Archive for September, 2008

Analysis of the House Voting Down Yesterday’s Bailout Bill

September 30, 2008

I had hoped to do a post on this yesterday, but I wanted to actually see the bill before I did anything on it.  It took them a while to get the bill language up, and I found out that it was about 110 pages long (it is available here if you’re interested).  Also, here’s the bill that the Senate didn’t vote to pass (it needed 60% to pass).

As I’m sure all of you know, the House voted down yesterday’s bill, H.R. 3997, the “Emergency Economic Stabilization Act of 2008” 205 (140D/65R) – 228 (95D/133R), with 1 not voting (R).

The following is the summary of the act, courtesy of the Financial Services Committee of the House:

SUMMARY OF THE “EMERGENCY ECONOMIC STABILIZATION ACT OF 2008″

I. Stabilizing the Economy

The Emergency Economic Stabilization Act of 2008 (EESA) provides up to $700 billion to the Secretary of the Treasury to buy mortgages and other assets that are clogging the balance sheets of financial institutions and making it difficult for working families, small businesses, and other companies to access credit, which is vital to a strong and stable economy. EESA also establishes a program that would allow companies to insure their troubled assets.

Alright, this basically explains the principle that the Representatives who were for the bill were advocating: This is an investment, not a bailout (similar to the Chrysler government loan guarantees of the 1970s and 1980s, where we co-signed on a $1.5 billion loan).  They argue that we will make our money back, and even possibly make a profit (like we did with Chrysler).  Here’s the problem with that thinking: many American people who are in crisis right now are NOT helping the situation.  I gave an example of a woman who simply left her old home and mortgage in the middle of the night and bought a house in the Carolinas (I don’t remember which off the top of my head) the next day, before the credit caught up to her.  There have been stories of people tearing apart houses right before the bank repossesses them, “because the bank is the bad guy” when in actuality, it’s both the bank’s fault for giving a loan to somebody who never should have been able to get one as well as the homeowner’s fault for trying to buy a house that he/she simply couldn’t afford.  It’s a lack of basic family budgeting and spending principles that helped get us into this situation.  Then mortgage companies gave out Adjustable Rate Mortgages to people who NEVER should’ve been able to get one, and people looking to buy homes ignored the first basic principle of fiscal responsibility: don’t buy something you can’t afford!  So, we’re going to buy these mortgages, but that’s not going to stop people from not being able to pay the mortgages.  Instead of banks losing money, it’ll be the government.

Now, on the other hand, it IS unfair for responsible buyers who happened to get a mortgage from the wrong company to have to suffer, and it is THESE instances that I am more willing to accept government intervention, but how the government is to analyze and weed out the good from the bad is quite a problem, considering the massiveness of banks and mortgage companies that have failed or are looking like they will fail.

II. Homeownership Preservation

EESA requires the Treasury to modify troubled loans – many the result of predatory lending practices – wherever possible to help American families keep their homes. It also directs other federal agencies to modify loans that they own or control. Finally, it improves the HOPE for Homeowners program by expanding eligibility and increasing the tools available to the Department of Housing and Urban Development to help more families keep their homes.

Now, that last sentence is where the government could lose a lot of money.  When you expand eligibility and increase tools for helping people stay in their homes, you’re saying that these people are getting help to stay in homes that they can’t afford, which means that the government is footing the bill, and that’s money that the government will not see back in its hands a good chunk of the time.

III. Taxpayer Protection

Taxpayers should not be expected to pay for Wall Street’s mistakes. The legislation requires companies that sell some of their bad assets to the government to provide warrants so that taxpayers will benefit from any future growth these companies may experience as a result of participation in this program. The legislation also requires the President to submit legislation that would cover any losses to taxpayers resulting from this program from financial institutions.

This is again, where the “investment” principle comes into the bill.  And this could be good for the government, like the bailout of Chrysler was profitable to the government in the 1980s and 1990s.  The part that confuses me is that last sentence – why the President is the one to draft legislation to cover taxpayer losses seems to confuse me, unless that’s their way of knowing that the President will approve of the measure, since he himself drafted it.  I’ll have to look into that a little more to understand what all that would do.

IV. No Windfalls for Executives

Executives who made bad decisions should not be allowed to dump their bad assets on the government, and then walk away with millions of dollars in bonuses. In order to participate in this program, companies will lose certain tax benefits and, in some cases, must limit executive pay. In addition, the bill limits “golden parachutes” and requires that unearned bonuses be returned.

If these executives cared about their companies, most of them just would stop taking pay.  I guarantee you that if I were the CEO of AIG, and if I were set for life, I wouldn’t take another pay check until the company was back on track.

V. Strong Oversight

Rather than giving the Treasury all the funds at once, the legislation gives the Treasury $250 billion immediately, then requires the President to certify that additional funds are needed ($100 billion, then $350 billion subject to Congressional disapproval). The Treasury must report on the use of the funds and the progress in addressing the crisis. EESA also establishes an Oversight Board so that the Treasury cannot act in an arbitrary manner. It also establishes a special inspector general to protect against waste, fraud and abuse [sic]

Good.  Frankly, I don’t trust the Treasury Department after they advocated the Fannie and Freddie bailouts.  I want to know where this money is going, and I want Congressional approval of it (even though I don’t support the Democrats in Congress, the more people that have to approve where the money goes, the better).

So, that’s the summary, and here’s the section-by-section analysis of the bill, basically the summary with details, also courtesy of the Financial Services Committee:

 SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION

Section 1. Short Title.

“Emergency Economic Stabilization Act of 2008.”

Section 2. Purposes.

Provides authority to the Treasury Secretary to restore liquidity and stability to the U.S. financial system and to ensure the economic well-being of Americans.

Section 3. Definitions.

Contains various definitions used under this Act.

Title I. Troubled Assets Relief Program.

Section 101. Purchases of Troubled Assets.

Authorizes the Secretary to establish a Troubled Asset Relief Program (“TARP”) to purchase troubled assets from financial institutions. Establishes an Office of Financial Stability within the Treasury Department to implement the TARP in consultation with the Board of Governors of the Federal Reserve System, the FDIC, the Comptroller of the Currency, the Director of the Office of Thrift Supervision and the Secretary of Housing and Urban Development.

Requires the Treasury Secretary to establish guidelines and policies to carry out the purposes of this Act.

Includes provisions to prevent unjust enrichment by participants of the program.

Like I said above.  The government has to be careful that this really is an investment, because if more companies say, “We can take risks, because we’re too big, so the government will HAVE to bail us out,” then it becomes purely a bailout and a terrible investment that will cost taxpayers billions (if not ultimately trillions, since this bill alone would authorize up to $700 billion).  Personally, I really don’t think the government should be doing this at all, but since some bailout bill will eventually pass, I’d want it filled with as many fiscal conservative principles as possible.

Section 102. Insurance of Troubled Assets.

If the Secretary establishes the TARP program, the Secretary is required to establish a program to guarantee troubled assets of financial institutions.

The Secretary is required to establish risk-based premiums for such guarantees sufficient to cover anticipated claims. The Secretary must report to Congress on the establishment of the guarantee program.

Again – I like the whole reporting to Congress idea.

Section 103. Considerations.

In using authority under this Act, the Treasury Secretary is required to take a number of considerations into account, including the interests of taxpayers, minimizing the impact on the national debt, providing stability to the financial markets, preserving homeownership, the needs of all financial institutions regardless of size or other characteristics, and the needs of local communities. Requires the Secretary to examine the long-term viability of an institution in determining whether to directly purchase assets under the TARP.

Section 104. Financial Stability Oversight Board.

This section establishes the Financial Stability Oversight Board to review and make recommendations regarding the exercise of authority under this Act. In addition, the Board must ensure that the policies implemented by the Secretary protect taxpayers, are in the economic interests of the United States, and are in accordance with this Act.

The Board is comprised of the Chairman of the Board of Governors of the Federal Reserve System, the Secretary of the Treasury, the Director of the Federal Home Finance Agency, the Chairman of the Securities and Exchange Commission and the Secretary of the Department of Housing and Urban Development.

Section 105. Reports.

Monthly Reports: Within 60 days of the first exercise of authority under this Act and every month thereafter, the Secretary is required to report to Congress its activities under TARP, including detailed financial statements.

Tranche Reports: For every $50 billion in assets purchased, the Secretary is required to report to Congress a detailed description of all transactions, a description of the pricing mechanisms used, and justifications for the financial terms of such transactions.

Regulatory Modernization Report: Prior to April 30, 2009, the Secretary is required to submit a report to Congress on the current state of the financial markets, the effectiveness of the financial regulatory system, and to provide any recommendations.

Section 106. Rights; Management; Sale of Troubled Assets; Revenues and Sale Proceeds.

Establishes the right of the Secretary to exercise authorities under this Act at any time. Provides the Secretary with the authority to manage troubled assets, including the ability to determine the terms and conditions associated with the disposition of troubled assets. Requires profits from the sale of troubled assets to be used to pay down the national debt.

Section 107. Contracting Procedures.

Allows the Secretary to waive provisions of the Federal Acquisition Regulation where compelling circumstances make compliance contrary to the public interest. Such waivers must be reported to Congress within 7 days. If provisions related to minority contracting are waived, the Secretary must develop alternate procedures to ensure the inclusion of minority contractors.

Allows the FDIC to be selected as an asset manager for residential mortgage loans and mortgage-backed securities.

Section 108. Conflicts of Interest.

The Secretary is required to issue regulations or guidelines to manage or prohibit conflicts of interest in the administration of the program.

Section 109. Foreclosure Mitigation Efforts.

For mortgages and mortgage-backed securities acquired through TARP, the Secretary must implement a plan to mitigate foreclosures and to encourage servicers of mortgages to modify loans through Hope for Homeowners and other programs. Allows the Secretary to use loan guarantees and credit enhancement to avoid foreclosures. Requires the Secretary to coordinate with other federal entities that hold troubled assets in order to identify opportunities to modify loans, considering net present value to the taxpayer.

This is the section that is most helpful directly to taxpayers, but will also award people for bad fiscal principles.  If you can’t afford a loan that you took out, it’s not the government’s job to use loan guarantees (essentially co-sign on the loan).  If you lose your house, that’s your own fault.  It’s harsh, but it’s fair.

Section 110. Assistance to Homeowners.

Requires federal entities that hold mortgages and mortgage-backed securities, including the Federal Housing Finance Agency, the FDIC, and the Federal Reserve to develop plans to minimize foreclosures. Requires federal entities to work with servicers to encourage loan modifications, considering net present value to the taxpayer.

Again, the government will lose a lot of money here, and so will banks.  If they’re letting people stay in houses when they can’t afford them, somebody is going to lose money, and it will be both banks and other lending agencies as well as the government.

Section 111. Executive Compensation and Corporate Governance.

Provides that Treasury will promulgate executive compensation rules governing financial institutions that sell it troubled assets. Where Treasury buys assets directly, the institution must observe standards limiting incentives, allowing clawback and prohibiting golden parachutes. When Treasury buys assets at auction, an institution that has sold more than $300 million in assets is subject to additional taxes, including a 20% excise tax on golden parachute payments triggered by events other than retirement, and tax deduction limits for compensation limits above $500,000.

Section 112. Coordination With Foreign Authorities and Central Banks.

Requires the Secretary to coordinate with foreign authorities and central banks to establish programs similar to TARP.

Section 113. Minimization of Long-Term Costs and Maximization of Benefits for Taxpayers.

In order to cover losses and administrative costs, as well as to allow taxpayers to share in equity appreciation, requires that the Treasury receive non-voting warrants from participating financial institutions.

Section 114. Market Transparency.

48-hour Reporting Requirement: The Secretary is required, within 2 business days of exercising authority under this Act, to publicly disclose the details of any transaction.

Good, if we’re going to screw our economy up more, I at least want to understand exactly how it happened.

Section 115. Graduated Authorization to Purchase.

Authorizes the full $700 billion as requested by the Treasury Secretary for implementation of TARP. Allows the Secretary to immediately use up to $250 billion in authority under this Act. Upon a Presidential certification of need, the Secretary may access an additional $100 billion. The final $350 billion may be accessed if the President transmits a written report to Congress requesting such authority. The Secretary may use this additional authority unless within 15 days Congress passes a joint resolution of disapproval which may be considered on an expedited basis.

Again, good – it at least gives us the hope that we won’t use all $700 billion, at least on this bailout.

Section 116. Oversight and Audits.

Requires the Comptroller General of the United States to conduct ongoing oversight of the activities and performance of TARP, and to report every 60 days to Congress. The Comptroller General is required to conduct an annual audit of TARP. In addition, TARP is required to establish and maintain an effective system of internal controls.

Section 117. Study and Report on Margin Authority.

Directs the Comptroller General to conduct a study and report back to Congress on the role in which leverage and sudden deleveraging of financial institutions was a factor behind the current financial crisis.

Section 118. Funding.

Provides for the authorization and appropriation of funds consistent with Section 115.

Section 119. Judicial Review and Related Matters.

Provides standards for judicial review, including injunctive and other relief, to ensure that the actions of the Secretary are not arbitrary, capricious, or not in accordance with law.

Section 120. Termination of Authority.

Provides that the authorities to purchase and guarantee assets terminate on December 31, 2009. The Secretary may extend the authority for an additional year upon certification of need to Congress.

Section 121. Special Inspector General for the Troubled Asset Relief Program.

Establishes the Office of the Special Inspector General for the Troubled Asset Relief Program to conduct, supervise, and coordinate audits and investigations of the actions undertaken by the Secretary under this Act. The Special Inspector General is required to submit a quarterly report to Congress summarizing its activities and the activities of the Secretary under this Act.

Section 122. Increase in the Statutory Limit on the Public Debt.

Raises the debt ceiling from $10.6 trillion to $11.3 trillion.

Section 123. Credit Reform.

Details the manner in which the legislation will be treated for budgetary purposes under the Federal Credit Reform Act.

Section 124. Hope for Homeowners Amendments.

Strengthens the Hope for Homeowners program to increase eligibility and improve the tools available to prevent foreclosures.

I’ve already voiced my opinions on this – this is gonna hurt us.

Section 125. Congressional Oversight Panel.

Establishes a Congressional Oversight Panel to review the state of the financial markets, the regulatory system, and the use of authority under TARP. The panel is required to report to Congress every 30 days and to submit a special report on regulatory reform

prior to January 20, 2009. The panel will consist of 5 outside experts appointed by the House and Senate Minority and Majority leadership.

Section 126. FDIC Enforcement Enhancement.

Prohibits the misuse of the FDIC logo and name to falsely represent that deposits are insured. Strengthens enforcement by appropriate federal banking agencies, and allows the FDIC to take enforcement action against any person or institution where the banking agency has not acted.

This wasn’t prohibited before?  I feel like that should’ve been outlawed back when the FDIC was FORMED!

Section 127. Cooperation With the FBI.

Requires any federal financial regulatory agency to cooperate with the FBI and other law enforcement agencies investigating fraud, misrepresentation, and malfeasance with respect to development, advertising, and sale of financial products.

Again, this needed to be in a bill?

Section 128. Acceleration of Effective Date.

Provides the Federal Reserve with the ability to pay interest on reserves.

Section 129. Disclosures on Exercise of Loan Authority.

Requires the Federal Reserve to provide a detailed report to Congress, in an expedited manner, upon the use of its emergency lending authority under Section 13(3) of the Federal Reserve Act.

Again, if we’re going to kill our economy, at least we know how we did it so we don’t do it again.

Section 130. Technical Corrections.

Makes technical corrections to the Truth in Lending Act.

Section 131. Exchange Stabilization Fund Reimbursement.

Protects the Exchange Stabilization Fund from incurring any losses due to the temporary money market mutual fund guarantee by requiring the program created in this Act to reimburse the Fund. Prohibits any future use of the Fund for any guarantee program for the money market mutual fund industry.

Section 132. Authority to Suspend Mark-to-Market Accounting.

Restates the Securities and Exchange Commission’s authority to suspend the application of Statement Number 157 of the Financial Accounting Standards Board if the SEC determines that it is in the public interest and protects investors.

Section 133. Study on Mark-to-Market Accounting.

Requires the SEC, in consultation with the Federal Reserve and the Treasury, to conduct a study on mark-to-market accounting standards as provided in FAS 157, including its effects on balance sheets, impact on the quality of financial information, and other matters, and to report to Congress within 90 days on its findings.

Section 134. Recoupment.

Requires that in 5 years, the President submit to the Congress a proposal that recoups from the financial industry any projected losses to the taxpayer.

Again, why is the President writing this proposal?  And how do they honestly plan on recouping losses?  How do you get back billions of dollars from the financial industry?  I feel sorry for whoever has to write that proposal.

Section 135. Preservation of Authority.

Clarifies that nothing in this Act shall limit the authority of the Secretary or the Federal Reserve under any other provision of law.

Title II-Budget-Related Provisions

Section 201. Information for Congressional Support Agencies.

Requires that information used by the Treasury Secretary in connection with activities under this Act be made available to CBO and JCT.

Section 202. Reports by the Office of Management and Budget and the Congressional Budget Office.

Requires CBO and OMB to report cost estimates and related information to Congress and the President regarding the authorities that the Secretary of the Treasury has exercised under the Act.

Section 203. Analysis in President’s Budget.

Requires that the President include in his annual budget submission to the Congress certain analyses and estimates relating to costs incurred as a result of the Act; and

Section 204. Emergency Treatment.

Specifies scoring of the Act for purposes of budget enforcement.

Title III-Tax Provisions

Section 301. Gain or Loss From Sale or Exchange of Certain Preferred Stock.

Details certain changes in the tax treatment of losses on the preferred stock of certain GSEs for financial institutions.

Section 302. Special Rules for Tax Treatment of Executive Compensation of Employers Participating in the Troubled Assets Relief Program.

Applies limits on executive compensation and golden parachutes for certain executives of employers who participate in the auction program.

That I agree with.  If we’re bailing out these companies, lets at least waste the money solely on the companies.

Section 303. Extension of Exclusion of Income From Discharge of Qualified Principal Residence Indebtedness.

Extends current law tax forgiveness on the cancellation of mortgage debt.

Alright, so that was the full summary of the bill that FAILED the House yesterday.

I want give you a quote from Representative Ron Paul (R-TX), given during yesterday’s House session:

Mr. PAUL. Madam Speaker, I rise in strong opposition to this bill. This is only going to make the problem that much worse. The problem came about because we spent too much; we borrowed too much, and we printed too much money; we inflated too much, and we overregulated. This is all that this bill is about is more of the same.

So you can’t solve the problem. We are looking at a symptom. We are looking at the collapsing of a market that was unstable. It was unstable because of the way it came about. It came about because of a monopoly control of money and credit by the Federal Reserve System, and that is a natural consequence of what happens when a Federal Reserve System creates too much credit.

Now, there have been a fair number of free market economists around who have predicted this would happen. Yet do we look to them for advice? No. We totally exclude them. We don’t listen to them. We don’t look at them. We look to the people who created the problem, and then we perpetuate the problem.

The most serious mistake that could be made here today is to blame free market capitalism for this problem. This has nothing to do with free market capitalism. This has to do with a managed economy, with an inflationary system, with corporatism, and with a special interest system. It has nothing to do with the failure of free markets and capitalism. Yet we’re resorting now, once again, to promoting more and more government.

Long term, this is disastrous because of everything we’re doing here and because of everything we’ve done for 6 months. We’ve already pumped in $700 billion. Here is another $700 billion. This is going to destroy the dollar. That’s what you should be concerned about. Yes, Wall Street is in trouble. There are a lot of problems, and if we don’t vote for this, there are going to be problems. Believe me: If you destroy the dollar, you’re going to destroy a worldwide economy, and that’s what we’re
on the verge of doing, and it is inevitable, if we continue this, that that’s what’s going to happen. It’s [Page: H10370]
going to be a lot more serious than what we’re dealing with today.

We need to get our house in order. We need more oversight–that is a certainty–but we need oversight of the Federal Reserve System, of the Exchange Stabilization Fund and of the President’s Working Group on Financial Markets. Find out what they’re doing. How much have they been meddling in the market?

What we’re doing today is going to make things much worse.

Pure economic genius from Dr. Paul.

And here’s a quote from Representative Marilyn Musgrave (R-CO):

Mrs. MUSGRAVE. Madam Speaker, I am pleased that the strong opposition to the initial administration proposal has helped to force some very important changes such as the bipartisan oversight board, which is an online database that will allow greater oversight of the Secretary’s actions, but this is still a bailout for Wall Street that will cost the average Colorado household thousands.

I simply cannot stomach transferring that kind of money from the middle class families to a bunch of Wall Street bankers whose avarice and greed put us in this situation in the first place. It’s interesting that, when working families were being crushed by soaring energy prices this summer, Congress went on vacation. Yet, when Wall Street faced the consequences of its actions, we worked around the clock to help them. We should place the same priority on helping Main Street that we place on helping
Wall Street.

And there she expresses what most Americans are expressing: “Why use my money to bail out people and companies who acted irresponsibly?”

A full record of everything said at yesterday’s House session is available on C-Span’s website here (it’s actually pretty cool – I never knew they had that!).

So, again, I am glad that the House voted down this bill.  Hopefully I’ll be able to see the next bill BEFORE there’s a vote on it – I was very disappointed that there was no record of this until today, and even then, so many people were trying to access it that they were killing GovTrack.us and the House websites.

On a side note, here’s a copy of the roll call vote, and I’d like to note that I’m terribly disappointed in Representative Tancredo (R-CO) for voting Aye on this.

Done Ranting,

Ranting Republican
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Obama’s “I’ve Got a Bracelet Too” Comment Was Disrespectful to Troops

September 29, 2008

Alright, this is (presumably) my last post about Friday’s debate.  The following is an exchange between Senator McCain and Senator Obama, regarding Afghanistan:

When I originally watched that, what struck me the most was Obama saying (1:17), “Uh, Jim, th-l-let me just make a point: I’ve got a bracelet too.  From Sergeant–uh–uh–from the mother of–uh–Ryan David Jopek, given to me in Green Bay.”

Now, first, I know that me putting the stuttering in there looks kinda bad, but I have a point to that.  The part that struck me most offensive was the “Let me just make a point: I’ve got a bracelet too.”  It came across as Obama saying something like, “Oh yeah, well I’ve got…”  And my (liberal) roommate agreed with me – he found that part as a bad statement from Obama (and again, thanks to my roommate for all he’s helped me with on the blog – especially during the debate, when I couldn’t keep up with typing as fast as they were talking).

The media had raised the fact that Obama stuttered over Sergeant Jopek’s name, and at first, based on initial videos that I watched I was going to dismiss it to the fact that Obama is really not that great of a speaker, especially in debates (as evidenced by the stuttering and the “um”s, which is why I included it.  It’s not an insult to him, it’s just the truth.  I love Representative Tom Tancredo [R-CO], but I’ll be the first to admit–and I have–that when it comes to speaking, he’s just atrocious).

Then I watched the video again today.  Notice as he’s trying to get the name out, that he looks down.  My thought was that the name is on the bracelet and he’s trying to read the name.  I don’t know if my theory is right or not, but if it is correct, it gives more credit to the people who were claiming that Obama forgot the name of the soldier.

Again, even if he did “forget” the name, I think this could be credited to the fact that he was probably nervous, and that’s what I credit a lot of his stuttering to (it seemed higher than normal).  The biggest problem that I had with that statement was his whole attitude.  The irreverent attitude of “I’ve got a bracelet too.”  It came across that he was just using the sacrifice that Sergeant Jopek gave for political gain.

We have to be very careful when we use military heroes as examples.  When our soldiers become methods to get points across instead of the REASON that we are making the point, we have trivialized their sacrifices and have dishonored them.  This is unacceptable, no matter who does it or what party they are from.

Done Ranting,

Ranting Republican
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Henry Kissinger Says that Obama Lied About His Views on Iran

September 29, 2008

I know that this has been raised in the media quite a bit, but I just wanted to comment briefly on this.  During the debate, the following exchange took place (transcript courtesy of CNN) (bolded areas are the parts that relate directly to Dr. Henry Kissinger (Fmr. Secretary of State), but I always put things in context, so here’s the whole segment:

LEHRER: Two minutes on Iran, Senator Obama.

OBAMA: Well, let me just correct something very quickly. I believe the Republican Guard of Iran is a terrorist organization. I’ve consistently said so. What Senator McCain refers to is a measure in the Senate that would try to broaden the mandate inside of Iraq. To deal with Iran.

And ironically, the single thing that has strengthened Iran over the last several years has been the war in Iraq. Iraq was Iran’s mortal enemy. That was cleared away. And what we’ve seen over the last several years is Iran’s influence grow. They have funded Hezbollah, they have funded Hamas, they have gone from zero centrifuges to 4,000 centrifuges to develop a nuclear weapon.

So obviously, our policy over the last eight years has not worked. Senator McCain is absolutely right, we cannot tolerate a nuclear Iran. It would be a game changer. Not only would it threaten Israel, a country that is our stalwart ally, but it would also create an environment in which you could set off an arms race in this Middle East.

Now here’s what we need to do. We do need tougher sanctions. I do not agree with Senator McCain that we’re going to be able to execute the kind of sanctions we need without some cooperation with some countries like Russia and China that are, I think Senator McCain would agree, not democracies, but have extensive trade with Iran but potentially have an interest in making sure Iran doesn’t have a nuclear weapon.

But we are also going to have to, I believe, engage in tough direct diplomacy with Iran and this is a major difference I have with Senator McCain, this notion by not talking to people we are punishing them has not worked. It has not worked in Iran, it has not worked in North Korea. In each instance, our efforts of isolation have actually accelerated their efforts to get nuclear weapons. That will change when I’m president of the United States.

LEHRER: Senator, what about talking?

MCCAIN: Senator Obama twice said in debates he would sit down with Ahmadinejad, Chavez and Raul Castro without precondition. Without precondition. Here is Ahmadinenene [mispronunciation], Ahmadinejad, who is, Ahmadinejad, who is now in New York, talking about the extermination of the State of Israel, of wiping Israel off the map, and we’re going to sit down, without precondition, across the table, to legitimize and give a propaganda platform to a person that is espousing the extermination of the state of Israel, and therefore then giving them more credence in the world arena and therefore saying, they’ve probably been doing the right thing, because you will sit down across the table from them and that will legitimize their illegal behavior.

The point is that throughout history, whether it be Ronald Reagan, who wouldn’t sit down with Brezhnev, Andropov or Chernenko until Gorbachev was ready with glasnost and perestroika.

Or whether it be Nixon’s trip to China, which was preceded by Henry Kissinger, many times before he went. Look, I’ll sit down with anybody, but there’s got to be pre-conditions. Those pre-conditions would apply that we wouldn’t legitimize with a face to face meeting, a person like Ahmadinejad. Now, Senator Obama said, without preconditions.

OBAMA: So let’s talk about this. First of all, Ahmadinejad is not the most powerful person in Iran. So he may not be the right person to talk to. But I reserve the right, as president of the United States to meet with anybody at a time and place of my choosing if I think it’s going to keep America safe.

And I’m glad that Senator McCain brought up the history, the bipartisan history of us engaging in direct diplomacy.

Senator McCain mentioned Henry Kissinger, who’s one of his advisers, who, along with five recent secretaries of state, just said that we should meet with Iran — guess what — without precondition. This is one of your own advisers.

Now, understand what this means “without preconditions.” It doesn’t mean that you invite them over for tea one day. What it means is that we don’t do what we’ve been doing, which is to say, “Until you agree to do exactly what we say, we won’t have direct contacts with you.”

There’s a difference between preconditions and preparation. Of course we’ve got to do preparations, starting with low-level diplomatic talks, and it may not work, because Iran is a rogue regime.

But I will point out that I was called naive when I suggested that we need to look at exploring contacts with Iran. And you know what? President Bush recently sent a senior ambassador, Bill Burns, to participate in talks with the Europeans around the issue of nuclear weapons.

Again, it may not work, but if it doesn’t work, then we have strengthened our ability to form alliances to impose the tough sanctions that Senator McCain just mentioned.

And when we haven’t done it, as in North Korea — let me just take one more example — in North Korea, we cut off talks. They’re a member of the axis of evil. We can’t deal with them.

And you know what happened? They went — they quadrupled their nuclear capacity. They tested a nuke. They tested missiles. They pulled out of the nonproliferation agreement. And they sent nuclear secrets, potentially, to countries like Syria.

When we re-engaged — because, again, the Bush administration reversed course on this — then we have at least made some progress, although right now, because of the problems in North Korea, we are seeing it on shaky ground.

And — and I just — so I just have to make this general point that the Bush administration, some of Senator McCain’s own advisers all think this is important, and Senator McCain appears resistant.

He even said the other day that he would not meet potentially with the prime minister of Spain, because he — you know, he wasn’t sure whether they were aligned with us. I mean, Spain? Spain is a NATO ally.

MCCAIN: Of course.

OBAMA: If we can’t meet with our friends, I don’t know how we’re going to lead the world in terms of dealing with critical issues like terrorism.

MCCAIN: I’m not going to set the White House visitors schedule before I’m president of the United States. I don’t even have a seal yet.

Look, Dr. Kissinger did not say that he would approve of face-to- face meetings between the president of the United States and the president — and Ahmadinejad. He did not say that.

OBAMA: Of course not.

MCCAIN: He said that there could be secretary-level and lower level meetings. I’ve always encouraged them. The Iranians have met with Ambassador Crocker in Baghdad.

What Senator Obama doesn’t seem to understand that if without precondition you sit down across the table from someone who has called Israel a “stinking corpse,” and wants to destroy that country and wipe it off the map, you legitimize those comments.

This is dangerous. It isn’t just naive; it’s dangerous. And so we just have a fundamental difference of opinion.

As far as North Korea is concerned, our secretary of state, Madeleine Albright, went to North Korea. By the way, North Korea, most repressive and brutal regime probably on Earth. The average South Korean is three inches taller than the average North Korean, a huge gulag.

We don’t know what the status of the dear leader’s health is today, but we know this, that the North Koreans have broken every agreement that they’ve entered into.

And we ought to go back to a little bit of Ronald Reagan’s “trust, but verify,” and certainly not sit down across the table from — without precondition, as Senator Obama said he did twice, I mean, it’s just dangerous.

OBAMA: Look, I mean, Senator McCain keeps on using this example that suddenly the president would just meet with somebody without doing any preparation, without having low-level talks. Nobody’s been talking about that, and Senator McCain knows it. This is a mischaracterization of my position.

When we talk about preconditions — and Henry Kissinger did say we should have contacts without preconditions — the idea is that we do not expect to solve every problem before we initiate talks.

And, you know, the Bush administration has come to recognize that it hasn’t worked, this notion that we are simply silent when it comes to our enemies. And the notion that we would sit with Ahmadinejad and not say anything while he’s spewing his nonsense and his vile comments is ridiculous. Nobody is even talking about that.

MCCAIN: So let me get this right. We sit down with Ahmadinejad, and he says, “We’re going to wipe Israel off the face of the Earth,” and we say, “No, you’re not”? Oh, please.

OBAMA: No, let me tell…

MCCAIN: By the way, my friend, Dr. Kissinger, who’s been my friend for 35 years, would be interested to hear this conversation and Senator Obama’s depiction of his — of his positions on the issue. I’ve known him for 35 years.

OBAMA: We will take a look.

MCCAIN: And I guarantee you he would not — he would not say that presidential top level.

OBAMA: Nobody’s talking about that.

MCCAIN: Of course he encourages and other people encourage contacts, and negotiations, and all other things. We do that all the time.

LEHRER: We’re going to go to a new…

MCCAIN: And Senator Obama is parsing words when he says precondition means preparation.

OBAMA: I am not parsing words.

MCCAIN: He’s parsing words, my friends.

OBAMA: I’m using the same words that your advisers use.

Please, go ahead.

Alright, so again, I bolded the parts relevant to Dr. Kissinger.

Obama is arguing that Kissinger said that we should meet with Iran without preconditions.  McCain has taken this to say that Obama is saying that we should have the President meet with President Ahmadinejad without preconditions.  Personally, I didn’t get that strong of a statement from this debate; HOWEVER, he did say (back in the Youtube primary debate) that HE would meet with Iran (and other nations) without preconditions in his first year of office.  He also said (in this debate), “I reserve the right, as president of the United States to meet with anybody at a time and place of my choosing if I think it’s going to keep America safe.” So although Obama may only be arguing for lower-level negotiations now, he HAS in the past said HE HIMSELF would meet without preconditions.  To me, it seems like McCain is making Obama’s statements from this debate seem a little more extreme than they necessarily are, but Obama is clearly changing his stance on the issues.

But we have one other thing:

Dr. Kissinger released the following statement:

Senator McCain is right. I would not recommend the next president of the United States engage in talks with Iran at the presidential level. My views on this issue are entirely compatible with the views of my friend Sen. John McCain. We do not agree on everything, but we do agree that any negotiations with Iran must be geared to reality.

So, although McCain may have stretched Obama’s statements a bit, Obama took Dr. Kissinger’s comments farther than Dr. Kissinger intended, and Obama has flip-flopped on the issue.  The greater fault definitely lies with Obama here, who is just being completely dishonest.

Kissinger did say that “I do not believe that we can make conditions for the opening of negotiations.”  Personally, I disagree with that – I will note that we have NEVER successfully met with a hostile country without preconditions at the Presidential level.  Nixon and Mao met with preconditions after years of other lower-level talks.  The same with Gorbachev and Reagan.  And the one time we did meet without preconditions, was when Kennedy met with Khrushchev and Kennedy admits that “He just beat the hell out of me.  I’ve got a terrible problem if he thinks I’m inexperienced and have no guts.  Until we remove those ideas we won’t get anywhere with him.”

That, my friends, would be Barack Obama.

Done Ranting,

Ranting Republican
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Unofficial Deal Reached in Congress on Financial Bailout Bill

September 28, 2008

Word has just come in that congress has reached at deal; however, this deal has NOT been written down officially on paper yet.  This was a verbal deal made between Congressional leaders and the Bush administration.  The House is expected to vote on this bill later today (Sunday), and then pass it on to the Senate for a vote on Monday.  Treasury Secretary Henry Paulson told reporters that the deal still has to be officially finalized, but “I think we’re there.”

Earlier in the night, Speaker of the House Nancy Pelosi (D-CA) told reporters that “quite a bit” of progress had been made.

Earlier in the night, Senate Finance Committee Chairman Max Baucus had told reporters, “We’re making a lot of headway; I think it’s possible to get this thing done tonight, [but] I can’t guarantee it.”  It appears as if this deal was reached sometime within the last hour, sometime just after midnight.

I really want to see the guts of this bill before I make a final judgment on it – I just hope that we’re not going to waste more taxpayer money on something that will completely plunge our economy into the ground.

I’ll give any updates as soon as I get them, which probably won’t be until the House convenes tomorrow.

Done Reporting,

Ranting Republican
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Happy 10th Birthday, Google

September 27, 2008

Well, I did a post on this last year(granted I was completely mentally out of it), so why not do another one this year?  I find it amusing that last year 3:30 A.M. was late for me.  Now I’m up until 4:00 or 5:00 A.M., get 3 hours of sleep, and I’m still fine as long as I get a 2 hour nap during the day.

Anyway, happy 10th birthday to Google.  Gosh, if I were as successful as Google by my 10th birthday, I’d be so happy right now.  Oh well, I’ve still got time!

Done Celebrating,

Ranting Republican
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Live Analysis of the September 26 Presidential Debate on Foreign Policy

September 26, 2008

**My apologies for any typos – I tried to catch all of them, but live blogging a debate is hard, and my keyboard acts up from time to time (especially the space bar), so if you see a typo, just leave a comment and I’ll fix it.**

We’re about a minute out, I’ll be live blogging the whole event.  Jim Lehrer (PBS) is the moderator.  I’ll be watching CNN (it would be FOX, but they weren’t ready on time).

The Ku Klux Klan is in the audience, we’ve heard, but not in robes and not protesting.

First question, “Where do you stand on the financial recovery plan?”

Obama: Thank you to everybody – the usual beginning.  “Worst financial crisis since the great depression. … We have to move swiftly and we have to move wisely.”  Talking about oversight, since it’s a lot of money.  Taxpayers need to be able to get the money back.  Shouldn’t be padding CEO bank accounts.  Talking about trickle down economics not working.  That’s not going to help him win over any Republicans.

McCain: Senator Kennedy is in the hospital.  Thank you to the sponsors, etc.  Talking about seeing Democrats and Republicans sitting down and working together, and the magnitude of the crisis.  Emphasizing that we have to work together, something that Obama didn’t mention – that was good from McCain.  Talking about having options for loans for businesses, not the government taking over those loans.  GOOD – not a pure bailout!  CNN has an audience  reaction, and McCain is getting a pretty good response from the Independents (must be some keypad rating system or something).  Talking about a lot of work to do if this will work.  Eliminate dependence on foreign oil – good.

Lehrer: Do you favor this plan?

Obama: I “haven’t seen the language yet.”  “How did we get in this situation in the first place?”  Talking about him warning 2 years ago that mortgage abuse would lead us down a trail we can’t afford to go down.  “Yes, we have to solve this problem short term, … but … look at how we shredded so many regulations … and that has … to do with an economic philosophy that says regulation is bad.”

Lehrer: “Will you vote for the plan?”

McCain: “Sure.”  Talking about warning about Freddie Mac and Fannie Mae.  Talking about getting flack for calling for resignation of Securities and Exchange Commission.  And the Independents’ rating has skyrocketed.  Republicans increased too.  It was good – him calling for the resignation, and people like that.

Obama: Talking about people struggling before this crisis.  It’s interesting – the Dems are rating Obama higher than the Indies, but the Indies rated McCain higher than the Reps.  Talking about holding ourselves accountable, all the time, talking about nurses and teachers, and politicians not paying attention to them.  Good – he’s appealing to the average Americans here, and that’s who he needs to win over.

McCain: “We have a long way to go.”  Need consolidation of regulatory agencies who failed and let us slip into this crisis.  Talking about the greatness of the American worker, and the Republicans like it, but it’s not that appealing to Independents, but it will appeal to a lot of average Joe Americans, as long as they believe he’s sincere (and the audience must not have).

Lehrer: How do we get out of the crisis?

McCain: Spending control.  And the Reps and Inds, liked it – and this is one of McCain biggest points, and now he’s talking about Senator Tom Coburn (R-OK), a huge anti-earmark politician.  Talking about the DNA testing of bears.  I LOVE McCain saying he’ll veto earmarked bills.  It’s one of his best stances.  He’s talking about Obama asking for earmark spending.  Talking about not being able to rein in spending with a plan like Obama’s.

Obama: The earmark process has been abused.  Lobbyists and special interests introduce these things, often times.  Contrasting the cost of earmarks against tax cuts (by allegedly McCain) for CEOs and big companies.  “Grow the economy for the bottom up.”  Tax cut for 95% of working families.  HOLD IT!  Only 90% of working families even PAY taxes!!!!  Come on Obama, don’t lie.

McCain: Obama suspended those earmarks after he started running for Congress.  YOU TELL ‘EM MCCAIN!  He’s saying that earmarks have tripled in 5 years, even though “it’s only $18 billion” (as pro-earmarkers say).  He was called the Sheriff.  That’s pretty sweet.  As I was saying before, we need to take Coburn’s example and STOP EARMARKS!

Obama: Interrupted McCain (must be kinda less formal).  Talking about priorities, and shipping, and I missed the rest.  Saying he’ll keep us from spending unwisely.  Earmarks alone won’t get us back on track.  The Democrats are loving this, but the Independents, aren’t really liking it.

McCain: Talking about the business tax, that we pay the 2nd highest in the world, 35%.  “I want to cut that business tax.  I want to cut it.”  “It’s a lot more than $18 billion in pork barrel spending.”  And he’s right, it’s SO much more than that, and it’s hidden in so many bills.  The Independents are liking this.  “I want every family to have a $5,000 refundable tax credit” for healthcare.  Double the dependent amount refund for children.

Obama: “Here’s what I can tell America 95% of you will get a tax cut.”  LIAR.  10% don’t even PAY taxes.  And another 5% make over $200,000, and he won’t give them a tax cut.  LIAR!  Saying McCain wants to add an additional tax cut over the loopholes.  Talking about McCain’s health care tax credit.  Saying McCain wants to tax health benefits.  That’s not true.

McCain: Talking about an energy bill with breaks for oil companies, and McCain voted against it, but Obama voted for it.”  Obama tried to interrupt – that just looks tacky when he keeps doing it.  Saying that Obama has shifted on a number of occasions.

Obama: Talking about Obama lying about the oil companies.  “I was opposed to those tax breaks … tried to strip them out.”

Lehrer: “As President … what are you going to have to give up … as a result of having to pay for the financial rescue plan?”

Obama: “Right now, it’s hard to anticipate what the budget is going to look like next year.”  He’s right about that.  “Energy independence.”  Talking about solar, wind, biodiesel here at home.  And the Independents REALLY loved that – highest rating I’ve seen all night.  Fix our healthcare system.  Compete in education – science and technology.  “Make sure our children are keeping pace in math and in science.”  Make college affordable for all.  That’s not even useful.  Not EVERYBODY needs college.  America needs plumbers and other basic labor workers too.

McCain: “No matter what, we have got to cut spending.”  Obama has most liberal rating.  “It’s hard to reach across the aisle from that far to the left.”  Do away with cost-plus contracts.  Talking about defense contracts and needing fixed-cost contracts.  And he’s absolutely right.  One of the big areas we need to save money is in defense contracts.  Talking about fixing a contract with Boeing, and people ending up in prison because of it, but hte Independents didn’t like that too much.

Lehrer: Neither of you are really going to have big changes?

Obama: “I want to make sure that we are investing in energy in order to [break off from] foreign oil.”  Right now, even the Democrats aren’t giving him a good audience reaction.  The Republicans are giving him a higher rating!  Saying that him being wildly liberal is just him opposing George Bush.  And that spiked the Dems’ rating.  Saying that he’s worked with Coburn so that taxpayers can see who’s promoting spending projects.

Lehrer: “How [will] this effect you in the approach you will take to the Presidency.”

McCain: Spending freeze on all but Veterans, defense, and I forget what else.

Obama: You’re using a hatchet where you need a scalpel.  But heck, that’d have to be a big scalpel.  But he does have a point here.

McCain: We’re sending money overseas, and some of that goes eventually to terrorists (through oil).  We need nuclear, solar, wind, offshore drilling, etc…  Get 70,000 (?) jobs by building nuclear plants throughout the country.  And Obama is against this.  And that’s one thing that really angers me about Obama – WE NEED NUCLEAR!

Obama: “There is not fact that it [economic crisis] will affect our budgets” even if we get the $700 billion back.  “If we’re lucky and do it right, that could potentially happen.”  “We can expect less tax revenue.”  And he’s really not getting a good audience response here.  Talking about not being able to leave out healthcare, and the Independents’ and Republicans’ approval just dropped.

McCain: Families should make decisions between themselves and doctors, not federal government.  “I have fought to cut spending.”  “Obama needs to cancel new spending programs.”  Talking about taking care of veterans.  Healthy economy, lowering, not raising taxes, with spending restraint.  And the independents liked that.  Talking about owing China money, and saying he’s fought against excessive spending.  And the ratings are skyrocketing – and again, I LOVE his stance on spending!

Obama: It’s been your President who presided over this spending.  But Bush and McCain aren’t the same.  Stop pretending they are.  That still got a good reply from the Independents.

McCain: I have opposed the President on spending, torture, Guantanamo, climate change.  Talking about being an Independent and Maverick, and having Sarah Palin as the same.  His ratings stunk right there.  He lost Dems, Reps, and Inds.

Lehrer: On to Iraq.

McCain: “Our initial military success … Baghdad, and everybody celebrated.”  Then the war was mishandled.  Came up with a new strategy.  It’s succeeding.  The Inds and Dems rating has fallen a lot, but hte Reps are rating him high.  Talking about the consequences of defeat being Iranian influence higher, more sectarian violence, and U.S. having to come back (referring to defeat before the surge).  And the Inds just started to rate him a lot better.  I think he did as good as he could back there.

Obama: I would’ve voted against it.  “We hadn’t finished the job in Afghanistan … caught bin Laden … and put Al Qaeda to rest.”  Talking about soon to be a trillion dollars spent, plus 4,000 lives lost.  Saying that Al Qaeda is stronger than ever.  “We took our eye off the ball.”  Talking about Iraq having a surplus while we’re losing money.  He’s bringing up a LOT of good points that I thought would appeal to people, but he’s not rating THAT great, although the Dems really like him.  Now it’s peaked a bit more.

McCain: President will have to decide how and when we leave and what we leave behind.  He’s absolutely right.  Obama saying surge worked, but he’d still oppose it.  And he lost a lot of Indy rating points just back there.  But he’s right.  Obama is simply sticking by what he said even though what he said was WRONG!

Obama: Talking about McCain being right about reduced violence.  Saying troops and Petraeus doing a good job.  But that made up for mismanagement before that.  War started in 2003, not 2007.  Saying McCain said it’d be quick and easy, but he was wrong.  Saying we’d be greeted as liberators, but we weren’t.  And he lost a lot of support from Inds, but he’s still doing better than McCain has on Iraq.

McCain: Saying Obama doesn’t have military experience, he’s got some better support form Inds and Reps now.  Saying that this strategy and general are winning, but Obama refuses to acknowledge this.  (Obama: “That’s not true.”)  Talking about elections and peace coming to Iraq, and the strategy will be employed in Afghanistan in a McCain administration, and the Inds went up a bit there.  Talking about Obama voting against troop funding.

Obama: McCain opposed funding for troops in a timetable bill.  Had a difference on timetables, not funding.  And Obama’s right.  It always looks bad on paper when you vote against funding, but if you don’t agree with the overall bill, don’t vote for it.  I have to side with Obama here, and the Inds liked that a lot, and even the Republicans aren’t that negatively rating him.  Reduce combat troops in Iraq.  “Capture and kill bin Laden.”  We don’t have enough troops to deal with Afghanistan.

McCain: Saying that military leaders saying that Obama’s plan would be bad for the troops.  Talking about Petraeus praising the progress we’ve made.  Saying that under Obama’s plan, we’d have been out before the surge could have even succeeded.  Saying that Obama’s plan will “snatch defeat from the jaws of victory.”

Lehrer: How many and when (if more troops in Afghanistan)?

Obama: As soon as possible.  Saying that this year has been the year for highest troop fatalities.  Can’t separate Afghanistan from Iraq.  And the Independents are rating him lower than the Repubs now – that’s surprising.  Saying that Al Qaeda is the greatest threat against us, and that we have to deal with them in Afghanistan and Pakistan, not Iraq.  Press the Afghan government to make sure that they’re working for their people.  And he’s absolutely right – we need to press the Afghani government.  Talking about needing to reduce the poppy trade over there.  And that’s another area we need to work on.

McCain: Talking about not being ready to threaten Pakistan, because that’d be dangerous.  We need to get support of the people of Pakistan.  And the Independents are rating him pretty high here.  Saying that Obama doesn’t understand that we need a new strategy.  Saying that Pakistani terrorists are married to Al Qaeda and Taliban.  Ratings are very high from Reps and Inds.  Although it’s dropped now.  Saying we need more troops in Afghanistan, but saying that we have put more in already.  Talking about Obama publicly saying he’d attack Pakistan.

Obama: Saying that if we have Al Qaeda in sights, and Pakistan won’t help us take them out, then we need to take them out.  Again, I have to side with Obama here.  Talking about McCain singing “Bomb Iran.”  And that was so stupid of McCain, and really makes him look like a hypocrite a bit here.  Although he lost a lot of ratings there surprisingly.  Talking about not going after Al Qaeda, and they’re more powerful than ever.

McCain: Talking about him being a new Congressman – Reagan wanting to send Marines into Lebanon, and McCain voting against it, because he didn’t think that 300 Marines could make a difference, and saying that he was right – many Marines were killed in the bombing.  Talking about voting for going into Bosnia, when it wasn’t popular.  Saying that we need more than a peace-keeping force in Somalia.  And he’s right.  We need to do what’s RIGHT, not what’s popular!  Saying that our mission NEEDS to succeed.  And he’s absolutely right.  We don’t want defeat, and we cannot afford defeat!  “We won’t come home in defeat and dishonor and probably have to go back if we fail.”

Obama: “No U.S. soldier ever dies in vain. … We honor the service they’ve provided. … Are we making good judgments” for keeping America safe, because sending troops is such a huge issue.  “We are having enormous problems in Afghanistan.”  Saying it’s not true that McCain has consistently cared about Afghanistan.  Saying McCain said we could “muddle through” Afghanistan.

McCain: “I’ve visited Afghanistan … and I know what our needs are.  We will prevail … and we need a new strategy.”  If we adopt Obama’s plan, we’ll fail in Iraq, and that will have a great effect on Afghanistan.  Obama fails to see that the 2 are connected.

Lehrer: “What is your reading from the threat from Iran?”

McCain: If Iran acquires nukes, it’s a threat to Israel and other countries.  Others will feel the need to get nukes.  “We can’t afford a second holocaust.”  Proposing a league of Democracies who would impose sanctions on Iranians, since the Russians won’t do it.  “The Iranians have a lousy government, so their economy is lousy, even though they have significant oil revenues.”  A nuclear Iran is a threat to the world.  They’re putting IEDs in Iraq.  They’re a sponsor of terror.  And he’s getting some pretty good ratings right now, from both Indeps and Repubs.

Obama: Talking about the thing that strengthened Iran was the War in Iraq.  Their involvement has grown.  They’ve tried harder to get nukes.  “We cannot tolerate a nuclear Iran.”  It would threaten Israel, and “create an environment [that would] set off an arms race in the Middle East.”  We can’t have sanctions without Russia and China.  Well Obama, you’re not going to get Russia OR China to side with you!  You’re dreaming if you think you will.  Saying we need to talk to leaders in Iran and North Korea, and he as President will.

McCain: Senator Obama twice said he’d sit down with Ahmadinejad, Chavez, and Castro.  Ahmadinejad is in New York now talking about extermination of Israel.  Saying that we can’t sit down without preconditions.  And he’s right.  NO President has ever sat down without preconditions (Reagan didn’t, JFK didn’t, and Nixon didn’t).  And now McCain is using examples that I just gave.  “I’ll sit down with anybody, but there’s gotta be preconditions.”  GOOD job McCain!  You’re absolutely right.

Obama: Ahmadinejad isn’t the most powerful person in Iran.  Saying as President, he can sit down with whoever he wants if it keeps America safe.  Saying that we CAN meet without preconditions, but not do with what we’ve been doing where we say you must do X or we won’t meet with you.  “Of course we need preparations.”  “It may not work.  Iran is a rogue regime.”  Obama is getting pretty much the same ratings now as McCain was getting a minute ago (about a third of the way between neutral and as positive as you can go).  “The Bush Administration and McCain’s advisors (Kissinger)” think we should meet without preconditions.  Saying McCain said we can’t meet with Spain, a NATO ally.

McCain: “Kissinger never said that the President could meet with Ahmadinejad.”  “Obama doesn’t understand that without precondition … you legitimize those comments [against Israel]. … It’s dangerous.”  Talking about North Koreans breaking everything they’ve ever said they’d do.

Obama: McCain keeps saying that I’ll meet with somebody without preparing – this isn’t true.  “We do not expect to solve every problem before we initiate talks.”  The Bush administration realized this doesn’t work.  “The notion that we’d meet with Ahmadinejad as he spews his comments is” wrong.

McCain: Kissinger would not say “that Presidential, top level” communications should be made without preconditions.

The two are going back and forth, and ratings are dropping a lot.

Lehrer: How do you see the relationship with Russia?

Obama: “Our entire Russian approach needs to be reevaluated. … Actions in Georgia were unacceptable and unwarranted.”  They need to get out of South Ossetia and Abkhazia.  The Democrats really aren’t liking what he’s saying here.  The Inds are rating him higher than Dems are.  We can’t go back to a Cold War status with Russia.  We need to deal with loose nuclear weapons when it comes to Russia.  “Deal with Russia based on [our] national security interests.”

McCain: Obama doesn’t understand that Russia committed aggression against Georgia when he said that both sides need to back down a bit.  He’s compared Putin to the KGB.  We can’t go back to the Cold War.  The Georgian War “had everything to do with energy.”  McCain’s rating a bit better than Obama, but neither are performing well right now with the audience.  “The Russians ought to understand that we’ll support … the inclusion of Georgia, and Ukraine … into inclusion of NATO.”  The Russians violated their cease fire agreement.  Saying that Russian intentions toward Georgia – just waiting to cease the opportunity.  Expecting Russians to behave as a country who will respect boundaries.  And he’s right – Russia can’t be left to keep doing what it’s been doing.  It HAS to respect the sovereignty of other countries.  McCain rating pretty decent now, compared to an average rating before.

Obama: McCain and I agree for the most part on these issues.  Says he disagrees with McCain a bit on Georgia.  I don’t think the Dems liked that – Obama is doing a decent amount worse than McCain was doing.  Talking about Russian peace keepers in Georgia not making sense and that we needed international peace keepers there, and that might have avoided the situation.  And Obama is right there.  Talking about energy.  We need to increase offshore drilling.  “We can’t drill our way out of the problem.”  Talking about needing wind, solar, and nuclear.  And now he’s rating higher than McCain was at the end of McCain’s last statement.  Saying McCain voted against alternative energy 23 times.

McCain: Saying that Obama is really against nuclear, and that offshore drilling would help more than Obama says it would.  McCain is getting pretty low ratings now, especially from Dems.

Obama: I have never said that I object to nuclear waste, but I’d store it safely.

McCain: I’ve always been for alternative energy.

Lehrer: What do you think the likelihood is of another 9/11 attack?

McCain: Much less than the day after 9/11, but we’re not safe yet.  Talking about working across the aisle to establish the investigation commission.  Saying we need interrogators who won’t use torture.  Saying that we are safer now.

Obama: We need to do more in terms of securing transit and ports.  Biggest issue is not missiles coming over skies, but from a suitcase.  Spending billions on missile defense, which we need because of Iran/Korea, but we need more for other areas as well.  Ratings are pretty high for him here.  We need more cooperation with allies.  “The way we are perceived in the world” will affect the cooperation we get.  He’s right here.  We have slipped in terms of how we’re viewed by the world.  McCain has a good stance on terror.  And the ratings right there are the highest they’ve been at any time during the debate, even Reps rated him decently high.

McCain: If we fail in Iraq, Al Qaeda will establish a base in Iraq.  McCain isn’t rating too good right now, especially with Inds and Dems.  We can’t have specific dates for withdrawal.  We’ve had great success, but it’s fragile.

Obama: Saying that this administration has been solely focused on Iraq, and we haven’t captured bin Laden.  Talking about borrowing from China, and they’ve been active around the world, while we’ve been focused on Iraq.  We’re spending so much money, we can’t invest in health care or science/technology.  “We’ve never seen a nation who has a failing economy but maintains military strength, so this is a national security issue.”  The next President has to have better strategy for all the challenges we face.  Pretty good ratings there

McCain: Saying he’s been around involved in challenges.  Saying Obama doesn’t have  experience, but he does.  Talking about Obama failing to admit the success of the surge.  McCain is right here.  Obama is just being stubborn.  Saying that he’ll take care of veterans, that he has right judgment to keep nation safe and secure.  “I don’t need any on the job training.  I’m ready to go right now.”

Obama: Talking about his father being from Kenya, and that there’s not nation like America, where you can become so successful.  “Part of what we need to do … is to send a message to the world that we’ll invest in issues like education … how ordinary people can live out there dreams.”

McCain: Talking about coming home from prison and seeing veterans treated poorly, and working on bipartisan bills to see our veterans treated better.  I know how to deal with our adversaries and how to deal with our friends.

Lehrer: We’re done.  “Thank you and good night.”

McCain/Obama: “Good job.”

And there you have it – the wives are coming out and kissing each other.  A little more than the 90 minutes scheduled, but that’s ok.

OK, so who won?  Both Obama and McCain had some pretty good moments, but I don’t think there was a clear cut winner here.  I think both performed pretty much on the same level.  I’m not saying that the two were identical in debating, but I don’t think one did better than the other.  I absolutely hate saying this, because I love objectivity and clear cut answers, but I really do think it was a tie.

I’d love to go on more and more, but my hands are just killing me right now (hey – it was a lot of typing), so I think I’ve said most all of what I wanted to say.

By the way – a big thanks to my roommate who helped with correcting quotes and what was said.  It’s hard to keep up with typing and trying to listen, so a huge thanks to him for helping me out with this!

Done Analyzing,

Ranting Republican
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McCain Will Participate in Tonight’s Debate

September 26, 2008

Well, I was just about to publish a post about the fate of tonight’s debate not being known when news broke from the McCain campaign that McCain will in fact participate in tonight’s debate.  I think this may look bad since it’ll seem like he’s reneging on his promise to suspend his campaign to resolve the economic crisis.  We’ll see if Obama plays that card or not.  Hopefully the Senate will pass the bill (but a good bill, not the bailout that many want) before the debate, not just for McCain’s sake, but for the sake of the country.  The following is my original post:

Well, in a twist that makes an already weird election even weirder, nobody (at least nobody outside of his campaign) knows whether or not McCain will attend tonight’s Presidential debate.

Personally, I don’t think he should’ve put a blanket suspension on his campaign.  Here’s why:

  • If he skips the debate, that’s some HUGE points for Obama, unless something drastic goes down in the Senate and McCain can actually blame the economic package not passing on Obama or something, but that’s pretty unlikely.
  • If he comes to the debate and the bailout bill hasn’t been resolved, he’s going to look like a reneger.  “Oh he suspended his campaign, but when it was really important, he went back on his word.”  He never should have suspended it indefinitely until he knew what was going on with the debate.

Personally, I think that both candidates should have postponed the debate (and Bill Clinton agrees with me here), but I don’t think McCain should’ve done it without coordinating with Obama first.

I’ll try to post information as soon as I get it, but I have classes later today and then some county GOP stuff to do, so I may not be around.  I do plan on live blogging the debate tonight … that is, if there is one.

Done Ranting,

Ranting Republican

So, as I said, I will now be live blogging tonight’s debate from Oxford, Mississippi.  It’ll be fun, so come back here and read my analysis.

Done Reporting,

Ranting Republican
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Holy Crap! This Election Could Get Weird: An Electoral College Tie? Acting President Pelosi?

September 25, 2008

So, I’ve been looking through polls lately, and the way it stands now, if Obama holds all the states he currently has, and McCain picks up all the tossup states, we’d have an Electoral College tie (assuming that all the electors keep their promise to vote for their party).

Let’s look at the map (courtesy of my favorite election website, the U.S. Election Atlas) of the current polls (note, that first link may be different than the image below.  That link goes to the updated version of the polls.  The image below is an image that I created inputting the different numbers):

Electoral Votes:
Obama: 269
McCain: 212
Tossup: 57

Now, these are the averages of the last 3 polls.  I have a couple disagreements with the polls:

  • Pennsylvania is not slight Obama.  I think it should be Lean Dem.
  • Michigan is not Lean Dem.  It should be slight Dem.  There was a recent poll that had Obama way more ahead than he really is, and I think it’s skewing the results.
  • Florida isn’t Slight Rep.  I think it’s Lean Rep.
  • West Virginia isn’t Slight Rep.  It should also be Lean Rep in my opinion.
  • I don’t think Minnesota is Slight Dem.  I think it should probably be Lean Dem.
  • Montana should be Strong Rep not Lean Rep, but there were a couple polls throwing that off.
  • Nevada should probably be Slight McCain in all honesty, but I’ll talk about that later.

Other than that, I agree with this map.  So, let’s take a look at the tossup states:

  • Nevada: Although it’s close, most recent polls have shown McCain with a slight lead here.  I wouldn’t be surprised if that switches over to slight McCain in the next 3 days (whenever a poll comes out).  It’s really only a tossup because of an ARG (American Research Group) poll, and they’re a pretty crappy polling firm.  My call: McCain +5.  That puts him at 217.
  • North Carolina: Freakishly close lately, and it’s a state that we wouldn’t expect to be close.  However, I think this’ll trend back toward McCain as we get closer to Election day.  My call: McCain +15.  That puts him at 232.
  • Virginia: Similar to Nevada, most polls have shown McCain with a lead here.  I think we simply have some outliers, and as more polls come out, we’ll see that swing back to Slight McCain.  My call: McCain +13.  That puts McCain at 245.
  • New Hampshire: Most polls have had Obama winning, but recently it’s been trending toward McCain, and then McCain took the lead (granted one of those was an ARG poll, so we can ignore one of the three that had McCain winning).  This may be more of a gut feeling than actual math, but I think New Hampshire will go for McCain.  My call: McCain +4.  That gives him 249.
  • Ohio: Now, here’s the exciting one.  This has been by far the closest state in this election.  Polls have had Obama and McCain ahead of each other, as well as simply tied.  Trying to call this right now is really probably a shot in the dark, but because McCain has an ever so slight lead here, I’m going to make my call: McCain +20.  That would give McCain 269.  And the two are now tied.

I think we need to talk a little more about one last state: Michigan, my home state.  Although it’s not this way on the map, I said that I think Michigan is the only Slight Obama state.  I think it’s the only current Obama state that could be in play.  With a rough economy, a lot could happen, and the economy has been effecting Michigan the worst.  If Michigan were to go for McCain, McCain could then afford to lose either North Carolina, Nevada, New Hampshire, Virginia, or Nevada and New Hampshire.  If he won Michigan, but lost Virginia and New Hampshire (also a very good possibility), we would once AGAIN have a tie.

So, what’s my honest prediction?  I’m glad you asked.  I’ll show you (since this’ll get outdated, I’m sure, here’s a link to my prediction page, which will have my latest prediction on it):

Percentages:

Electoral Votes:
Obama: 269
McCain: 269

 

Confidence:

Electoral Votes:
Obama: 252
McCain: 227
Tossup: 59

 

So, what would happen if my prediction comes true?

  1. Assuming that we don’t have any faithless electors (electors who don’t vote the way they’re supposed to), and I don’t think we will–any faithless elector is pretty much asking to be assassinated: The vote would go to the House of Representatives.  But they do things kinda funky when they vote.  They don’t vote individually, they vote by state delegation, so it’s winner take all, but the Representatives decide, not the voters.  Here’s a map of the current House:

    The Republicans hold 21 of those, the Democrats hold 27, and 2 are tied.  You need 26 to win (50 states, so 1 more than half).  Obama wins, right?  Well, hold on a minute.  There’s a couple of things we have to keep in mind:

    1. Alaska could easily be won by the Democrat this year.  That’d be one more for Obama.
    2. Arizona, a tied state, could easily go to the Republican side.  Even if it doesn’t, a Democrat may be swayed to vote for the “home state boy.”  I’m pretty confident that we can add Arizona to McCain’s pile.  McCain has 22.
    3. Indiana could easily go over to the Republicans.  For now, I’ll keep Indiana in Obama’s pile.
    4. So, we have Obama with 27, McCain with 22, and 1 tie.  I think Kansas would go for McCain, making it 27, 23.  Obama wins, right?  Again, slow down.
    5. 4 of Obama’s delegations are in the south.  I don’t see the Tennessee, North Carolina, or Mississippi delegations voting for an African American.  That makes it Obama 24, McCain 26.  McCain wins.  However, there are enough Democrats in Mississippi that there’s an EVER SO SLIGHT possibility that it’d go for Obama.  That leaves us at 25-25.
  2. If we get to 25-25, they’d keep voting.  If they never break the tie…
  3. While the House was voting on President, the Senate would have elected the Vice-President, and we’d have acting President Biden/Palin.  As it stands now, it’d probably be a tie.  You have 49 Democrats and 49 Republicans, plus Bernie Sanders (I-VT) and Joe Lieberman (I-CT).  Sanders votes with the Democrats (he caucuses with them, so he would vote with them on this).  Lieberman, who caucuses with the Democrats votes for McCain.  I don’t doubt this, he’s endorsed him.  That gives us 50-50. 
  4. We then have acting President Nany Pelosi, since Speaker of the House is next in line.  Scary, I know.
  5. One litle note I forgot to put in here – the House has until March 4th to come up with a President.  If they don’t by then, then the acting President (whether that be the VP choice that the Senate made or the Speaker of the House) becomes the President.

Not only is this scenario extremely complicated, it’s historically unprecedented, but it actually has a decent chance of happening.  I shudder to think that Pelosi could be President, but this would be one heck of a story for the history books.

I’ll hopefully becoming out with Predictions once a week, as more polls and details come in, and as we get closer to the election.  I’ll also be covering the debate tomorrow night, live, so come back here for lots more election fun.

Done Hypothetically Situating,

Ranting Republican
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McCain Asks Obama, Debate Commission to Postpone Debate Due to Economic Crisis

September 24, 2008

Today, John McCain issued the following statement regarding the economic crisis:

Remarks on the Economic Crisis

September 24, 2008

America this week faces an historic crisis in our financial system. We must pass legislation to address this crisis. If we do not, credit will dry up, with devastating consequences for our economy. People will no longer be able to buy homes and their life savings will be at stake. Businesses will not have enough money to pay their employees. If we do not act, ever corner of our country will be impacted. We cannot allow this to happen.

Well, it was mainly legislation that got us into this mess, so let’s be careful not to make a temporary fix that will make things even worse 50 years down the road.

Last Friday, I laid out my proposal and I have since discussed my priorities and concerns with the bill the Administration has put forward. Senator Obama has expressed his priorities and concerns. This morning, I met with a group of economic advisers to talk about the proposal on the table and the steps that we should take going forward. I have also spoken with members of Congress to hear their perspective.

It has become clear that no consensus has developed to support the Administration’s proposal. I do not believe that the plan on the table will pass as it currently stands, and we are running out of time.

Tomorrow morning, I will suspend my campaign and return to Washington after speaking at the Clinton Global Initiative. I have spoken to Senator Obama and informed him of my decision and have asked him to join me.

I will say that this is a good move for both candidates to do.  This crisis is not something that we can end with a Congress that’s more worried about getting reelected than legislating.

I am calling on the President to convene a meeting with the leadership from both houses of Congress, including Senator Obama and myself. It is time for both parties to come together to solve this problem.

We must meet as Americans, not as Democrats or Republicans, and we must meet until this crisis is resolved. I am directing my campaign to work with the Obama campaign and the commission on presidential debates to delay Friday night’s debate until we have taken action to address this crisis.

Again, I’m glad he’s doing this, but on the other hand, this is gonna look kinda bad in the media, and personally, I’m not sure I want to see McCain’s plans for this economic crisis.  I’ve never exactly agreed with his stances on stuff like GSEs and the Economic Stimulus Act of 2008 (I’m much more in line with Representative Ron Paul (R-TX) and Senators Chuck Hagel (R-NE) and Elizabeth Dole (R-NC)).

I am confident that before the markets open on Monday we can achieve consensus on legislation that will stabilize our financial markets, protect taxpayers and homeowners, and earn the confidence of the American people. All we must do to achieve this is temporarily set politics aside, and I am committed to doing so.

Following September 11th, our national leaders came together at a time of crisis. We must show that kind of patriotism now. Americans across our country lament the fact that partisan divisions in Washington have prevented us from addressing our national challenges. Now is our chance to come together to prove that Washington is once again capable of leading this country.

Alright, so there’s his statement.

Again, I’m glad to see that he’s putting campaigning aside to resolve this, but I’m worried about what the Congress will do here.  The last thing we need is another Economic Stimulus Package-esque bill that’s going to look good to voters, but wind up screwing us up even more.  A $700 billion bailout WILL NOT HELP!

Done Ranting,

Ranting Republican
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Ron Paul on Bailouts: “We Are Headed for a Rough Ride”

September 24, 2008

The following is Representative Ron Paul’s (R-TX) statements regarding government bailouts of financial institutions, with my analysis sprinkled throughout his comments:

Many Americans today are asking themselves how the economy got to be in such a bad spot.

For years they thought the economy was booming, growth was up, job numbers and productivity were increasing. Yet now we find ourselves in what is shaping up to be one of the most severe economic downturns since the Great Depression.

Unfortunately, the government’s preferred solution to the crisis is the very thing that got us into this mess in the first place: government intervention.

And here’s the sad part – it’s been people like Paul, and his followers and others who believe like him that have predicted things like this would happen.  I’ve always been against government intervention into stuff like this, although, due to my age, haven’t had the opportunity to voice this as much as Dr. Paul.

Ever since the 1930s, the federal government has involved itself deeply in housing policy and developed numerous programs to encourage homebuilding and homeownership.

Blame a lot of it on FDR – he’s the one who started all this crap TRYING to get us out of the Great Depression.  Emphasis on “trying.”  None of FDR’s plans really worked–what got us out was going to war.

Government-sponsored enterprises Fannie Mae and Freddie Mac were able to obtain a monopoly position in the mortgage market, especially the mortgage-backed securities market, because of the advantages bestowed upon them by the federal government.

Well, they were, after all, created by the federal government – the first mistake that was made here.

Laws passed by Congress such as the Community Reinvestment Act required banks to make loans to previously underserved segments of their communities, thus forcing banks to lend to people who normally would be rejected as bad credit risks.

And even the Economic Stimulus Package did this.  It INCREASED loan limits for people using adjustable rate mortgages, and increased the amount of people getting loans–people who NEVER should’ve been able to get loans with their credit.

These governmental measures, combined with the Federal Reserve’s loose monetary policy, led to an unsustainable housing boom. The key measure by which the Fed caused this boom was through the manipulation of interest rates, and the open market operations that accompany this lowering.

When interest rates are lowered to below what the market rate would normally be, as the Federal Reserve has done numerous times throughout this decade, it becomes much cheaper to borrow money. Longer-term and more capital-intensive projects, projects that would be unprofitable at a high interest rate, suddenly become profitable.

Because the boom comes about from an increase in the supply of money and not from demand from consumers, the result is malinvestment, a misallocation of resources into sectors in which there is insufficient demand.

In this case, this manifested itself in overbuilding in real estate. When builders realize they have overbuilt and have too many houses to sell, too many apartments to rent, or too much commercial real estate to lease, they seek to recoup as much of their money as possible, even if it means lowering prices drastically.

And this is evident in my home state of Michigan.  Where I live, there are some housing areas just recently built that are largely still up for sale.  Either that, or people will buy the new houses before selling their own houses, and then the original houses are left up for sale.  But not all of this is the government’s fault.  My mother was telling me other day that the sister of her friend was going to have the bank repossess her house, so she left in the middle of the night, went down to South Carolina, and bought a house the next day, before the credit caught up with her.  Not only is that dishonest and despicable, it’s detrimental to the economy!  Or you have people vandalizing their own houses right before banks repossess them.  IT’S NOT THE BANK’S fault that you can’t make your payments (it’s the bank’s fault if they gave an undeserving person a loan, but still, these actions are NOT helping!).

This lowering of prices brings the economy back into balance, equalizing supply and demand. This economic adjustment means, however that there are some winners — in this case, those who can again find affordable housing without the need for creative mortgage products, and some losers — builders and other sectors connected to real estate that suffer setbacks.

The government doesn’t like this, however, and undertakes measures to keep prices artificially inflated. This was why the Great Depression was as long and drawn out in this country as it was.

I am afraid that policymakers today have not learned the lesson that prices must adjust to economic reality. The bailout of Fannie and Freddie, the purchase of AIG, and the latest multi-hundred billion dollar Treasury scheme all have one thing in common: They seek to prevent the liquidation of bad debt and worthless assets at market prices, and instead try to prop up those markets and keep those assets trading at prices far in excess of what any buyer would be willing to pay.

Additionally, the government’s actions encourage moral hazard of the worst sort. Now that the precedent has been set, the likelihood of financial institutions to engage in riskier investment schemes is increased, because they now know that an investment position so overextended as to threaten the stability of the financial system will result in a government bailout and purchase of worthless, illiquid assets.

And that was the attitude that Freddie and Fannie executives had.  “The government will HAVE to bail us out” mentality HAS GOT TO STOP!

Using trillions of dollars of taxpayer money to purchase illusory short-term security, the government is actually ensuring even greater instability in the financial system in the long term.

The solution to the problem is to end government meddling in the market. Government intervention leads to distortions in the market, and government reacts to each distortion by enacting new laws and regulations, which create their own distortions, and so on ad infinitum.

Easier said than done.  Once you start bailouts, it’s hard to stop.  It’s similar to returning to the gold standard.  Our money is so inflated now that it would take national cooperation to return to the gold standard.  Prices for anything purchased as well as wages would have to significantly decrease, and Americans are too greedy to do this.  People wouldn’t want their wages cut, even though they’d still be able to afford everything that they can now, because “it would look bad on paper.”  Getting out of the Great Depression would’ve been simple, if everybody agreed to a plan, but if one greedy person doesn’t agree to the set plan, that throws off the whole rest of the plan.  Complete cooperation is necessary, but in today’s world, it will never happen (unles the government forces you, but then you’re dealing with extreme government involvement, which STILL doesn’t work as evidenced in the massive failures of communism).

It is time this process is put to an end. But the government cannot just sit back idly and let the bust occur. It must actively roll back stifling laws and regulations that allowed the boom to form in the first place.

But where will they get their money from if they lose their corporate backers!  How’s a politician supposed to live if he doesn’t have businesses feeding him money!

The government must divorce itself of the albatross of Fannie and Freddie, balance and drastically decrease the size of the federal budget, and reduce onerous regulations on banks and credit unions that lead to structural rigidity in the financial sector.

And unfortunately neither of our major Presidential candidates will do this.  I’d like to see what Senator Hagel (R-NE) would’ve done about the Fannie and Freddie situation, since he voted AGAINST the Economic Stimulus Package.

Until the big-government apologists realize the error of their ways, and until vocal free-market advocates act in a manner which buttresses their rhetoric, I am afraid we are headed for a rough ride.

A very rough ride indeed, Dr. Paul.

And again, Paul shows just how smart he is when it comes to economic issues.  I disagree with him on a couple other issues (kinda a half disagreement on Iraq), but I honestly wouldn’t have been disappointed if he were the Republican nominee.

I just hope that people (especially McCain) start listening to him and realize that we can’t keep doing what we’ve been doing.

Done Ranting,

Ranting Republican
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