Michael Barone:

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.

Other Obama supporters have threatened critics with criminal prosecution. In September, St. Louis County Circuit Attorney Bob McCulloch and St. Louis City Circuit Attorney Jennifer Joyce warned citizens that they would bring criminal libel prosecutions against anyone who made statements against Obama that were “false.” I had been under the impression that the Alien and Sedition Acts had gone out of existence in 1801-02. Not so, apparently, in metropolitan St. Louis. Similarly, the Obama campaign called for a criminal investigation of the American Issues Project when it ran ads highlighting Obama’s ties to Ayers.

These attempts to shut down political speech have become routine for liberals. Congressional Democrats sought to reimpose the “fairness doctrine” on broadcasters, which until it was repealed in the 1980s required equal time for different points of view. The motive was plain: to shut down the one conservative-leaning communications medium, talk radio. Liberal talk-show hosts have mostly failed to draw audiences, and many liberals can’t abide having citizens hear contrary views.

To their credit, some liberal old-timers — like House Appropriations Chairman David Obey — voted against the “fairness doctrine,” in line with their longstanding support of free speech. But you can expect the “fairness doctrine” to get another vote if Barack Obama wins and Democrats increase their congressional majorities.

Snopes, the great site for hoax debunking, confirms an email going around that shows Republican concern, and Democrat disdain, for the looming threat of subprime loans via Freddie and Fannie.

But, no, Nostradamus didn’t predict it.

…and have him bring his friend, Angelo.

Former Lehman Brothers CEO Dick Fuld was under oath Monday when he was grilled on Capitol Hill about his role in the current financial meltdown. But if Members really want to understand the credit mania, they should also call Chris Dodd.
[Review & Outlook] AP

The Connecticut Senator has been out front denouncing the “companies that form the foundation of our financial markets,” for “their insatiable appetite for risk.” He has also decried “reckless, careless and sometimes unscrupulous actors in the mortgage lending industry” and he has proclaimed that “American taxpayers deserve to know how we arrived at this moment.” To that end, we propose he take the stand — under oath.

Former Countrywide Financial loan officer Robert Feinberg says Mr. Dodd knowingly saved thousands of dollars on his refinancing of two properties in 2003 as part of a special program the California mortgage company had for the influential. He also says he has internal company documents that prove Mr. Dodd knew he was getting preferential treatment as a friend of Angelo Mozilo, Countrywide’s then-CEO.

That a “Friends of Angelo” program existed is not in dispute. It was crucial to the boom that Countrywide enjoyed before its fortunes turned. While most of the company was aggressively lending to risky borrowers and off-loading those mortgages in bulk to Fannie Mae and Freddie Mac, Mr. Feinberg’s department was charged with making sure those who could influence Fannie and Freddie’s appetite for risk were sufficiently buttered up. As a Banking Committee bigshot, Mr. Dodd was perfectly placed to be buttered.

In response to the charge that he knew he was getting favors, Mr. Dodd at first issued a strong denial: “This suggestion is outrageous and contrary to my entire career in public service. When my wife and I refinanced our loans in 2003, we did not seek or expect any favorable treatment. Just like millions of other Americans, we shopped around and received competitive rates.” Less than a week later he acknowledged he was part of Countrywide’s VIP program but claimed he thought it was “more of a courtesy.”

In July, Senator Charles Schumer (D) precipitated the failure of IndyMac with his big mouth. Last week, Senator Harry Reid (D) caused the stock of all major insurers to drop because of his big mouth.

Is it idiocy or intentional?

Barney sure knows how to pick ‘em.  In the late ’80s, one of Barney’s live-in lovers ran a prostitution ring from Frank’s townhouse. Frank was reprimanded by the House of Representatives.

Now, it turns out his next “spouse” was working at Fannie Mae at a time when Frank served on the banking committee providing oversight.

Unqualified home buyers were not the only ones who benefitted from Massachusetts Rep. Barney Frank’s efforts to deregulate Fannie Mae throughout the 1990s.

So did Frank’s partner, a Fannie Mae executive at the forefront of the agency’s push to relax lending restrictions.

Now that Fannie Mae is at the epicenter of a financial meltdown that threatens the U.S. economy, some are raising new questions about Frank’s relationship with Herb Moses, who was Fannie’s assistant director for product initiatives. Moses worked at the government-sponsored enterprise from 1991 to 1998, while Frank was on the House Banking Committee, which had jurisdiction over Fannie.

Both Frank and Moses assured the Wall Street Journal in 1992 that they took pains to avoid any conflicts of interest. Critics, however, remain skeptical.

“It’s absolutely a conflict,” said Dan Gainor, vice president of the Business & Media Institute. “He was voting on Fannie Mae at a time when he was involved with a Fannie Mae executive. How is that not germane?

“If this had been his ex-wife and he was Republican, I would bet every penny I have - or at least what’s not in the stock market - that this would be considered germane,” added Gainor, a T. Boone Pickens Fellow. “But everybody wants to avoid it because he’s gay. It’s the quintessential double standard.”

A top GOP House aide agreed.

“C’mon, he writes housing and banking laws and his boyfriend is a top exec at a firm that stands to gain from those laws?” the aide told FOX News. “No media ever takes note? Imagine what would happen if Frank’s political affiliation was R instead of D? Imagine what the media would say if [GOP former] Chairman [Mike] Oxley’s wife or [GOP presidential nominee John] McCain’s wife was a top exec at Fannie for a decade while they wrote the nation’s housing and banking laws.”

Frank’s office did not immediately respond to requests for comment.

Frank met Moses in 1987, the same year he became the first openly gay member of Congress.

“I am the only member of the congressional gay spouse caucus,” Moses wrote in the Washington Post in 1991. “On Capitol Hill, Barney always introduces me as his lover.”

The two lived together in a Washington home until they broke up in 1998, a few months after Moses ended his seven-year tenure at Fannie Mae, where he was the assistant director of product initiatives. According to National Mortgage News, Moses “helped develop many of Fannie Mae’s affordable housing and home improvement lending programs.”

Liberal Democrats fancy themselves generous humanitarians with greater concern for the common man than those greedy, country clubbing Republicans.

But facts are sticky things. TaxProf put together this chart

As we’ve noted before, Senator Joe Biden has averaged $329/year in charitable gifts over the past decade. Cheap bastard.

Not on the chart are Dick and Lynn Cheney, who donated 75% of their 2007 income — nearly $7,000,000.

Senate Banking Committee, Feb. 24-25, 2004:

Sen. Thomas Carper (D., Del.): What is the wrong that we’re trying to right here? What is the potential harm that we’re trying to avert?

Federal Reserve Chairman Alan Greenspan: Well, I think that that is a very good question, senator.

What we’re trying to avert is we have in our financial system right now two very large and growing financial institutions which are very effective and are essentially capable of gaining market shares in a very major market to a large extent as a consequence of what is perceived to be a subsidy that prevents the markets from adjusting appropriately, prevents competition and the normal adjustment processes that we see on a day-by-day basis from functioning in a way that creates stability. . . . And so what we have is a structure here in which a very rapidly growing organization, holding assets and financing them by subsidized debt, is growing in a manner which really does not in and of itself contribute to either home ownership or necessarily liquidity or other aspects of the financial markets. . . .

…But that is no reason to have national policy guided by their ignorance.

So writes Thomas Sowell.

Democrats carp incessantly about executive pay. (Unless the exec is Franklin Delano Raines who got rich running Freddie Mae into the ground. In his case, Republicans were accused of “lynching” by asking for regulation.)

There are lousy executives and brilliant executives. The problem for “most people” is they cannot see why top execs are tops. In sports, fans can see why Kobe Bryant pulls down his millions. They probably understand why Phil Jackson does, too.

A coach is an executive and not all coaches are equal. Bill Parcells has made every football teach he’s coached better. Which is why he always has a job waiting for him.

Should the government decide how much Kobe or Parcells gets paid by locking in their salaries as a percentage of the wages paid the towel boy? No, and neither should busybody Democrats stick their noses into corporate business.

Back to Sowell:

People who say that they cannot understand how CEOs in general get so many millions of dollars seem not to realize what a trivial thing they are saying. Most people do not understand most things. But that is no reason to have national policy guided by their ignorance.

I do not understand one percent of what there is to understand about the very computer on which these words are being written– nor about the Internet on which these words will be transmitted to the syndicate that distributes this column. I don’t have a clue about how a syndicate is run, much less how much someone should be paid for running it.

What really sets some people off is the fact that a CEO who has mismanaged some corporation into losing billions of dollars is rewarded with a severance package worth millions.

Think about it. If the CEO’s decisions are costing the company billions, it is a bargain to get him out the door immediately for millions, rather than having his departure delayed by either internal struggles or battles in the courts.

It is the same principle if you are married to someone who is impossible to live with. The divorce may cost far more than the marriage– and still be worth every cent of it.

But what about the “social justice” of it all?

Such questions seem to carry great weight with people who act as if they are God on Judgment Day. But one of the little overlooked differences between themselves and God on Judgment Day is that God does not have to worry about what is going to happen the day after Judgment Day.

Rewarding someone for being impossible to live with may offend our feelings, just as rewarding someone for mismanaging a company does. But the real question is– what is the alternative and how will that alternative affect the future?

Politically imposed limits on the pay of CEOs is one of the most penny-wise and pound-foolish things that can be done. The difference between a top-notch CEO and a second-rate CEO can be billions of dollars on the bottom line.

WSJ:

A running cliché of the political left and the press corps these days is that our current financial problems all flow from Congress’s 1999 decision to repeal the Glass-Steagall Act of 1933 that separated commercial and investment banking. Barack Obama has been selling this line every day. Bill Clinton signed that “deregulation” bill into law, and he knows better.

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

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

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

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

“But I can’t blame [the Republicans]. This wasn’t something they forced me into. I really believed that given the level of oversight of banks and their ability to have more patient capital, if you made it possible for [commercial banks] to go into the investment banking business as Continental European investment banks could always do, that it might give us a more stable source of long-term investment.”

We agree that Mr. Clinton isn’t wrong about everything. The Gramm-Leach-Bliley Act passed the Senate on a 90-8 vote, including 38 Democrats and such notable Obama supporters as Chuck Schumer, John Kerry, Chris Dodd, John Edwards, Dick Durbin, Tom Daschle — oh, and Joe Biden. Mr. Schumer was especially fulsome in his endorsement.

Senator Chris Dodd (D), a friend of Angelo, tried to slip a provision into the bailout bill that would send 20% of all profits from resold assets to groups such as ACORN. Aside from rigging elections, what does ACORN do?

Stanley Kurtz:

WHAT exactly does a “community organizer” do? Barack Obama’s rise has left many Americans asking themselves that question. Here’s a big part of the answer: Community organizers intimidate banks into making high-risk loans to customers with poor credit.

In the name of fairness to minorities, community organizers occupy private offices, chant inside bank lobbies, and confront executives at their homes - and thereby force financial institutions to direct hundreds of millions of dollars in mortgages to low-credit customers.

In other words, community organizers help to undermine the US economy by pushing the banking system into a sinkhole of bad loans. And Obama has spent years training and funding the organizers who do it.

THE seeds of today’s financial meltdown lie in the Community Reinvestment Act - a law passed in 1977 and made riskier by unwise amendments and regulatory rulings in later decades.

CRA was meant to encourage banks to make loans to high-risk borrowers, often minorities living in unstable neighborhoods. That has provided an opening to radical groups like ACORN (the Association of Community Organizations for Reform Now) to abuse the law by forcing banks to make hundreds of millions of dollars in “subprime” loans to often uncreditworthy poor and minority customers.

Any bank that wants to expand or merge with another has to show it has complied with CRA - and approval can be held up by complaints filed by groups like ACORN.

“Humanitarian” greed perhaps?

ONE key pioneer of ACORN’s subprime-loan shakedown racket was Madeline Talbott - an activist with extensive ties to Barack Obama. She was also in on the ground floor of the disastrous turn in Fannie Mae’s mortgage policies.

Long the director of Chicago ACORN, Talbott is a specialist in “direct action” - organizers’ term for their militant tactics of intimidation and disruption. Perhaps her most famous stunt was leading a group of ACORN protesters breaking into a meeting of the Chicago City Council to push for a “living wage” law, shouting in defiance as she was arrested for mob action and disorderly conduct. But her real legacy may be her drive to push banks into making risky mortgage loans.

In February 1990, Illinois regulators held what was believed to be the first-ever state hearing to consider blocking a thrift merger for lack of compliance with CRA. The challenge was filed by ACORN, led by Talbott. Officials of Bell Federal Savings and Loan Association, her target, complained that ACORN pressure was undermining its ability to meet strict financial requirements it was obligated to uphold and protested being boxed into an “affirmative-action lending policy.” The following years saw Talbott featured in dozens of news stories about pressuring banks into higher-risk minority loans.

IN April 1992, Talbott filed an other precedent-setting complaint using the “community support requirements” of the 1989 savings-and-loan bailout, this time against Avondale Federal Bank for Savings. Within a month, Chicago ACORN had organized its first “bank fair” at Malcolm X College and found 16 Chicago-area financial institutions willing to participate.

Two months later, aided by ACORN organizer Sandra Maxwell, Talbott announced plans to conduct demonstrations in the lobbies of area banks that refused to attend an ACORN-sponsored national bank “summit” in New York. She insisted that banks show a commitment to minority lending by lowering their standards on downpayments and underwriting - for example, by overlooking bad credit histories.

By September 1992, The Chicago Tribune was describing Talbott’s program as “affirmative-action lending” and ACORN was issuing fact sheets bragging about relaxations of credit standards that it had won on behalf of minorities.

And Talbott continued her effort to, as she put it, drag banks “kicking and screaming” into high-risk loans.

It’s unlikely that loans to minorities and the poor account for all the bad mortgages, or that even most loans to minorites are in default, but we have clear evidence of the government pushing lenders into making risky loans, a practice that grew into a crisis.

There’s a fascinating black angle to the mortgage meltdown story. Watch how nasty some of these black pols get when Fannie Mae gets criticized. Why?

For all the shouting, grandstanding and partisan insults, it seems that Republicans in Congress improved on the rescue/bailout bill.  

Here’s a side-by-side comparison.

Betsy Newmark weighs in the politics of it all:

Nancy Pelosi is really despicable

First she tries to make a deal without consulting the House Republicans. Then she demands that the GOP House members provide 100 votes for the plan because she wants to protect her Democratic Representatives and make sure that they don’t take the blame for a deal that may turn out to be very unpopular. She could have passed the bill last week if she wanted because she has the majority in the House and could have pushed it through as she has pushed through so many bills since she became Speaker. She’d probably have even gotten a few dozen Republican market.

Then John McCain shows up and says that the House Republicans have to be included in negotiating a deal. The Democrats then all run for microphones to say that John McCain was gumming up the deal. But he was actually bringing in the House GOP so that they could voice their concerns and influence the bill and get the support that Pelosi herself was demanding.

But she just wanted them to rubber stamp the deal that the Democrats and Senate GOP had made with Henry Paulson. And when they insisted on having a role in crafting the bill and refused to go along with a the deal as negotiated earlier, she goes and calls them unpatriotic for not having helped out more earlier. As Allahpundit points out, even Paul Kanjorski, the Democratic chair of the House Financial Services subcommittee on Capital Markets, Insurance, and Government-Sponsored Enterprises, admits that the Democrats had not involved the House GOP enough.

If she really thought that this was a patriotic deal that was absolutely necessary for the country’s financial health, she wouldn’t have cared whether she had GOP support or not. That’s the way she’s acted on innumerable bills since she became Speaker. The fact is that the public doesn’t understand the financial crisis or the proposed bill. And she’s afraid that it will turn out to be very unpopular especially if people start understanding the role that the government has played in causing the crisis in the first place.

In 1995, the Clinton Administration issued rules that required banks and lending institutions to give loans to people who could not afford them. The lending standards were essentially gutted. This was an overt act of government.

The banks complied and gave the loans. They got the money to lend by selling the bad mortgages to Fannie Mae and Freddie Mac. These semi-government entities “bought” the bad mortgages from the banks. But where did Fannie and Freddie get the money to buy the bad debt?

Fannie and Freddie got the money by packaging the bad debts into bundles and selling them to investors. Now, most people would never have bought these “mortgage backed securities” except for one thing: Fannie and Freddie marketed them as backed by the U.S. Government.

So, naturally, investors bought them. And over time, these securities were traded and treated just like real money. But of course they weren’t “real money.”

They were backed by little more than hope; hope that people with insufficient income or prospects would somehow be able to pay the mortgage.

When those mortgage payments failed to materialize, the securities couldn’t pay the dividends and the whole sordid deal started to fall apart.

Now, should investment companies and large banks have been aware and defended themselves and their stockholders? Yes, of course. But they were told from the beginning that the government had their back. It was “risk free.” Now they are calling the government’s bluff and we, the taxpayers, are getting stuck.

There was ample warning. Since 1999, responsible members of Congress and the two presidential administrations have attempted numerous times to tighten the lending standards and force reform of the system.

But using millions in political cash, Fannie Mae and Freddie Mac blocked all moves at reform. And people like Frank and Dodd – and, yes, Barrack Obama — were there to defend the government social policy, while raking in tens of thousands of campaign contributions for themselves.

So now all of us will pay dearly for this failed utopian government policy.

No wonder that Nancy Pelosi wants cover for this vote and is ticked at the GOP House members for not dancing to the tune.

From 1993:

QUIETLY, behind the scenes, the Clinton Administration is preparing for the biggest regulatory crackdown of recent years. Attorney General Janet Reno is linking up with banking regulators and with HUD Secretary Henry Cisneros to end the supposed epidemic of discrimination against minorities in making home loans. The implications for society at large are ominous.

Here, as in affirmative-action efforts in hiring, college admissions, and the drawing of voting districts, the Washington establishment is obsessed with “disparate impact,” which it equates with racism. In the mortgage-lending area, there is ample evidence of disparate impact to feed this obsession. Data collected by the Federal Government reveal that in 1992, while 16 per cent of white applicants for mortgage loans were rejected, 36 per cent of black applicants were rejected.

But does disparate impact indicate racism?

To a liberal, yes.

Racism had affected housing policy, with red lining invented by none other than liberal diety, Franklin Delano Roosevelt.

The Federal Home Ownership Loan Corporation, a New Deal agency that invented the 30-year mortgage before it morphed into the FHA, also invented redlining.

The agency, one of Franklin Roosevelt’s initiatives to help recover from the Great Depression, sent inspectors to look at housing across the country to determine where federal investment would help the most. The inspectors, reflecting the prejudices of the era, marked red on their maps to forbid making the loans in areas where there were not enough “red-blooded, high-quality Americans.”

So, with the federal government inducing lenders to make risky loans, the seeds were sown. A warning came in 2000:

The Clinton administration has turned the Community Reinvestment Act, a once-obscure and lightly enforced banking regulation law, into one of the most powerful mandates shaping American cities—and, as Senate Banking Committee chairman Phil Gramm memorably put it, a vast extortion scheme against the nation’s banks. Under its provisions, U.S. banks have committed nearly $1 trillion for inner-city and low-income mortgages and real estate development projects, most of it funneled through a nationwide network of left-wing community groups, intent, in some cases, on teaching their low-income clients that the financial system is their enemy and, implicitly, that government, rather than their own striving, is the key to their well-being.

The CRA’s premise sounds unassailable: helping the poor buy and keep homes will stabilize and rebuild city neighborhoods. As enforced today, though, the law portends just the opposite, threatening to undermine the efforts of the upwardly mobile poor by saddling them with neighbors more than usually likely to depress property values by not maintaining their homes adequately or by losing them to foreclosure. The CRA’s logic also helps to ensure that inner-city neighborhoods stay poor by discouraging the kinds of investment that might make them better off.

If you’re not in the mood to read, here’s a video that connects plenty of dots.

Time for some big Democrats to sweat:

The Wall Street Journal reports that a federal grand jury in Los Angeles is investigating the so-called “Friends of Angelo” loan program at Countrywide Financial, under which influential borrowers received preferential terms on home loans.

The reported borrowers under the program have included U.S. Sen. Chris Dodd (D-Conn.), former Fannie Mae Chief Executive Franklin Raines, and California state appeals court judge Richard Aldrich.

Today’s Journal:

Countrywide loans on preferential terms to influential figures are the subject of a federal grand jury investigation in Los Angeles, according to people involved in the inquiry. Prosecutors subpoenaed records of many of the so-called “Friends of Angelo” loans in August, lawyers and others familiar with the matter said.

… The VIP loan program was discontinued by Bank of America when it acquired Countrywide in July, Bank of America spokesman Dan Frahm said. Bank of America, which had no such program of its own, will cooperate with any legal inquiries, Mr. Frahm said.

Rep. Alcee Hastings told an audience of Jewish Democrats Wednesday that they should be wary of Republican VP nominee Sarah Palin because “anybody toting guns and stripping moose don’t care too much about what they do with Jews and blacks.”

“If Sarah Palin isn’t enough of a reason for you to get over whatever your problem is with Barack Obama, then you damn well had better pay attention,” Rep. Alcee Hastings of Florida said at a panel about the shared agenda of Jewish and African-American Democrats Wednesday. Hastings, who is African-American, was explaining what he intended to tell his Jewish constituents about the presidential race. “Anybody toting guns and stripping moose don’t care too much about what they do with Jews and blacks. So, you just think this through,” Hastings added as the room erupted in laughter and applause.

One, Hastings’s comment is a non sequitur. It’s also racist. Look at Hillary grinning behind him. Has she forgotten that Hastings is a criminal?

From Wikipedia:

In 1981, Hastings was charged with accepting a $150,000 bribe in exchange for a lenient sentence and a return of seized assets for 21 counts of racketeering by Frank and Thomas Romano, and of perjury in his testimony about the case. He was acquitted by a jury after his alleged co-conspirator, William Borders, refused to testify in court (resulting in a jail sentence for Borders).

In 1988, the Democratic-controlled U.S. House of Representatives took up the case, and Hastings was impeached for bribery and perjury by a vote of 413-3. Voters to impeach included Democratic Representatives Nancy Pelosi, Steny Hoyer, John Conyers and Charles Rangel. He was then convicted in 1989 by the United States Senate, becoming the sixth federal judge in the history of the United States to be removed from office by the Senate.

So, how does such a crook become a Congressman?

The same way OJ Simpson got away with murder, by playing the race card. He also compared his travails to that of Jesus. I remember. I lived in Miami at the time.

And so here he is: given the spotlight by CNN without taint.

National Review:

Barack Obama wants to tell a tale about turbulence in the financial markets, and like any good melodrama this story needs a villain. Sen. Obama believes he has found his mustache-twirling Snidely Whiplash in the person of Phil Gramm, the candid-to-a-fault former senator from Texas who presided over a major reform of American banking laws a decade ago. Obama here displays a signal failure to understand the convulsions in the markets. And he also fails to identify the guilty parties — which is odd, since some of them used to sign his paycheck back in his community-organizing days and others are among his most important political donors.

The Gramm-Leach-Bliley Act of 1999 passed the Senate with 90 votes (8 against, 1 absence: John McCain, who supported the legislation) and was signed into law by Bill Clinton. It had little to do with the issues at play in the current crisis: lending standards and the amount of debt banks can take on relative to their equity. The upshot of the Gramm legislation is that it allows financial services companies to diversify their lines of business: Commercial banks can engage in investment banking, banks can offer brokerage services, and you can have an IRA at the same place you have your checking account.

What we have here is a case of what economist Paul H. Rubin calls “folk economics” — value-laden myths that do not reflect financial realities.

It is not at all clear what, if anything, Gramm’s legislation has to do with the current difficulties in the market, other than the fact that Democrats instinctively recoil when they hear the word “deregulation.”

Gramm-Leach-Bliley did not create securitization and collateralized debt obligations. It did not change the rules for banks’ leverage ratios. If anything, Gramm-Leach-Bliley mitigated some risks by allowing financial companies to diversify their businesses, and it is the most diversified firms that are best weathering the storm. Which makes sense: An investment portfolio is more stable the more diversified it is. The firms that have spectacularly imploded have mostly been non-diversified commercial banks, like Countrywide, or pure investment banks, like Lehman Brothers. But the broadly diversified megabanks are enduring — taking a hit from housing, sure, but they have other lines of business to sustain them. And we should not forget: Without the Gramm-Leach-Bliley reforms, Bank of America would have been legally forbidden to take over Merrill Lynch — very possibly leaving taxpayers on the hook for that one, too. Morgan would not have been able to buy Bear Stearns without Gramm’s reforms. 

Much more problematic than Gramm-Leach-Bliley is the Community Reinvestment Act, a bit of legislative arm-twisting much beloved by Sen. Obama and his fellow Democrats. One of the reasons so many bad mortgage loans were made in the first place is that Barack Obama’s celebrated community organizers make their careers out of forcing banks to do so. ACORN, for which Obama worked, is one of many left-wing organizations that spent decades pressuring banks and bank regulators to do more to make mortgages available to people without much in the way of income, assets, or credit. These campaigns often were couched in racially inflammatory terms. The result was the Community Reinvestment Act. The CRA empowers the FDIC and other banking regulators to punish those banks which do not lend to the poor and minorities at the level that Obama’s fellow community organizers would like. Among other things, mergers and acquisitions can be blocked if CRA inquisitors are not satisfied that their demands — which are political demands — have been met. There is a name for loans made to people who do not have the credit, assets, income, or down payment to qualify for a normal mortgage: subprime.

The bankers cannot blame CRA entirely; they made a lot of bad bets on rising home prices. But CRA did influence lending standards across the banking industry, even in those institutions that are not strictly liable to its jurisdiction. The subprime debacle is in no trivial part the result of lending decisions in which political extortion trumped businesses’ normal bottom-line concerns.

Along with these bad loans, the underlying problem is that there was a bubble in the price of housing — a bubble caused in no small part by politics, in the form of an easy-money/easy-credit policy from the Fed.

It was politics, too, that created Fannie Mae and Freddie Mac, enabled them to dominate the mortgage market, and implicitly took upon American taxpayers the risks of those business while the rewards were enjoyed, to the tune of hundreds of millions of dollars, by largely Democratic political opportunists, who then gave generously to Democrats, the top recipients of their largesse being: Chris Dodd, Hillary Rodham Clinton, John Kerry, and Barack Obama. And it was politics that unwisely nationalized Fannie and Freddie without resolving the underlying moral hazard — private profit, public risk — that makes those institutions problematic. From this Senator Obama takes away the lesson that there has been a failure of the market, and that what is needed is more politics. In this analysis Obama is as wrong as it is possible to be.

The only reason there are returns on investments is that there is risk involved. Obama talks as though the government can create new regulations that will remove risk from the markets. It cannot. Investors sometimes make bad decisions. Businesses sometimes borrow too much money. “Some of these investment banks look like hedge funds, they’re so leveraged,” says one longtime Wall Street hand. But the markets are addressing that problem, too, in their own brutally Darwinian way: That’s why Bank of America is acquiring  Merrill Lynch on the cheap.

Phil Gramm is a fine foil for Obama: a conservative Texan with a furry accent and an unsympathetic demeanor. He’s the perfect symbol — and Obama’s campaign is rooted in nothing but symbolism. The reality is the thousands of dollars in donations from Fannie Mae executives sitting in Obama’s campaign coffers. If Obama wants a villain, he doesn’t have far to look.

Yesterday at lunch I overheard a guy cursing the Republicans for being anti-regulation. It was hard to finish eating without butting in, but I held my tongue. I wish I had this to hand him.

From the Harford Courant

Taxpayers face a tab of as much as $200 billion for a government takeover of Fannie Mae and Freddie Mac, the formerly semi-autonomous mortgage finance clearinghouses. And Sen. Christopher Dodd, the Democratic chairman of the Senate banking committee, has the gall to say in a Bloomberg Television interview: “I have a lot of questions about where was the administration over the last eight years.”

We will save the senator some trouble. Here is what we saw firsthand at the White House from late 2002 through 2007: Starting in 2002, White House and Treasury Department economic policy staffers, with support from then-Chief of Staff Andy Card, began to press for meaningful reforms of Fannie, Freddie and other government-sponsored enterprises, known GSEs.

The crux of their concern was this: Investors believed that the GSEs were government-backed, so shouldn’t the GSEs also be subject to meaningful government supervision?

This was not the first time a White House had tried to confront this issue. During the Clinton years, Treasury Secretary Larry Summers and Treasury official Gary Gensler both spoke out on the issue of Fannie and Freddie’s investment portfolios, which had already begun to resemble hedge funds with risky holdings. Nor were others silent: As chairman of the Federal Reserve, Alan Greenspan regularly warned about the risks posed by Fannie and Freddie’s holdings.
President Bush was receptive to reform. He withheld nominees for Fannie and Freddie’s boards — a presidential privilege. While it would have been valuable politically to use such positions to reward supporters, the president put good policy above good politics.

The administration did not accept half-measures. In 2005, Republican Mike Oxley, then chairman of the House Financial Services Committee, brought up a reform bill, and Fannie and Freddie’s lobbyists set out to weaken it. The bill was rendered so toothless that Card called Oxley the night before markup and promised to oppose it. Oxley pulled the bill instead.

During this period, Sen. Richard Shelby led a small group of legislators favoring reform, including fellow Republican Sens. John Sununu, Chuck Hagel and Elizabeth Dole. Meanwhile, Dodd — who along with Democratic Sens. John Kerry, Barack Obama and Hillary Clinton were the top four recipients of Fannie and Freddie campaign contributions from 1988 to 2008 — actively opposed such measures and further weakened existing regulation.

The president’s budget proposals reflected the nature of the challenge. Note the following passage from the 2005 budget: Fannie, Freddie and other GSEs “are highly leveraged, holding much less capital in relation to their assets than similarly sized financial institutions. … A misjudgment or unexpected economic event could quickly deplete this capital, potentially making it difficult for a GSE to meet its debt obligations. Given the very large size of each enterprise, even a small mistake by a GSE could have consequences throughout the economy.”

That passage was published in February 2004. Dodd can find it on Page 82 of the budget’s Analytical Perspectives.

Bush got involved in the effort personally, speaking out for the cause of reform in December. He even mentioned GSE reform in this year’s State of the Union address.

How did Fannie and Freddie counter such efforts? They flooded Washington with lobbying dollars, doled out tens of thousands in political contributions and put offices in key congressional districts. Not surprisingly, these efforts worked. Leaders in Congress did not just balk at proposals to rein in Fannie and Freddie. They mocked the proposals as unserious and unnecessary.

As recently as last summer, when housing prices had clearly peaked and the mortgage market had started to seize up, Dodd called on Bush to “immediately reconsider his ill-advised” reform proposals. Rep. Barney Frank, D-Mass., chairman of the House Financial Services Committee, said that the president’s suggestion for a strong, independent regulator of Fannie and Freddie was “inane.”

Sen. Dodd wonders what the Bush administration did to address the risks of Fannie and Freddie. Now, he knows. The real question is: Where was he?

Facts are stubborn things. McCain ran this ad:

As Byron York noted:

Within moments of the ad’s appearance, the Obama campaign called it “shameful and downright perverse.” The legislation in question, a bill in the Illinois State Senate that was supported but not sponsored by Obama, was, according to Obama campaign spokesman Bill Burton, “written to protect young children from sexual predators” and had nothing to do with comprehensive sex education for kindergartners. In a stinging final shot, Burton added, “Last week, John McCain told Time magazine he couldn’t define what honor was. Now we know why.”

Newspaper, magazine, and television commentators quickly piled on. “The kindergarten ad flat-out lies,” wrote the New York Times, arguing that “at most, kindergarteners were to be taught the dangers of sexual predators.” The Washington Post wrote that “McCain’s ‘Education’ Spot is Dishonest, Deceptive.” And in a column in The Hill, the influential blogger Josh Marshall called the sex-education spot “a rancid, race-baiting ad based on [a] lie. Willie Horton looks mild by comparison.”

The condemnation has been so widespread that the Obama campaign has begun to sense success in placing the “McCain-is-a-liar” storyline in the press. But before accepting the story at face value, it might first be a good idea to examine the bill in question, look at the statements made by its supporters at the time it was introduced, talk to its sponsors today (at least the ones who will consent to speak), and find answers to a few basic questions. What were the bill’s provisions? Why was it written? Was it really just, or even mostly, about inappropriate advances? And the bottom-line question: Is McCain’s characterization of it unfair?

…The second purpose was to increase the number of children receiving sex education. Illinois’ existing law required the teaching of sex education and AIDS prevention in grades six through twelve. The old law read:

Each class or course in comprehensive sex education offered in any of grades 6 through 12 shall include instruction on the prevention, transmission and spread of AIDS.

Senate Bill 99 struck out grade six, changing it to kindergarten, in addition to making a few other changes in wording. It read:

Each class or course in comprehensive sex education in any of grades K through 12 shall include instruction on the prevention of sexually transmitted infections, including the prevention, transmission and spread of HIV.

The bill’s third purpose was to remove value-laden language in the old law. For example, the old law contained passages like this:

Course material and instruction shall teach honor and respect for monogamous heterosexual marriage.
Course material and instruction shall stress that pupils should abstain from sexual intercourse until they are ready for marriage…
[Classes] shall emphasize that abstinence is the expected norm in that abstinence from sexual intercourse is the only protection that is 100 percent effective against unwanted teenage pregnancy [and] sexually transmitted diseases…

The proposed bill eliminated all those passages and replaced them with wording like this:

Course material and instruction shall include a discussion of sexual abstinence as a method to prevent unintended pregnancy and sexually transmitted infections, including HIV.
Course material and instruction shall present the latest medically factual information regarding both the possible side effects and health benefits of all forms of contraception, including the success and failure rates for the prevention of pregnancy and sexually transmitted infections, including HIV…

IBD: 

Obama in a statement yesterday blamed the shocking new round of subprime-related bankruptcies on the free-market system, and specifically the “trickle-down” economics of the Bush administration, which he tried to gig opponent John McCain for wanting to extend.

But it was the Clinton administration, obsessed with multiculturalism, that dictated where mortgage lenders could lend, and originally helped create the market for the high-risk subprime loans now infecting like a retrovirus the balance sheets of many of Wall Street’s most revered institutions.

Tough new regulations forced lenders into high-risk areas where they had no choice but to lower lending standards to make the loans that sound business practices had previously guarded against making. It was either that or face stiff government penalties.

The untold story in this whole national crisis is that President Clinton put on steroids the Community Redevelopment Act, a well-intended Carter-era law designed to encourage minority homeownership. And in so doing, he helped create the market for the risky subprime loans that he and Democrats now decry as not only greedy but “predatory.”

Yes, the market was fueled by greed and overleveraging in the secondary market for subprimes, vis-a-vis mortgaged-backed securities traded on Wall Street. But the seed was planted in the ’90s by Clinton and his social engineers. They were the political catalyst behind this slow-motion financial train wreck.

And it was the Clinton administration that mismanaged the quasi-governmental agencies that over the decades have come to manage the real estate market in America.

As soon as Clinton crony Franklin Delano Raines took the helm in 1999 at Fannie Mae, for example, he used it as his personal piggy bank, looting it for a total of almost $100 million in compensation by the time he left in early 2005 under an ethical cloud.

Other Clinton cronies, including Janet Reno aide Jamie Gorelick, padded their pockets to the tune of another $75 million.

Raines was accused of overstating earnings and shifting losses so he and other senior executives could earn big bonuses.

In the end, Fannie had to pay a record $400 million civil fine for SEC and other violations, while also agreeing as part of a settlement to make changes in its accounting procedures and ways of managing risk.

But it was too little, too late. Raines had reportedly steered Fannie Mae business to subprime giant Countrywide Financial, which was saved from bankruptcy by Bank of America.

At the same time, the Clinton administration was pushing Fannie and her brother Freddie Mac to buy more mortgages from low-income households.

The Clinton-era corruption, combined with unprecedented catering to affordable-housing lobbyists, resulted in today’s nationalization of both Fannie and Freddie, a move that is expected to cost taxpayers tens of billions of dollars.

And the worst is far from over. By the time it is, we’ll all be paying for Clinton’s social experiment, one that Obama hopes to trump with a whole new round of meddling in the housing and jobs markets. In fact, the social experiment Obama has planned could dwarf both the Great Society and New Deal in size and scope. (more…)

We noted that Dick and Lynne Cheney donated 75% of their income to charity last year.

Now comes a report showing:

• Joe Biden donated $369 on average for the past decade or about 0.3% of his income
• John McCain: $105,000 or 26% of his total income
• Barack and Michelle Obama: $240,000 or 5.7% of their total income

Heavens, there are corrupt Democrats, too? I’m shocked, shocked.

Beleaguered Harlem Congressman Charles Rangel withdrew his divorce against his wife of 42 years on the same day he came clean on his Dominican Republic tax dodge, The Post has learned.

Rangel, whom the House ethics committee is probing for misusing Congressional stationery and a sweetheart rent control deal, had originally blamed his wife, Alma, 77, a retired social worker, for the Caribbean casita tax accounting snafu.

The Congressman filed for divorce on Feb. 13 last year. The case had been scheduled for jury selection Wednesday.

The same day, he agreed to pay $5,000 in back taxes on his Punta Cana Yacht Club retreat and by the afternoon, Alma Rangel’s lawyer, Sherri Donovan, asked the court clerk to release the Manhattan Supreme Court panel.

“I guess they worked it out,” said the jury clerk.

Jury trial for a divorce? That sounds like fun.

Camille Paglia always provokes with her intellect and clear writing.

An Obama supporter, she nevertheless appreciates Sarah Palin and can diagnose the pathologies of the current Democrat party.

…I have become increasingly uneasy about Obama’s efforts to sound folksy and approachable by reflexively using inner-city African-American tones and locutions, which as a native of Hawaii he acquired relatively late in his development and which are painfully wrong for the target audience of rural working-class whites that he has been trying to reach. Obama on the road and even in major interviews has been droppin’ his g’s like there’s no tomorrow. It’s analogous to the way stodgy, portly Al Gore (evidently misadvised by the women in his family and their feminist pals) tried to zap himself up on the campaign trail into the happening buff dude that he was not. Both Gore and Obama would have been better advised to pursue a calm, steady, authoritative persona. Forget the jokes — be boring! That, alas, is what reads as masculine in the U.S.

The over-the-top publicity stunt of a mega-stadium for Obama’s acceptance speech at the Democratic convention two weeks ago was a huge risk that worried me sick — there were too many things that could go wrong, from bad weather to crowd control to technical glitches on the overblown set. But everything went swimmingly. Obama delivered the speech nearly flawlessly — though I was shocked and disappointed by how little there was about foreign policy, a major area where wavering voters have grave doubts about him. Nevertheless, it was an extraordinary event with an overlong but strangely contemplative and spiritually uplifting finale. The music, amid the needlessly extravagant fireworks, morphed into “Star Wars” — a New Age hymn to cosmic reconciliation and peace.

After that extravaganza, marking the 40th anniversary of Martin Luther King Jr.’s epochal civil rights speech on the Washington Mall, I felt calmly confident that the Obama campaign was going to roll like a gorgeous juggernaut right over the puny, fossilized McCain. The next morning, it was as if the election were already over. No need to fret about American politics anymore this year. I had already turned with relief to other matters.

Pow! Wham! The Republicans unleashed a doozy — one of the most stunning surprises that I have ever witnessed in my adult life. By lunchtime, Obama’s triumph of the night before had been wiped right off the national radar screen. In a bold move I would never have thought him capable of, McCain introduced Gov. Sarah Palin of Alaska as his pick for vice president. I had heard vaguely about Palin but had never heard her speak. I nearly fell out of my chair. It was like watching a boxing match or a quarter of hard-hitting football — or one of the great light-saber duels in “Star Wars.” (Here are the two Jedi, Obi-Wan Kenobi and Qui-Gon Jinn, going at it with Darth Maul in “The Phantom Menace.”) This woman turned out to be a tough, scrappy fighter with a mischievous sense of humor.

On feminism:

Conservative though she may be, I felt that Palin represented an explosion of a brand new style of muscular American feminism. At her startling debut on that day, she was combining male and female qualities in ways that I have never seen before. And she was somehow able to seem simultaneously reassuringly traditional and gung-ho futurist. In terms of redefining the persona for female authority and leadership, Palin has made the biggest step forward in feminism since Madonna channeled the dominatrix persona of high-glam Marlene Dietrich and rammed pro-sex, pro-beauty feminism down the throats of the prissy, victim-mongering, philistine feminist establishment.

In the U.S., the ultimate glass ceiling has been fiendishly complicated for women by the unique peculiarity that our president must also serve as commander in chief of the armed forces. Women have risen to the top in other countries by securing the leadership of their parties and then being routinely promoted to prime minister when that party won at the polls. But a woman candidate for president of the U.S. must show a potential capacity for military affairs and decision-making. Our president also symbolically represents the entire history of the nation — a half-mystical role often filled elsewhere by a revered if politically powerless monarch.

As a dissident feminist, I have been arguing since my arrival on the scene nearly 20 years ago that young American women aspiring to political power should be studying military history rather than taking women’s studies courses, with their rote agenda of never-ending grievances. I have repeatedly said that the politician who came closest in my view to the persona of the first woman president was Sen. Dianne Feinstein, whose steady nerves in crisis were demonstrated when she came to national attention after the mayor and a gay supervisor were murdered in their City Hall offices in San Francisco. Hillary Clinton, with her schizophrenic alteration of personae, has never seemed presidential to me — and certainly not in her bland and overpraised farewell speech at the Democratic convention (which skittered from slow, pompous condescension to trademark stridency to unseemly haste).

Finally, the intolerance of Democrats.

The witch-trial hysteria of the past two incendiary weeks unfortunately reveals a disturbing trend in the Democratic Party, which has worsened over the past decade. Democrats are quick to attack the religiosity of Republicans, but Democratic ideology itself seems to have become a secular substitute religion. Since when did Democrats become so judgmental and intolerant? Conservatives are demonized, with the universe polarized into a Manichaean battle of us versus them, good versus evil. Democrats are clinging to pat group opinions as if they were inflexible moral absolutes. The party is in peril if it cannot observe and listen and adapt to changing social circumstances.

Let’s take the issue of abortion rights, of which I am a firm supporter. As an atheist and libertarian, I believe that government must stay completely out of the sphere of personal choice. Every individual has an absolute right to control his or her body. (Hence I favor the legalization of drugs, though I do not take them.) Nevertheless, I have criticized the way that abortion became the obsessive idée fixe of the post-1960s women’s movement — leading to feminists’ McCarthyite tactics in pitting Anita Hill with her flimsy charges against conservative Clarence Thomas (admittedly not the most qualified candidate possible) during his nomination hearings for the Supreme Court. Similarly, Bill Clinton’s support for abortion rights gave him a free pass among leading feminists for his serial exploitation of women — an abusive pattern that would scream misogyny to any neutral observer.

But the pro-life position, whether or not it is based on religious orthodoxy, is more ethically highly evolved than my own tenet of unconstrained access to abortion on demand. My argument (as in my first book, “Sexual Personae,”) has always been that nature has a master plan pushing every species toward procreation and that it is our right and even obligation as rational human beings to defy nature’s fascism. Nature herself is a mass murderer, making casual, cruel experiments and condemning 10,000 to die so that one more fit will live and thrive.

Hence I have always frankly admitted that abortion is murder, the extermination of the powerless by the powerful. Liberals for the most part have shrunk from facing the ethical consequences of their embrace of abortion, which results in the annihilation of concrete individuals and not just clumps of insensate tissue. The state in my view has no authority whatever to intervene in the biological processes of any woman’s body, which nature has implanted there before birth and hence before that woman’s entrance into society and citizenship.

On the other hand, I support the death penalty for atrocious crimes (such as rape-murder or the murder of children). I have never understood the standard Democratic combo of support for abortion and yet opposition to the death penalty. Surely it is the guilty rather than the innocent who deserve execution?

What I am getting at here is that not until the Democratic Party stringently reexamines its own implicit assumptions and rhetorical formulas will it be able to deal effectively with the enduring and now escalating challenge from the pro-life right wing. Because pro-choice Democrats have been arguing from cold expedience, they have thus far been unable to make an effective ethical case for the right to abortion.

Clive Crook in the Financial Times:

Democrats speak up for the less prosperous; they have well-intentioned policies to help them; they are disturbed by inequality, and want to do something about it. Their concern is real and admirable. The trouble is, they lack respect for the objects of their solicitude. Their sympathy comes mixed with disdain, and even contempt.

Democrats regard their policies as self-evidently in the interests of the US working and middle classes. Yet those wide segments of US society keep helping to elect Republican presidents. How is one to account for this? Are those people idiots? Frankly, yes – or so many liberals are driven to conclude. Either that or bigots, clinging to guns, God and white supremacy; or else pathetic dupes, ever at the disposal of Republican strategists. If they only had the brains to vote in their interests, Democrats think, the party would never be out of power. But again and again, the Republicans tell their lies, and those stupid damned voters buy it.

It is an attitude that a good part of the US media share. The country has conservative media (Fox News, talk radio) as well as liberal media (most of the rest). Curiously, whereas the conservative media know they are conservative, much of the liberal media believe themselves to be neutral.

Their constant support for Democratic views has nothing to do with bias, in their minds, but reflects the fact that Democrats just happen to be right about everything. The result is the same: for much of the media, the fact that Republicans keep winning can only be due to the backwardness of much of the country.

Because it was so unexpected, Sarah Palin’s nomination for the vice-presidency jolted these attitudes to the surface. Ms Palin is a small-town American. It is said that she has only recently acquired a passport. Her husband is a fisherman and production worker. She represents a great slice of the country that the Democrats say they care about – yet her selection induced an apoplectic fit.

For days, the derision poured down from Democratic party talking heads and much of the media too. The idea that “this woman” might be vice-president or even president was literally incomprehensible. The popular liberal comedian Bill Maher, whose act is an endless sneer at the Republican party, noted that John McCain’s case for the presidency was that only he was capable of standing between the US and its enemies, but that should he die he had chosen “this stewardess” to take over. This joke was not – or not only – a complaint about lack of experience. It was also an expression of class disgust. I give Mr Maher credit for daring to say what many Democrats would only insinuate.

Read on.

…better known as Rielle Hunter, the ditz John Edwards had an affair with. She’s been around.

Rielle Hunter was in a business meeting in the lounge of the Regency Hotel in New York City when she saw Sen. John Edwards across the room. He, too, was in a meeting. They eyed each other. And not just once.

She left the hotel but later in the day found herself walking along Park Avenue toward the Regency. As she approached the hotel, she saw John Edwards on the sidewalk.

Face to face, their connection was instant. They spoke briefly, flirtatiously.

They could have left it at that. But they didn’t.

Instead, they began an affair, according to Pigeon O’Brien, a friend of Hunter who said Hunter told her all about that first meeting. And Hunter fell in love.

“Head over heels,” said O’Brien.

The rest is tabloid history.

When Edwards confessed on national television last month to his affair with Hunter, 44, she was already the focus of the most sensational scandal of the political season.

Edwards’ public denial that he is the father of her 6-month-old baby girl was greeted with skepticism in many corners. So was his timeline.

Edwards said in his televised “Nightline” interview that their affair began after she had been hired in the summer of 2006 to produce the Web videos of an informal Edwards before the announcement of his candidacy at the end of December 2006.

O’Brien contends that the two met no later than February 2006 and started their relationship almost immediately.

Edwards lied? Say it ain’t so.

Let’s rewind the tape of the life that brought Rielle Hunter, nee Lisa Jo Druck, to that fateful meeting on Park Avenue with Sen. John Edwards.

And her name is pronounced “Ree — elle.”

Hunter’s life has been equal parts magical mystery tour and perpetual job quest. She has been a party girl, a minor (but working) actress, a writer of oddly titled compositions, a yoga enthusiast and a spiritual seeker.

During the 1980s and ’90s, she bounced between coasts and made occasional forays in the world abroad, following one guru or another

McInerney — a friend and former boyfriend — immortalized Hunter to a degree by using her as the model for Alison Poole, the hard-partying, promiscuous, glib narrator of his 1988 novel “Story of My Life”:

The first year I was in New York I didn’t do anything but guys and blow. Staying out all night at the Surf Club and Zulu, waking up at five in the afternoon with plugged sinuses… Story of my life.

“She was thrilled,” O’Brien said of Hunter’s reaction to the book.

Jonah Goldberg:

The US economy — yes, that economy — grew at a 3.3 percent annual rate last quarter. This no doubt caused consternation at the highest levels of the Democratic Party, perhaps forcing some to consider a new convention film at the last minute: “Dude, Where’s My Recession?”

To hear the Democrats at their convention this week, you’d get the sense that a recession is merely a technical term for the worst human misery ever visited upon a once-great people. You’d think Americans were listening to the Democratic speeches as they huddled around their kitchen tables (if they hadn’t already been used for firewood), deciding which of their children to pack off to the orphanage and how much tree bark they can afford to eat next week.

Last night, Barack Obama proclaimed: “Our economy is in turmoil, and the American promise has been threatened once more.” He went on to describe an America reminiscent of the Grapes of Wrath (if not Mad Max).

But this was a week-long theme. Over and over again, Democrats insisted that the “American dream” is being snuffed out, crushed, beaten, stabbed and quite possibly dismembered in President Bush’s West Wing bathtub, where Bush and Dick “The Cleaner” Cheney can dissolve the remains in sulfuric acid.

On Wednesday, Joe Biden reminded the world that he rides Amtrak home to Delaware from Washington. (Apparently not since Gunga Din has there been a more heroic commute.) He told us that when he gazes out the window of his barreling locomotive, he can “almost hear” the conversations in the houses he sees whizzing by.

He “almost hears” things with an awful lot of specificity: “Should Mom move in with us now that Dad’s gone? Fifty, 60, 70 dollars just to fill up the gas tank? How in God’s name, with winter coming, how are we gonna heat the home? Another year, no raise? Did you hear — did you hear they may be cutting our health care at the company?” Super Joe even hears people asking him, “How are we gonna retire, Joe?”

Is there nobody between DC and Delaware talking about “American Idol” or their kids’ school play or how they’re sick of meatloaf?

Obviously, there is real economic pain out there. Food and energy costs are rising too fast and by too much. The mortgage crisis is real.

But while Americans don’t like the direction in which the country is heading, and hate high gas prices, they’re pretty satisfied with their lives.

Some 94 percent of Americans polled by Harris Interactive this month said they were satisfied with the lives they lead. Gallup reports that only 9 percent of Americans are dissatisfied with their jobs and only 13 percent are dissatisfied with their job security. The unemployment rate is at a five-year high of 5.7 percent, but it wasn’t long ago when that was considered close to full employment.

Read on.

In other news:

Orders for big-ticket items jumped 1.3% in July, a strong signal for manufacturing. But the outlook for exports is in question.

By Tom Petruno, Los Angeles Times Staff Writer
August 28, 2008

What happened to the recession?

A government report Wednesday on July orders for big-ticket manufactured goods showed surprising strength — defying the gloom on the consumer side of the economy.

The dollar value of durable-goods orders rose 1.3% in July from June, compared with the flat reading analysts had expected. What’s more, the figure for June was revised to a 1.3% gain as well, from the initially reported rise of 0.8%.

The numbers “hardly look recessionary or pre-recessionary,” said Robert Brusca, head of Fact and Opinion Economics in New York.

One key barometer of business spending — the value of new orders for machinery and other capital goods, excluding aircraft — jumped 2.6% in July, double the June advance.

Gov. Bill Richardson to the DNC crowd:

“John McCain may pay hundreds of dollars for his shoes, but we’ll be the ones who pay for his flip-flops.”

Fire the speechwriter.

Hugh Hewitt:

As the Democrats kicked off a convention designed to unite support behind Obama, interviews with several dozen delegates pointed to an undercurrent of anxiety among many from key swing states who will be charged with leading the push in their communities. They expressed doubts bordering on bewilderment: Why, in a year that had been shaping up as a watershed for Democrats, amid an economic downturn and an unpopular Republican presidency, is the race so tight?

Why, indeed.  The answers:  Jeremiah Wright. Tony Rezko. Michael Pfleger. Bill Ayers and Bernadine Dohrn.

“Above my pay grade.”  “Bitter and clinging to God and their guns.” “Citizen of the world.”  Tire gauges.  “First time I have been proud of my country.”  “Vastly superior infrastructure.”  The Born Alive Infant Protection Act.

And now Slow Joe Biden.

That’s just part of the list.  The Dems are nominating the most radical major party candidate in history, whose thin record is relentlessly hard left, and whose rhetoric of change and hope cannot cover the fact that he has never worked across the aisle, has never sought to reform the deeply corrupt Chicago or Illinois political machines, and that he is hopelessly out of his depth on foreign policy and national security issues. 

Dems are uneasy because Obama has gone out of his way to run over the Clintons and insult them, telegraphing how he would run the party and the country if he got to 1600.

Andy they are also alarmed by a shaken and struggling campaign that releases text messages of important decisions in the middle of the night, and ads on the first day of the convention that focus on Bill Ayers, the unrepentant terrorist who has long and significant ties to Obama.  It made matters much worse that Nancy Pelosi used Meet the Press to start a major confrontation with the Roman Catholic Church on abortion which has sparked stinging rebukes from senior Catholic leadership in Denver and nationally.