Click on WORD or PDF below for full content
Victor Davis Hanson says weakness in our economy will be translated abroad.
… We’ve seen the connection between American economic crisis and world upheaval before. In the 1930s, the United States and its democratic allies, in the midst of financial collapse, disarmed and largely withdrew from foreign affairs. That isolation allowed totalitarian regimes in Germany, Italy, Japan and Russia to swallow their smaller neighbors and replace the rule of law with that of the jungle. World War II followed.
During the stagflation and economic malaise of the Jimmy Carter years, the Russians invaded Afghanistan, the Iranians stormed our embassy in Tehran, the communists sought to spread influence in Central America and a holocaust raged unchecked in Cambodia.
It was no surprise that an emboldened Iranian President Mahmoud Ahmadinejad once again last week called for the elimination of Israel. He’s done that several times before. But rarely has he felt brazen enough to blame world financial problems on the Jews in general rather than on just Israelis. And he spouted his Hitlerian hatred in front of the United Nations General Assembly — in New York, just a few blocks away from the ground zero of the Wall Street meltdown. …
Debra Saunders says there’s blame to go around.
Who do I blame for this financial disaster? Let me count the villains.
Start with President Bush and Treasury Secretary Hank Paulson. By their own actions, they have shown that they believe that markets have become too vulnerable under their watch.
The Bushies have mishandled the $700 billion bailout at every juncture. They pulled a too-large number out of the hat, then asked Congress to write a blank check. Paulson even rejected limits on the compensation of the geniuses who bought bad mortgage paper with other people’s money. No way was Congress going to go along with that scheme.
Like many Americans, I am angry and have strong doubts as to whether the bailout is necessary. Having proposed it, however, Paulson probably made it necessary. If there is a 10 percent risk of an economic collapse without a bailout, Washington probably has to pass something.
I blame Democrats, who pushed to give government-supported mortgage giants Fannie Mae and Freddie Mac more flexibility to buy dicey home loans, despite their accounting irregularities. It was Senate Banking Committee Democrats who blocked GOP-backed reforms of Fannie and Freddie in 2003 and 2006 – but that doesn’t stop them from disowning any role in this fiasco now. …
David Ignatius says we don’t necessarily need Congress for a rescue.
… So the real question is how to unfreeze the credit markets. And here it’s not clear that the $700 billion bailout is the most effective response. A better approach may be to target the specific problems that are squeezing lenders.
One step in the right direction was Tuesday’s announcement by the Securities and Exchange Commission to clarify the “mark-to-market” accounting rules that have been forcing financial institutions to take huge write-downs on “illiquid” paper assets for which there’s no market today.
“When an active market for a security does not exist,” said the SEC clarification, companies can base their valuations on expected future cash flow. Many members of Congress have been urging the SEC to suspend the rule entirely — and allow easier valuation standards — thereby easing the pressure on the Treasury to buy up toxic securities. Accountants oppose the suspension, arguing that changing the rules now would further erode trust in corporate balance sheets.
A year ago, I heard warnings about the mark-to-market rules from Joe Robert, who runs a global real estate investment firm called J.E. Robert Cos. He argued that these rules were forcing financiers to sell into a declining market and assign rock-bottom valuations to assets that, if held to maturity, might be far more valuable. …
James Taranto spots some of the cult-like aspects of The One’s campaign.
Way back in February, we noted the cultish aspect of Barack Obama’s campaign, a quality that even creeped out as hardcore a Democrat as Time magazine’s Joe Klein. Eight months later–and with Obama the favorite to win the presidency in a scant 34 days–we can’t say we’re reassured. Last month the Sophian, Smith College’s student newspaper, published an op-ed titled “ ’I Will Follow Him’: Obama as My Personal Jesus,” by Maggie Mertens: …
Paul Johnson comments for Forbes on the unscientific nature of global warming claims.
… I wish the great philosopher Sir Karl Popper were alive to denounce the unscientific nature of global warming. He was a student when Albert Einstein’s General Theory of Relativity was first published and then successfully tested. Einstein said that for his theory to be valid it would have to pass three tests. “If,” Einstein wrote to British scientist Sir Arthur Eddington, “it were proved that this effect does not exist in nature, then the whole theory would have to be abandoned.”
To Popper, this was a true scientific approach. “What impressed me most,” he wrote, “was Einstein’s own clear statement that he would regard his theory as untenable if it should fail in certain tests.” In contrast, Popper pointed out, there were pseudo-scientists, such as Karl Marx and Sigmund Freud. Marx claimed to be constructing a theory of scientific materialism based on scientific history and economic science. “Science” and “scientific” were words Marx used constantly. Far from formulating his theory with a high degree of scientific content and encouraging empirical testing and refutation, Marx made it vague and general. When evidence turned up that appeared to refute his theory, the theory was modified to accommodate the new evidence. It’s no wonder that when communist regimes applied Marxism it proved a costly failure.
Freud’s theories were also nonspecific, and he, too, was willing to adjust them to take in new science. We now know that many of Freud’s central ideas have no basis in biology. They were formulated before Mendel’s Laws were widely known and accepted and before the chromosomal theory of inheritance, the recognition of inborn metabolic errors, the existence of hormones and the mechanism of nervous impulse were known. As the scientist Sir Peter Medawar put it, Freud’s psychoanalysis is akin to mesmerism and phrenology; it contains isolated nuggets of truth, but the general theory as a whole is false. …
Think the only pigs are in Washington and New York? Read the ESPN story of how baseball scouts were shaking down prospects in the Dominican.
LA CALETA, Dominican Republic — Kelvin De Leon, 17 years old and a millionaire for a day, rumbles over a dirt road in his silver Japanese SUV and stops in front of his grandmother’s house.
He doesn’t live around here anymore. Before it was torn down, the small house where he grew up — a cinder-block-and-concrete box with a corrugated metal roof just down another dirt road — was like the others in this town. Last year, he moved with his parents to Santo Domingo, the capital, about 30 minutes away. The family’s new home was made possible by the $1.1 million signing bonus the New York Yankees paid De Leon to wear pinstripes.
He signed a contract July 2, 2007, and everything about his life changed.
“Imagine,” De Leon says in Spanish. “I had reached another level; I was going to be a professional. I was about to play.”
Two years after he quit school to train with a buscon (Spanish for a “finder” and a kind of street agent), De Leon was sent to the Yankees’ Dominican academy not far from where he grew up. But before he left, he had one more transaction to complete — $100,000 of his signing bonus had to be delivered to two men: Carlos Rios, the Yankees’ director of Latin American scouting, and Ramon Valdivia, the team’s Dominican scouting director. …