Obama and Notre Dame

President Obama has agreed to serve as commencement speaker at Notre Dame's graduation in the Spring, where he will also receive an honorary degree (as is customary). The President's notable support of abortion rights has caused quite an uproar, with many in the Catholic community calling for Notre Dame to rescind its invitation.

President Obama is quite clearly pro-abortion, and that places him squarely on the other side of the question from the teaching of the Catholic Church. Notre Dame is ostensibly a Catholic University, and many see his speaking at graduation as a ceremonial "thumbing of the nose" at the church's pro-life teachings.

I disagree. While Notre Dame is a Catholic University, it is also an American University...and as such, it is a place where freedom of speech should be particularly well-protected (although conservatives on modern campuses sometimes don't receive this benefit). Mr. Obama is the freely elected leader of this nation, and while his views on abortion are inconsistent with the church's teachings, his obvious concern for social justice and human rights place him squarely in the mainstream of modern, liberal Catholic theology.

It is an honor for any University to have the President deliver the commencement address, even one with whom many might disagree.

What Happened to Tom Cruise?

I just watched the last 40 minutes of Jerry Maguire, Tom Cruise's 1996 hit that also starred Renee Zellwegger in what I think was her first big role (and she was fetching!). You cannot watch this movie and NOT like Tom Cruise. He did not appear to be acting...not in the least. I guess some would say that is truly great acting.

The Color of Money....Days of Thunder...A Few Good Men...Mission Impossible....The Firm....Magnolia....the 1990's BELONGED to Tom Cruise. He made hit after hit, he was a real live movie star, and he looked like a decent guy to have a beer with.

Along came the Scientology, the Oprah appearance, the Matt Lauer interview, the Brooke Shields criticism--the turn of the century was not good for Tom Cruise. He's a cartoon character now, a puffed up version of a comic book character control freak.

I wonder if he'll ever be able to return to a regular guy who makes great movies?

UVA Basketball Has A New Coach

UVA has apparently hired Tony Bennett (I know, I know) to be its new men's basketball coach.

I've never heard of the man. He's been at Washington State for three seasons--in the first two he took his team to the NCAA's, this year he was 16-13 and a first round loser in the NIT.

Where did the rumors of Tubby Smith and Jeff Capel come from, I wonder? Are UVA hoops fans that delusional to think that a program that has won exactly one ACC tournament in its history (1976--Ralph Sampson never won an ACC tournament title) can really compete for coaches at that level?

To say I'm a little let-down is an understatement.

GM and Chrysler Get Bad News

Looks like the Obama Administration is administering tough medicine to the two most ailing car manufacturers, giving GM and Chrysler 60 and 30 days respectively to get their acts in order. Additionally, GM's CEO is out, reportedly at the behest of the Obama Administration. A couple of things about this.

1. The Dow will drop 500 points today as skittish investors see additional signs of the Apocalypse. Institutional investors saw this coming and have already priced this into their outlooks. The steep drop to occur today will be earned back within two weeks.

2. Unlike some, I don't see the forcing out of GM's CEO as evidence of nationalization/socialization. I think the Obama Administration has a fundamental interest in seeing that the money taxpayers have paid into this corporation is well spent on a company headed in the right direction....and if that isn't the case, making the CEO and the GM Board aware of that fact is part of their duty. As a matter of fact, I see what appears to be Obama's "letting them fail" policy as reinforcing the power of creative destruction inherent in capitalism.

On the whole, I think Obama's playing this one right.

The Final Four

UNC vs Villanova
Michigan State vs. UConn


Here are the bold predictions made on the site. Dan and Sam Shapiro both 0-4 in their final four.

Proud of the People of Fargo

A fine example of how community's are supposed to act in the face of natural disaster. Bully for you, Fargo. You betch'ya.

Maureen Dowd Remains Ridiculous

Could someone please read this and then make a case for this woman having a column in the New York Times? She is beyond trite.

Charter Schools in DC

Charter schools in DC educate 36% of the students there and fill important gaps in a school system struggling to turn around years of benign neglect. Yet the education establishment, DC Public Schools (DCPS) and the teachers union all look at them as somehow antithetical to the mission of public education. DC's school age population has declined year after year, forcing authorities to close neighborhood schools that were severely under-utilized. Many charter schools popped up looking to take over the schools (or purchase them for reasonable prices), but the Mayor and DCPS decided to sell the buildings instead at market price--something few charters are prepared to do. Now the Mayor and DCPS are looking to change the formula for which charters are funded, a formula that would deal a blow to the desire of many charters to build capital accounts that would enable them to build or buy schools. It is time for the city to recognize its charters as vital parts of its public eduction mission and fund them accordingly.

Japan Takes Aim at North Korea's Missile

Looks like the North Koreans are moving ahead with their plans to launch a "satellite" atop a Taepo-dong 2 ballistic missile. This story describes something I've mentioned here before, a scenario in which the Japanese act to shoot down the missile, rather than the US.

The US and Japan have cooperated heavily in recent history to create an architecture of weapons, sensors and information that would enable forces from either nation to destroy ballistic missiles. Take a look at the two destroyers in the picture accompanying the story--you'll see the telltale signs of the SPY radar, heart and soul of the AEGIS Weapons System. What you can't see is the sophisticated network of communications systems that make up an information grid into which those destroyers plug, in order to gain fire control quality tracks.

I can see a scenario developing that goes something like this...depending on the trajectory of the missile, Japanese Maritime Self-Defense Forces (JMSDF) and US Navy forces are arrayed in such a manner as to give each nation's forces an engagement opportunity on the missile. JMSDF forces will be the primary shooters, with US in backup. The trajectory of the missile is very important, as it (and the position of the allied forces) will determine the number of engagement opportunities. The difficulty here is in the "kill assessment" process--that is, will there be sufficient time (and kinematics) to support a subsequent engagement if the initial shooter is unsuccessful? Ultimately, such a coordinated response might require interceptors from both nations to be in flight simultaneously, with the back up missiles command destructed in the event the primary missiles are successful.

You can be sure very smart people at the highest levels of the JMSDF and the US Navy are working hard to create a concept of operations (CONOPS) for this kind of thing...that is, if our governments have the will to carry it out.

Obama and Afghanistan

The President announced his new strategy in Afghanistan yesterday, and it is one that Republicans and conservatives can support. Clearly benefiting from the breathing space afforded by the successful surge in Iraq, Mr. Obama seeks now to ramp up our efforts in Afghanistan on all fronts. With rhetoric sounding a lot like that of the previous occupant of the Oval Office, the President is very much moving in the direction upon which he campaigned, treating Afghanistan (rather than Iraq) as the central front of the war on terror (whoops, overseas contingency operation).

Good and smart people disagree on this strategy. Many believe it is time to stop the bleeding in Afghanistan and slowly disengage. That may prove to be the case, but I don't think it is the case now. Given our efforts in Iraq and the strains placed on our land forces, Afghanistan never got the kind of attention it deserved.

It is now put up or shut up time in the Democratic Party. We all endured the poetic waxings of Obama, Pelosi, Reid et al about the goodness and importance of the war in Afghanistan, mainly as a way of trying to force President Bush into retreat on Iraq. He did not, and Iraq is making a go of it even as we begin a controlled withdrawl. Now we get to see the truth (or not) behind the elevation of Afghanistan in the councils of Democratic war and policy making. Was it simply to look strong and attack a Republican President? Or did they really mean it? How will the Moveon.org crowd react to their President actually taking the Commander-in-Chief role seriously? The fractious nature of the Democratic Party will be on display for all to see.

Charitable Giving, Liberals, and Conservatives.

Joel Berg is a community activist in New York who runs "The New York City Coalition Against Hunger", and he's written an Op-Ed in this morning's Washington Post in which he accuses large charities and conservatives of "hyperventilating" about the damage that will be done to charities by reducing the charitable giving deduction on the wealthiest Americans. Putting aside for a moment the fact that much of the "hyperventilating" has come from the Democratic chairmen of the Congressional committees charged with writing tax law, I generally tend to agree with Mr. Berg. I don't think lowering the value of the deduction will matter to the overwhelming majority of wealthy people, and I find the tie of "deductibility" to one's tax bracket to be odd. That said, Mr. Berg and I arrive at our common views through very, very different processes.

The plain truth of the matter is that in ceteris paribus, conservatives give more than liberals to charity. Here's a story of one of the many such studies available, and I pulled it from that the propaganda organ of the RNC known as the New York Times. Where Berg goes off the tracks in his argument is in equating charity and government spending. Charity is the free and uncoerced donation of money to an organization devoted to functions and causes. Government spending is the redistribution of money removed from its bearers at the point of a gun (you think that is too dramatic? Try tax evasion; I guarantee the federal marshals who come for you will be armed). Berg's argument is supported by the likelihood that much of his funding COMES from the government (he's coy on this, citing only that he gets MORE of his private funding from middle class people than from wealthy--it would be interesting to see where ALL his revenue comes from--methinks there are a butt-ton of government funds coming in)rather than from charitable giving. Plain truth is, his "competition" gets more of its money from private funding--the competition being largely church groups.

Berg's support for raising taxes on the rich flows from the central idea that what he is doing is a proper function of government, and that the rich aren't paying their fair share. Besides, in his opinion, charitable giving is inefficient and benefits places rich people like anyway. My support for eliminating a portion of this benefit to wealthy Americans arises from a sense that the wealthy in America will keep giving anyway, and eliminating any difference in the level of deduction for anyone kind enough to donate to charity is simply the right thing to do. Berg just doesn't like the competition.

A Cautionary Tale: Uncle Sam on Your Board

Here's an interesting little story about the dangers of government/business (or in this case, government/government sponsored entity) "cooperation". It seems that last year's intercession by the Feds in the operations of Freddie Mac (and the Feds pouring of billions into the mix to prop Freddie up) has resulted in a situation in which management of the company (Freddie) wanted to complain to the regulator (SEC) about the role that the federal government was having in potentially holding Freddie back from profitability.

You see, the instrument of Federal control of Freddie (the Federal Housing Finance Agency) and the Obama Administration have made Freddie an essential part of the "Homeowner Affordable and Stability Plan" (I know, weird name). By forcing Freddie to "re-do" mortgages, Freddie sees a loss of $30B that has to be reported in its books. Fannie's management sought to disclose this fully in its annual report; folks at FHFP wanted them to water down the language so that it didn't appear that the Obama Plan was contributing to further losses at Freddie. Freddie threatened to go to the SEC and report the whole shooting match. They all settled on sufficiently watered down language.

What's going on here? For one thing, the weirdly private/weirdly public status of Freddie Mac (and Fannie Mae for that matter)--even before the Bush Administration intervened--was always a thumb on the scale where risk was concerned for Wall Street. In the back of investors' minds was a sense that the government would never let these guys fail, so whatever they are doing must be legit and the risk must not be too high. We know that wasn't the case. Secondly, the relationship between the Feds and the big federally sponsored mortgage corporations is even FURTHER muddied now that the feds intervened. You can't run a corporation that seeks to maximize shareholder value (which after all, is the purpose of corporations) that is also being run as an instrument of public policy.

What's to be done? One of two things. End the charade of the GSE's being looked at in any way as "private". Completely nationalize them and make them solely responsible to the federal government for executing a national policy of increased homeownership. OR--set them free. Cut all government ties. Completely privatize them and let them go see if the market will support the kinds of products they sell. At this point, I would support nationalizing them completely. We've had our dance with the silliness of homeownership as a birthright, and the ridiculous ends to which government, Wall Street and the public went in that pursuit have become manifest. If increasing home-ownership remains a government pursuit, it ought to fund that in its annual plan in and among all the other competing national priorities.

The Bottom is in The Rear-View Mirror

Dow closed at 7925 today. Housing is coming back...from the dead. Retail sales in Jan and Feb were better than expected. I'm calling a bottom (actually, the bottom was about three weeks ago). Not saying we won't give some of this back in the weeks/months to come, but I believe the general trend is up. If you haven't already done so, it's time to get back in.

So the question is, why? What is it that is beginning to bring the economy back? I have a few thoughts:

1. Fast, concerted action by both the Bush Administration and the Obama Administration. This crisis was taken seriously by very serious people, and though there was a lot of confidence lost in the markets, investors overall seem satisfied that the people in charge recognized that there were serious problems.

2. Superb monetary policy by the Fed. Bernancke is one of the adults in DC, and he has been stellar. Encouraging liquidity has kept us afloat.

3. The stimulus. Although none of the money has gone out the door, there is an awful lot of money on the way out....and that has been priced in. I would suggest that if the President came out and said, "you know, I've looked at the economy and I think we should NOT spend $300B of the stimulus package and instead apply it to deficit relief" the markets would love it. All that borrowing is going to act as a brake on liquidity when the private sector actually begins needing it to fund expansion.

So....what are you buying?

Democrats and Taxes, Part 26

EJ Dionne, reliable lefty editorial writer for the Washington Post, has a column in this morning's paper extolling the virtues of the President's plans to raise taxes on wealthy Americans and to limit the value of charitable deductions for those same people. Dionne starts out with this proposition: "The debate on the budget is phony, the howling on deficits a charade. Few politicians want to acknowledge that if you really are concerned about long-term deficits, you have to support tax increases.". Perhaps. But what about controlling spending? Have we so thoroughly given up on entitlement reform and reining in the span of government that we must now all agree that the only way to deficit control is the raising of taxes? Or how about that old favorite, growing the economy! Yep. A growing economy provides the government with additional revenue for its operations. Should government arrest its own growth as the economy grows, deficits will naturally fall.

Dionne's insistence on raising taxes follows the Obama Party Line--that we must punish wealthy and successful Americans, that we must "share the wealth". Dionne puts it this way: "He's right that a large share of any increase should hit those who enjoyed the biggest income gains over the past decade." Yes, and they also were the ones who created jobs and wealth. But this is inconvenient to the narrative.

But here's a surprise for you...I don't mind the reduction in charitable contribution deductions. The wealthy folks I know who are big givers are definitely aware of that their contributions are tax deductible, but I would wager to say that very few of them care whether it is at 28% or 35%. They give because they can, and the tax deduction is icing on the cake.

Just for the sake of argument, let's do a thought experiment. Let's assume Dionne is right, that there simply is no way to close the deficit and expanding debt without raising taxes. What would a tax increase that I could support look like? Here goes:

1. Taxes would be raised on NO ONE until US GDP expanded for three consecutive quarters. Obama's continued rattling about "cutting taxes for 95% of working Americans" doesn't obscure the fact that his increases on the top earners cause more money to flow into the federal system and less into goods and services (total revenue). Raising taxes ON ANYONE in a recession is simply illogical and as was shown convincingly during the Depression, only lengthens economic misery.

2. Implement the cut in charitable deductions as planned.

3. Phase in a ten-year implementation of an elimination of the mortgage interest deduction, forever ending the protected status of a dangerously oversubscribed to portion of American investment portfolios. Take 90% of the benefit (to the government) and return it to taxpayers in the form of lower interest and capital gains tax rates.

4. Implement the tax increase on wealthy Americans as planned. Additionally, create a "Minimum Tax Liability" of 1%, thereby eliminating the HUGE portion of workers in our society who do not pay income taxes (estimates between 38% and 42%). The President (and his supporters) points often to payroll taxes paid by these people as evidence of the silliness of the "they don't pay taxes" charge. But let's be honest here--the payroll taxes they pay are fed into programs from which they will someday directly and individually benefit; in most cases, the total amount of that benefit (given increasing life expectancy) will dwarf what they ever paid in. Those without income tax liability are paying NOTHING toward national defense, veterans benefits, the space program, stem-cell research, early childhood education, green energy research or federally-funded student loans. Every single working American should have a stake in this country's future, and 1% is not too much to ask for that.

So there you have it. Am I advocating this approach? Has the CW lost his mind and suddenly decided that higher taxes are a good thing? Nope. I simply want to be on record as providing policy inputs for Democrats to ignore when the subject comes up.

Site Update

Our little experiment in conservative banter is a little over nine months old now, and it seems to be a going concern. In that time, we've had 8,444 different people (or IP addresses, more appropriately) visit from 95 different countries and all 50 states. Greenland has yet to provide a reader, a glaring fact when viewing readership against the backdrop of a Mercator projection of the globe. Sub-Saharan Africa is also notably unrepresented.

Don't forget to take the time to click on my sponsor blocks to see what they have to offer! There are a variety of sponsors keyed to the content on the site (Google picks them), and every time you click, it turns to money in my pocket! Stimulate MY economy!

An AIG Executive Votes With His Feet

I figured that this would happen; no, I'm being a little dishonest. I hoped this would happen. I wrote earlier about a dream sequence I had in which the Brahmin of Wall Street just packed up and quit, leaving to Tim Geithner and his Treasury Department bureaucrats the job of cleaning up the global financial crisis without their help. By this action (and the concomitant fall of the financial system) they would show class envious Americans who value their skills and talents not at all, just how wrong they were.

In an action not far removed from this dream sequence, Jake DeSantis, Executive Vice President of AIG's Financial Products Division has quit, and his letter of resignation points to his boss's lack of support in front of Congressional lynch mobs seeking to vilify DeSantis and his fellow workers. Coming up through the commodities arm of AIG, DeSantis had no play in the parts of AIG that were bringing the company down...a key graph follows:

"The profitability of the businesses with which I was associated clearly supported my compensation. I never received any pay resulting from the credit default swaps that are now losing so much money. I did, however, like many others here, lose a significant portion of my life savings in the form of deferred compensation invested in the capital of A.I.G.-F.P. because of those losses. In this way I have personally suffered from this controversial activity — directly as well as indirectly with the rest of the taxpayers."

So a guy who did the right things, played by the rules, worked hard and then came into the failure part of the business to help save it--is now quitting. Jake DeSantis seems like a pretty good guy, and he seems like the kind of guy I want at AIG helping them get out of their own way. Instead, he'll now go to a company that isn't in trouble, and he'll help them get ever bigger and richer. C'est la vie, right?

The President's News Conference

Scroll down a bit to read the comments from tonight's live-blog of the President's news conference. I think he was better tonight than in the last one (shorter answers), but still too long.

We had an Anonymous (or Anonymi?) participating, which always makes it fun. I made a comment at one point that Obama was growing more human and beatable every day. This person cited Obama's poll numbers and indicated that I was misinformed, as I must have been following "Fox" polls. I did some looking, and found (non-Fox) polls that had George W Bush's popularity at this point in his first term HIGHER than President Obama's. I also found some polls that had Obama's slightly higher than Bush's.

But let's remember where each started, shall we? George Bush ascended to the Presidency after the most bitterly contested Presidential election in history. Barack Obama won a landslide. Yet they are now neck and neck (in comparison). Anyone who thinks these two months have been good ones for Barack Obama simply isn't paying close attention.

Senate Lays Down Its Pitchforks---For Now....

Responding to the cool response from the Obama Administration to the House effort to vindictively target/tax the AIG bonuses, the Senate appears to be slow-rolling the effort to lynch the AIG execs. This is good news, and it represents to some extent, the wisdom of the founders in creating two bodies in the legislature. One--the House--directly elected by the people every two years--is more responsive to the people, both the better and the lesser angels of their nature. The Senate--originally appointed to six year terms by the state legislatures--is there to temper the passions of the people so that wise policies might be adopted. Though the Senate today appears more like a House with longer terms (due to direct election), it is carrying out its envisioned function on this matter.

Red (Meat) Scare!

Terrible news of my impending demise here. I am generally prone to ignoring studies such as this one, as it seems that food studies take on a ping-pong like quality after a while (a glass of wine a day is good, a glass of wine a day is bad). That said, the SIZE and duration of this study has me taking notice.

I am a fan of red meat. Steak of any cut. Lamb chops. Pork chops, ribs, sausage. The Atkins Diet was MADE for me! But it seems that my chosen style of eating will counteract the more monk-like aspects of my life (non-smoker, non-drinker) and drive me to an early grave.

The good news is I love chicken, turkey and fish. Plus, living on the Eastern Shore gives me access to heavenly crab concoctions all summer long (as long as the crabs last!).

Obama Moves on Toxic Debt

Most of you have already seen Wall Street's euphoric reaction to the Obama Administration's FINALLY acting to attack toxic debt on financial industry balance sheets. This has been a long time coming (too long), but it represents one of the first true actions of the Obama Administration to attack what could ultimately be the single most difficult impediment to overcome in our economic recovery.

One significant argument in favor of this plan is that Paul Krugman hates it...thinks it just isn't quite socialist enough.