge because if you get too big your quality goes, but I definitely wouldn’t mind having two good plumbers out there with me working. …

Karl Rove says Obama hasn’t closed the sale yet.

… Mr. McCain is hitting Mr. Obama for wanting to raise taxes in difficult economic times, especially on small business and for the purpose of redistributing income, and for having lavish spending plans at a time when the economy is faltering. He’s criticizing Mr. Obama for lingering on the sidelines while Mr. McCain dove in to help pass a rescue plan, necessary no matter how distasteful. And he’s attacking Mr. Obama for not joining the fight in 2005 when reformers like Mr. McCain tried to rein in Fannie Mae and Freddie Mac.

Mr. McCain’s other adjustment is his schedule. His campaign understands the dire circumstances it faces and is narrowing his travels almost exclusively to Florida, North Carolina, Virginia, Ohio, Missouri, Colorado and Nevada. If he carries those states, while losing only Iowa and New Mexico from the GOP’s 2004 total, Mr. McCain will carry 274 Electoral College votes and the White House. It’s threading the needle, but it’s come to that.

This task, while not impossible, will be difficult. By mid-September, the McCain camp was slightly ahead in the polls. Then came the financial crisis. The past month has taken an enormous toll on the McCain campaign.

Whether it can find the right formula in the next 19 days to dig out is a question. If Mr. McCain succeeds, he will have engineered the most impressive and improbable political comeback since Harry Truman in 1948. But having to reach back more than a half-century for inspiration is not the place campaign managers want to be now.

Ross Douthat in WaPo traces our present credit crisis to It’s a Wonderful Life.

If the global economy survives the autumn and our cable-TV companies are still in business come Christmas, Americans surfing the channels for classic Yuletide movies may finally figure out exactly whom they have to blame for the housing bubble and everything that has followed. Forget the predatory lenders, Wall Street sharks and their government enablers: It all started with George Bailey.

Yes, that George Bailey — the hero of Frank Capra‘s “It’s a Wonderful Life,” the most popular man in Bedford Falls, the man so indispensable that he earned a private visitation from a guardian angel just to show him how dreadful a world without him would have been. It’s easy to forget, so potent is the supernaturally charged final act of Capra’s classic, that before he was visiting looking-glass worlds where he’d never been born or scampering through the snow and shouting “Merry Christmas!” till his lungs burst, Jimmy Stewart‘s George Bailey was actually a pretty savvy businessman. And it’s even easier to forget the precise nature of his business: putting the downscale families of Bedford Falls into homes they couldn’t quite afford to buy.

This is the substance of the great war between Bailey and Lionel Barrymore’s Mr. Potter, the richest, meanest man in Bedford Falls. Potter is against easy credit and the suburban dream, against the rabble moving out of his tenements and buying homes, while the Bailey Building and Loan exists to make suburbia possible.

The Bailey vision is economic and moral all at once. …

The Economist reviews a book on the financial history of the world – The Ascent of Money.

… Of far greater interest is Mr Ferguson’s general theory, which does not emerge until the end of the book. He thinks that finance evolves through natural selection. Although the professor cautions against the sort of Darwinism that sees evolution as progress, he believes that new sorts of finance are constantly coming into being as the environment changes. The sequence of creation, selection and destruction is what has generated many of the financial techniques that modern economies depend on.

This leads Mr Ferguson to make two timely points. One is to remember that evolution depends on extinction as well as creation. You have to allow ill-adapted techniques to fail if you are going to get something new. As the world rushes around rescuing every bank in sight, it is a reminder that the guarantor-state will later have to administer painful medicine.

The other is to observe the wonder of what financial evolution has created. Just now it is only natural to think of the “roller-coaster ride of ups and downs, bubbles and busts, manias and panics, shocks and crashes.” But Mr Ferguson sees something else too: “From ancient Mesopotamia to present-day China…the ascent of money has been one of the driving forces behind human progress: a complex process of innovation, intermediation and integration that has been as vital as the advance of science or the spread of law in mankind’s escape from the drudgery of subsistence agriculture and the misery of the Malthusian trap.” Amid this financial bust, cleave to that.

Turns out Alaska’s glaciers have been growing. Anchorage Daily News with the story.

… “In general, the weather this summer was the worst I have seen in at least 20 years.”

Never before in the history of a research project dating back to 1946 had the Juneau Icefield witnessed the kind of snow buildup that came this year. It was similar on a lot of other glaciers too.

Scrappleface reports Obama has declared plumbing a constitutional right.

After a presidential debate which focused on the needs of one man, a plumber named Joe Wurzelbacher of Holland, Ohio, Sen. Barack Obama this morning announced that “plumbing, like health care, is a Constitutional right, and therefore a federal government responsibility.”

“Millions of Americans go to bed every night listening to the incessant drip of a leaky faucet, fearing a flooded basement or a backed up toilet,” said Sen. Obama. “In my travels around the country, I’ve learned that single mothers, children and seniors are hardest hit. Often it comes down to a decision between buying groceries, or getting the garbage disposal fixed.” …

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David Warren comments on the inexorable growth of government.

… Even if McCain wins, we can expect another “stagflation party,” of the kind we attended in the 1970s, though quite possibly on a 1930s scale. For in the time-hallowed tradition of party competition, the Republicans may now be offering even bigger giveaways than the Democrats in the hope of buying off swing voters.

And while there is no unanswerable logical reason why the Canadian government should follow the rest of the West down the next plughole of the Nanny State, we heard the sucking sound throughout our short northern campaign season. The era of Thatcher and Reagan is over, and the era of Herbert Hoover has resumed.

Of course I have only touched on money, and the freedom to retain your earnings and spend or invest as you think wise, in your own interest and that of your family, is only one aspect of freedom. It is a key aspect, however, for money talks, and a government that has appropriated most of it will have a lot to say about the rest of your habits.

Through the last generation the consistent trend has been towards “liberal fascism”: constantly escalating legal and quasi-legal pressure on people who do not agree with the direction society is taking. Look for more.

A telling note on media bias from John Fund.

David Harsanyi’s column reminds us of Mark Twain’s dictum; “It could probably be shown by facts and figures that there is no distinctly native American criminal class except Congress.”

How is it that most ordinary citizens can survive an entire lifetime without experiencing the thrill of a grand jury indictment or the shadow of an ethics investigation?

Well, congratulations! And if you’re curious, feel free to live vicariously through your elected official.

It’s true that by 2006, Republicans had infested D.C. with shifty and corrupt swindlers, and the party paid the price by handing Congress over to Democrats.

Remember Speaker of the House Nancy Pelosi promising a new age of principled government in 2006? “The American people voted to restore integrity and honesty in Washington, D.C.,” she claimed, “and the Democrats intend to lead the most honest, most open and most ethical Congress in history.”

Naturally, it was pure bunk. …

Speaking of corruption, how about the “card check” bill Big Labor has told the Dems to pass? The Hill says George McGovern is helping the fight against it.

… McGovern said that he became involved in the campaign when Rick Berman, executive director of the Employee Freedom Action Committee, brought the issue to his attention. The two have known each other for a number of years.

“But I wasn’t doing it to please him,” McGovern said. “I’m doing it because I believe it’s an important right that should be protected.

In the ad, McGovern says, “It’s hard to believe that any politician would agree to a law denying millions of employees the right to a private vote. I have always been a champion of labor unions. But I fear that today’s union leaders are turning their backs on democratic workplace elections.”

The ad will first air nationally on Fox during Tuesday’s presidential debate, and then in the coming weeks in seven states with close Senate elections. …

John Stossel takes exception to the “reregulation mantra.”

… It’s intuitive to assume that regulation prevents problems, but it’s rarely true. First, how would regulators know what to do? Leaving aside the bias they might have and the brutal fact that regulation is physical force, how can a small group of people understand the workings of a market sufficiently to regulate sensibly? Markets, especially financial markets, are far more complicated than any mind can grasp. They consist of many millions of participants making countless decisions on the basis of unarticulated know-how and intuition. To attempt to regulate such activity requires knowledge no one can possess.

To seriously regulate those markets you’d have to impose the “precautionary principle,” a favorite idea of some environmentalists, especially in Europe. The principle prohibits any product or activity not proven 100 percent safe. It sounds so reasonable. But Ron Bailey of “Reason” points out what it really means: Don’t do anything for the first time.

Bad idea. The world needs innovators and inventors. We need people who try things for the first time.

Nobel Laureate F.A. Hayek emphasized that government planners suffer from a “knowledge problem” because “the knowledge of the circumstances of which [they] must make use never exists in concentrated or integrated form but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess.”

In other words, the planner or regulator can’t possibly know what the multitude in a market “knows.” So what regulators really do is straitjacket market participants, preventing innovators from creating prosperity for us all. …

Drawing from a WSJ Op-Ed, Ed Morrissey points out the government interference that created affirmative action mortgages.

… Now Obama and the same Democrats who pushed Fannie and Freddie to buy a trillion dollars in bad loans want to blame “deregulation” for the crisis.  It wasn’t deregulation, and as Wallison points out, the industry didn’t get deregulated at all.  Congress created this crisis by pushing Fannie and Freddie into not just buying subprime paper but into transforming it into securities that infected the entire financial system. …

Morrissey also posts on Jesse Jackson’s Zionist slip.

Barack Obama may say that Israel has no better friend than himself, but Jesse Jackson begs to differ.  Amir Taheri wrote in yesterday’s New York Post that Jackson hailed a new era in American foreign policy, where the “Zionists” would no longer control American action:

He promised “fundamental changes” in US foreign policy – saying America must “heal wounds” it has caused to other nations, revive its alliances and apologize for the “arrogance of the Bush administration.”

The most important change would occur in the Middle East, where “decades of putting Israel’s interests first” would end.

Jackson believes that, although “Zionists who have controlled American policy for decades” remain strong, they’ll lose a great deal of their clout when Barack Obama enters the White House. …

Peter Wehner posts in Contentions.

At a time when many people are saying Barack Obama’s past associations with radical figures doesn’t matter — and even that it shouldn’t matter – it’s worth considering the opposite argument.

From the ancient Greeks to the founding fathers, many of our best political minds believed character in our leaders matters. It doesn’t matter more than anything else, and character is itself a complicated thing. People can have strong character in some respects and weak character in others. People can demonstrate battlefield valor, for example, yet show cruelty to those over whom they have power. They can speak unpleasant truths when there is a high cost to doing so and betray their spouses. Individuals can demonstrate admirable loyalty to their friends and still lie to the public, or work for peace and yet violate the laws of our land. …

Power Line tells Barack to spread his own wealth around.

… Given that poorer citizens always outnumber the rich, political philosophers have long worried that government based on majority rule could lead to organized theft from the wealthy by the democratic masses. “If the majority distributes among itself the things of a minority, it is evident that it will destroy the city,” warns Aristotle.

The founders of the United States were deep students of politics and history, and they shared Aristotle’s worry. Up through their time, history had shown all known democracies to be “incompatible with personal security or the rights of property.” James Madison and others therefore made it a “first object of government” to protect personal property from unjust confiscation. Numerous provisions were included in the Constitution and Bill of Rights to protect the property rights of citizens.

Given that one of the causes of the American Revolution was a tax, the founders understood very well that taxation could become a way for one group to prey on another. So while the Constitution empowered the federal government to levy taxes, it limited this power mostly to indirect taxes like tariffs, duties, and excise taxes. For much of American history the federal government subsisted solely on those fees. …

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John Bolton doesn’t like our new North Korea policy.

North Korea has now achieved one of its most-prized objectives: removal from the U.S. list of state sponsors of terrorism. In exchange, the U.S. has received “promises” on verification that are vague and amount to an agreement to negotiate the critical points later.

In the Bush administration’s waning days, this is what passes for diplomatic “success.” It is in fact the final crash and burn of a once-inspiring global effort to confront and reverse nuclear proliferation, thereby protecting America and its friends. …

Same with Anne Applebaum.

… For the record, North Korea has sold missile technology to Syria and Libya, has assassinated diplomats, and has kidnapped Japanese and South Korean citizens and refuses to give a full accounting of their fate. North Korea also keeps untold numbers of its own citizens in concentration camps, which are direct copies of those built by Stalin, and knowingly starves many of its citizens to death as well. By any normal definition, North Korea is still a “terrorist” state, and everyone knows it. The administration’s decision was thus not a recognition of any change in North Korean behavior. It was, rather, a negotiated exchange of one set of words for another: We withdraw terrorist—and, in exchange, they offer a “promise,” once again, to dismantle their nuclear facilities. Ritual favors were bestowed as well: Presumably as a sign of the respect in which they hold him, the U.S. official negotiating these terms was, on his last visit to the north, ceremonially allowed to travel by car through Panmunjom instead of being forced to fly in from Beijing. …

Spengler says Americans are gamblers.

America’s homeowners feel like busted gamblers after a bender in Vegas. They wagered not only the nest egg, but the nest, with the abandon of tulip-bulb traders in 17th century Holland. Americans are hard put to explain how the American dream turned into a chip on the craps table. The focal point of speculation was the asset one usually associates with secure domesticity. What happened to the risk-averse Economic Man of textbooks?

The textbook was misleading to begin with: we are all gamblers and always have been, argues Reuven Brenner, the Repap Professor of Business at McGill University. In a series of books beginning in 1983 with History: The Human Gamble and culminating with his latest volume, A World of Chance: Betting on Religion, Games, Wall Street, Brenner yanks economics inside-out by placing risky behavior at the center of the economic model.

Conventional economics describes an artificial world of slight deviations from equilibrium; Brenner presents the real world, in all its danger and uncertainty. Man lives not only by the sweat of his brow, but by the fortitude of his intestines, for survival demands that we take mortal leaps of a kind that are unknown to the conventional model. Men who would prefer to be timid risk everything to leapfrog their peers before they themselves are left behind.

Rather than award yet another Nobel Prize to an economist who put bells and whistles on the conventional model (Princeton University Professor Paul Krugman was honored this past weekend ”for his analysis of trade patterns and location of economic activity”,) the Swedish Academy should have honored Brenner, who gives us a model that makes sense in the real world of tumult and uncertainty – 2008 should have been Brenner’s year, given the cataclysmic breakdown of the conventional model. Only a few months ago, the governments of the world went about their business as if nothing unusual was at work; now they are lurching from one emergency plan to another and warning of a new Great Depression. …

A retort to Mike Bloomberg’s big head when George Will argues in favor of term limits.

… The Times dutifully reported that 37 governors, 15 state legislatures and nine of the 10 most populous cities have term limits, which remain popular with the people who imposed them: “Recent ballot initiatives to alter them, including one in California in February, have failed.”

Two amusing arguments against term limits are that political novices are too susceptible to the wiles of lobbyists and that term-limited legislators, worrying too much about their next jobs and too little about their current ones, are constantly in campaign mode, thinking of the next election rather than the next generation. The idea that when term limits are absent, these difficulties are absent is refuted by one word: Congress.

“Make no mistake about it,” Bloomberg said when announcing his intention to revise the law without seeking the permission of the public that enacted it. “I still think term limits are a good thing.” Just not for him, not now, in these “tough times.” Yet again, the political class’s reaction to term limits is a powerful, indeed sufficient, argument for them.

Speaking of clowns, American Spectator on Biden.

… Well, take a glance at Senator Biden’s performance just last month. On September he 22 bragged to a Baltimore audience that, “If you want to know where al-Qaida lives, you want to know where bin Laden is, come back to Afghanistan with me. Come back to the area where my helicopter was forced down with a three-star general and three senators at 10,500 feet in the middle of those mountains. I can tell you where they are.” Two days later he continued his B.S.-ing that al-Qaida’s headquarters had been moved to “the mountains between Afghanistan and Pakistan, where my helicopter was recently forced down.” Both statements were rehashes of his September 9 garbagespiel that “the superhighway of terror between Pakistan and Afghanistan [is] where my helicopter was forced down.” Left unsaid by the senator — who rarely leaves anything unsaid — was that the helicopter was “brought down” not by enemy fire but by inclement weather.

Okay, maybe those outbursts do not reveal Senator Biden as an airhead, but they do reveal him as a phony. So consider a couple more of the senator’s September follies. …

Thomas Sowell wonders why telling the truth becomes “going negative.”

… When Barack Obama donated $20,000 to Jeremiah Wright, does anyone imagine that he was unaware that Wright was the epitome of grievance, envy and resentment hype? Or were Wright’s sermons too subtle for Obama to pick up that message?

How subtle is “Goddamn America!”?

Yet those in the media who deplore “negative advertising” regard it as unseemly to dig up ugly facts instead of sticking to the beautiful rhetoric of an election year. The oft-repeated mantra is that we should trick to the “real issues.”

What are called “the real issues” are election-year talking points, while the actual track record of the candidates is treated as a distraction– and somehow an unworthy distraction.

Does anyone in real life put more faith in what people say than in what they do? A few gullible people do– and they often get deceived and defrauded big time.

Barack Obama has carried election-year makeovers to a new high, presenting himself a uniter of people, someone reaching across the partisan divide and the racial divide– after decades of promoting polarization in each of his successive roles and each of his choices of political allies.

Yet the media treat exposing a fraudulent election-year image as far worse than letting someone acquire the powers of the highest office in the land through sheer deception.

Charles Krauthammer says Obama’s friends are a legitimate issue and McCain was remiss in not taking up the issue sooner.

Convicted felon Tony Rezko. Unrepentant terrorist Bill Ayers. And the race-baiting Rev. Jeremiah Wright. It is hard to think of any presidential candidate before Barack Obama sporting associations with three more execrable characters. Yet let the McCain campaign raise the issue, and the mainstream media begin fulminating about dirty campaigning tinged with racism and McCarthyite guilt by association.

But associations are important. They provide a significant insight into character. They are particularly relevant in relation to a potential president as new, unknown, opaque and self-contained as Obama. With the economy overshadowing everything, it may be too late politically to be raising this issue. But that does not make it, as conventional wisdom holds, in any way illegitimate.

McCain has only himself to blame for the bad timing. He should months ago have begun challenging Obama’s associations, before the economic meltdown allowed the Obama campaign (and the mainstream media, which is to say the same thing) to dismiss the charges as an act of desperation by the trailing candidate. …

Dilbert is here.

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David Owen, former Brit Foreign Secretary sees coming strike on Iran.

Some key decision makers in Israel fear that unless they attack Iranian nuclear enrichment facilities in the next few months, while George W Bush is still president, there will not be another period when they can rely on the United States as being anywhere near as supportive in the aftermath of a unilateral attack.

In the past 40 years there have been few occasions when I have been more concerned about a specific conflict escalating to involve, economically, the whole world. We are watching a disinformation exercise involving a number of intelligence services. Reality is becoming ever harder to disentangle.

Last month a story in The Guardian claimed that on May 14 Ehud Olmert, the Israeli prime minister, in a meeting with Bush, had asked for a green light to attack Iran’s nuclear enrichment facilities. We were told that Bush refused. He believed Iran would see the United States as being behind any such assault and Americans would come under renewed attack in Iraq and Afghanistan. Shipping in the Gulf would be vulnerable. We were told that the source of the story was a European head of government and “his” officials – as if to exclude Angela Merkel and Germany. It is, however, improbable that Israel abandoned its option to take unilateral action.

Three weeks later the Israeli military conducted an exercise over the Mediterranean to demonstrate to the United States as well as Iran that it could attack. More recently there have been a number of stories raising concern about what is happening in Iran. …

The author of A Random Walk Down Wall Street says to chill.

As the world economy reels under the weight of the worst financial crisis since the Great Depression, we have been left with a broken financial system. Financial institutions around the world have suffered life-threatening, self-inflicted wounds by purchasing over a trillion dollars of complex mortgage-backed securities backed by dodgy loans based on inflated real-estate values. These assets have been financed with enormous leverage and with short-term debt. Just prior to its “rescue,” Bear Stearns had a debt to equity ratio of over 30 to 1, making it susceptible to a “run on the bank,” although Bear was not a commercial bank but rather part of the “shadow banking system” built on derivatives.

The long-run solution to the present crisis must involve substantial deleveraging and a recapitalization of our financial institutions. In the meantime, credit has been essentially frozen and a world-wide recession seems almost inevitable.

But just because stock markets have panicked, investors should not. The best position for investors today is not “fetal and 100% in cash.” We are not going to have a depression, and we have survived financial crises before. A century of investing experience, as well as insights from the field of behavioral finance, suggest that investors who bail out of equities during times like these are almost always making the wrong decision. …

So does David Warren.

… The things that we produce by our labour we may continue to produce, so far as they are needed; and the things we need may continue to be produced, in exchange. Money itself, so long as it is taken at face value, may continue to be the convenient mode of exchange. Neither now, nor in 1929, nor in any of the other times of stock plunge and bank failure, has anything much been lost, until, to use Franklin Delano Roosevelt’s phrase, “fear itself” became the enemy of the people.

For in practical terms, the stocks on Wall Street are not worth nothing. Formidable agencies of production lie behind each of them. When their heads have cooled, investors may sort out which are over-valued, which under-valued by comparison, and what needs writing off. The more I try to think it through, the clearer it seems to me that every “rescue plan” is counter-productive. The sorting-out process is seriously confused when the government blunders in.

Indeed, the consensus of the economists I have read is that the Great Depression was largely an artifact of government intervention, reacting to a meltdown by freezing it into place. For politicians and bureaucracies characteristically mistake money for goods, words for things, pictures for reality.

ProPublica reports on Clinton SEC Chairman Arthur Levitt who claims Clinton era officials argued against derivatives regulation.

As the world financial system implodes, Democrats have blamed the Bush administration’s lack of regulation for creating the conditions for collapse. But a top Clinton regulator acknowledges that he and his colleagues a decade ago “beat back” regulatory efforts that could have prevented credit markets from becoming so precariously balanced they were “milliseconds” from disaster.

“That was a point in history when perhaps we should have anticipated something like where we are today, at least the possibility,” says Arthur Levitt, chairman of the Securities and Exchange Commission from 1993 to 2001.

In 1998, an obscure federal agency, the Commodity Futures Trading Commission, raised the prospect of regulating the burgeoning market in complex financial instruments, which then had a notional value of $28.7 trillion. Today the notional value is $531.2 trillion, according to the International Swaps and Derivatives Association.

The nation’s leading financial officials – Levitt, Federal Reserve Chairman Alan Greenspan, Secretary of the Treasury Robert Rubin, and his deputy Lawrence Summers – pummeled the proposal, saying it was dangerous to even discuss the idea.  Led by Rubin, Levitt and Greenspan, the Clinton White House instead proposed a modest set of reforms. Months later, Clinton Administration officials walked away from their own recommendations, concluding the market could be best managed by the financial industry. …

Mark Steyn comments on the David Warren column in Oct 9th Pickings – The American people and their irreconcilable differences.

Another Steyn Corner post leads to David Harsanyi’s column claiming the GOP has no candidate.

This election has never been about John McCain — though his candidacy is sure to revive a debate about the worst presidential candidates of all time.

No, this is a referendum on Barack Obama. And many Republicans are exuding the confidence of a hopelessly quixotic sports fan — a person who watches his atrocious team struggle for three quarters with the false expectation that some miraculous comeback is imminent in the fourth.

It rarely is.

McCain has consistently remained inconsistent, vacillating between promises and populism. From his support of cap-and-trade to his actions during the bailout, McCain’s positions seem entirely focused on winning the middle- of-the-road vote.

No modern Republican has ever won the presidency solely focused on the ambivalent squishy inattentive center. These people don’t care enough to name their political party, much less pay attention.

But he’s a maverick. One of McCain’s central arguments has been his uncompromising valor in opposing the Bush administration.

Here’s a newsbreak: Disagreeing with the Bush administration on a handful of issues (often the wrong ones, in McCain’s case) doesn’t make you a maverick, it makes you an average American. And, sadly, the second debate proved that McCain would be incapable of making his party’s philosophical or political case even if he genuinely tried. …

Samizdata liked the Sebastian Mallaby column in Pickings last week.

This is a good, very fair-minded take on the current financial turmoil and all the more impressive for its insights precisely because the writer is not some sort of ultra-free market ideologue:

“The real roots of the crisis lie in a flawed response to China. Starting in the 1990s, the flood of cheap products from China kept global inflation low, allowing central banks to operate relatively loose monetary policies. But the flip side of China’s export surplus was that China had a capital surplus, too. Chinese savings sloshed into asset markets ’round the world, driving up the price of everything from Florida condos to Latin American stocks.”

Absolutely. China, and the massive pool of savings that Asian economies have been able to provide to Western borrowers, is the 800 pound gorilla in the room in the current saga. …

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Nobel peace prize is Finni.

Martti Ahtisaari’s Nobel Peace Prize yesterday won’t get European elites buzzing as in past years (See: Gore, Al and Carter, Jimmy). In his diplomatic and political career, the former Finnish President brokered peace on various continents — yet also recognized clear limits to good intentions. …

Spengler explains why Israel is such a happy country.

Envy surrounds no country on Earth like the state of Israel, and with good reason: by objective measures, Israel is the happiest nation on Earth at the 60th anniversary of its founding. It is one of the wealthiest, freest and best-educated; and it enjoys a higher life expectancy than Germany or the Netherlands. But most remarkable is that Israelis appear to love life and hate death more than any other nation. If history is made not by rational design but by the demands of the human heart, as I argued last week , the light heart of the Israelis in face of continuous danger is a singularity worthy of a closer look.

Can it be a coincidence that this most ancient of nations, and the only nation persuaded that it was summoned into history for God’s service, consists of individuals who appear to love life more than any other people? As a simple index of life-preference, I plot the fertility rate versus the suicide rate of 35 industrial countries, that is, the proportion of people who choose to create new life against the proportion who choose to destroy their own. Israel stands alone, positioned in the upper-left-hand-quadrant, or life-loving, portion of the chart. Those who believe in  Israel’s divine election might see a special grace reflected in its love of life. …

Mark Steyn is back from his hiatus. His subject is the shape of an Obama administration.

Speaking personally, I’m not looking for a messiah in the White House. My favorite presidential heritage site is the Coolidge homestead in Plymouth Notch, Vt.: I have seen the mausoleums of mighty kings, but none compares with the row of headstones on a snowbound hillside cemetery, seven generations of Coolidges lined up in a row, all buried under simple, bald granite markers with only an all but imperceptible small American eagle to distinguish the 30th president from his forebears and descendants. The American ideal: the citizen-president.

Or so I always assumed. But let’s be bipartisan here. If I were a Democrat, I’d salute Harry S. Truman, the Missouri haberdasher who … whoa, “haberdasher”! There’s a word you don’t hear too much nowadays, and, if you did, it’d probably be because the treasury secretary and the chairman of the House Financial Services Committee are on cable TV, standing on the steps of the Capitol announcing a 700 gazillion-dollar bipartisan haberdashery bailout package because the global haberdashery sector is too big to fail, and if we don’t act now there’ll be a massive planetary ripple effect that could take down ladies’ lingerie, if you’ll pardon the expression.

Where was I? Oh, yeah. Citizen-presidents: Who needs ‘em? The day after the most-recent debate I bumped into two Obama supporters in St Johnsbury, Vt. They said isn’t it great that he’s on course to win. Well, they were cute chicks, and I know an obvious pick-up line when I hear one, so I stopped to chat. God Almighty, it was like reverse Viagra: After 10 minutes of Babes For Barack, I never want to meet a female woman of the opposite sex for the rest of my life. Their basic pitch was:

“How do you solve a problem? Like, Obama!

How do you hold a moonbeam in your hand?”  …

Michael Barone on the Obama thugs.

“I need you to go out and talk to your friends and talk to your neighbors,” Barack Obama told a crowd in Elko, Nev. “I want you to talk to them whether they are independent or whether they are Republican. I want you to argue with them and get in their face.” Actually, Obama supporters are doing a lot more than getting into people’s faces. They seem determined to shut people up.

That’s what Obama supporters, alerted by campaign emails, did when conservative Stanley Kurtz appeared on Milt Rosenberg’s WGN radio program in Chicago. Kurtz had been researching Obama’s relationship with unrepentant Weather Underground terrorist William Ayers in Chicago Annenberg Challenge papers in the Richard J. Daley Library in Chicago — papers that were closed off to him for some days, apparently at the behest of Obama supporters.

Obama fans jammed WGN’s phone lines and sent in hundreds of protest emails. The message was clear to anyone who would follow Rosenberg’s example. We will make trouble for you if you let anyone make the case against The One. …

Charges in Canada against Mark Steyn have been dismissed says Mark Hemingway in the Corner.

But Mark doesn’t want to leave it at that.

… I sympathize with the Canadian Islamic Congress, whose mouthpiece feels that, if the British Columbia pseudo-judges had applied the logic of previous decisions, we’d have been found guilty. He’s right: Under the ludicrous British Columbia “Human Rights” Code, we are guilty. Which is why the Canadian Islamic Congress should appeal, and why I offered on the radio an hour ago to chip in a thousand bucks towards their costs.

Canada is having an election too. David Warren compares the two.

… Canadians who congratulate themselves for the comparative “niceness” of our election campaign, after glimpsing the nastiness of the presidential race to the south, are peculiarly out of touch with current realities. As Americans better realize — because they have no choice but to take their election seriously — this is no time for “nice.” There is far too much at stake.

With neither the McCain/Palin nor the Obama/Biden ticket, can Americans opt for “more of the same.” Touching everything from tax-and-spending, to core moral values, they have real issues before them. They know it; whereas, up here, what is there to know?

Alas, in the United States as here, the advance of “political correctness” has made a number of key issues undiscussable, except by the brave. But after years of prelude, the battle of the brave has now begun. It is a trial by ordeal for the candidates, but the job they are seeking requires it, and there is no question that should not be asked of the candidate for such a job.

I will be prouder of my country when our own elections get much nastier.

Bjørn Lomborg was in the London Times arguing for sensible global warming policies.

… Of course, we shouldn’t ignore global warming. But instead of trying to cut CO2 emissions, we should focus on dramatically increasing the funding into energy research and development. What matters is getting low-cost low-carbon technology available faster. If the price of renewable energy dropped below the cost of fossil fuels by mid-century, everyone – including China and India – would switch to the greener alternatives. Work done by the Copenhagen Consensus suggests that such a policy could be 300 times better for the world than the UK approach. We could end up doing more than £11 worth of good for each £1 invested. While we would do much more good in total terms, the cost would also be much lower, and hence much more likely to be implemented.

When it comes to climate, we have to come to our senses. Yes, global warming is real and caused by human beings, but it doesn’t mean we should panic in our policy decisions. We need to do the right thing – and invest in discovering and developing new low-carbon technology.

David Harsanyi asks,”Is it negativity or the truth?”

Most polls tell us that Americans have a tremendous aversion to negative campaigns. What these polls fail to explain is how Americans define “negative.” It probably goes something like this: any ugly or disparaging truth about my candidate.

So until those running for office begin to voluntarily divulge their own misdeeds, bad votes, devious dealings and shady alliances, negative ads remain advantageous for voters.

As the economic news — fairly or not — has provided Barack Obama the momentum this past month, John McCain has decided to bring the Illinois senator’s shady associations to the forefront. This promises to be spectacularly “negative” — and even somewhat true. But will it matter?

Former President Bill Clinton was recently asked by Fox News’ Greta Van Susteren: “What is the difference between an association with someone like David Duke and someone like Reverend [Jeremiah] Wright?” Clinton, as suave as they come, fumbled for a several moments, before he finally stating that “we don’t have to go there” and moved on to more comfortable environs.

The answer, of course, is, that anyone linked to Duke would never have been running for national office in the first place. …

Uninspired by the last debate, Samizdata commenter invents a drinking game.

Every time McCain says “My friends…” take a drink.

Every time Obama sidesteps a question in order to work Iraq into a question which was not asked…take a drink. …

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Foreign Policy writes on Putin’s useful idiots – German environmentalists.

… Two decades of stringent environmental regulations have made Germany, Europe’s largest economy, increasingly dependent on natural gas from Russia, the world’s largest exporter. Of course, economic leverage translates seamlessly into political power, and Russia’s sway over German foreign policy has been conspicuous as the recent imbroglio in Georgia has continued to play out.

In fact, Germany has the means to power its economy without Russian natural gas, so energy dependence is unnecessary. For starters, it is home to the largest reserves of coal in Europe. But thanks to the European Union’s marquee climate-change mitigation policy—the continent-wide Emission Trading Scheme—the economics of power production have shifted decidedly against coal because its combustion releases the most greenhouse gases of any conventional fuel source.

Given that coal is currently taboo, Germany could meet its energy needs by expanding the use of nuclear energy, which emits no carbon dioxide when used to generate electricity. Yet the environmental movement in Germany opposes nuclear energy because its waste is difficult and dangerous to store. In 2000, environmentalists won passage of the Nuclear Exit Law, which commits German utilities to phasing out nuclear power by 2020. …

David Warren has a great column on the irreconcilable differences in our politics.

… To one side, it goes without saying that the crisis was caused by greed and conspiracy, in the absence of sufficient government regulation. To the other, it is self-evidently the accomplishment of a U.S. government that set the accounting rules and created the subprime monsters (Freddie Mac and Fannie Mae) to deliver mortgages to people who would never qualify under common-sense rules of banking.

The latter are right and the former are wrong on the history, but that is beside the point for the time being. The issue has instead found its way to the front line between two basically irreconcilable views of reality. Only in America are they so equally balanced. Elsewhere in the West, the true believers in the Nanny State have long since prevailed.

Democrats and Republicans have become two solitudes, and so, the result of the election will be ugly, no matter which side wins.

John Stossel says too bad the bailout passed.

… Steven Horwitz, an economics professor at St. Lawrence University, got it right when he wrote, “There will be short-term pain if we don’t bail out these firms, but that is the hangover price we pay for 15 years or more of binge lending. The proposed bailout cannot prevent the pain of the hangover; it can only conceal it by shifting and dispersing it among the taxpayers and an economy weakened by the borrowing, taxing and/or inflation needed to pay for that $700 billion. Better we should take our short-term pain straight up and clean out the mistakes of our binge and then get back to the business of free markets without creating an unchecked executive branch monstrosity trying to ‘save’ those who profited most from the binge and harming innocent taxpayers in the process”.

Sure, without the bailout, there might have been a severe recession. Bubbles must pop. But it’s important that we let bubbles pop. Markets would then find a floor and recover.

Now the politicians are blowing some new air into the bubble, but we may have a recession anyway. And with more intervention, regulation and ambiguity about what the real market prices for those government-supported securities are, investors won’t know where the real bottom is.

So any recession will last longer. And the moral hazard the bailout perpetuates will lead to new bubbles … and then demands for another bailout.

Free enterprise sounds nice. We should try it sometime.

Walter Williams has the real lessons of the bailout.

In my more cynical moments, I think that we Americans deserve what we get from our politicians, many of whom can be generally described as nothing less than loathsome. You say, “Williams, that’s a pretty heavy putdown.” My question to you is how else would you describe these congressmen who are now blaming the financial mess on the failure of the free market? Starting with the Community Reinvestment Act of 1977, that was given more teeth during the Clinton administration, Congress started intimidating banks and other financial institutions into making loans, so-called subprime loans, to high-risk homebuyers and businesses. The carrot offered was that these high-risk loans would be purchased by the government-sponsored enterprises Fannie Mae and Freddie Mac. Anyone with an ounce of brains would have known that this was a prescription for disaster but there was a congressional chorus of denial.

Five years ago, Congressman Barney Frank (D-Mass.) vouched for the “soundness” of Fannie Mae and Freddie Mac, and said, “I do not see any possibility of serious financial losses to the treasury.” In 2004 congressional hearings, where the Bush administration sought greater oversight over Freddie Mac and Fannie Mae, congresswoman Maxine Waters (D-Calif.) said, “We do not have a crisis at Freddie Mac and particularly at Fannie Mae,” adding that “the GSEs have exceeded their housing goals.” Congressman Gregory Meeks (D-N.Y.) said, “There’s nothing wrong with Fannie Mae and Freddie Mac.” In these hearings Barney Frank said that he doesn’t see “anything in the reports that raises safety and soundness problems.” Earlier this year, Sen. Christopher Dodd (D-Conn.) praised Fannie Mae and Freddie Mac for “riding to the rescue” to help people get home mortgage loans, adding that they “need to do more” to help high-risk borrowers get better loans. …

Alvaro Vargas Llosa in the New Republic says we need to make sure we don’t take the wrong lessons from the credit crisis.

As was the case with the 1929 crash that ushered in the Great Depression, the current financial meltdown is giving rise to myths that will influence public policy for decades to come. It is imperative that those myths be debunked before the next U.S. administration starts to make important decisions, followed by many other countries. By far the most dangerous myth is that deregulation is the root cause of the problem.

Yes, Wall Street firms were greedy, irresponsible and, in many cases, downright stupid. But those are fairly constant features in any society and there is no reason to believe that investment bankers were any more greedy, irresponsible and stupid in 2007 and 2008 than, say, five or 10 years earlier.

As many authoritative economists are desperately trying to explain amid all the confusion, the culprit was a system geared toward loaning money to people who were not in a position to pay it back. Two policies underpinned that system: easy money by the Federal Reserve and the government-induced lowering of standards for approving loan requests. …

Karl Rove says the voters haven’t decided yet.

… Each faces a big challenge. Mr. McCain’s is that events have tilted the field towards Mr. Obama. To win, Mr. McCain must demonstrate he stands for responsible conservative change, while portraying Mr. Obama as an out-of-the-mainstream liberal not ready to be president.

Mr. Obama’s test is that voters haven’t shaken deep concerns about his lack of qualifications. Having accomplished virtually nothing in his three years in the Senate except to win the Democratic nomination, Mr. Obama must show he is up to the job. Voters like him, conditions favor him, yet he has not closed the sale. He may be approaching the finish line with that mixture of lassitude and insouciance he displayed in the spring against Mrs. Clinton.

But here’s a warning sign for Mr. Obama. Of recent candidates, only Michael Dukakis in 1988 has had a larger percentage of voters tell pollsters they believe he lacks the necessary qualifications to be president.

Camille Paglia’s column this month builds from letters. She answers a great one about Sarah Palin.

… Yes, both Todd and Sarah Palin, whom most people in the U.S. and abroad had never even heard of until six weeks ago, have emerged as powerful new symbols of a revived contemporary feminism. That the macho Todd, with his champion athleticism and working-class cred, can so amiably cradle babies and care for children is a huge step forward in American sexual symbolism.

Although nothing will sway my vote for Obama, I continue to enjoy Sarah Palin’s performance on the national stage. During her vice-presidential debate last week with Joe Biden (whose conspiratorial smiles with moderator Gwen Ifill were outrageous and condescending toward his opponent), I laughed heartily at Palin’s digs and slams and marveled at the way she slowly took over the entire event. I was sorry when it ended! But Biden wasn’t — judging by his Gore-like sighs and his slow sinking like a punctured blimp. Of course Biden won on points, but TV (a visual medium) never cares about that.

The mountain of rubbish poured out about Palin over the past month would rival Everest. What a disgrace for our jabbering army of liberal journalists and commentators, too many of whom behaved like snippy jackasses. The bourgeois conventionalism and rank snobbery of these alleged humanitarians stank up the place. As for Palin’s brutally edited interviews with Charlie Gibson and that viper, Katie Couric, don’t we all know that the best bits ended up on the cutting-room floor? Something has gone seriously wrong with Democratic ideology, which seems to have become a candied set of holier-than-thou bromides attached like tutti-frutti to a quivering green Jell-O mold of adolescent sentimentality. …

Ann Coulter has fun with this year’s most outrageous candidate – Joe Biden.

If Sarah Palin had made just one of the wildly inaccurate statements smugly uttered by Sen. Joe Biden in last week’s vice presidential debate, there would have been 3-inch headlines in newspapers across America. (I can almost hear Katie Couric asking me, “Which newspapers?”)

These weren’t insignificant errors, such as when Biden said, “Look, all you have to do is go down Union Street with me in Wilmington or go to Katie’s restaurant or walk into Home Depot with me where I spend a lot of time, and you ask anybody in there whether or not the economic and foreign policy of this administration has made them better off in the last eight years.”

It turns out that Katie’s restaurant, where Biden gets his feel for the average American, closed 20 years ago. The only evidence that he spends any time in Home Depot is that it appears that a pipe wrench fell on his head one too many times.

Palin would surely have been forced to withdraw from the ticket had she said something like that, but most of Biden’s errors were not trifling mistakes like these. They were lengthy Lyndon LaRouche-like disquisitions that were pure fantasy from beginning to end.

For example, Biden said about Hezbollah: “When we kicked — along with France — we kicked Hezbollah out of Lebanon.” Hezbollah was never kicked out of Lebanon. …

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Before our descent into the political news, a Washington Post article on the collapse of Russia is here. Behind the Russian Bear getting ready to ravage Europe are serious problems.

… According to U.N. figures, the average life expectancy for a Russian man is 59 years — putting the country at about 166th place in the world longevity sweepstakes, one notch above Gambia. For women, the picture is somewhat rosier: They can expect to live, on average, 73 years, barely beating out the Moldovans. But there are still some 126 countries where they could expect to live longer. And the gap between expected longevity for men and for women — 14 years — is the largest in the developed world.

So what’s killing the Russians? All the usual suspects — HIV/AIDS, tuberculosis, alcoholism, cancer, cardiovascular and circulatory diseases, suicides, smoking, traffic accidents — but they occur in alarmingly large numbers, and Moscow has neither the resources nor the will to stem the tide. Consider this:

Three times as many Russians die from heart-related illnesses as do Americans or Europeans, per each 100,000 people.

Tuberculosis deaths in Russia are about triple the World Health Organization‘s definition of an epidemic, which is based on a new-case rate of 50 cases per 100,000 people.

Average alcohol consumption per capita is double the rate the WHO considers dangerous to one’s health.

About 1 million people in Russia have been diagnosed with HIV or AIDS, according to WHO estimates.

Using mid-year figures, it’s estimated that 25 percent more new HIV/AIDS cases will be recorded this year than were logged in 2007. …

Saturday Night Live did some satire that might help the GOP. So it was removed from their website. John Fund has the story.

One of the funniest and most politically searing comedy sketches in years has vanished from the Web site of NBC’s Saturday Night Live. Visitor comments asking about its disappearance are also being scrubbed from the Web site. The sketch — a harsh indictment of the housing meltdown that led to last week’s bailout bill — was clearly too much truth for someone to handle.

The seven-minute sketch featured a mock news conference of Democratic Congressional leaders on the bailout bill, during which Nancy Pelosi and Barney Frank inadvertently acknowledge that it was Congress that blocked reform and effective oversight of mortgage giants Fannie Mae and Freddie Mac. …

And Roger Simon has a link so you too can see it.

We are in the midst of an important, possibly crucial, political campaign and the head honchos at NBC are engaging in thought control.  They are suppressing a Saturday Night Live sketch about the economic crisis that skewers the massive hypocrisy of Democrats like Frank and Pelosi on the issue. …

Good WSJ Op-Ed on McCain’s health care proposal. McCain’s ideas conform to Pickerhead’s dictum that to find solutions to problems, it is always a mistake to pass a law. The correct strategy is to find the bad law that created the problem, and repeal it.

With less than a month to go, presidential candidate Barack Obama wants to deliver a knock-out punch by hitting John McCain on health care.

On Saturday Mr. Obama called his rival’s health-care proposal “radical” and, in swing states, he is now blasting it in TV ads. Mr. Obama is also distributing mailers and organizing “Docs for Barack” meetings to rally voters.

It’s good politics for Mr. Obama. But it’s bad policy. Mr. McCain’s proposal — to give every American the tax credit businesses get for buying health insurance — is the right prescription for what ails our health-care system.

The foundation of that system — employer provided health insurance — is crumbling. For decades, the percentage of Americans who get their health insurance at work has been shrinking. In August, the Census Bureau reported that the decline continues. Today, 59% of Americans get their health insurance through the workplace. Twenty years ago, three-quarters of us did. With costs skyrocketing — health-insurance premiums roughly doubled since 2000 — the current path we are on is not sustainable. …

Thomas Sowell writes on the real Obama.

Critics of Senator Barack Obama make a strategic mistake when they talk about his “past associations.” That just gives his many defenders in the media an opportunity to counter-attack against “guilt by association.”

We all have associations, whether at the office, in our neighborhood or in various recreational activities. Most of us neither know nor care what our associates believe or say about politics.

Associations are very different from alliances. Allies are not just people who happen to be where you are or who happen to be doing the same things you do. You choose allies deliberately for a reason. The kind of allies you choose says something about you.

Jeremiah Wright, Father Michael Pfleger, William Ayers and Antoin Rezko are not just people who happened to be at the same place at the same time as Barack Obama. They are people with whom he chose to ally himself for years, and with some of whom some serious money changed hands. …

Sol Stern in City Journal comments on Bill Ayers – school reformer.

… Calling Bill Ayers a school reformer is a bit like calling Joseph Stalin an agricultural reformer. (If you find the metaphor strained, consider that Walter Duranty, the infamous New York Times reporter covering the Soviet Union in the 1930s, did, in fact, depict Stalin as a great land reformer who created happy, productive collective farms.) For instance, at a November 2006 education forum in Caracas, Venezuela, with President Hugo Chávez at his side, Ayers proclaimed his support for “the profound educational reforms under way here in Venezuela under the leadership of President Chávez. We share the belief that education is the motor-force of revolution. . . . I look forward to seeing how you continue to overcome the failings of capitalist education as you seek to create something truly new and deeply humane.” Ayers concluded his speech by declaring that “Venezuela is poised to offer the world a new model of education—a humanizing and revolutionary model whose twin missions are enlightenment and liberation,” and then, as in days of old, raised his fist and chanted: “Viva Presidente Chávez! Viva la Revolucion Bolivariana! Hasta la Victoria Siempre!” …

Melanie Phillips from London with more on Ayers who turns out to be the topic de jour.

… And in what appeared to be a pre-emptive strike to neutralise what it knew was coming, the New York Times finally published a story about the Obama-Ayers connection – only to dismiss it, disgracefully, as a relationship that had been exaggerated and, even worse, to sanitise Ayers as having been ‘rehabilitated’ in Chicago. The laziness and dishonesty of this piece was quite breathtaking. It produced this stinging response from Stanley Kurtz, the journalist who has been bringing the full extent of this troubling connection to light ( – once again in the blogosphere, on NRO):

There is nothing ‘sporadic’ about Barack Obama delivering hundreds of thousands of dollars over a period of many years to fund Bill Ayers’ radical education projects, not to mention many millions more to benefit Ayers’ radical education allies. We are talking about a substantial and lengthy working relationship here… The point of Ayers’ education theory is that the United States is a fundamentally racist and oppressive nation. Students, Ayers believes, ought to be encouraged to resist this oppression. Obama was funding Ayers’ ‘small schools’ project, built around this philosophy. Ayers’ radicalism isn’t something in the past. It’s something to which Obama gave moral and financial support as an adult. So when Shane says that Obama has never expressed sympathy for Ayers’ radicalism, he’s flat wrong. Obama’s funded it.

The line of counter-attack is clear. Dismiss all these associations as sporadic or exaggerated – hey, we might all be on a board sometime with someone we don’t approve of! – and categorise all this mountain of evidence and questions as a ‘smear’. Which is of course itself a smear. The whole point about a real smear, however, is that it isn’t true. The evidence that is being so painfully dragged into the light has yet to be refuted and looks pretty damn solid. The smear by Camp Obama is that the evidence of their man’s radical connections amounts to ‘guilt by association’. Wrong. This is guilt by participation. And big media is in collusion to keep it quiet.

Turns out CNN can do some real reporting. They did a six minute segment on Ayers the other night. Ed Morrissey from Hot Air has details.

You’ll want to double-check the logo at the bottom left corner during this report.  It really is CNN and Anderson Cooper fact-checking Barack Obama’s claims to have barely known William Ayers — and calling it dishonest.  Stanley Kurtz even gets to make an appearance on a network other than Fox for this report (via Dirty Harry’s Place): …

Power Line with a couple of Bill Ayers posts

Sarah Palin’s calling out of Barack Obama over the Bill Ayers connection has finally caused some mainstream outlets to report the story (albeit generally in misleading fashion) and has compelled the Obama campaign to respond. That response is surprising, to say the least: Obama now claims that he didn’t know about Bill Ayers’ terrorist past through all the years when he worked with Ayers in Chicago! …

… Exactly as Obama dropped out of Jeremiah “God damn America” Wright’s church only when the association became politically inconvenient, he insincerely “denounced” Ayers only after his association with the terrorist had become a liability. That was after years of working with Ayers as a radical political ally, without showing the slightest concern about his friend’s career as an attempted mass murderer.

One wonders, sometimes, what it would take to convince an American reporter that a Democratic Presidential candidate has poor judgment.

Jennifer Rubin is next.

We end this with a Dick Morris column.

In the best tradition of Bill Clinton’s famous declaration that the answer to the question of whether or not he was having an affair with Monica depended on “what the definition of ‘is’ is,” Barack Obama was clearly splitting hairs and concealing the truth when he said that William Ayers was “just a guy who lives in my neighborhood.”

The records of the administration of the Chicago Annenberg Challenge (CAC), released last week by the University of Illinois, show that the Ayers-Obama connection was, in fact, an intimate collaboration and that it led to the only executive or administrative experience in Obama’s life.

After Walter Annenberg’s foundation offered several hundred million dollars to American public schools in the mid-’90s, William Ayers applied for $50 million for Chicago. The purpose of his application was to secure funds to “raise political consciousness” in Chicago’s public schools. After he won the grant, Ayers’s group chose Barack Obama to distribute the money. Between 1995 and 1999, Obama distributed the $50 million and raised another $60 million from other civic groups to augment it. In doing so, he was following Ayers’s admonition to grant the funds to “external” organizations, like American Community Organizations for Reform Now (ACORN) to pair with schools and conduct programs to radicalize the students and politicize them. …

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Sebastian Mallaby, no friend to free marketers, says blaming deregulation for the credit crisis is dangerous.

The financial turmoil has pushed the Obama campaign into the lead, and this is mostly justified. Barack Obama is more thoughtful on the economy than his opponent, and his bench of advisers is superior. But there’s a troubling side to the Democratic advance. The claim that the financial crisis reflects Bush-McCain deregulation is not only nonsense. It is the sort of nonsense that could matter.

The real roots of the crisis lie in a flawed response to China. Starting in the 1990s, the flood of cheap products from China kept global inflation low, allowing central banks to operate relatively loose monetary policies. But the flip side of China’s export surplus was that China had a capital surplus, too. Chinese savings sloshed into asset markets ’round the world, driving up the price of everything from Florida condos to Latin American stocks.

That gave central bankers a choice: Should they carry on targeting regular consumer inflation, which Chinese exports had pushed down, or should they restrain asset inflation, which Chinese savings had pushed upward? Alan Greenspan‘s Fed chose to stand aside as asset prices rose; it preferred to deal with bubbles after they popped by cutting interest rates rather than by preventing those bubbles from inflating. After the dot-com bubble, this clean-up-later policy worked fine. With the real estate bubble, it has proved disastrous.

So the first cause of the crisis lies with the Fed, not with deregulation. …

Continuing with WaPo columnists, Robert Samuelson writes on the differences between 1929 and today.

Watching the slipping economy and Congress’s epic debate over the unprecedented $700 billion financial bailout, it is impossible not to wonder whether this is 1929 all over again. Even sophisticated observers invoke the comparison. Martin Wolf, the chief economics commentator for the Financial Times, began a recent column: “It is just over three score years and ten since the [end of the] Great Depression.” What’s frightening is not any one event but the prospect that things are slipping out of control. Panic — political as well as economic — is the enemy.

There are parallels between then and now, but there are also big differences. Now as then, Americans borrowed heavily before the crisis — in the 1920s for cars, radios and appliances; in the past decade, for homes or against inflated home values. Now as then, the crisis caught people by surprise and is global in scope. But unlike then, the federal government is a huge part of the economy (20 percent vs. 3 percent in 1929), and its spending — for Social Security, defense, roads — provides greater stabilization. Unlike then, government officials have moved quickly, if clumsily, to contain the crisis.

We need to remind ourselves that economic slumps — though wrenching and disillusioning for millions — rarely become national tragedies. …

Gary Becker too.

In order to promote a much smoother functioning of the financial system, it is paramount to distinguish between the immediate steps needed to cope with the present crisis and the long-run reforms needed to reduce the likelihood of future crises. Let’s start with the short-run fixes.

First of all, the magnitude of this financial disturbance should be placed in perspective. Although it is the most severe financial crisis since the Great Depression of the 1930s, it is a far smaller crisis, especially in terms of the effects on output and employment. The United States had about 25% unemployment during most of the decade from 1931 until 1941, and sharp falls in GDP. Other countries experienced economic difficulties of a similar magnitude. So far, American GDP has not yet fallen, and unemployment has reached only a little over 6%. Both figures are likely to get quite a bit worse, but they will nowhere approach those of the 1930s.

The Treasury’s announced insurance of all money-market funds, and the full insurance of bank deposits, carry considerable moral hazard risks, but they have not aroused much controversy. The main thrust of the new banking law allows the Treasury secretary to purchase bank assets up to $700 billion in order to increase the liquidity of the banking system. These assets are of uncertain worth since there is essentially no market for many of them, and hence they have no market price. The government hopes to create this market partly through using auctions, where banks would offer their assets at particular prices, and the government would decide whether to buy them. I would have preferred starting with a smaller dollar value of purchases, and up the amount if the situation deteriorates further. …

NY Times does a long piece on a Fannie CEO.

“Almost no one expected what was coming. It’s not fair to blame us for not predicting the unthinkable.“— Daniel H. Mudd, former chief executive, Fannie Mae

When the mortgage giant Fannie Mae recruited Daniel H. Mudd, he told a friend he wanted to work for an altruistic business. Already a decorated marine and a successful executive, he wanted to be a role model to his four children — just as his father, the television journalist Roger Mudd, had been to him.

Fannie, a government-sponsored company, had long helped Americans get cheaper home loans by serving as a powerful middleman, buying mortgages from lenders and banks and then holding or reselling them to Wall Street investors. This allowed banks to make even more loans — expanding the pool of homeowners and permitting Fannie to ring up handsome profits along the way.

But by the time Mr. Mudd became Fannie’s chief executive in 2004, his company was under siege. Competitors were snatching lucrative parts of its business. Congress was demanding that Mr. Mudd help steer more loans to low-income borrowers. Lenders were threatening to sell directly to Wall Street unless Fannie bought a bigger chunk of their riskiest loans.

So Mr. Mudd made a fateful choice. Disregarding warnings from his managers that lenders were making too many loans that would never be repaid, he steered Fannie into more treacherous corners of the mortgage market, according to executives.

For a time, that decision proved profitable. In the end, it nearly destroyed the company and threatened to drag down the housing market and the economy.

Dozens of interviews, most from people who requested anonymity to avoid legal repercussions, offer an inside account of the critical juncture when Fannie Mae’s new chief executive, under pressure from Wall Street firms, Congress and company shareholders, took additional risks that pushed his company, and, in turn, a large part of the nation’s financial health, to the brink.

Between 2005 and 2008, Fannie purchased or guaranteed at least $270 billion in loans to risky borrowers — more than three times as much as in all its earlier years combined, according to company filings and industry data. …

Peter Wehner in Contentions has advice for the McCain campaign.

… The thing that McCain has in his favor is that Obama is in fact deeply liberal. That judgment is beyond dispute, at least if voting records have any relevance. In a center-right nation, that is a problem. The task for McCain has always been to do more than shout “liberal, liberal, liberal” in a crowded political theater; he has to show that Obama’s liberalism, especially combined with a Pelosi-and-Reid led Congress, will have real world consequences. He has to demonstrate, in a way that’s accessible and relevant, why one’s political philosophy serves as a reliable guide to one’s political actions.

Barack Obama will do what he has done from the outset: deny the charge and insist that such labels are passé, a political artifact from 1988, a page from the GOP’s book of “old politics.” In fact, in this election, as in all elections, ideas and political ideology ought to matter. Whether John McCain – a man who over the years has prided himself on being non-ideological, a “maverick,” and a deal-maker – can make that case at all, let alone in the current environment, is very much of an open question. But he really has no other choice than to try, starting tomorrow night in Nashville.

Along the same lines, a Corner post.

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Spengler on why Asian capital markets send their money to the U. S.

Why do Asian investors depend on American capital markets? Given the near breakdown of key sectors of the American market, one might expect Asians to bring their money home. Quite the opposite has happened: Asian currencies have fallen sharply against the American dollar.

On my desk is a draft paper by a prominent Asian politician, sent to me privately for comment. It calls on Asians to take charge of their own financial destiny and invest their money in Asian markets rather than into the maelstrom of American markets. Privately, I advised the leader in question not to publish it. It will do no good. Asian capital markets cannot absorb Asia’s savings.

What does America have that Asia doesn’t have? The answer is, Sarah Palin – not Sarah Palin the vice presidential candidate, but Sarah Palin the “hockey mom” turned small-town mayor and reforming Alaska governor. All the PhDs and MBAs in the world can’t make a capital market work, but ordinary people like Sarah Palin can. Laws depend on the will of the people to enforce them. It is the initiative of ordinary people that makes America’s political system the world’s most reliable.

America is the heir to a long tradition of Anglo-Saxon law that began with jury trial and the Magna Carta and continued through the English Revolution of the 17th century and the American Revolution of the 18th. Ordinary people like Palin are the bearers of this tradition.

Outside of the United States, the young governor of Alaska has become a figure of ridicule – someone who did not own a passport until last year and who quaintly believes that her state’s proximity to Russia gives her insights on foreign policy. How, my European friends ask, was it possible for such an an ignorant bumpkin to become a candidate for America’s second-highest office? They don’t understand America.

Provincial America depends on the initiative of ordinary people to get through the day. America has something like an Education Ministry, but it has little money to dispense. Americans pay for most of their school costs out of local taxes, and levy those taxes on themselves. In small towns, many public agencies, including fire protection and emergency medical assistance, depend almost entirely on volunteers. People who tax themselves, and give their own time and money for services on which communities depend, are not easily cowed by the federal government or by large corporations. …

Bill Kristol had a chance to ask Sarah Palin if she would challenge Biden to another debate. Pickerhead has a better idea; instead of the cranky GOP socialist debating Obama, let Sarah do the job. She’d be better at it.

I spoke on the phone Sunday with Sarah Palin, who was in Long Beach, Calif., preparing to take off on her next campaign trip. It was the first time I’d talked with her since I met her in far more relaxed circumstances in Alaska over a year ago. But even though she’s presumably now under some strain and stress, she seemed, as far as I could tell, confident and upbeat.

In terms of substance, some of what she had to say was unsurprising: She doesn’t have a very high opinion of the mainstream media, and she believes an Obama administration would kill jobs by raising taxes. But she said a couple of things that were, I thought, either personally touching or politically provocative.

At one point, noting that Palin had remarked ruefully almost a week ago that her son Track had been, since his recent deployment to Iraq, in touch with his girlfriend but not his mother, I asked whether she had subsequently heard from him.

Palin told me she had. “He called the day of the debate, and it was so wonderful because it was the first call since they were deployed over there, and it was like a burden lifted even when I heard his voice.” Palin said that she told him that she had a debate that night. “And he says, ‘Yeah, I heard, Mom,’ and he says, ‘Have you been studying?’ And I said, ‘Yeah, I have,’ and he goes, ‘O.K., well I’ll be praying.’ I’m like — total role reversal here, that’s what I’ve been telling him for 19 years.” …

In the current issue of Newsweek, Jon Meacham says Palin’s words are mindless populism. Karl Rove, in the same issue, differs.

With respect, Jon misses the principal arguments for Sarah Palin. She is the governor of a state with an $11 billion operating budget, a $1.7 billion capital budget and nearly 29,000 employees; she’s got more executive experience than any candidate for president or vice president this year. In Alaska she took on the state political establishment, the incumbent Republican governor and the oil companies. She’s a rising star who accentuates John McCain’s maverick strengths and a “hockey mom” who has developed a powerful tie to ordinary voters.

That link isn’t itself an argument for Palin. But being able to connect with, and inspire, the public is an asset —not a liability. As for Jon’s argument against “everyday Americans” as political leaders, many great presidents have been more average than elitist. Ronald Reagan, from Eureka College, was a far better leader than Woodrow Wilson, a former president of Princeton. Wilson would have given you 100 Supreme Court opinions he disagreed with, whether you wanted to listen or not. …

Looking over Barack’s record, Thomas Sowell wonders if facts matter.

Abraham Lincoln said, “You can fool all the people some of the time and some of the people all the time, but you can’t fool all the people all the time.”

Unfortunately, the future of this country, as well as the fate of the Western world, depends on how many people can be fooled on election day, just a few weeks from now.

Right now, the polls indicate that a whole lot of the people are being fooled a whole lot of the time.

The current financial bailout crisis has propelled Barack Obama back into a substantial lead over John McCain– which is astonishing in view of which man and which party has had the most to do with bringing on this crisis.

It raises the question: Do facts matter? Or is Obama’s rhetoric and the media’s spin enough to make facts irrelevant?

Fact Number One: It was liberal Democrats, led by Senator Christopher Dodd and Congressman Barney Frank, who for years– including the present year– denied that Fannie Mae and Freddie Mac were taking big risks that could lead to a financial crisis.

It was Senator Dodd, Congressman Frank and other liberal Democrats who for years refused requests from the Bush administration to set up an agency to regulate Fannie Mae and Freddie Mac. …

David Harsanyi wrote some on the bail-out.

… “We need 100 Republican votes to pass this,” Democratic House Majority Leader Steny Hoyer told reporters after the Senate vote. So to assist these hardheaded Republicans in making up their minds on the Economic Stabilization Act of 2008, the bill is also now loaded with tax cuts and other conservative goodies.

For instance, it will keep around 20 million Americans from paying the alternative minimum tax while offering $8 billion in tax relief to victims of natural disasters in Texas, Louisiana and other areas.

Those worthwhile issues should be taken up separately. This was about a Treasury bailout of the mortgage industry that will have lasting consequences.

The argument will be made that these goodies are only scraps, considering the big picture.

Perhaps. But then the vote also tells us that the Senate can be bought for scraps.

John Fund was in the NY Post writing on voter fraud.

“If you think of election problems as akin to forest fires, the woods are no drier than they were in 2000, but many more people have matches,” says Doug Chapin, editor of the nonpartisan Electionline.org.

The real battle that could decide this election may be fought by the squadrons of lawyers both sides have hired to prepare Florida-style challenges to the results in any close state. Once again, America’s sloppy, fraud-prone voting system could turn Election Day into an Election Month of court challenges. …

Swedish libertarian blooger, Johann Norberg, asks some good questions about the credit crisis in three different posts;  IF REGULATION IS THE ANSWER, WHY DIDN´T IT HELP?, HOW TO CREATE A CRISIS and WHY THE BAILOUT IS BAD

… Now most commentators demand more regulation. Before we accept that, let´s look at what the old regulations did. Why did independent investment banks evolve in the first place? Because American politicians outlawed universal banks as part of the New Deal, a ban that was in place for 66 years.

And why did the value of their assets collapse? Because American politicians responded to accounting fraud by implementing “fair value accounting”, which means that financial instruments must be evaluated at the price that they would get if they were sold right now. And in a market without liquidity, mortgage loans are not worth anything, even though they will be in the future. So suddenly banks and thrifts look insolvent and have to sell assets, which pushes the price further down, so that others have to mark down their assets even more, and so on. …

Borowitz reports O. J. Simpson requests bail-out since his incarceration will tank earnings for the cable networks.

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Lots of items today on the credit crisis and the probable origins of it in affirmative action mortgages. It is important to understand if these are problems of the market, or of government interference in the market.

David Warren comments on the efforts of our political class.

Talk about lipstick on a pig: the bailout measure, which began as a modest, $700-billion, three-page oink, reached the U.S. House of Representatives yesterday wearing about 450 pages of lipstick. Its maximum final cost was no longer calculable — after bipartisan negotiations to add “sweeteners” to the thing, to buy it support from various congressional factions.

Americans, and anyone else who happened to be watching (most of the world), got a good taste of what “Congressional oversight” means; to say nothing of the explanation of why, in opinion polls, the U.S. Congress enjoys even less popular esteem than President Bush.

It is not for a Canadian to lecture Americans on U.S. constitutional niceties, but I’m going to do it anyway. Money bills in that country are supposed to originate in the Lower House, as they do in all civilized national jurisdictions. This one effectively originated in the Upper House. In order to disguise this irregularity, the senators had to dress the thing up as a non-money bill. That is how the “Emergency Economic Stabilization Act” became the more aptly-named “Paul Wellstone Mental Health and Addiction Equity Act” — by taking a bill already on the floor of the Senate, stripping out its text, and substituting the text of the bailout bill.

“The letter killeth, but the spirit giveth life.” This decadent habit of cautiously observing the letter of the law, while purposely ignoring the spirit, is at the root of so many enormities in contemporary politics and society. …

Gerard Baker says Armageddon is not here.

There’s something curious about the human imagination. Confronted with unprecedented events of unfathomable scale, it seems to find the shocking reality insufficiently interesting and reaches instead for even grander, more cosmic explanations of what’s going on.

The financial crisis is precisely that sort of moment. It’s a vast drama, with consequences that will ripple steadily from immediate economic hardship to changes in short-term political fortune to a broad recasting of the way our economies and societies work.

But that’s not enough, apparently, for the drama queens and kings of our political and media establishments. Hastily, they’ve constructed a grand historical narrative in the last couple of weeks, composed largely of overarching myths that are in danger of hardening into conventional wisdom.

So at the risk of being accused of missing the historical boat, let me try to take a few of them on. …

We interrupt coverage of the plan with Mark Steyn’s VP debate review.

… When Regular Joe Six-Pack Bluecollar Biden tried to match her on the Main Street cred, it rang slightly wacky. “Look,” he said, “All you have to do is go down Union Street with me in Wilmington or go to Katie’s Restaurant or walk into Home Depot with me, where I spend a lot of time.” Why? Is he moonlighting as a checkout clerk on the evening shift? Or is he stalking that nice lady in Lighting Fixtures? As for Katie’s Restaurant, ah, I’m sure it was grand but apparently it closed in 1990. In the Diner of the Mind, the refills are endless and Senator Joe is sitting shootin’ the breeze over a cuppa joe with a couple other regular joes on adjoining stools while Betty-Jo, the sassy waitress who’s tough as nails but with a heart of gold, says Ol’ Joe, the short-order cook who’s doing his Sloppy Joes just the way the Senator likes ‘em, really appreciates the way that, despite 78 years in Washington, Joe Biden is still just the same regular Joe Six-Pack he was when he and Norman Rockwell first came in for a sarsaparilla all those years ago. But, alas, while he was jetting off for one-to-one talks with the Deputy Tourism Minister of Waziristan, the old neighborhood changed.

In a conventional presidential environment, Bidenesque fake authenticity would be enough. Up against Sarah Palin’s authentic authenticity, I’m not so sure. All I know is that the McCain campaign should have her out on the road and doing every interview she can over this final month. Oh, and send her snowmobiling hubby to Maine, which splits its electoral college votes. He’ll put their Second Congressional District back in the red camp, and the way things are looking that could be the 270th vote that saves McCain’s bacon.

IBD editors wanted the plan passed.

… All this could cascade into a deep economic downturn that will last years. The victims, however, won’t be gazillionaires on Wall Street. It’ll be you. That’s why, despite IBD’s impeccable free-market credentials, we support the rescue plan. Time for taking effective action is running short .

As the old saying goes, the perfect is often the enemy of the good. We agree that this rescue package is far from perfect. But with time of the essence, we’ll take the good and hope for the best.

It’s possible that once the Treasury has snapped up a good chunk of the damaged mortgage portfolios now on banks’ books, normal lending will resume and the economy will pick up. If so, the government will eventually be able to unload the bad mortgages at a small loss, limiting taxpayer cost.

This happened from 1988 to 1992, when the Resolution Trust Corp. unloaded a huge portfolio of real estate assets. Today as then, action is needed to prevent a meltdown.

Good post from Adam Smith.org lists 8 bullet points that help to understand the financial crisis

Good WSJ Op-Ed by George Mason’s Russell Roberts on the government’s hand in creating this crisis.

Many believe that wild greed and market failure led us into this sorry mess. According to that narrative, investors in search of higher yields bought novel securities that bundled loans made to high-risk borrowers. Banks issued these loans because they could sell them to hungry investors. It was a giant Ponzi scheme that only worked as long as housing prices were on the rise. But housing prices were the result of a speculative mania. Once the bubble burst, too many borrowers had negative equity, and the system collapsed.

Part of this story is true. The fall in housing prices did lead to a sudden increase in defaults that reduced the value of mortgage-backed securities. What’s missing is the role politicians and policy makers played in creating artificially high housing prices, and artificially reducing the danger of extremely risky assets. …

National Review’s cover story this issue is on the origins of the mortgage crisis.

Why did the mortgage market melt down so badly? Why were there so many defaults when the economy was not particularly weak? Why were the securities based upon these mortgages not considered anywhere near as risky as they actually turned out to be? Although there are many factors involved, the key and fundamental answer is that, in an attempt to increase homeownership — particularly among minorities and the less affluent — an attack on underwriting standards has been undertaken by virtually every branch of the government since the early 1990s. This weakening of underwriting standards had the intended impact of increasing home ownership and the unintended impact of increasing the price of housing, helping lead to a housing-price bubble that masked for many years the crucial (and predictable) problem of increased defaults.

After the government succeeded in weakening the underwriting standards, mortgages seemed to require virtually no down payment — which is the main key to the problem. There were also few restrictions on the size of monthly payments relative to income, little examination of credit scores, and little examination of employment history. This was the government’s goal and, as homeownership rates increased, there was self-congratulation all around. The community of regulators, academic specialists, and housing activists all reveled in the increase in homeownership and the increase in wealth that ensued. The decline in underwriting standards was universally praised as an “innovation” in mortgage lending.

The resulting bubble brought in a large number of speculators, in the form of individuals owning one or two houses in the hope of quickly reselling them at a profit. It is estimated that one-quarter of all home sales were speculative sales of this nature. The speculators wanted mortgages with the smallest down payment and the lowest interest rate: adjustable-rate mortgages, option ARMs, and so forth. Once housing prices stopped rising, these speculators tried to get out from under their investments made largely with other people’s money, which is why foreclosures increased mainly for adjustable-rate mortgages and not fixed-rate, regardless of whether the mortgages were prime or subprime. The rest, as they say, is history.

In good times, strict underwriting standards seem unnecessary. But like levees against a flood, they serve a useful purpose. When markets turn sour, these standards help ensure that homeowners will not bail out of homes at the first sign of price declines, that they will have the financial wherewithal to survive economic downturns, and that even if they can’t make their payments, mortgage owners will be covered by the equity remaining in the home. Removing these protections greatly increased the risk in this market when a storm did approach.

Unfortunately, it seems likely that our governing bodies have learned little or nothing from this series of events. If the proper lessons are not learned, it’s all likely to happen again. …

Geologists use stalagmites to track ancient earthquakes. The Economist has the story.

… Like trees, stalagmites are often composed of concentric layers that represent annual growth periods. Counting the layers is one way of assessing how old a stalagmite is. But radioactive dating provides a second, and sometimes more accurate, assessment. In this case the geologists drilled into the stalagmites and estimated their age from the way that uranium decays into an isotope of thorium. Many, they found, dated back to 1811, while others began life in 1917, the date of another nearby earthquake.

Subsequent investigation has confirmed a further seven big earthquakes previously suspected to have happened over the course of the past 18,000 years. An average interval between quakes of 2,500 years is a hopeful sign for New Madrid’s immediate future. But if the technique can be tried out in other places it might reveal areas now thought safe, precisely because there has not been a recent earthquake, that are actually under threat.