January 2007 vs. Now - What Happened?

At the risk of gross oversimplification, here is some US Economic data:

Item January 2007 Now

Unemployment Rate 4.5% 6.1%

CPI (incl. food and energy) 2% 5.5%

Gasoline cost/gallon $2.25 $3.60

Dow Jones Industrial Ave 12,500 10,325

S&P 500 1,450 1,099

Nasdaq 2,500 1,947

What happened in January 2007? The Democrats took control of Congress. No wonder the Congressional approval rating is worse than Bush's. 

Crap Sandwich with Cream

Well the bailout package finally passed. Loaded up with lots of unrelated goodies. Will it end the credit crunch and improve market confidence? In the short run it had better, or otherwise the whole thing was a complete waste of time and money. I suspect it will have some short run benefit. But in the long run it doesn't fix the real problems, which are:

1) Legislative meddling in free market processes for setting credit prices and policy for sub-prime borrowers. The Community Reinvestment Act is but one of the culprits. That law needs to be abolished, and Fannie/Freddie need to be privatized.

2) Fast recapitalization is needed for banks and financial firms. Many economists (even Paul Krugman) agree with me on this one! It's starting to happen, but not because of the bailout and probably not fast enough. Even Europe has to do this, proving that it is not just a US problem. 

3) Corrupt Democrats: Here at least, Barney Frank gets held to account by his own words. No matter how hard he tries, he can't spin his way out

I think this article has it right. Ultimately it is a failure of leadership. There has not been an effective national debate on whether oil prices should be high or whether home ownership is a right (as opposed to an opportunity). It is going to take time to unwind all this, and a new kind of leadership (and not the Obama/Biden socialist facism kind!!!)

All You Need to Know about MSM and VP Debate

As if any further evidence is needed about main-stream media bias in this election, here's the simple fact. How can the media call it for Biden, or that Biden was even close when he made at least as dozen fundamental errors of fact on matters of constitutional law and foreign policy? In my high school debate team days, such errors would have resulted in automatic point deductions and very likely outright loss even if all of our other arguments were sound! Here are 14 lies about McCain and recent history.  Here is more on significant errors about Lebanon. Here is a serious misunderstanding of the constitution from a guy who sits on the Senate Judiciary committee!

But even better, Palin clearly held her own against a seasoned Washington pol, made her case that Obama/Biden is not "hope and change", and showed that she is every bit as equal to the challenge. It was a good day for the McCain-Palin ticket.