Blogito, Ergo Sum - 26 November 2008

Joe Biden doesn't know it, but he's slated to return the vice presidency to its conventional role: the guy who stands by in case the president dies. Remember, this was supposed to be the horror of Palin, the imminent death expected from McCain, whereas Obama is safe, he'll live forever. Whatever, Biden will return the role to its proper place in the pitcher line-up, kissing babies and attending openings and shaking hands while smiling broadly, something he does well. The operation on his vocal cords will be performed during the next few weeks, although I hear he has been given one more chance to escape the knife.

Here's an item that shows you how different the world was that I grew up in:

This is front-page stuff in the NYTimes, but I wondered when that failed to be the case before? We weren't poor when I was a boy, born in late 1934, my dad had a government job he retired from 44 years later, but Christmas was a time when many of our presents were new clothes for school. Shirts were fine, Levis were okay, but I thought underwear and socks were cheating. But everything that we got definitely came from someone else, Mom and Dad, not getting things for themselves.

Tom Friedman says he's figuring things out after watching the Citigroup debacle:

Because in searing detail it exposed — using Citigroup as Exhibit A — how some of our country’s best-paid bankers were overrated dopes who had no idea what they were selling, or greedy cynics who did know and turned a blind eye. ... This financial meltdown involved a broad national breakdown in personal responsibility, government regulation and financial ethics.

So many people were in on it: People who had no business buying a home, with nothing down and nothing to pay for two years; people who had no business pushing such mortgages, but made fortunes doing so; people who had no business bundling those loans into securities and selling them to third parties, as if they were AAA bonds, but made fortunes doing so; people who had no business rating those loans as AAA, but made a fortunes doing so; and people who had no business buying those bonds and putting them on their balance sheets so they could earn a little better yield, but made fortunes doing so.

What Tom doesn't tell you, good Liberal boy that he is, barking only on cue, is where this all began and why Long Beach Financial ever dreamt that they would be able to do such a thing.

Because it starts with the good intentions and well-meaning efforts of Liberals who intended to make it possible for every American, especially the racially and economically disadvantaged, to have a home. Like the tender-hearted little boy who "helps" the baby bird or chicken escape from its egg by breaking its shell, they had perhaps little idea of the consequences.

This warm and comfy Liberal idea was planted during the Clinton years and became too Politically Correct to stamp out by anyone who felt that they were a Compassionate Conservative, although that's what true compassion is: understanding that what is best for someone doesn't always seem like it. The strawberry picker probably thought he had died and gone to heaven in his new house, but that's not the way things turned out. Fortunately for him, he probably didn't lose anything out of the deal, since in California the home stands as sole security for the loan except via judicial foreclosure, and expensive and long-drawn-out practice that wouldn't net anything from someone making only $14,000 a year, anyhow.

It all stems from what I consider the unfortunate error in thinking that all men are created equal. Sadly, and obviously, they are not...and never have been. And never will be.

America should stand for equality of OPPORTUNITY, to be sure, but isn't it obvious that in dozens or in hundreds or even in thousands of ways we recognize that people really aren't equal? We simply pretended--or wished--too hard in the case of the subprime mortgages to people who couldn't afford them.

And the well-wishers forgot to take human nature into consideration, since it, just like plain old nature, likewise abhors a vacuum.

And some people subscribe enthusiastically to the nostrum: never give a sucker an even break.

Another old nostrum is: a chain is only as strong as its weakest link. We deliberately broke one when we allowed the lender who originated and actually made the loan to become disassociated from the borrower and responsibility for the loan. I was recently reading about a small bank in Kansas, in fact it had a number of branches, which was boasting that it was financially solvent and doing business as usual, without even one foreclosure on its books. It kept all of its loans in its own portfolio, they didn't disappear into never-never land, and they not only didn't make bad loans in the first place, they stayed right on top of them if any of their customers--you see, they still regarded them as customers--got into trouble by being laid off or for whatever other reason.

Once that link was broken the chain became useless. You do not need to be a financial genius in order to see this. Responsibility begins at home.

Why is all of the other headline news this morning about Gates "probably" staying on in the Obama administration? I thought that was a done deal a long time ago.

Maybe because there doesn't seem to be much other news today? Ah, yes, I forgot...it's the day before Thanksgiving for you folks up north, isn't it.

Here's a nice item in the WSJ which reveals the difference between talk and action:

Barack Obama yesterday introduced his new White House budget director, Peter Orszag, vowing to conduct a "line by line" review of the federal fisc. Most incoming chief executives promise that sort of thing. But here's a detail that really caught our eye: As part of his plan to kill government programs "that have outlived their usefulness," the President-elect singled out farm subsidies for the rich.

If he really means it, this would be big news. Mr. Obama cited a recent Government Accountability Office report that found that of the 1.8 million people receiving farm payments from 2003 to 2006, nearly 3,000 had incomes above $2.5 million, which ought to make them ineligible for aid. Nevertheless, they cashed in to the tune of some $49 million. Having written 40,000 or so editorials against this corporate welfare over the years, we'd love to see a Democrat join the fight.

However, there is the small matter of where Senator Obama was on this issue when we really needed him. The 2008 farm bill -- which set national policy for five years -- was a perfect chance for real change thanks to surging crop prices, record farm income and a President unconcerned about re-election.

President Bush actually sought a $200,000 annual income cap on subsidy payments, but Congress couldn't bring itself to vote on anything below $750,000. And even that got killed by the likes of Senate Budget Chairman Kent Conrad, who as it happens helped Mr. Orszag get his current job running the Congressional Budget Office. The Members ended up passing a $300 billion bill in which nearly every crop, from corn to sugar, won subsidy increases. Mr. Bush vetoed it in May but was overridden.

The vote in the Senate was 82 to 13. Mr. Obama missed the roll call, issuing a campaign statement saying that the bill was "far from perfect" and would have preferred "tighter payment limits." However, he added that "with so much at stake, we cannot make the perfect the enemy of the good." And he then went on to rake Mr. Bush and John McCain (who opposed the bill) for "saying no to America's farmers and ranchers, no to energy independence, no to the environment, and no to millions of hungry people." In other words, given the chance to support cuts in farm subsidies for the rich, Mr. Obama chose instead to attack his Republican opponents for doing precisely that.

One of these days someone is going to stumble across things like these and discover that Bush tried to do a lot of things for which he got no credit. Now Obama will come along claiming that he is the one to slash subsidies, to wide praise.

But Obama's talk is cheap and the rich farmers got their five years, so they don't care what he says now.

The entire issue rests on the fact that the various producers have substantially different requirements for the dollar-denominated income generated by their sales of crude oil. In general terms the key factor is the amount of this hard currency that is needed to balance their respective external accounts.

The Russians have been careful not to announce their break-even figure, but it's broadly conceded to be approximately $70 per barrel. With oil futures regularly at or around $50 per barrel in New York, the Moscow government accountants have had to go back to their computers. ...

Venezuela needed to average $91 per barrel for '08 and that goes up to $102.7 in 2010. Iran is better off in '08 at $57.3 per barrel as against $83.3 in the next two years. These figures must be judged against the projections of both the Deutsche Bank and the Chinese National Offshore Oil Corporation, which have warned that the price of oil could fall below $40 per barrel in the beginning of 2009. ...

Interestingly the UAE, Algeria, Qatar, and most likely Libya can balance their external accounts next year if world prices stay modestly below $50 per barrel. The Saudis appear able to break even, and Iraq, still unable to reach its pre-war production goals, effectively has an exemption as it is in the process of economic recovery.

In spite of the doom and gloom in the oil world, Dubai last week held the debut of, yet again, another super lavish hostelry. Film stars and moguls of all types were jetted in to attend the opening of the Atlantis, partly owned by one Sol Kerzner. Unfortunately for Sol and his Dubai government partners, Citibank has stated (and it should know about such things) that Dubai is the most vulnerable economy in the Gulf. With a debt that reaches above 100% of its GDP, this mini-state still retains its exuberant belief in itself in spite of the realities of the world economy. The answer is to wish them mazel tov, followed by a strongly stated inshallah!

Why is it that Marlowe's line comes to mind, unbidden..."and burnt the topless towers of Ilium"? Have you seen photos of modern Dubai recently? The word "fantastic" is not even close to being properly respectful. I can barely imagine what it must have been like, working at constructing the tops of some of those towers.

Meanwhile, back at home we don't get no respect. Utah, 12-0, is ranked #6, whereas Alabama, 11-0, is ranked #1. Worse, the other four teams above Utah all have one loss, all have played fewer games, and USC has played a total of only 10.

I was barely home from the hospital in 1934 when I woke up to the sobbing as Alabama beat Stanford in the Rose Bowl, the last time that Alabama was there.

Can Alabama lose to Auburn this weekend and leave Utah alone among the undefeated in the top 6? And losers this week could also include Texas, Oklahoma, Florida and USC, whereas Utah has completed its season.

We could even dream about being the only undefeated major team. If Boise State also loses, and if Ball State has another game left to play, then we might even be the only undefeated team in the top 25 at a minimum. Ah, fall dreams of glory...

I speak as a Marine...once a Marine, always a Marine...who has at times wondered what the difference was. I was on active duty during 1953-56, a long time ago, and one of the things I knew for certain was that we were different from all of the other services. Not only that, but the other services seemed to recognize that, too, some quite unhappy and unwilling to acknowledge it.

I don't know what the other services do, but I do know what the Marine Corps does in boot camp. The first thing is showing you how utterly worthless you are and how unlikely it is that you are going to make it all the way through boot camp. I guess this produces two kinds of reaction: one agrees, the other says "screw you" and redoubles his effort to succeed. One of the reasons that Marines are stubborn and determined is because they are selected for that trait from the beginning through a process of natural selection.

You have to really want badly to make it all the way through boot camp, because they're more than willing to let you drop by the wayside and weed you out.

You learn a lot of practical lessons in the process. One I remember vividly from boot camp was after I had been promoted to 1st squad leader, in charge of 12 men. In the early mornings, before we started our training day, we all had clean-up chores around the Quonset hut and a short time in which to get them done. As we began, one morning, my DI shouted at me "Calkins, I want 8 men over here, on the double."

Now I realized I couldn't get my squad's chores done if I sent him 8 of my 12, so I told each of the other three squad leaders that the DI wanted 2 men from each of them, on the double. I sent my two and went back to work.

A few minutes later I was facing one very angry Drill Instructor. "Where are my 8 men, you sent only 2?" I started to explain when he cut me off abruptly. "Calkins," he told me very firmly, "I don't give a damn where you get them from or how you do it, but you damn well better get them!"

My other three squad leaders, with their own chores to do, and well aware that I had no authority over them, had simply ignored me. I learned right then and there that if you are going to give orders then you better have command authority, even if just by force of personality, and you damn well better get the job done somehow, no matter how. Getting the job done had first priority.

The time that hurt, though, was when I screwed up something in front of my favorite Drill Instructor, a staff NCO who I really respected. He shook his head at me sadly and said something to the effect that he hoped I never was put in command of a squad when we got to Korea because I'd probably get them all killed. That hurt, and I redoubled my efforts. (Although the truth was that I had absolutely no desire to be responsible for a squad in a combat situation! Just the thought of that responsibility scared me to death. I was desperately hoping that I would perform my own personal responsibilities in honorable fashion.)

When we graduated from boot camp we discovered that we were no longer worthless but actually the finest fighting men in the world, better than anyone else anywhere else. Congratulations, Marine!

And, just like they had convinced us the first time, they convinced us the second time. To a man, we were all both surprised and proud to learn that we had made it through boot camp! Now, of course, we had to live up to our own expectations. Combat infantry training came next and gave us some kind of idea about those.

Later on, I decided that all of them were master psychologists and I wondered how they did that. I couldn't believe they taught psychology in DI School, but they sure knew how to push the buttons, just the same. Amazing.