If there was one newspaper that would have come up last on my list of American newspapers that will actually show a glimmer of truth about the McCain/Palin ticket, the San Francisco Chronicle is it.
The article below is an accurate foretelling of the future Barack Obama can expect from what will become increasingly shrill pronouncements during the campaign.
And it also tells the truth about the anti-democracy mindset of many of his supporters.
First a couple of background paragraphs to set the stage for the Chronicle article.
For an example of what I mean by shrill, in a speech yesterday (9/17/2008), Obama told his modern day version of Germany's National Socialist Brown Shirts:
"'I want you to argue with them and get in their face,' he said."
As one poster commented, does this mean wholesale hacking of email accounts? (I guess we know the answer to that from the news that Obama's supporters hacked Sarah Palin's personal email account. Blatant criminal activity does not require them to think outside their own box.)
Physical destruction of McCain supporters' property? (They key autos in Hollywood that have McCain stickers on them) Rushing the podium at McCain rallies?
Now that Obama has given them permission to interpret "argue with them and get in their face" as they see fit, exactly what can we expect from the Obama supporters' Brown Shirt mentality?
This site suffered the Obama Brown Shirts going through blogs and having Google shut them down. It's all documented by Anna Phillips of the NY Sun.
What's next from this modern day version of Germany's National Socialist Brown Shirts?
Now let's take a look at what the Chronicle printed through its SF Gate news site about the public's reaction to Obama's Brown Shirt tactics against Sarah Palin:
Palin Derangement Syndrome: Obama's Worst Enemy?
Cinnamon Stillwell
Wednesday, September 18, 2008
There's a new affliction sweeping the nation, and it's known as Palin Derangement Syndrome. The phenomenon is similar to Bush Derangement Syndrome, a term coined by political columnist Charles Krauthammer to describe the personal animosity and irrational hatred directed at President Bush by his leftist opponents.
But this time, Republican presidential candidate John McCain's running mate, Sarah Palin, is the object of wrath.
The feeding frenzy began with the news of Palin's selection, but it was her electrifying speech at the Republic National Convention last month that really set it off. In one fell swoop, Palin managed to energize the Republican base, breathe life into the McCain campaign, launch some very effective jabs at Barack Obama, and quite possibly, attract the support of the 18 million Hillary Clinton voters.
The attacks on Palin have ranged from patronizing to vicious to fantastical.
She has been caricatured as an inexperienced rube, a baby-making automaton, an uneducated underachiever, a bad mother, trailer-park trash, a rightwing religious fanatic, a sexual fantasy, and of course, a fascist. No subject has been deemed taboo in the effort to take Palin down.
What her detractors don't seem to realize is that in the process of insulting Palin, they are insulting the majority of the country. If being a self-made success story, a working mother, a church-going member of a small-town community, and a believer in moderate to conservative political viewpoints disqualifies Palin, what does that say about mainstream America? The inherent condescension at the heart of the anti-Palin campaign is coming across loud and clear and it may actually be boosting her popularity.
The sexist tenor of the attacks on Palin is only furthering this process.
Some of the worst comments have emanated from self-professed feminists who seem to resent the path Palin has taken in life, even as it parallels their own. The always independent-minded Camille Paglia is a notable exception, but by and large, the liberal, female establishment has turned on Palin .
Never mind that Palin -- with an amazing record of professional accomplishment, a happy marriage, and five beautiful children -- is the personification of the feminist "women can have it all" ideal.
What all the attackers have in common is an almost pathological hatred and attendant desire to project upon Palin all of their worst fears, prejudices, and in some cases, fantasies. In the pages of Salon Magazine, for instance, writer Gary Kamiya likened her to a "dominatrix," while University of Michigan Middle East studies professor Juan Cole compared her to a "Muslim fundamentalist" and a member of the Taliban.
In what constitutes the lowest of the low, a number of Palin's opponents have focused on her children or rather, their apparent resentment that she has chosen to have children. The National Review's Byron York catalogued several of these in a recent column for The Hill.
As he noted: Wendy Doniger, the Mircea Eliade Distinguished Service Professor of the History of Religions at the University of Chicago Divinity School, wrote that Palin's "greatest hypocrisy is in her pretense that she is a woman" and denounced "the Republican Party's cynical calculation that because [Palin] has a womb and makes lots and lots of babies … she speaks for the women of America.
"Carol Fowler, the chairman of the South Carolina Democratic Party, said that Palin's "primary qualification seems to be that she hasn't had an abortion."
Other adversaries have questioned Palin's ability as a mother and in particular, a mother with a special needs baby, while still others have used her teenage daughter's pregnancy to undermine her credibility. But Palin's domestic challenges are shared by millions of Americans and tend to elicit more sympathy than condemnation. And everyone knows a male politician would never be asked such questions.
Always eager to proffer their political opinions, a host of Hollywood celebrities have issued their own high-minded objections to Palin. Lindsay Lohan weighed in with her condescending belief that Palin is only "qualified to be" a "television anchor."Matt Damon likened Palin's candidacy to a "really bad Disney movie," and Gina Gershon went so far as to impersonate Palin in a vicious and unfunny clip that culminates in her stripping down to a bikini. The list goes on, but every time another one of these desperately out-of-touch with America celebrities tries to belittle Palin, it has the opposite effect.
Despite her impressive resume, Palin has been dogged by accusations that she lacks experience and foreign policy know-how. Democrats have pointed to the first part of her recent interview with ABC's Charlie Gibson as a "gotcha" moment simply because Palin asked Gibson to clarify what he meant by the Bush Doctrine.
As columnist Charles Krauthammer points out, the Bush Doctrine has held four different definitions over the course of the last eight years and has never been finally determined by the Bush administration. The term was, in fact, originated by Krauthammer. But Palin's detractors have ignored this inconvenient fact, as well as failing to notice that Gibson's pompous manner and ridiculously suspicious questions have become the real story.
Generally speaking, a public backlash over perceived media bias against Palin may be brewing. US Weekly'sdecision to run a trashy cover story on Palin titled, "Baby, Lies & Scandal" (two months after a glowing cover story on the Obamas) has reportedly resulted in thousands of cancellations. In a larger sense, a September 4 Rasmussen poll notes that "51% of American voters think reporters are trying to hurt Sarah Palin with their news coverage, and 24% say those stories make them more likely to vote for Republican presidential candidate John McCain in November."
The media has been fixated on Palin for weeks and one is hard pressed to go a day without hearing some or another allegation being trotted out. The worst example was when mainstream media outlets ran with a lurid rumor originating with an anonymous diarist at the leftist blog Daily Kos that insinuated that Palin's son Trig was actually her grandson.
The falsehoods surrounding Palin on the Internet have been so widely reproduced that FactCheck.org, a nonpartisanw Web site, posted a listing of corrections aptly titled, "Sliming Palin.
"The all-out assault on the genuine and likable Palin is certainly a blessing in disguise for the Republican Party. Not only is it galvanizing Republicans, but the nasty tone and hysterical nature are turning off potential Democratic voters. In particular, those Democrats who, in the words of Obama speaking after a fundraiser at the Getty mansion in San Francisco earlier this year, "cling to their guns and religion."
When Palin referenced Obama's gaffe in her RNC speech, calling him out for speaking about Americans "one way in Scranton and another in San Francisco," it was evident that she had her finger on the pulse of the Democratic Party's discord.
So too Palin's praise for Hillary Clinton and her reference to the "18 million cracks in the glass ceiling." In building on McCain's already existing strategy of reaching out to Hillary voters and others disaffected with the DNC leadership, Palin demonstrated a political savvy that the Obama camp never saw coming.
In choosing Palin as his running mate, McCain displayed the boldness and forward-thinking that his Democratic rival Obama has yet to embody. By picking the conventional Joe Biden over Hillary Clinton as his running mate, Obama failed to live up to his own mantra of "change." He also failed to recognize a politically smart move when it was staring him in the face, as Clinton would have presumably brought millions of votes with her.
In fact, rumors that the Obama ticket would seek to unburden itself of Biden and replace him with Hillary in the coming weeks have been circulating, and at least one Huffington Post columnist has suggested as much. Some have speculated that Democrats may be experiencing a bout of buyer's remorse over their choice of Obama to head the ticket.
Obama's empty rhetoric about "hope" and "change" certainly pales in light of the actual reform implemented by Palin in Alaska and by McCain throughout his career. Meanwhile his brief resume and lack of political savvy and even at times, personal likability (his odd sense of humor comes to mind) have become liabilities.
But Obama's worst enemy is not himself, or even Sarah Palin, but rather, the ranks of his own rabid supporters. If they keep it up, McCain could be laughing all the way to the White House.
Cinnamon Stillwell is a San Francisco writer. She can be reached at cinnamonstillwell@yahoo.com. She also writes for the blog at campus-watch.org.
-30-
Thursday, September 18, 2008
Global credit system suffers cardiac arrest
If there is one exceptionally brilliant light in the economic analysis niche, it is Ambrose Evans-Pritchard of the London Telegraph. The newspaper accurately writes that, "He is essential reading for anyone interested in how shifts in the world economy are changing the balance of political power."
This morning I'm sharing with you his perceptive determinations about what happened this weekend, and why it matters to you.
I suggest that you consider adding the London Telegraph to your Favorites (Bookmarks for Firefox and Safari). As I mentioned last night, the US MainStream Media (MSM) are untrustworthy at the first-tier level because so many have prostituted themselves for the Obama campaign.
I started warning my listeners on WEBY AM-1330's "Your Turn" program 18 months ago this is where the financial world is headed. I'll discuss it on today's edition from 4 - 5:30 PM US CDT. The 5 - 5:30 segment features a leading economist. If you can't get the station's signal, it streams over the Internet from this site:
http://cybersmartcomputers.com/
Read on:
Global credit system suffers cardiac arrest on US crash
By Ambrose Evans-Pritchard
Last Updated: 11:59pm BST 17/09/2008
The global credit system almost grinds to a halt as yields on US Treasury bills reach zero for the first time since the Great Depression, writes Ambrose Evans-Pritchard
The global credit system came close to total seizure yesterday. Key parts of the derivatives market shut down and a panic flight to safety depressed the yield on three-month US Treasury bills to almost zero for the first since the Great Depression in 1934.
The closely-watched TED-spread measuring stress in the interbanking lending market rocketed to 238 as the share prices of Morgan Stanley, Goldman Sachs, Citigroup, Wachovia, and Bank of America all went into a tailspin yesterday.
The collapse in investor confidence is a harsh verdict on the judgment of the US Federal Reserve, which chose to ignore market pleas for a rate cut to halt what amounts to a modern-era run on the banking system. Almost none of the current Fed governors have market experience. Most are academic theorists.
The Fed had hoped that a targeted $85bn (£47bn) bail-out for insurance giant AIG - on onerous terms - would be enough to stabilize the banks after the weekend failure of Lehman Brothers.
Instead it set off a cardiac arrest at the heart of the credit system.
Bernard Connolly, global strategist at Banque AIG, said the Fed and the Treasury were doing too little, too late, to stave off disaster. Interest rates need to be cut immediately and dramatically, while Washington must prepare for a wholesale takeover of large parts of the lending system along the lines of the Scandinavian bank rescues in the early 1990s.
"Unless there is a very rapid change of mind, depression - with all its horrors and consequences - will be inevitable. The judgment that letting Lehmans go would not create systemic risk depended, if it was ever going to be anything other than ludicrous, on very rapid action to shore up the financial system. Instead, Hank Paulson seems to be adding to the risk in the system," he said.
"We fear that a virtual nationalisation of the financial system will now be necessary."
America's Reserve Primary Fund suspended withdrawals after shareholders pulled out almost $40bn in two days on news of its heavy exposure to Lehmans' debt. The move came as the fallout from Lehmans' collapse spread worldwide. Japan's Nikkei wire said Japanese banks would suffer almost $2bn of losses on Lehmans' bond defaults.
Russia suspended trading the Moscow bourse after the Micex index crashed 24pc in two days. Officials promised $44bn to support the banking system.
As Washington bails out one financial institution after another, investors have begun to doubt the long-term credit-worthiness of the US itself.
The cost of insuring against default on 10-year US Treasuries jumped to an all-time high of 30 basis points yesterday, as measured by the credit default swaps (CDS) on the derivatives markets. Germany is at 13, and France is 20.
"This is historically significant because we have never seen anything like it before," Daniel Pfaender, sovereign credit strategist at Dresdner Kleinwort.
"What we don't know yet is whether this a liquidity issue or whether it reflects the credibility of the US financial system."
The Treasury's rescue of the mortgage giants Fannie Mae and Freddie Mac has added $5.3 trillion in liabilities to the US government. It almost doubles the national debt (under IMF definitions), at least on paper.
The Fed has now added a further $85bn in debt for AIG. While the sums are manageable so far, what worries investors is the likely avalanche of insolvencies yet to come.
The Federal Deposit Insurance Corporation FDIC has already exhausted half its capital cleaning up after the collapse of IndyMac. It may need half a trillion dollars of fresh money to cope with the 120-odd lenders on its sick list.
Professor Nouriel Roubini from New York University warns that several hundred banks will go under before this hurricane has exhausted its fury.
John Chambers, head of sovereign ratings at Standard & Poor's, said America's AAA grade is safe for now. The Fannie/Freddie bail-out is not comparable to ordinary state debt. It is backed by housing collateral, mostly based on prime mortgages.
"In the worst case scenario, the losses from Fannie and Freddie will be 2.5pc of GDP. This is not to belittle the unprecedented actions of the last two weeks.
"For the US to lose its AAA we would have to see the sort of financial distress that occurred in the Nordic countries. It could get that bad. There's no God-given gift of a AAA rating. The US has to earn it like everyone else," he said.
Charles Dumas from Lombard Street Research said America's dependency on foreign money would carry a high price.
"The ultimate test will be whether this seriously jeopardizes the reserve currency role of the US dollar. China finances the US government. So as long as the Chinese are willing to accept an annual loss of 15pc on their holdings of US bonds in real yuan terms, this can go on, but the decision lies in Beijing. What is clear is that it will take the US decades to pay this off," he said.
"We think the next phase of this crisis is going to be a repatriation story as American investors bring their money back from frontier markets. The US broker dealers were 60 times leveraged and now they need to take assets back onto dollar balance sheets."
Albert Edwards, global strategist at Société Générale, said Washington's serial bail-outs are the inevitable result of the credit bubble of preceding years. "This was all baked in the cake long ago.
"What we have seen so far is just a dress rehearsal for the deep recession that is coming. America is going to be losing 500,000 jobs a months. That is when we will see interest rates go to zero.
"The deficit will be covered with printed money as it was in Japan.
"The endgame will be helicopters full of cash dropped by Ben Bernanke," he said.
-30-
This morning I'm sharing with you his perceptive determinations about what happened this weekend, and why it matters to you.
I suggest that you consider adding the London Telegraph to your Favorites (Bookmarks for Firefox and Safari). As I mentioned last night, the US MainStream Media (MSM) are untrustworthy at the first-tier level because so many have prostituted themselves for the Obama campaign.
I started warning my listeners on WEBY AM-1330's "Your Turn" program 18 months ago this is where the financial world is headed. I'll discuss it on today's edition from 4 - 5:30 PM US CDT. The 5 - 5:30 segment features a leading economist. If you can't get the station's signal, it streams over the Internet from this site:
http://cybersmartcomputers.com/
Read on:
Global credit system suffers cardiac arrest on US crash
By Ambrose Evans-Pritchard
Last Updated: 11:59pm BST 17/09/2008
The global credit system almost grinds to a halt as yields on US Treasury bills reach zero for the first time since the Great Depression, writes Ambrose Evans-Pritchard
The global credit system came close to total seizure yesterday. Key parts of the derivatives market shut down and a panic flight to safety depressed the yield on three-month US Treasury bills to almost zero for the first since the Great Depression in 1934.
The closely-watched TED-spread measuring stress in the interbanking lending market rocketed to 238 as the share prices of Morgan Stanley, Goldman Sachs, Citigroup, Wachovia, and Bank of America all went into a tailspin yesterday.
The collapse in investor confidence is a harsh verdict on the judgment of the US Federal Reserve, which chose to ignore market pleas for a rate cut to halt what amounts to a modern-era run on the banking system. Almost none of the current Fed governors have market experience. Most are academic theorists.
The Fed had hoped that a targeted $85bn (£47bn) bail-out for insurance giant AIG - on onerous terms - would be enough to stabilize the banks after the weekend failure of Lehman Brothers.
Instead it set off a cardiac arrest at the heart of the credit system.
Bernard Connolly, global strategist at Banque AIG, said the Fed and the Treasury were doing too little, too late, to stave off disaster. Interest rates need to be cut immediately and dramatically, while Washington must prepare for a wholesale takeover of large parts of the lending system along the lines of the Scandinavian bank rescues in the early 1990s.
"Unless there is a very rapid change of mind, depression - with all its horrors and consequences - will be inevitable. The judgment that letting Lehmans go would not create systemic risk depended, if it was ever going to be anything other than ludicrous, on very rapid action to shore up the financial system. Instead, Hank Paulson seems to be adding to the risk in the system," he said.
"We fear that a virtual nationalisation of the financial system will now be necessary."
America's Reserve Primary Fund suspended withdrawals after shareholders pulled out almost $40bn in two days on news of its heavy exposure to Lehmans' debt. The move came as the fallout from Lehmans' collapse spread worldwide. Japan's Nikkei wire said Japanese banks would suffer almost $2bn of losses on Lehmans' bond defaults.
Russia suspended trading the Moscow bourse after the Micex index crashed 24pc in two days. Officials promised $44bn to support the banking system.
As Washington bails out one financial institution after another, investors have begun to doubt the long-term credit-worthiness of the US itself.
The cost of insuring against default on 10-year US Treasuries jumped to an all-time high of 30 basis points yesterday, as measured by the credit default swaps (CDS) on the derivatives markets. Germany is at 13, and France is 20.
"This is historically significant because we have never seen anything like it before," Daniel Pfaender, sovereign credit strategist at Dresdner Kleinwort.
"What we don't know yet is whether this a liquidity issue or whether it reflects the credibility of the US financial system."
The Treasury's rescue of the mortgage giants Fannie Mae and Freddie Mac has added $5.3 trillion in liabilities to the US government. It almost doubles the national debt (under IMF definitions), at least on paper.
The Fed has now added a further $85bn in debt for AIG. While the sums are manageable so far, what worries investors is the likely avalanche of insolvencies yet to come.
The Federal Deposit Insurance Corporation FDIC has already exhausted half its capital cleaning up after the collapse of IndyMac. It may need half a trillion dollars of fresh money to cope with the 120-odd lenders on its sick list.
Professor Nouriel Roubini from New York University warns that several hundred banks will go under before this hurricane has exhausted its fury.
John Chambers, head of sovereign ratings at Standard & Poor's, said America's AAA grade is safe for now. The Fannie/Freddie bail-out is not comparable to ordinary state debt. It is backed by housing collateral, mostly based on prime mortgages.
"In the worst case scenario, the losses from Fannie and Freddie will be 2.5pc of GDP. This is not to belittle the unprecedented actions of the last two weeks.
"For the US to lose its AAA we would have to see the sort of financial distress that occurred in the Nordic countries. It could get that bad. There's no God-given gift of a AAA rating. The US has to earn it like everyone else," he said.
Charles Dumas from Lombard Street Research said America's dependency on foreign money would carry a high price.
"The ultimate test will be whether this seriously jeopardizes the reserve currency role of the US dollar. China finances the US government. So as long as the Chinese are willing to accept an annual loss of 15pc on their holdings of US bonds in real yuan terms, this can go on, but the decision lies in Beijing. What is clear is that it will take the US decades to pay this off," he said.
"We think the next phase of this crisis is going to be a repatriation story as American investors bring their money back from frontier markets. The US broker dealers were 60 times leveraged and now they need to take assets back onto dollar balance sheets."
Albert Edwards, global strategist at Société Générale, said Washington's serial bail-outs are the inevitable result of the credit bubble of preceding years. "This was all baked in the cake long ago.
"What we have seen so far is just a dress rehearsal for the deep recession that is coming. America is going to be losing 500,000 jobs a months. That is when we will see interest rates go to zero.
"The deficit will be covered with printed money as it was in Japan.
"The endgame will be helicopters full of cash dropped by Ben Bernanke," he said.
-30-
Wednesday, September 17, 2008
9/17/2008: The Wheels Came Off the Wagon
Nine months ago I told my listeners on WEBY AM-1330's Your Turn program to immediately begin preparing their personal finances for a crisis not seen since The Great Depression.
Just as there was day when the world looked back and marked it as the beginning of the depression, today will be the day the world looks back and marks what well may turn into The Great Depression II.
I will post analysis by myself and others in the next few days. Right now, I am posting articles from primarily British sources because American journalism is hopelessly skewed by the presidential election. In general, I don't trust the first-tier news organizations because they are prostituting themselves for Obama. The unconscionable treatment of Sarah Palin shows that their commitment to so-called feminism consists only of women who wear pants, drink hard, curse profusely, and swing AC/DC.
On that thought, this is the second time a highly qualified woman has been trashed by the so-called Main Stream Media (MSM) because she was not part of the Eastern liberal media mafia. I'll comment on that in a later post.
Back to The Great Depression II:
This article from the Financial Times of London tells the story; the banks are in crisis because of the outrageous lies told about the stability of Lehman Bros. and AIG. They don't believe anything coming out of the mouths of anyone in America's financial leadership or governmental agencies.
But there is a much more sinister aspect to all this; I have been telling listeners and readers for about the last 18 months, America is bankrupt. The idea that the Federal Reserve, or the American Treasury, can just wave its hand and tell the world that no matter what the number of dollars needed, the US can cover it, are over.
Worse, is the ignorance of the American public to the reality that the Federal Reserve is a bank; it can go bankrupt just like any other bank. The wholesale looting of the Fed by the NY City banking mob has reached a point where no one with the education about the American system's realities can continue to believe the Fed's promises to come up with the cash it is promising to stave off a worldwide financial collapse.
This is not 1929 in this critical aspect: The Federal Reserves' chairman is a respected student of The Great Depression. He has a reasonable belief that it could have been avoided had the Fed come up with enough dollars to ensure the liquidity of the system.
The difference in this crisis is that America is not the one unscathed victor of a world war. America is not dealing with the wholesale destruction of its factories, cities, and human spirit.
And most importantly, America is not alone as it was in 1929 as the world's solo player at the top of the world's financial game. This time, America is very limited by the reality that the Arabs, the Red Chinese, and the Koreans, are now powerful players in the world economy in their own right; they are where America went searching for money to float Merrill Lynch, Lehman Bros., and AIG.
And this time they said "No."
The result of their decision? The key phrase in the story below is, "Lending between banks, in effect, stopped."
Read on:
Panic grips credit markets
By Krishna Guha in Washington, Michael Mackenzie in New York
and Gillian Tett in London
Published: September 17 2008
The panic in world credit markets reached historic intensity on Wednesday, prompting a flight to safety of the kind not seen since the second world war.
Barometers of financial stress hit record peaks across the world. Yields on short-term US Treasuries hit their lowest level since the London Blitz, while gold had its biggest one-day gain ever in dollar terms. Lending between banks, in effect, stopped.
Speculation mounted that the Federal Reserve, which refused to cut rates on Tuesday, could be forced into an embarrassing U-turn or might further expand its market liquidity operations.
The $85bn emergency Fed loan for the troubled insurance group AIG, announced on Tuesday night, failed to curb the surge in risk aversion. Instead, markets were hit by a fresh wave of anxiety.
One cause for fear came when shares in a supposedly safe money market mutual fund fell below par value – or “broke the buck” – owing to losses on debt in Lehman Brothers, which filed for bankruptcy protection on Monday. This raised the risk that retail investors in other such funds could panic and pull out their money.
All thought of profit was abandoned as traders piled in to the safety of short-term Treasuries, with the yield on three-month bills falling as low as 0.02 per cent – rates that characterised the “lost decade” in Japan. The last time US Treasuries were this low was January 1941.
Shares in the two largest independent US investment banks left standing – Morgan Stanley and Goldman Sachs – fell 24 per cent and 14 per cent, respectively, as the cost of insuring their debt soared, threatening their ability to finance themselves .
Morgan Stanley was holding preliminary merger talks with Wachovia, a troubled regional lender, and could approach other banks and look at other options in the coming days, people familiar with the situation said. Washington Mutual, another regional lender, has hired Goldman Sachs to contact potential buyers.
HBOS, a leading UK mortgage lender pressed into sales talks by the government after its share price halved this week, agreed to a £12bn takeover by Lloyds TSB.
A key measure of fear in the fixed-income markets - the so-called Ted spread, which tracks the difference between three-month Libor and Treasury bill rates - moved above 3 per cent, higher than the record close after the Black Monday stock market crash of 1987.
US authorities fired back with the Treasury announcing it was borrowing $40bn to give to the Fed to use for its emergency lending – in essence removing balance sheet constraints on the size of this assistance.
The Securities and Exchange Commission announced new curbs on short selling.
Some analysts have criticised US authorities for adopting an arbitrary approach to rescues - saving AIG, but not Lehman - that was impossible for investors to predict and therefore did not boost confidence.
The S&P 500 fell 4.7 per cent, led by a 8.9 per cent slump in financials. Equity volatility was near its highest level since March. The dollar fell against other major currencies.
Gold benefited from safe-haven buying, with prices rising 11.2 per cent to a three-week high of $866.47 a troy ounce.
Andrew Brenner, co-head of structured products and emerging markets at MF Global, said: “It feels like no one wants to take anyone’s credit...it feels like we are on a precipice.”
-30-
Just as there was day when the world looked back and marked it as the beginning of the depression, today will be the day the world looks back and marks what well may turn into The Great Depression II.
I will post analysis by myself and others in the next few days. Right now, I am posting articles from primarily British sources because American journalism is hopelessly skewed by the presidential election. In general, I don't trust the first-tier news organizations because they are prostituting themselves for Obama. The unconscionable treatment of Sarah Palin shows that their commitment to so-called feminism consists only of women who wear pants, drink hard, curse profusely, and swing AC/DC.
On that thought, this is the second time a highly qualified woman has been trashed by the so-called Main Stream Media (MSM) because she was not part of the Eastern liberal media mafia. I'll comment on that in a later post.
Back to The Great Depression II:
This article from the Financial Times of London tells the story; the banks are in crisis because of the outrageous lies told about the stability of Lehman Bros. and AIG. They don't believe anything coming out of the mouths of anyone in America's financial leadership or governmental agencies.
But there is a much more sinister aspect to all this; I have been telling listeners and readers for about the last 18 months, America is bankrupt. The idea that the Federal Reserve, or the American Treasury, can just wave its hand and tell the world that no matter what the number of dollars needed, the US can cover it, are over.
Worse, is the ignorance of the American public to the reality that the Federal Reserve is a bank; it can go bankrupt just like any other bank. The wholesale looting of the Fed by the NY City banking mob has reached a point where no one with the education about the American system's realities can continue to believe the Fed's promises to come up with the cash it is promising to stave off a worldwide financial collapse.
This is not 1929 in this critical aspect: The Federal Reserves' chairman is a respected student of The Great Depression. He has a reasonable belief that it could have been avoided had the Fed come up with enough dollars to ensure the liquidity of the system.
The difference in this crisis is that America is not the one unscathed victor of a world war. America is not dealing with the wholesale destruction of its factories, cities, and human spirit.
And most importantly, America is not alone as it was in 1929 as the world's solo player at the top of the world's financial game. This time, America is very limited by the reality that the Arabs, the Red Chinese, and the Koreans, are now powerful players in the world economy in their own right; they are where America went searching for money to float Merrill Lynch, Lehman Bros., and AIG.
And this time they said "No."
The result of their decision? The key phrase in the story below is, "Lending between banks, in effect, stopped."
Read on:
Panic grips credit markets
By Krishna Guha in Washington, Michael Mackenzie in New York
and Gillian Tett in London
Published: September 17 2008
The panic in world credit markets reached historic intensity on Wednesday, prompting a flight to safety of the kind not seen since the second world war.
Barometers of financial stress hit record peaks across the world. Yields on short-term US Treasuries hit their lowest level since the London Blitz, while gold had its biggest one-day gain ever in dollar terms. Lending between banks, in effect, stopped.
Speculation mounted that the Federal Reserve, which refused to cut rates on Tuesday, could be forced into an embarrassing U-turn or might further expand its market liquidity operations.
The $85bn emergency Fed loan for the troubled insurance group AIG, announced on Tuesday night, failed to curb the surge in risk aversion. Instead, markets were hit by a fresh wave of anxiety.
One cause for fear came when shares in a supposedly safe money market mutual fund fell below par value – or “broke the buck” – owing to losses on debt in Lehman Brothers, which filed for bankruptcy protection on Monday. This raised the risk that retail investors in other such funds could panic and pull out their money.
All thought of profit was abandoned as traders piled in to the safety of short-term Treasuries, with the yield on three-month bills falling as low as 0.02 per cent – rates that characterised the “lost decade” in Japan. The last time US Treasuries were this low was January 1941.
Shares in the two largest independent US investment banks left standing – Morgan Stanley and Goldman Sachs – fell 24 per cent and 14 per cent, respectively, as the cost of insuring their debt soared, threatening their ability to finance themselves .
Morgan Stanley was holding preliminary merger talks with Wachovia, a troubled regional lender, and could approach other banks and look at other options in the coming days, people familiar with the situation said. Washington Mutual, another regional lender, has hired Goldman Sachs to contact potential buyers.
HBOS, a leading UK mortgage lender pressed into sales talks by the government after its share price halved this week, agreed to a £12bn takeover by Lloyds TSB.
A key measure of fear in the fixed-income markets - the so-called Ted spread, which tracks the difference between three-month Libor and Treasury bill rates - moved above 3 per cent, higher than the record close after the Black Monday stock market crash of 1987.
US authorities fired back with the Treasury announcing it was borrowing $40bn to give to the Fed to use for its emergency lending – in essence removing balance sheet constraints on the size of this assistance.
The Securities and Exchange Commission announced new curbs on short selling.
Some analysts have criticised US authorities for adopting an arbitrary approach to rescues - saving AIG, but not Lehman - that was impossible for investors to predict and therefore did not boost confidence.
The S&P 500 fell 4.7 per cent, led by a 8.9 per cent slump in financials. Equity volatility was near its highest level since March. The dollar fell against other major currencies.
Gold benefited from safe-haven buying, with prices rising 11.2 per cent to a three-week high of $866.47 a troy ounce.
Andrew Brenner, co-head of structured products and emerging markets at MF Global, said: “It feels like no one wants to take anyone’s credit...it feels like we are on a precipice.”
-30-
Foreign money won't buy US debt; we're cooked
Again, I see further evidence that my predictions of federal bankruptcy - the US as a debtor nation - is next on the Hit Parade. And it's going to be one gawd-awful hit.
This is a concept unimaginable by Americans; nobody wants to buy our federal bonds, notes, and other forms of debt. But that is because America's political leadership has either decided to not tell the truth of where the US economy is headed - obviously, for political survival reasons - or the fact of the matter is that our political leadership doesn't have the faintest idea what is happening right under their noses; they are clueless.
I vote for number 2; they are clueless.
Something you need to consider in the upcoming financial disaster is that the truth of the matter is that no matter how bad it gets for you, your congress member and US senator gets a paycheck. They get health insurance. They get a staff. They get offices. They get foreign travel. No matter how bad it gets, they do not suffer for a single second.
You better get that through your head. Because once you do, you understand why your congress member and US senator don't say a word to stop the wholesale looting of the Federal Reserve by the NY City banking mafia. No matter how much they destroy your life, your congress member and US senator suffer nothing at all. They have impunity from suffering because they write their own paychecks and benefits package.
We are so cooked.
Here is Mayor Bloomberg saying today what you heard me saying 18 months ago: "It's not clear who's going to be buying our debt," said Bloomberg. "It may very well be that the next wave is going to come back and bite us."
My listeners have known that for 18 months; finally the mayor gets honest, too.
Read on:
Bloomberg warns of "next wave" crisis
By DEVLIN BARRETT, Associated Press Writer
WASHINGTON - New York Mayor Michael Bloomberg warned Wednesday a "next wave" of financial pain may come from overseas if foreign entities stop buying U.S. debt.
The billionaire mayor spoke before an audience at Georgetown University, telling them it's not clear who is going to continue buying U.S. debt as financial firms try to cope with a crisis of confidence on Wall Street.
The mayor is scheduled to meet Thursday morning with Treasury Secretary Hank Paulson and Securities and Exchange Commission Chairman Chris Cox.
Before becoming mayor, Bloomberg made a fortune by launching a financial information company that bears his name, and he has more credibility than most politicians on economic matters.
Bloomberg said he was concerned that the credit crisis in the United States may scare off foreign investors that, until now, have been willing to buy debt that the U.S. uses to maintain a deficit.
"It's not clear who's going to be buying our debt," said Bloomberg. "It may very well be that the next wave is going to come back and bite us."
The mayor, a Democrat-turned-Republican-turned independent, regularly criticizes both parties, the Congress, and the White House for what he says is their lack of foresight. He said the current economic crisis is the latest example of the same problem.
"We have on both sides of the aisle, on both ends of Pennsylvania Avenue, thrown caution to the wind. We pay lip service to responsibility," he said, as he sat onstage in an armchair, fielding questions from Georgetown President Jack DeGioia.
Bloomberg had originally planned to give a speech about the economy, but amid the fast-moving events on Wall Street, he scrapped the speech and went with a question-and-answer session instead.
"The systemic problem is we've all gotten into a situation where we want it now, there's no pain ... We keep saying we want to have it, we don't want to pay for it. You can't go on forever not addressing the key issues in this country," like health care and immigration, he said.
Asked about government regulation of the U.S. economy, he said that while some complain it is excessive, the United States has a competitive advantage because in many other countries "you would think that most (corporate financial statements) are just made up."
In fact, just last year the mayor and New York Senator Charles Schumer issued a lengthy report decrying what they saw as overreaching and overly demanding regulation of business.
Back then, Bloomberg and Schumer wrote that enforcement of a 2002 law toughening business reporting requirements "produced far heavier costs than expected (and) has only aggravated the situation," putting the U.S. at a competitive disadvantage with other financial centers like London.
Fast forward to 2008 — and the meltdown of confidence in U.S. financial markets — and
Bloomberg had many nice things to say about regulation, including the Depression-era Glass-Steagall Act that separated commercial and investment banking, and was scrapped in 1999. As the modern financial sector has struggled, many Wall Street watchers have suggested resuscitating the old law.
Bloomberg did, though, continue to argue for a reordering of the current regulatory thicket.
"The real world has changed," he said, and old government agencies no longer are equipped to monitor companies that offer a combination of services, like insurance and investments and banking.
"All of these industries, the participants all do the same thing so there's a mishmash and there's too many places for things to slip through the cracks. I don't know that the regulators are asleep at the switch. The structure is not suitable for the real world."
-30-
This is a concept unimaginable by Americans; nobody wants to buy our federal bonds, notes, and other forms of debt. But that is because America's political leadership has either decided to not tell the truth of where the US economy is headed - obviously, for political survival reasons - or the fact of the matter is that our political leadership doesn't have the faintest idea what is happening right under their noses; they are clueless.
I vote for number 2; they are clueless.
Something you need to consider in the upcoming financial disaster is that the truth of the matter is that no matter how bad it gets for you, your congress member and US senator gets a paycheck. They get health insurance. They get a staff. They get offices. They get foreign travel. No matter how bad it gets, they do not suffer for a single second.
You better get that through your head. Because once you do, you understand why your congress member and US senator don't say a word to stop the wholesale looting of the Federal Reserve by the NY City banking mafia. No matter how much they destroy your life, your congress member and US senator suffer nothing at all. They have impunity from suffering because they write their own paychecks and benefits package.
We are so cooked.
Here is Mayor Bloomberg saying today what you heard me saying 18 months ago: "It's not clear who's going to be buying our debt," said Bloomberg. "It may very well be that the next wave is going to come back and bite us."
My listeners have known that for 18 months; finally the mayor gets honest, too.
Read on:
Bloomberg warns of "next wave" crisis
By DEVLIN BARRETT, Associated Press Writer
WASHINGTON - New York Mayor Michael Bloomberg warned Wednesday a "next wave" of financial pain may come from overseas if foreign entities stop buying U.S. debt.
The billionaire mayor spoke before an audience at Georgetown University, telling them it's not clear who is going to continue buying U.S. debt as financial firms try to cope with a crisis of confidence on Wall Street.
The mayor is scheduled to meet Thursday morning with Treasury Secretary Hank Paulson and Securities and Exchange Commission Chairman Chris Cox.
Before becoming mayor, Bloomberg made a fortune by launching a financial information company that bears his name, and he has more credibility than most politicians on economic matters.
Bloomberg said he was concerned that the credit crisis in the United States may scare off foreign investors that, until now, have been willing to buy debt that the U.S. uses to maintain a deficit.
"It's not clear who's going to be buying our debt," said Bloomberg. "It may very well be that the next wave is going to come back and bite us."
The mayor, a Democrat-turned-Republican-turned independent, regularly criticizes both parties, the Congress, and the White House for what he says is their lack of foresight. He said the current economic crisis is the latest example of the same problem.
"We have on both sides of the aisle, on both ends of Pennsylvania Avenue, thrown caution to the wind. We pay lip service to responsibility," he said, as he sat onstage in an armchair, fielding questions from Georgetown President Jack DeGioia.
Bloomberg had originally planned to give a speech about the economy, but amid the fast-moving events on Wall Street, he scrapped the speech and went with a question-and-answer session instead.
"The systemic problem is we've all gotten into a situation where we want it now, there's no pain ... We keep saying we want to have it, we don't want to pay for it. You can't go on forever not addressing the key issues in this country," like health care and immigration, he said.
Asked about government regulation of the U.S. economy, he said that while some complain it is excessive, the United States has a competitive advantage because in many other countries "you would think that most (corporate financial statements) are just made up."
In fact, just last year the mayor and New York Senator Charles Schumer issued a lengthy report decrying what they saw as overreaching and overly demanding regulation of business.
Back then, Bloomberg and Schumer wrote that enforcement of a 2002 law toughening business reporting requirements "produced far heavier costs than expected (and) has only aggravated the situation," putting the U.S. at a competitive disadvantage with other financial centers like London.
Fast forward to 2008 — and the meltdown of confidence in U.S. financial markets — and
Bloomberg had many nice things to say about regulation, including the Depression-era Glass-Steagall Act that separated commercial and investment banking, and was scrapped in 1999. As the modern financial sector has struggled, many Wall Street watchers have suggested resuscitating the old law.
Bloomberg did, though, continue to argue for a reordering of the current regulatory thicket.
"The real world has changed," he said, and old government agencies no longer are equipped to monitor companies that offer a combination of services, like insurance and investments and banking.
"All of these industries, the participants all do the same thing so there's a mishmash and there's too many places for things to slip through the cracks. I don't know that the regulators are asleep at the switch. The structure is not suitable for the real world."
-30-
Monday, September 15, 2008
European Banks Are Looting the ECB's Coffers
Just in case you think only the Wall Street bankers are looting their national bank, the Fed, think again. Below is an article about how they are doing it in Europe to the European Central Bank (ECB), the European Union's mirror of the the US Fed.
(Note: the Fed is a bank for bankers - backed by, but not a part of , the federal government- and therefore, it can, like any other bank, go bankrupt. They never told you that in Econ 101, did they? Well, it's true - and what is happening as US bankers loot the Fed opens the possibility we will see what happens when the Fed takes on enough junk from bankers as so-called assets to depress its own balance sheet. If you think you've seen a financial crisis so far, just watch what happens when the credit rating agencies blow the whistle on the Fed . . . and US Treasury bonds.)
Enjoy - and link, link, link!
Kenneth
++++++++++++
Bank borrowing from ECB is out of control
By Ambrose Evans-Pritchard
Telegraph.co.uk
"Britian's No. 1 Quality Newspaper Web Site"
The European Central Bank has issued the clearest warning to date that it cannot serve as a perpetual crutch for lenders caught off-guard by the severity of the credit crunch.
Not Wellink, the Dutch central bank chief and a major figure on the ECB council, said that banks were becoming addicted to the liquidity window in Frankfurt and were putting the authorities in an invidious position.
"There is a limit how long you can do this. There is a point where you take over the market," he told Het Finacieele Dagblad, the Dutch financial daily.
"If we see banks becoming very dependent on central banks, then we must push them to tap other sources of funding," he said.
While he did not name the chief culprits, there are growing concerns about the scale of ECB borrowing by small Spanish lenders and 'cajas' with heavy exposed to the country's property crash. Dutch banks have also been hungry clients at the ECB window.
One ECB source told The Daily Telegraph that over-reliance on the ECB funds has become an increasingly bitter issue at the bank because the policy amounts to a covert bail-out of lenders in southern Europe.
"Nobody dares pinpoint the country involved because as soon as we do it will cause a market reaction and lead to a meltdown for the banks," said the source.
This "soft bail-out" is largely underwritten by German and North European taxpayers, though it is occurring in a surreptitious way. It has become a neuralgic issue for the increasingly tense politics of EMU.
The latest data from the Bank of Spain shows that the country's banks have increased their ECB borrowing to a record €49.6bn (£39bn). A number have been issuing mortgage securities for the sole purpose of drawing funds from Frankfurt.
These banks are heavily reliant on short-term and medium funding from the capital markets. This spigot of credit is now almost entirely closed, making it very hard to roll over loans as they expire.
The ECB has accepted a very wide range of mortgage collateral from the start of the credit crunch. This is a key reason why the eurozone has so far avoided a major crisis along the lines of Bear Stearns or Northern Rock.
While this policy buys time, it leaves the ECB holding large amounts of questionable debt and may be storing up problems for later.
The practice is also skirts legality and risks setting off a political storm. The Maastricht treaty prohibits long-term taxpayer support of this kind for the EMU banking system.
Few officials thought this problem would arise. It was widely presumed that the capital markets would recover quickly, allowing distressed lenders to return to normal sources of funding.
Instead, the credit crunch has worsened in Europe.
Not to miss out, Nationwide recently announced that it was setting up operations in Ireland, partly in order to be able to take advantage of ECB liquidity if necessary. Any bank can tap ECB funds if they have a registered branch in the eurozone, although collateral must be denominated in euros.
Jean-Pierre Roth, head of the Swiss National Bank, complained this week that lenders were getting into the habit of shopping for funds from those authorities that offer the best terms. The practice is playing havoc monetary policy.
"What we should avoid is some kind of arbitrage by banks, which say they are going to go to central bank X, instead of central bank Y, because conditions are more attractive," he said.
-30-
(Note: the Fed is a bank for bankers - backed by, but not a part of , the federal government- and therefore, it can, like any other bank, go bankrupt. They never told you that in Econ 101, did they? Well, it's true - and what is happening as US bankers loot the Fed opens the possibility we will see what happens when the Fed takes on enough junk from bankers as so-called assets to depress its own balance sheet. If you think you've seen a financial crisis so far, just watch what happens when the credit rating agencies blow the whistle on the Fed . . . and US Treasury bonds.)
Enjoy - and link, link, link!
Kenneth
++++++++++++
Bank borrowing from ECB is out of control
By Ambrose Evans-Pritchard
Telegraph.co.uk
"Britian's No. 1 Quality Newspaper Web Site"
The European Central Bank has issued the clearest warning to date that it cannot serve as a perpetual crutch for lenders caught off-guard by the severity of the credit crunch.
Not Wellink, the Dutch central bank chief and a major figure on the ECB council, said that banks were becoming addicted to the liquidity window in Frankfurt and were putting the authorities in an invidious position.
"There is a limit how long you can do this. There is a point where you take over the market," he told Het Finacieele Dagblad, the Dutch financial daily.
"If we see banks becoming very dependent on central banks, then we must push them to tap other sources of funding," he said.
While he did not name the chief culprits, there are growing concerns about the scale of ECB borrowing by small Spanish lenders and 'cajas' with heavy exposed to the country's property crash. Dutch banks have also been hungry clients at the ECB window.
One ECB source told The Daily Telegraph that over-reliance on the ECB funds has become an increasingly bitter issue at the bank because the policy amounts to a covert bail-out of lenders in southern Europe.
"Nobody dares pinpoint the country involved because as soon as we do it will cause a market reaction and lead to a meltdown for the banks," said the source.
This "soft bail-out" is largely underwritten by German and North European taxpayers, though it is occurring in a surreptitious way. It has become a neuralgic issue for the increasingly tense politics of EMU.
The latest data from the Bank of Spain shows that the country's banks have increased their ECB borrowing to a record €49.6bn (£39bn). A number have been issuing mortgage securities for the sole purpose of drawing funds from Frankfurt.
These banks are heavily reliant on short-term and medium funding from the capital markets. This spigot of credit is now almost entirely closed, making it very hard to roll over loans as they expire.
The ECB has accepted a very wide range of mortgage collateral from the start of the credit crunch. This is a key reason why the eurozone has so far avoided a major crisis along the lines of Bear Stearns or Northern Rock.
While this policy buys time, it leaves the ECB holding large amounts of questionable debt and may be storing up problems for later.
The practice is also skirts legality and risks setting off a political storm. The Maastricht treaty prohibits long-term taxpayer support of this kind for the EMU banking system.
Few officials thought this problem would arise. It was widely presumed that the capital markets would recover quickly, allowing distressed lenders to return to normal sources of funding.
Instead, the credit crunch has worsened in Europe.
Not to miss out, Nationwide recently announced that it was setting up operations in Ireland, partly in order to be able to take advantage of ECB liquidity if necessary. Any bank can tap ECB funds if they have a registered branch in the eurozone, although collateral must be denominated in euros.
Jean-Pierre Roth, head of the Swiss National Bank, complained this week that lenders were getting into the habit of shopping for funds from those authorities that offer the best terms. The practice is playing havoc monetary policy.
"What we should avoid is some kind of arbitrage by banks, which say they are going to go to central bank X, instead of central bank Y, because conditions are more attractive," he said.
-30-
Sunday, September 14, 2008
Lehman tanks; Wall Street loots the Fed
Yeah, I know, long title. But for those of us who are not doing the drugs the Fed takes from its Wall Street dope dealers, the coming "Judgment Day" in the financial markets is inevitable. Even Alan "Uncle Sugar" Greenspan agreed that this is, "a once-in-a-century financial crisis."
That's nice; your open-the-gates-for-all-to-loot the Treasury, the Fed, and speculate ourselves into bankruptcy is why we are here today. But how can anyone get angry with America's favorite financial "Uncle Sugar?" So what if he is the reason for this disastrous financial season . . . you gotta love Uncle Sugar!
I have to get away from the tainted take of all this served up by the Wall Street flacks (GE owns one national TV network - and Rupert owns the WSJ - so what quality of financial news coverage are you going to get in the US?).
I go to the London Telegraph Business section. For months upon months, they've bravely gone where no double-talking US free-marketer has gone before. Tonight, I'm adding this article to my posts to show you what is really happening in NYC on Wall Street - and what it means to you in the US.
Concerning article length, I post the entire article because 1) if you are reading Reading Between the Lines, it is because you are a high IQ thinker who wants to understand the events swirling around you - the very premise of this blog's reason to exist; and 2) you are intellectually curious about many, many things, and you realize that I am finding many, many things to interest your intellectual curiosity. Those are compliments to you.
I will bring more of these articles to your attention, so keep coming back - and of course, link freely!
+++++++++++++
Wall Street privatises US government: be very afraid
By Charles Dumas
From Telegraph.co.uk
"Britian's No. 1 Quality News Site"
The US low-tax zealot, Grover Norquist, is famous for wanting to "shrink government down to the size where we can drown it in the bathtub". Still alive, he is not turning in his grave, but his idea has been well and truly buried - and not by the Democrats he hates; they have been tongue-tied on the credit crisis.
It is Wall Street, the paradigm of "red in tooth and claw" capitalism, that has turned to government subsidy on an unprecedented scale.
Low, ideally non-existent, taxes may be very desirable, but when free-market principles came into conflict with the survival of business as we know it, priorities were clear. The US Federal government's full faith and credit - in other words, the resources of American taxpayers - should be urgently deployed to preserve as much as possible of the financial industry.
Luckily for Wall Street, government was still too big to fit in that bathtub - and proved only too willing to take up the challenge.
The scale of the operation has been huge. The Bear Stearns' takeover last March by JP Morgan was helped down by a spoonful of sugar in the form of $29bn of quasi-equity investment by the Federal Reserve Board that can only go down in value, never appreciate. Nice money if you can get it - well done JPM! (I must declare an interest: I am a future pensioner of JP Morgan, so I like to see its fortunes improved.)
By March the Fed might have been forgiven for hardly noticing a mere $29bn: it had provided more than $250bn in liquidity assistance to the money markets, accepting dodgy mortgage paper as collateral. Lucky old Wall Street - though, to be fair, this liquidity was the only justifiable aspect of the Fed's conduct in the 15 months of credit crunch.
The "Bear" was only the hors d'oeuvre, as anyone could see. After a mid-summer Act of Congress promising major help to the mortgage market, the full scope of potential largesse from Washington was more thoroughly exploited last weekend when the two giant "government sponsored enterprises", nicknamed Fannie Mae and Freddie Mac - here collectively "Frannie" for convenience - were formally extended a Federal government guarantee by Treasury Secretary Paulson.
Frannie is emphatically, in fact by definition, not part of the sub-prime crisis. Out of the country's total home mortgages of $10.5 trillion the lowest tier, sub-prime, is (or was) about $1.5 trillion, with another dubious category called "Alt-A" (also not "prime"), of another $0.5 trillion.
Within sub-prime, came the so-called "Ninja" mortgages: qualifications required being No Income, No Job or Assets, and in the bulk of cases no documentation either. Wall Street's enthusiasm for this kind of paper led to the losses even at 15 per cent higher, house prices a year ago, requiring the hors d'oeuvre described above.
With house prices now nearly 20 per cent down from their peak, the story has moved on from sub-prime to prime. Frannie is the main course. The definition of a prime loan is one that can be taken onto the Frannie balance sheet, or placed with investors under a Frannie guarantee. With about $8.5 trillion of prime loans out there in total, Frannie is on the hook, in one form or another, for more than half, some $4.5 trillion.
Back in the sound-money days of more than a half-century ago, Senator Everett Dirksen came up with the classic thought about the US Federal government: "A billion here, a billion there… pretty soon you're talking about real money". How quaint that sounds. In these go-go days for fiscal "conservatives", it is more like "a trillion here, a trillion there…".
The Frannie deal is big even by today's standards. It single-handedly vaults the US from a public debt ratio in the sound-money range into the company of fiscal basket-cases like Italy and Belgium, and that long-standing economic invalid, Japan.
The chart shows how the net US government sector debt pre-Frannie was about the same size relative to the economy as Germany, though worse than other G7 peers such as Canada, Britain and France. Now with one bound, the addition of $4.5 trillion puts it up there with Italy and Japan.
For connoisseurs, the post-Frannie endorsement of the rating agency, Standard & Poor's, may raise an eyebrow: the triple-A rating of the US government is unaffected, we were told after last weekend's events. Many a nasty, even catastrophic, deterioration of credit has started with such a reassurance.
I have myself dealt with bankruptcy of a company that was actually "in the can" less than a year after it was triple-A rated. But triple-A rated mortgage securities trading at 50 cents in the dollar are bad enough. A bank whose credit-worthiness requires public defence has generally lost it. A government has greater resources, but questions are bound to be asked.
Nor is the monetary policy of the Federal Reserve designed to give comfort. Last autumn and winter, only too clearly panicked by Wall Street's fear of meltdown, the Fed made huge cuts in interest rates, as well as advancing (much more reasonably) over a quarter trillion dollars to the money market. The sense of panic told global investors all they needed to know.
China's accumulation of reserves, running at $500bn a year, had to be kept in dollars to support its (unwise) policy of controlling the yuan/dollar exchange rate. But the funds all got shifted to government or Frannie paper - no doubt a major force behind the US government's backing of Frannie: sudden withdrawal of China's dollar support genuinely might lead to financial Armageddon, in contrast with a few badly needed Wall Street failures.
Others flew the dollar - to anything they could think of. The euro, the yen, but notably to oil and other commodity derivatives. Commodity derivatives held off the public exchanges, "over the counter" (OTC), grew six-fold in three years, from $1.5 trillion at the end of 2004 to $9 trillion at the end of 2007 (and no doubt more since, though the data have yet to be published).
This is eight times the size of public-exchange commodity derivatives about which information is more detailed. Nobody knows the form of these OTC positions. But oil prices doubled from $70 a barrel just before the credit crisis to over $140 at the peak in July this year - and have since seen one of the fastest commodity price collapses ever, to little over $100. Those positions contained huge speculative accounts.
Who pays for dearer oil? Chiefly, the US consumer. So the rescue of Wall Street has panicked the Fed into a policy that has hammered American taxpayers, just as they have been called upon to finance the bailout of Wall Street.
The Fed's goals, as specified by Act of Congress, are to sustain good growth and keep inflation low (in that order). By its subjection to Wall Street priorities, it has both stimulated price inflation - the CPI was up 5.6 per cent over the latest 12 months - and thereby cut the real value of US incomes, and with them US growth.
It has thus failed in both its mandated goals. With one bullet - panicky interest rate cuts that have little relationship to saving Wall Street in any case - it has shot itself in both feet.
The irony is - I hesitate to say "joke", though black joke it is - that Wall Street did not need it, and will not (of course) be grateful. Sometime over this weekend, probably - or maybe a little later - Lehman Brothers is expected to endure a similar fate to Bear Stearns six months ago.
Perhaps "Hank the hunk" Paulson, former head of the leading Wall Street firm, Goldman Sachs, will play his usual highly visible part in devoting US taxpayers' resources to the cause. And will the world come to an end? Just as was feared at Y2K, or the CERN experiment last week? Well, actually, no.
And Wall Street realised this on Thursday when, after several days' worry over Lehman's fate, the stock market managed to go down sharply at the opening and then realise that it did/does not matter so much after all, ending up sharply instead. Neither would it have mattered much last March, had Bear Stearns simply been let go. Finally light has dawned.
In the meantime, the world has been changed. Free markets have been abandoned in America at the crucial hour by their chief exemplars, the financial masters of the universe. Let us hope that the convictions of the British financial and political community, though less confidently flaunted, will prove more durable.
Firms that fail after doing stupid things - or sometimes firms that are just plain unlucky - should go to the wall. Opinions may differ as to which category Northern Rock (our own particular policy disgrace) falls into.
The economy will recover sooner if banks that have made stupid mortgage loans suffer, and house prices fall more rapidly to levels at which affordability is obvious and buyers come forward. Society will also be more just. We should be grateful the Bank of England has an inflation target, not a confusing mishmash like the Fed. And that Mervyn King sticks to it.
It seems that President Bush and the Republicans are not just well to the left of Grover Norquist. They leave clear blue water on the left of Gordon Brown, much to the envy of Euro-lefties no doubt, who would love to ditch what they call "neo-liberalism", and what we call free markets, as easily as the American right wing.
Small wonder Barack Obama is having trouble establishing a distinct political identity - not to mention a feasible economic policy. And where subsidy is concerned, whoever may lead, can Detroit be far behind?
We read of a request for $25bn of Federal help to the car industry - both Messrs McCain and Obama think the amount should be twice that. Pigs to the trough - with or without your lipstick!
++++++++
Charles Dumas is director of Lombard Street Research
-30-
That's nice; your open-the-gates-for-all-to-loot the Treasury, the Fed, and speculate ourselves into bankruptcy is why we are here today. But how can anyone get angry with America's favorite financial "Uncle Sugar?" So what if he is the reason for this disastrous financial season . . . you gotta love Uncle Sugar!
I have to get away from the tainted take of all this served up by the Wall Street flacks (GE owns one national TV network - and Rupert owns the WSJ - so what quality of financial news coverage are you going to get in the US?).
I go to the London Telegraph Business section. For months upon months, they've bravely gone where no double-talking US free-marketer has gone before. Tonight, I'm adding this article to my posts to show you what is really happening in NYC on Wall Street - and what it means to you in the US.
Concerning article length, I post the entire article because 1) if you are reading Reading Between the Lines, it is because you are a high IQ thinker who wants to understand the events swirling around you - the very premise of this blog's reason to exist; and 2) you are intellectually curious about many, many things, and you realize that I am finding many, many things to interest your intellectual curiosity. Those are compliments to you.
I will bring more of these articles to your attention, so keep coming back - and of course, link freely!
+++++++++++++
Wall Street privatises US government: be very afraid
By Charles Dumas
From Telegraph.co.uk
"Britian's No. 1 Quality News Site"
The US low-tax zealot, Grover Norquist, is famous for wanting to "shrink government down to the size where we can drown it in the bathtub". Still alive, he is not turning in his grave, but his idea has been well and truly buried - and not by the Democrats he hates; they have been tongue-tied on the credit crisis.
It is Wall Street, the paradigm of "red in tooth and claw" capitalism, that has turned to government subsidy on an unprecedented scale.
Low, ideally non-existent, taxes may be very desirable, but when free-market principles came into conflict with the survival of business as we know it, priorities were clear. The US Federal government's full faith and credit - in other words, the resources of American taxpayers - should be urgently deployed to preserve as much as possible of the financial industry.
Luckily for Wall Street, government was still too big to fit in that bathtub - and proved only too willing to take up the challenge.
The scale of the operation has been huge. The Bear Stearns' takeover last March by JP Morgan was helped down by a spoonful of sugar in the form of $29bn of quasi-equity investment by the Federal Reserve Board that can only go down in value, never appreciate. Nice money if you can get it - well done JPM! (I must declare an interest: I am a future pensioner of JP Morgan, so I like to see its fortunes improved.)
By March the Fed might have been forgiven for hardly noticing a mere $29bn: it had provided more than $250bn in liquidity assistance to the money markets, accepting dodgy mortgage paper as collateral. Lucky old Wall Street - though, to be fair, this liquidity was the only justifiable aspect of the Fed's conduct in the 15 months of credit crunch.
The "Bear" was only the hors d'oeuvre, as anyone could see. After a mid-summer Act of Congress promising major help to the mortgage market, the full scope of potential largesse from Washington was more thoroughly exploited last weekend when the two giant "government sponsored enterprises", nicknamed Fannie Mae and Freddie Mac - here collectively "Frannie" for convenience - were formally extended a Federal government guarantee by Treasury Secretary Paulson.
Frannie is emphatically, in fact by definition, not part of the sub-prime crisis. Out of the country's total home mortgages of $10.5 trillion the lowest tier, sub-prime, is (or was) about $1.5 trillion, with another dubious category called "Alt-A" (also not "prime"), of another $0.5 trillion.
Within sub-prime, came the so-called "Ninja" mortgages: qualifications required being No Income, No Job or Assets, and in the bulk of cases no documentation either. Wall Street's enthusiasm for this kind of paper led to the losses even at 15 per cent higher, house prices a year ago, requiring the hors d'oeuvre described above.
With house prices now nearly 20 per cent down from their peak, the story has moved on from sub-prime to prime. Frannie is the main course. The definition of a prime loan is one that can be taken onto the Frannie balance sheet, or placed with investors under a Frannie guarantee. With about $8.5 trillion of prime loans out there in total, Frannie is on the hook, in one form or another, for more than half, some $4.5 trillion.
Back in the sound-money days of more than a half-century ago, Senator Everett Dirksen came up with the classic thought about the US Federal government: "A billion here, a billion there… pretty soon you're talking about real money". How quaint that sounds. In these go-go days for fiscal "conservatives", it is more like "a trillion here, a trillion there…".
The Frannie deal is big even by today's standards. It single-handedly vaults the US from a public debt ratio in the sound-money range into the company of fiscal basket-cases like Italy and Belgium, and that long-standing economic invalid, Japan.
The chart shows how the net US government sector debt pre-Frannie was about the same size relative to the economy as Germany, though worse than other G7 peers such as Canada, Britain and France. Now with one bound, the addition of $4.5 trillion puts it up there with Italy and Japan.
For connoisseurs, the post-Frannie endorsement of the rating agency, Standard & Poor's, may raise an eyebrow: the triple-A rating of the US government is unaffected, we were told after last weekend's events. Many a nasty, even catastrophic, deterioration of credit has started with such a reassurance.
I have myself dealt with bankruptcy of a company that was actually "in the can" less than a year after it was triple-A rated. But triple-A rated mortgage securities trading at 50 cents in the dollar are bad enough. A bank whose credit-worthiness requires public defence has generally lost it. A government has greater resources, but questions are bound to be asked.
Nor is the monetary policy of the Federal Reserve designed to give comfort. Last autumn and winter, only too clearly panicked by Wall Street's fear of meltdown, the Fed made huge cuts in interest rates, as well as advancing (much more reasonably) over a quarter trillion dollars to the money market. The sense of panic told global investors all they needed to know.
China's accumulation of reserves, running at $500bn a year, had to be kept in dollars to support its (unwise) policy of controlling the yuan/dollar exchange rate. But the funds all got shifted to government or Frannie paper - no doubt a major force behind the US government's backing of Frannie: sudden withdrawal of China's dollar support genuinely might lead to financial Armageddon, in contrast with a few badly needed Wall Street failures.
Others flew the dollar - to anything they could think of. The euro, the yen, but notably to oil and other commodity derivatives. Commodity derivatives held off the public exchanges, "over the counter" (OTC), grew six-fold in three years, from $1.5 trillion at the end of 2004 to $9 trillion at the end of 2007 (and no doubt more since, though the data have yet to be published).
This is eight times the size of public-exchange commodity derivatives about which information is more detailed. Nobody knows the form of these OTC positions. But oil prices doubled from $70 a barrel just before the credit crisis to over $140 at the peak in July this year - and have since seen one of the fastest commodity price collapses ever, to little over $100. Those positions contained huge speculative accounts.
Who pays for dearer oil? Chiefly, the US consumer. So the rescue of Wall Street has panicked the Fed into a policy that has hammered American taxpayers, just as they have been called upon to finance the bailout of Wall Street.
The Fed's goals, as specified by Act of Congress, are to sustain good growth and keep inflation low (in that order). By its subjection to Wall Street priorities, it has both stimulated price inflation - the CPI was up 5.6 per cent over the latest 12 months - and thereby cut the real value of US incomes, and with them US growth.
It has thus failed in both its mandated goals. With one bullet - panicky interest rate cuts that have little relationship to saving Wall Street in any case - it has shot itself in both feet.
The irony is - I hesitate to say "joke", though black joke it is - that Wall Street did not need it, and will not (of course) be grateful. Sometime over this weekend, probably - or maybe a little later - Lehman Brothers is expected to endure a similar fate to Bear Stearns six months ago.
Perhaps "Hank the hunk" Paulson, former head of the leading Wall Street firm, Goldman Sachs, will play his usual highly visible part in devoting US taxpayers' resources to the cause. And will the world come to an end? Just as was feared at Y2K, or the CERN experiment last week? Well, actually, no.
And Wall Street realised this on Thursday when, after several days' worry over Lehman's fate, the stock market managed to go down sharply at the opening and then realise that it did/does not matter so much after all, ending up sharply instead. Neither would it have mattered much last March, had Bear Stearns simply been let go. Finally light has dawned.
In the meantime, the world has been changed. Free markets have been abandoned in America at the crucial hour by their chief exemplars, the financial masters of the universe. Let us hope that the convictions of the British financial and political community, though less confidently flaunted, will prove more durable.
Firms that fail after doing stupid things - or sometimes firms that are just plain unlucky - should go to the wall. Opinions may differ as to which category Northern Rock (our own particular policy disgrace) falls into.
The economy will recover sooner if banks that have made stupid mortgage loans suffer, and house prices fall more rapidly to levels at which affordability is obvious and buyers come forward. Society will also be more just. We should be grateful the Bank of England has an inflation target, not a confusing mishmash like the Fed. And that Mervyn King sticks to it.
It seems that President Bush and the Republicans are not just well to the left of Grover Norquist. They leave clear blue water on the left of Gordon Brown, much to the envy of Euro-lefties no doubt, who would love to ditch what they call "neo-liberalism", and what we call free markets, as easily as the American right wing.
Small wonder Barack Obama is having trouble establishing a distinct political identity - not to mention a feasible economic policy. And where subsidy is concerned, whoever may lead, can Detroit be far behind?
We read of a request for $25bn of Federal help to the car industry - both Messrs McCain and Obama think the amount should be twice that. Pigs to the trough - with or without your lipstick!
++++++++
Charles Dumas is director of Lombard Street Research
-30-
Wednesday, September 10, 2008
Obama's "crass" Comments Infecting Democrats
In the article posted just prior to this one, I quoted from an article in Times Online, the web version of the Times of London, that called Barack Obama's lipstick on a pig remark, "crass." According to the mainstay dictionary of American newsrooms, The American Heritage Dictionary, the word means, "So crude and unrefined as to be lacking in discrimination and sensibility."
Now it seems Obama's crass nature is sweeping across the Democrat Party like a raging epidemic. Check out this from Politico's Jonathon Martin's Blog:
S.C. Dem chair: Palin primary qualification is she hasn't had an abortion
South Carolina Democratic chairwoman Carol Fowler sharply attacked Sarah Palin today, saying John McCain had chosen a running mate "whose primary qualification seems to be that she hasn’t had an abortion.”
Palin is an opponent of abortion rights and gave birth to her fifth child, Trig, earlier this year after finding out during her pregnancy that the baby had Down syndrome.
Fowler told my colleague Alex Burns in an interview that the selection of an opponent of abortion rights would not boost McCain among many women.
“Among Democratic women and even among independent women, I don’t think it helped him,” she said.
Told of McCain's boost in the new ABC/Washington Post among white women following the Palin pick, Fowler said: "Just anecdotally, I believe that those white women are Republican women anyway."
END
Looking through the posts following this, I found these posts that seem to me to sum up concisely what we are watching happen to the Obama campaign, and the Democrat Party with him:
"Democrats are in a total meltdown. We've gone from practically recreating the Paul Wellstone Memorial disaster in the way the media reacted to Palin's pick as VP, and now we're rapidly moving towards a Howard Dean "YEA" moment from the Obama team."
Above posted by Mike
"That's right Democrats, keep saying that a Governor, and former Mayor isn't qualified to be President, but a first term Senator who has never had a job as an executive is. That's the ticket to victory. Clearly it's worked real well in the polls."
Above posted by Dave F
Personally, I think that what we have here is that Obama and his cohorts have had the Main Stream Media (MSM) in their back pocket for so long that they have no respect for the MSM any longer. As I mentioned in the previous post, Obama really thinks he just gives a command, in this case his obvious command to the MSM to stop talking about his crass lipstick remark, and the MSM will obediently grovel at the sound of his voice.
And actually, that's understandable. The truth is that they have been Obama's handmaidens. You've got a group of journalists out there who have done some serious prostitution of their profession for him.
Now it's all coming home to roost.
-30-
Now it seems Obama's crass nature is sweeping across the Democrat Party like a raging epidemic. Check out this from Politico's Jonathon Martin's Blog:
S.C. Dem chair: Palin primary qualification is she hasn't had an abortion
South Carolina Democratic chairwoman Carol Fowler sharply attacked Sarah Palin today, saying John McCain had chosen a running mate "whose primary qualification seems to be that she hasn’t had an abortion.”
Palin is an opponent of abortion rights and gave birth to her fifth child, Trig, earlier this year after finding out during her pregnancy that the baby had Down syndrome.
Fowler told my colleague Alex Burns in an interview that the selection of an opponent of abortion rights would not boost McCain among many women.
“Among Democratic women and even among independent women, I don’t think it helped him,” she said.
Told of McCain's boost in the new ABC/Washington Post among white women following the Palin pick, Fowler said: "Just anecdotally, I believe that those white women are Republican women anyway."
END
Looking through the posts following this, I found these posts that seem to me to sum up concisely what we are watching happen to the Obama campaign, and the Democrat Party with him:
"Democrats are in a total meltdown. We've gone from practically recreating the Paul Wellstone Memorial disaster in the way the media reacted to Palin's pick as VP, and now we're rapidly moving towards a Howard Dean "YEA" moment from the Obama team."
Above posted by Mike
"That's right Democrats, keep saying that a Governor, and former Mayor isn't qualified to be President, but a first term Senator who has never had a job as an executive is. That's the ticket to victory. Clearly it's worked real well in the polls."
Above posted by Dave F
Personally, I think that what we have here is that Obama and his cohorts have had the Main Stream Media (MSM) in their back pocket for so long that they have no respect for the MSM any longer. As I mentioned in the previous post, Obama really thinks he just gives a command, in this case his obvious command to the MSM to stop talking about his crass lipstick remark, and the MSM will obediently grovel at the sound of his voice.
And actually, that's understandable. The truth is that they have been Obama's handmaidens. You've got a group of journalists out there who have done some serious prostitution of their profession for him.
Now it's all coming home to roost.
-30-
Barack Obama's Palin problem
I found this article in the Times Online, the web version of the Times of London. Even they can see that Barack Obama is losing it; both in terms of the votes he needs for election, and mentally in terms of his ability to grasp the problems he is creating for himself, and how to deal with them.
There is just no way around it - the lipstick on a pig remark is one of those indelible memories voters carry with them into the booth. It creates a mental picture of the person who uttered it, and becomes the image of who that person is.
I mentioned in a comment reply that I believe Barack Obama is someone for whom the world has always gotten out of his way whenever he wanted to get his way. His frustration with this issue that he created for himself reminded me of King Canute ordering the waves to cease coming ashore. Barack Obama is telling his handmaidens in the press, "Enough is enough!" - as if reality is his to just command at his will.
What I found fascinating in one article in the Times is the description of Obama's remark as "crass." That struck me as a truly interesting word choice. Look at its definition from the American Heritage Dictionary, the standard choice in nearly all first-tier newspapers:
"So crude and unrefined as to be lacking in discrimination and sensibility."
Here is the paragraph that used it:
"Some Democrats concede privately that Mr Obama’s choice of words was crass at a time when Mrs Palin’s lipstick joke was being replayed endlessly on news channels." (Article title: "From lipsticks to mudslicks in US election," Times Online, 9/10/2008)
Crass. What an accurate description; brilliant wordsmithing.
It is that definition that Obama's groupies fail to grasp for its accurate description of what he said. You can go round and round about what he really meant - knock-out blows are often single image events; Muskie crying in New Hampshire; Reagan's commanding "I paid for this mic" remark; Dukakis looking like a little kid playing soldier with his head sticking up in a tank's turret; Kerry's image as an over aged surfer dude wind sailing on his board. They all were just single images that the public indelibly etches into its mind.
Lipstick on a pig is Barack Obama's "crass" contribution to the list.
Here is the article headlined at the top of this post:
Barack Obama's Palin problem
There is just no way around it - the lipstick on a pig remark is one of those indelible memories voters carry with them into the booth. It creates a mental picture of the person who uttered it, and becomes the image of who that person is.
I mentioned in a comment reply that I believe Barack Obama is someone for whom the world has always gotten out of his way whenever he wanted to get his way. His frustration with this issue that he created for himself reminded me of King Canute ordering the waves to cease coming ashore. Barack Obama is telling his handmaidens in the press, "Enough is enough!" - as if reality is his to just command at his will.
What I found fascinating in one article in the Times is the description of Obama's remark as "crass." That struck me as a truly interesting word choice. Look at its definition from the American Heritage Dictionary, the standard choice in nearly all first-tier newspapers:
"So crude and unrefined as to be lacking in discrimination and sensibility."
Here is the paragraph that used it:
"Some Democrats concede privately that Mr Obama’s choice of words was crass at a time when Mrs Palin’s lipstick joke was being replayed endlessly on news channels." (Article title: "From lipsticks to mudslicks in US election," Times Online, 9/10/2008)
Crass. What an accurate description; brilliant wordsmithing.
It is that definition that Obama's groupies fail to grasp for its accurate description of what he said. You can go round and round about what he really meant - knock-out blows are often single image events; Muskie crying in New Hampshire; Reagan's commanding "I paid for this mic" remark; Dukakis looking like a little kid playing soldier with his head sticking up in a tank's turret; Kerry's image as an over aged surfer dude wind sailing on his board. They all were just single images that the public indelibly etches into its mind.
Lipstick on a pig is Barack Obama's "crass" contribution to the list.
Here is the article headlined at the top of this post:
Barack Obama's Palin problem
The former community organiser from Chicago is seeing white women from the Democratic base defect in droves to the former mayor of Wasilla. Only one person can bring them back.
At the start of the Democratic convention in Denver, one woman seemed to stand between Barack Obama and a straight fight with John McCain for the White House. The same is true now, but the woman in question is not Sarah Palin. It is still Hillary Clinton.
For ten days, the media leviathan that stalks US presidential campaigns has been slavering, of course, over the Governor of Alaska. Her speaking skills have been tested and found to be electrifying. Her family's foibles and her mis-steps in office have failed to dent her popularity. Instead, her swift rise to political rock-star status has distracted Senator Obama, and gives every appearance of having impaired his judgment.
In Virginia on Tuesday Mr Obama likened promises of sweeping change from the McCain campaign to putting “lipstick on a pig”. Aides to Senator McCain accused him of calling Mrs Palin a pig. Mr Obama noted that he had not even mentioned her by this point in his speech, but the damage had been done. Consciously or not, he had evoked Mrs Palin's unforgettable description of herself as a pitbull with lipstick, and appeared to insult her. This was a stumble. The real mis-step has been for Mr Obama, a presidential candidate, to acknowledge Mrs Palin, a vice-presidential nominee. He should be above the Palintology.
The Democrats have yet to grapple seriously with the Palin phenomenon, which is simultaneously shoring up the Republican base and eroding Mr Obama's. Thanks largely to Mrs Palin's performance in Minnesota, Mr McCain's post-convention bounce has brought him level with Mr Obama in most national polls. Democrats have scaled back ambitious campaign plans for all 50 states to focus on familiar battlegrounds. Even the financial race is tightening.
But it is the trend among white women voters that should truly alarm the Obama camp. One survey from the past two days shows an 11 per cent swing within this group since last week towards the McCain-Palin ticket. Another shows an astonishing and potentially decisive 20 per cent swing, comprising independents but also up to a quarter of women previously pledged to support Senator Clinton.
It was with these women that the “hockey mom” label was meant to resonate, and it is resonating. Some will return to the Democratic fold if the Obama campaign succeeds in making Mrs Palin's social conservatism more of an issue. But many will back Mr McCain, out of anger either at their candidate's failure to be nominated or at perceived prejudice towards Mrs Palin herself. One Clinton fundraiser has devoted herself to fighting sexist coverage of the Alaska Governor.
White women have traditionally favoured Democrats in national races. Without them, it is doubtful that Mr Obama can win in November, but only Mrs Clinton has the credentials and sheer political wattage to bring them back under the Democratic umbrella. It is by no means clear that she wants to.
Lesser-known Democrats have dutifully attacked Mrs Palin in person since last week. Mrs Clinton has not. She has explicitly declined to be drawn into a “cat fight” and on Monday, four days into the campaign proper, was still calling Mrs Palin's place on the Republican ticket “a great accomplishment”.
Mrs Clinton therefore has an historic decision to make: to sit on her hands and watch Mr Obama flail in a race that, two weeks ago, was his to lose; or to ride to his rescue for the second time since his capture of a nomination that she considered hers by right.
The first time, in Denver, her appeal for party unity seemed likely to launch Mr Obama towards the White House. Then came Mrs Palin. Cue Hillary, again.
Sarah Palin from someone who knows her
I just receiving this forwarded email. It is written by Butch Wildman, who owns Wildman Lodge on the Alaskan Peninsula. It is unedited for your review. Feel free to link this as you see fit.
Kenneth
++++++++++++++
Forwarded by friends of friends of the following:
One of our good friends, Eddie Spalten from San Antonio, fishes at the Wildman Lodge on the Alaskan Peninsula. The lodge is owned by Butch and Kathy Wildman. The Wildmans spend their winters in Texas and their summers in Alaska. Kathy’s father and former husband served in the Alaskan legislature for around 30 years so Butch and Kathy know Alaska politics.
Eddie emailed Butch and asks Butch what the Wildmans think of Gov. Sarah Palin. Butch’s unedited email is attached below. Please read it and forward it to your friends. This is what the citizens of Alaska think of Sarah Palin!
Thanks, Gene Powell
________________________________________________________________________________________________________________________________________
.Subject: Who is Sarah
by Butch Wildman, www.wildmanlodge.com
Hi Eddie:
Fishing is good here at Wildman and I rarely have time for politics, but many of our friends are asking us “Who is Sarah Palin?”
Of course, as Alaskans, Kathy and I are extremely proud of her. We just want to let you know that Sarah “Barracuda” Palin is a straight shooting, hard charging, get it done gal. She knows when to listen, how to analyze the facts and how to make a decision, then implement the plan. She doesn’t do a poll before jumping in with both feet like too many of the Washington types. She has little legislative experience because she has always held the EXECUTIVE position; in private life, as mayor of Anchorage’s largest bedroom community or more recently as Governor of our State.
She is a smart, attractive home grown Alaska girl with excellent moral and family values. She can see what needs to be done and does not hesitate to get it done.
One of our State’s major problems is that its Capital is in Juneau, 500 miles from the nearest road and 800 air miles from the population base which is Anchorage, Wasilla and Fairbanks. Our legislature and most of the State government is in Juneau and they ALL behave like a bunch of freshmen in a college town.
It has been this way since Statehood in 1959. When Sarah moved to Juneau, so did accountability and responsibility When the oil revenue started flown and a barrel of North Slope Crude hit $23.00, these people began spending money like drunken sailors. You can only imagine what was happenings when oil hit $100.00 a barrel, about the time Sarah took command.
My wife Kathy has first-hand experience with this fiasco, as her father and also her ex-husband were Alaska Legislators who served in Juneau as Senators, Senate President, or members of the State House for a combined period spanning nearly three decades.
About the time Sarah took the HELM as Governor of Alaska, about half of the State legislature was in the pocket of big oil companies or contractors doing big projects for Native Corporations around Alaska, all funded by State oil revenue. Alaska government was nothing but a good old boys club riding the perpetual wave of prosperity. This filtered down from the legislature, through the Department of Natural Resources, Department of Labor and even spilled in to the Public Safety who are supposed to “preserve and protect”.
When Sarah walked into the Governor’s Mansion, she promptly dismissed the State Trooper detachment assigned to Governor and had her and her husband’s gun case brought in from Wasilla.
Then, she got rid of the former Governor’s STATE Jet and told legislators that there were no more free rides, they would have to fly Alaska Airlines, just like her and her family if they wanted to travel.
Next came the nut cutting (the Barracuda part) the heads that rolled were too numerous to name, but when Sarah finished cleaning house, a number of our legislators ended up in jail for on corruption charges, or tendered their resignations along with numerous department heads and those who have been riding the gravy train for way too long, AND THEN SHE HAD LUNCH.
By the end of the day, Sarah Palin had saved the people of Alaska millions and has not yet slowed down.
She has truly brought CHANGE to Juneau. I personally know several persons in the private sector in Alaska, that hold her in high esteem. She surrounds herself with smart people, many from my hometown of Anchorage, she listens to them but makes her own decisions.
Sarah Palin is a no B.S. politician. It is refreshing that there is such a thing anymore. You want to talk about CHANGE? You should see a before and after picture of the State government in Alaska. That’s CHANGE!
Sarah will bring a number of things to the election. I am sure she will appeal many voters who my otherwise could have gone the other direction on election day. The conservative block will not be for Barack. We have their vote.
We need what Sarah will bring, first to the election and second, what she will bring to Washington D.C. McCain has been advised well, let’s just hope the American people can get the straight scoop on her in the weeks ahead.
This is just the opinion of one Alaska Bush Pilot and Guide, who pays attention to national politics, watches the news and is deathly afraid of the direction our nation is headed.
I guarantee that if Sarah gets a chance to dig her spurs into the flanks of the liberal Washington types, they will know that she is in the saddle.
Butch King
Pilot/Guide
Butch & Kathy King
Proprietors
Wildman Lake Lodge
www.wildmanlodge.com
-30-
Kenneth
++++++++++++++
Forwarded by friends of friends of the following:
One of our good friends, Eddie Spalten from San Antonio, fishes at the Wildman Lodge on the Alaskan Peninsula. The lodge is owned by Butch and Kathy Wildman. The Wildmans spend their winters in Texas and their summers in Alaska. Kathy’s father and former husband served in the Alaskan legislature for around 30 years so Butch and Kathy know Alaska politics.
Eddie emailed Butch and asks Butch what the Wildmans think of Gov. Sarah Palin. Butch’s unedited email is attached below. Please read it and forward it to your friends. This is what the citizens of Alaska think of Sarah Palin!
Thanks, Gene Powell
________________________________________________________________________________________________________________________________________
.Subject: Who is Sarah
by Butch Wildman, www.wildmanlodge.com
Hi Eddie:
Fishing is good here at Wildman and I rarely have time for politics, but many of our friends are asking us “Who is Sarah Palin?”
Of course, as Alaskans, Kathy and I are extremely proud of her. We just want to let you know that Sarah “Barracuda” Palin is a straight shooting, hard charging, get it done gal. She knows when to listen, how to analyze the facts and how to make a decision, then implement the plan. She doesn’t do a poll before jumping in with both feet like too many of the Washington types. She has little legislative experience because she has always held the EXECUTIVE position; in private life, as mayor of Anchorage’s largest bedroom community or more recently as Governor of our State.
She is a smart, attractive home grown Alaska girl with excellent moral and family values. She can see what needs to be done and does not hesitate to get it done.
One of our State’s major problems is that its Capital is in Juneau, 500 miles from the nearest road and 800 air miles from the population base which is Anchorage, Wasilla and Fairbanks. Our legislature and most of the State government is in Juneau and they ALL behave like a bunch of freshmen in a college town.
It has been this way since Statehood in 1959. When Sarah moved to Juneau, so did accountability and responsibility When the oil revenue started flown and a barrel of North Slope Crude hit $23.00, these people began spending money like drunken sailors. You can only imagine what was happenings when oil hit $100.00 a barrel, about the time Sarah took command.
My wife Kathy has first-hand experience with this fiasco, as her father and also her ex-husband were Alaska Legislators who served in Juneau as Senators, Senate President, or members of the State House for a combined period spanning nearly three decades.
About the time Sarah took the HELM as Governor of Alaska, about half of the State legislature was in the pocket of big oil companies or contractors doing big projects for Native Corporations around Alaska, all funded by State oil revenue. Alaska government was nothing but a good old boys club riding the perpetual wave of prosperity. This filtered down from the legislature, through the Department of Natural Resources, Department of Labor and even spilled in to the Public Safety who are supposed to “preserve and protect”.
When Sarah walked into the Governor’s Mansion, she promptly dismissed the State Trooper detachment assigned to Governor and had her and her husband’s gun case brought in from Wasilla.
Then, she got rid of the former Governor’s STATE Jet and told legislators that there were no more free rides, they would have to fly Alaska Airlines, just like her and her family if they wanted to travel.
Next came the nut cutting (the Barracuda part) the heads that rolled were too numerous to name, but when Sarah finished cleaning house, a number of our legislators ended up in jail for on corruption charges, or tendered their resignations along with numerous department heads and those who have been riding the gravy train for way too long, AND THEN SHE HAD LUNCH.
By the end of the day, Sarah Palin had saved the people of Alaska millions and has not yet slowed down.
She has truly brought CHANGE to Juneau. I personally know several persons in the private sector in Alaska, that hold her in high esteem. She surrounds herself with smart people, many from my hometown of Anchorage, she listens to them but makes her own decisions.
Sarah Palin is a no B.S. politician. It is refreshing that there is such a thing anymore. You want to talk about CHANGE? You should see a before and after picture of the State government in Alaska. That’s CHANGE!
Sarah will bring a number of things to the election. I am sure she will appeal many voters who my otherwise could have gone the other direction on election day. The conservative block will not be for Barack. We have their vote.
We need what Sarah will bring, first to the election and second, what she will bring to Washington D.C. McCain has been advised well, let’s just hope the American people can get the straight scoop on her in the weeks ahead.
This is just the opinion of one Alaska Bush Pilot and Guide, who pays attention to national politics, watches the news and is deathly afraid of the direction our nation is headed.
I guarantee that if Sarah gets a chance to dig her spurs into the flanks of the liberal Washington types, they will know that she is in the saddle.
Butch King
Pilot/Guide
Butch & Kathy King
Proprietors
Wildman Lake Lodge
www.wildmanlodge.com
-30-
Tuesday, September 9, 2008
Drudge Report: Obama The Only Pig In This Race
I am still in shock that anyone who calls him- or herself a comunity leader could sink to the lowest level that Barack Obama sank to with this from Ben Smith's Blog:
September 09, 2008
Categories: Barack Obama
Obama: 'Lipstick on a pig'
Amie Parnes reports from Lebanon, VA:
Obama poked fun of McCain and Palin's new "change" mantra."You can put lipstick on a pig," he said as the crowd cheered. "It's still a pig."
"You can wrap an old fish in a piece of paper called change. It's still gonna stink.""We've had enough of the same old thing."
The crowd apparently took the "lipstick" line as a reference to Palin, who described the difference between a hockey mom and a pit bull in a single word: "lipstick."
++++++++++++++++
How much longer can anyone who portrays him or herself "decent" withhold a barrage on Obama for this remark? Barack Obama is showing his true "moral core;" it is to slice and dice, lie and libel, do whatever it takes with The One as the sole criterion for deciding how far to go.
As the night progresses, I see that nearly 2,000 posts have gone up in the last 3 hours. To say that this hit a nerve is an understatement. This remark shattered the nation's spine.
What the Obama supporters can't handle is the reality of their Chosen One. He is vapid, shallow, inarticulate left to his own devices; and yes, it's true: if this were a white candidate, he would never have gotten past the Iowa Caucuses. He is where he is because he is black; that is the "historic" novelty of his campaign.
It's not racism to admit that reality; it is the truth, and everyone but the black racists knows that it is the truth. Well, actually it is more accurate to say that they do know, but by keeping up the "white guilt trip" hanging over everybody's head, they can act oblivious to the truth, and get away with it.
Let's have an honesty moment here: If Jeremiah Wright were white, and substituted black in his racist diatribes, do you believe for even a single second that person would be invited to address The National Press Club?
No, not in a million years.
The reality, the dirty secret of America's race relations, is that black racism directed towards whites is the only socially accepted racism left in America.
Let me make clear I am not saying it is morally acceptable - no form of racism is morally acceptable. What I am saying is that the black racists so cower the whites whom they attack, and force them into a total collapse of moral force, that they can assert their racism and not only have no fear of paying any penalties in the realm of social acceptance, but will, in fact, find themselves invited to such first-tier forums such as The National Press Club as "honored" speakers "enlightening" journalists inside The Beltway.
Oprah Winfrey offers another example of black racism at work. When a white author was caught lying in his Oprah-endorsed autobiography, no one can forget the groveling Ms. Winfrey made that author do to "earn" forgiveness.
Yet when Barack Obama's autobiography turns up with 40 significant lies documented by the Chicago Tribune, Ms. Winfrey goes on a whistle-stop tour to get him elected president.
When you apply one standard to one race, and another to some other race, that is racism. And that is exactly what Ms. Winfrey practiced in these well-known incidents.
-30-
September 09, 2008
Categories: Barack Obama
Obama: 'Lipstick on a pig'
Amie Parnes reports from Lebanon, VA:
Obama poked fun of McCain and Palin's new "change" mantra."You can put lipstick on a pig," he said as the crowd cheered. "It's still a pig."
"You can wrap an old fish in a piece of paper called change. It's still gonna stink.""We've had enough of the same old thing."
The crowd apparently took the "lipstick" line as a reference to Palin, who described the difference between a hockey mom and a pit bull in a single word: "lipstick."
++++++++++++++++
How much longer can anyone who portrays him or herself "decent" withhold a barrage on Obama for this remark? Barack Obama is showing his true "moral core;" it is to slice and dice, lie and libel, do whatever it takes with The One as the sole criterion for deciding how far to go.
As the night progresses, I see that nearly 2,000 posts have gone up in the last 3 hours. To say that this hit a nerve is an understatement. This remark shattered the nation's spine.
What the Obama supporters can't handle is the reality of their Chosen One. He is vapid, shallow, inarticulate left to his own devices; and yes, it's true: if this were a white candidate, he would never have gotten past the Iowa Caucuses. He is where he is because he is black; that is the "historic" novelty of his campaign.
It's not racism to admit that reality; it is the truth, and everyone but the black racists knows that it is the truth. Well, actually it is more accurate to say that they do know, but by keeping up the "white guilt trip" hanging over everybody's head, they can act oblivious to the truth, and get away with it.
Let's have an honesty moment here: If Jeremiah Wright were white, and substituted black in his racist diatribes, do you believe for even a single second that person would be invited to address The National Press Club?
No, not in a million years.
The reality, the dirty secret of America's race relations, is that black racism directed towards whites is the only socially accepted racism left in America.
Let me make clear I am not saying it is morally acceptable - no form of racism is morally acceptable. What I am saying is that the black racists so cower the whites whom they attack, and force them into a total collapse of moral force, that they can assert their racism and not only have no fear of paying any penalties in the realm of social acceptance, but will, in fact, find themselves invited to such first-tier forums such as The National Press Club as "honored" speakers "enlightening" journalists inside The Beltway.
Oprah Winfrey offers another example of black racism at work. When a white author was caught lying in his Oprah-endorsed autobiography, no one can forget the groveling Ms. Winfrey made that author do to "earn" forgiveness.
Yet when Barack Obama's autobiography turns up with 40 significant lies documented by the Chicago Tribune, Ms. Winfrey goes on a whistle-stop tour to get him elected president.
When you apply one standard to one race, and another to some other race, that is racism. And that is exactly what Ms. Winfrey practiced in these well-known incidents.
-30-
Drudge Report: FactCheck.org on sliming Palin
This morning, the Drudge Report posted an article about FactCheck.org and their research on the left-wing lunatics posting serial lies about Sarah Palin. I'm sure Barack Obama will come out and tell them to stop . . . (I wrote facetiously.)
Let me remind you that Reading Between the Lines was one of the blogs targeted by the Obama Brown Shirts in their campaign with Google (the "Do No Evil" owner of Blogspot) to shut down anyone opposing The One.
Google only relented when the NY Sun picked up the story and forced Google to admit that it allowed itself to be used to systematically vaporize the First Amendment by shutting down blogs without bothering to check first if they were, in fact, violating the Terms of Use.
To show you how far the far-leftists are going over the top, here is today's post from the Drudge Report, that was authored by FactCheck.Org:
Sliming Palin
False Internet claims and rumors fly about McCain's running mate.
Updated: 6:55 p.m. ET Sep 8, 2008
Summary
We've been flooded for the past few days with queries about dubious Internet postings and mass e-mail messages making claims about McCain's running mate, Gov. Palin. We find that many are completely false, or misleading.
Palin did not cut funding for special needs education in Alaska by 62 percent. She didn't cut it at all. In fact, she tripled per-pupil funding over just three years.
She did not demand that books be banned from the Wasilla library. Some of the books on a widely circulated list were not even in print at the time. The librarian has said Palin asked a "What if?" question, but the librarian continued in her job through most of Palin's first term.
She was never a member of the Alaskan Independence Party, a group that wants Alaskans to vote on whether they wish to secede from the United States. She's been registered as a Republican since May 1982.
Palin never endorsed or supported Pat Buchanan for president. She once wore a Buchanan button as a "courtesty" when he visited Wasilla, but shortly afterward she was appointed to co-chair of the campaign of Steve Forbes in the state.
Palin has not pushed for teaching creationism in Alaska's schools. She has said that students should be allowed to "debate both sides" of the evolution question, but she also said creationism "doesn't have to be part of the curriculum."
A few of these claims were included in a chain e-mail by a woman named Anne Kilkenny. We'll be looking into other charges in that e-mail for a future story. For more explanation of the bullet points above, please read the Analysis.
Analysis
Since Republican presidential nominee John McCain tapped Alaska Gov. Sarah Palin to be his running mate, information about Palin's past has been zipping around the Internet.
Several claims are not true, and other rumors are misleading.
No Cut for "Special Needs" Kids It's not true, as widely reported in mass e-mails, Web postings and at least one mainstream news source, that Palin slashed the special education budget in Alaska by 62 percent. CNN's Soledad O'Brien made the claim on Sept. 4 in an interview with Nicolle Wallace, a senior adviser to the McCain campaign:
O'Brien, Sept. 4: One are that has gotten certainly people sending to me a lot of e-mails is the question about as governor what she did with the special needs budget, which I'm sure you're aware, she cut significantly, 62 percent I think is the number from when she came into office. As a woman who is now a mother to a special needs child, and I think she actually has a nephew which is autistic as well. How much of a problem is this going to be as she tries to navigate both sides of that issue?
Such a move might have made Palin look heartless or hypocritical in view of her convention-speech pledge to be an advocate for special needs children and their families. But in fact, she increased special needs funding so dramatically that a representative of local school boards described the jump as "historic."
According to an April 2008 article in Education Week, Palin signed legislation in March 2008 that would increase public school funding considerably, including special needs funding. It would increase spending on what Alaska calls "intensive needs" students (students with high-cost special requirements) from $26,900 per student in 2008 to $73,840 per student in 2011. That almost triples the per-student spending in three fiscal years. Palin's original proposal, according to the Anchorage Daily News, would have increased funds slightly more, giving intensive needs students a $77,740 allotment by 2011.
Education Week: A second part of the measure raises spending for students with special needs to $73,840 in fiscal 2011, from the current $26,900 per student in fiscal 2008, according to the Alaska Department of Education and Early Development.
Unlike many other states, Alaska has relatively flush budget coffers, thanks to a rise in oil and gas revenues. Funding for schools will remain fairly level next year, however. Overall per-pupil funding across the state will rise by $100, to $5,480, in fiscal 2009. ...
Carl Rose, the executive director of the Association of Alaska School Boards, praised the changes in funding for rural schools and students with special needs as a "historic event," and said the finance overhaul would bring more stability to district budgets.
According to Eddy Jeans at the Alaska Department of Education and Early Development, funding for special needs and intensive needs students has increased every year since Palin entered office, from a total of $203 million in 2006 to a projected $276 million in 2009.
Those who claim that Palin cut special needs funding by 62 percent are looking in the wrong place and misinterpreting what they find there. They point to an apparent drop in the Department of Education and Early Development budget for special schools. But the special schools budget, despite the similar name, isn't the special needs budget. "I don't even consider the special schools component [part of] our special needs funding," Jeans told FactCheck.org.
"The special needs funding is provided through our public school funding formula. The special schools is simply a budget component where we have funding set aside for special projects," such as the Alaska School for the Deaf and the Alaska Military Youth Academy. A different budget component, the Foundation Program, governs special needs programs in the public school system.
And in any case, the decrease in funding for special schools is illusory. Palin moved the Alaska Military Youth Academy's ChalleNGe program, a residential military school program that teaches job and life skills to students under 20, out of the budget line for "special schools" and into its own line. This resulted in an apparent drop of more than $5 million in the special schools budget with no actual decrease in funding for the programs.
Not a Book Burner One false rumor accuses then-Mayor Palin of threatening to fire Wasilla's librarian for refusing to ban books from the town library. Some versions of the rumor come complete with a list of the books that Palin allegedly attempted to ban.
The story is false on several fronts: Palin never asked that books be banned; the librarian continued to serve in that position; no books were actually banned; and many of the books on the list that Palin supposedly wanted to censor weren't even in print at the time, proving that the list is a fabrication.
It's true that Palin did raise the issue with Mary Ellen Emmons, Wasilla's librarian, on at least two occasions. Emmons flatly stated her opposition both times. But, as the Mat-Su Valley Frontiersman (Wasilla's local paper) reported at the time, Palin asked general questions about what Emmons would say if Palin requested that a book be banned. According to Emmons, Palin "was asking me how I would deal with her saying a book can't be in the library."
Emmons reported that Palin pressed the issue, asking whether Emmons' position would change if residents were picketing the library. Wasilla resident Anne Kilkenny, who was at the meeting, corroborates Emmons' story, telling the Chicago Tribune that "Sarah said to Mary Ellen, 'What would your response be if I asked you to remove some books from the collection?' "
Palin characterized the exchange differently, initially volunteering the episode as an example of discussions with city employees about following her administration's agenda. Palin described her questions to Emmons as "rhetorical," noting that her questions "were asked in the context of professionalism regarding the library policy that is in place in our city."
Actually, true rhetorical questions have implied answers (e.g., "Who do you think you are?"), so Palin probably meant to describe her questions as hypothetical or theoretical. We can't read minds, so it is impossible for us to know whether or not Palin may actually have wanted to ban books from the library or whether she simply wanted to know how her new employees would respond to an instruction from their boss. It is worth noting that, in an update, the Frontiersman points out that no book was ever banned from the library's shelves.
Moreover, although Palin fired Emmons as part of a "loyalty" purge, she rehired Emmons the next day, and Emmons remained at her job for two-and-a-half more years. Actually, Palin initially requested Emmons' resignation in October 1996, four days before the public discussion of censorship. That was at the same time she requested that all four of Wasilla's department heads resign. Palin described the requests as a loyalty test and allowed all four department heads to retain their positions.
But on Jan. 30, 1997, three months after the censorship discussion, Palin informed Emmons and Wasilla's police chief, Irv Stambaugh, that they would be fired. According to the Chicago Tribune, Palin did not list censorship as a reason for Emmons' firing. Palin rehired Emmons the following day. Emmons continued to serve as librarian until August 1999, when the Chicago Tribune reports that she resigned.
So what about that list of books targeted for banning, which according to one widely e-mailed version was taken "from the official minutes of the Wasilla Library Board"? If it was, the library board should take up fortune telling. The list includes the first four Harry Potter books, none of which had been published at the time of the Palin-Emmons conversations. The first wasn't published until 1998.
In fact, the list is a simple cut-and-paste job, snatched (complete with typos and the occasional incorrect title) from the Florida Institute of Technology library Web page, which presents the list as "Books banned at one time or another in the United States."
Closet Secessionist?
Palin was never a member of the Alaskan Independence Party – which calls for a vote on whether Alaska should secede from the union or remain a state – despite mistaken reports to the contrary. But her husband was a member for years, and she attended at least one party convention, as mayor of the town in which it was held.
The party's chair originally told reporters that Palin had been a member, but the official later retracted that statement. Chairwoman Lynette Clark told the New York Times that false information had been given to her by another member of the party after she first told the Times and others that Palin joined the AIP in 1994. Clark issued an apology on the AIP Web site.
The director of Alaska's Division of Elections, Gail Fenumiai, confirms that Palin registered to vote in the state for the first time in May 1982 as a Republican and hasn't changed her party affiliation since. She also told FactCheck.org that Palin's husband, Todd, was registered with AIP from October 1995 to July 2000, and again from September 2000 until July 2002. (He has since been registered as undeclared.)
However, the AIP says Todd Palin "never participated in any party activities aside from attending a convention in Wasilla at one time."
There is still some dispute as to whether Sarah Palin also attended the AIP's 1994 convention, held in Wasilla. Clark and another AIP official told ABC News' Jake Tapper that both Palins were there. Palin was elected mayor of Wasilla two years later. The McCain campaign says Sarah Palin went to the 2000 AIP convention, also held in Wasilla, "as a courtesy since she was mayor."
As governor, Palin sent a video message to the 2008 convention, which is available on YouTube, and the AIP says she attended in 2006 when she was campaigning.Didn't Endorse Pat BuchananClaims that Palin endorsed conservative Republican Pat Buchanan for president in the 2000 campaign are false. She worked for conservative Republican Steve Forbes.
The incorrect reports stem from an Associated Press story on July 17, 1999, that said Palin was "among those sporting Buchanan buttons" at a lunch for Buchanan attended by about 85 people, during a swing he took through Fairbanks and Wasilla.
Buchanan didn't help matters when he told a reporter for the liberal publication The Nation on Aug. 29: "I'm pretty sure she's a Buchananite." But in fact, she wasn't.
Soon after The AP story appeared, Palin wrote in a letter to the editor of the Anchorage Daily News that she had merely worn a Buchanan button as a courtesy to her visitor and was not endorsing him. The letter, published July 26, 1999, said:
Palin, July 26, 1999: As mayor of Wasilla, I am proud to welcome all presidential candidates to our city. This is true regardless of their party, or the latest odds of their winning. When presidential candidates visit our community, I am always happy to meet them. I'll even put on their button when handed one as a polite gesture of respect.
Though no reporter interviewed me for the Associated Press article on the recent visit by a presidential candidate (Metro, July 17), the article may have left your readers with the perception that I am endorsing this candidate, as opposed to welcoming his visit to Wasilla. As mayor, I will welcome all the candidates in Wasilla.
Palin actually worked for Forbes. Less than a month after being spotted wearing the "courtesy" button for Buchanan, she was named to the state leadership committee of the Forbes effort. The Associated Press reported on Aug. 7, 1999:
The Associated Press, Aug. 7 1999: State Sen. Mike Miller of Fairbanks will head the Alaska campaign chairman for Republican presidential candidate Steve Forbes, campaign officials said. Joining the Fairbanks Republican on the leadership committee will be Wasilla Mayor Sarah Palin, and former state GOP chairman Pete Hallgren, who will serve as co-chairs.
Still, after nine years, the truth has yet to catch up completely.
No Creationism in SchoolsOn Aug. 29, the Boston Globe reported that Palin was open to teaching creationism in public schools. That's true. She supports teaching creationism alongside evolution, though she has not actively pursued such a policy as governor. In an Oct. 25, 2006, debate, when asked about teaching alternatives to evolution, Palin replied:
Palin, Oct. 25, 2006: Teach both. You know, don't be afraid of information. Healthy debate is so important and it's so valuable in our schools. I am a proponent of teaching both. And you know, I say this too as the daughter of a science teacher. Growing up with being so privileged and blessed to be given a lot of information on, on both sides of the subject – creationism and evolution. It's been a healthy foundation for me. But don't be afraid of information and let kids debate both sides.
A couple of days later, Palin amended that statement in an interview with the Anchorage Daily News, saying:
Palin, Oct. 2006: I don't think there should be a prohibition against debate if it comes up in class. It doesn't have to be part of the curriculum.
After her election, Palin let the matter drop. The Associated Press reported Sept 3: "Palin's children attend public schools and Palin has made no push to have creationism taught in them.
It reflects a hands-off attitude toward mixing government and religion by most Alaskans.
The article was headlined, "Palin has not pushed creation science as governor." It was written by Dan Joling, who reports from Anchorage and has covered Alaska for 30 years.
That E-mail Author Switching gears: Almost 100 readers have written to ask us if the many claims made about Palin in an e-mail written by someone named Anne Kilkenny are true. We can tell you that Kilkenny is a real person. (She was quoted by the Chicago Tribune, as we said above.)
According to the New York Times, she's a Democrat. According to Kilkenny herself, Palin "has hated me since back in 1996, when I was one of the 100 or so people who rallied to support the City Librarian against Sarah's attempt at censorship."
We're still analyzing Kilkenny's claims, and we will be posting something on this soon.
Republished with permission from factcheck.org.
SourcesSutton, Anne. "Governor signs revamped education package into law." Anchorage Daily News, 28 Mar. 2008.
Holland, Megan. "Intensive needs funding examined." Anchorage Daily News, 12 Jan. 2008.
Cavanagh, Sean. "Alaska Legislators Overhaul Funding." Education Week, 29 Apr. 2008.
Hawkins, John. "This Is The Sarah Palin Bikini Shot You Are Looking For And, No, It's Not Real." Right Wing News, 2 Sept. 2008.
Godel, Addison. "elizabeth - american flag bikini rifle." Posted on flickr Web site, accessed 8 Sept. 2008.
Joling, Dan. "Palin has not pushed creation science as governor." The Associated Press, 3 Sept. 2008.
Hayes, Christopher. "Sarah Palin, Buchananite." The Nation "Capitolism" Web site, 29 Aug. 2008.
Palin, Sarah. "Letters from the People." Anchorage Daily News. 26 July 1999; 5B.
The Associated Press: "Forbes sets Alaska leadership team," 7 Aug 1999.
Kizzia, Tom. "'Creation science' enters the race."
Anchorage Daily News, 27 Oct. 2006.
Paulson, Michael. "Sarah Palin on faith, life and creation." The Boston Globe, 29 Aug. 2008.
Tapper, Jake. "Another AIP Official Says Palin Was at 1994 Convention." ABCNews.com, 2 Sept. 2008.
Tapper, Jake. "Members of 'Fringe' Alaskan Independence Party Incorrectly Say Palin Was a Member in 90s." ABCNews.Com, 1Sept. 2008.
Komarnitsky, S.J. "Wasilla Keeps Librarian, But Police Chief Is Out." 1 February 1997. The Anchorage Daily News, 8 Sept. 2008.
Stuart, Paul. "FROM THE ARCHIVE: Palin: Library Censorship Inquiries 'Rhetorical'." 18 December 1996. Mat-Su Valley Frontiersman, 8 Sept. 2008.
White, Rindi. "Palin Asked City Librarian Whether She'd Ban Books." 7 September 2008. The Chicago Tribune, 8 Sept. 2008.
-30-
Let me remind you that Reading Between the Lines was one of the blogs targeted by the Obama Brown Shirts in their campaign with Google (the "Do No Evil" owner of Blogspot) to shut down anyone opposing The One.
Google only relented when the NY Sun picked up the story and forced Google to admit that it allowed itself to be used to systematically vaporize the First Amendment by shutting down blogs without bothering to check first if they were, in fact, violating the Terms of Use.
To show you how far the far-leftists are going over the top, here is today's post from the Drudge Report, that was authored by FactCheck.Org:
Sliming Palin
False Internet claims and rumors fly about McCain's running mate.
Updated: 6:55 p.m. ET Sep 8, 2008
Summary
We've been flooded for the past few days with queries about dubious Internet postings and mass e-mail messages making claims about McCain's running mate, Gov. Palin. We find that many are completely false, or misleading.
Palin did not cut funding for special needs education in Alaska by 62 percent. She didn't cut it at all. In fact, she tripled per-pupil funding over just three years.
She did not demand that books be banned from the Wasilla library. Some of the books on a widely circulated list were not even in print at the time. The librarian has said Palin asked a "What if?" question, but the librarian continued in her job through most of Palin's first term.
She was never a member of the Alaskan Independence Party, a group that wants Alaskans to vote on whether they wish to secede from the United States. She's been registered as a Republican since May 1982.
Palin never endorsed or supported Pat Buchanan for president. She once wore a Buchanan button as a "courtesty" when he visited Wasilla, but shortly afterward she was appointed to co-chair of the campaign of Steve Forbes in the state.
Palin has not pushed for teaching creationism in Alaska's schools. She has said that students should be allowed to "debate both sides" of the evolution question, but she also said creationism "doesn't have to be part of the curriculum."
A few of these claims were included in a chain e-mail by a woman named Anne Kilkenny. We'll be looking into other charges in that e-mail for a future story. For more explanation of the bullet points above, please read the Analysis.
Analysis
Since Republican presidential nominee John McCain tapped Alaska Gov. Sarah Palin to be his running mate, information about Palin's past has been zipping around the Internet.
Several claims are not true, and other rumors are misleading.
No Cut for "Special Needs" Kids It's not true, as widely reported in mass e-mails, Web postings and at least one mainstream news source, that Palin slashed the special education budget in Alaska by 62 percent. CNN's Soledad O'Brien made the claim on Sept. 4 in an interview with Nicolle Wallace, a senior adviser to the McCain campaign:
O'Brien, Sept. 4: One are that has gotten certainly people sending to me a lot of e-mails is the question about as governor what she did with the special needs budget, which I'm sure you're aware, she cut significantly, 62 percent I think is the number from when she came into office. As a woman who is now a mother to a special needs child, and I think she actually has a nephew which is autistic as well. How much of a problem is this going to be as she tries to navigate both sides of that issue?
Such a move might have made Palin look heartless or hypocritical in view of her convention-speech pledge to be an advocate for special needs children and their families. But in fact, she increased special needs funding so dramatically that a representative of local school boards described the jump as "historic."
According to an April 2008 article in Education Week, Palin signed legislation in March 2008 that would increase public school funding considerably, including special needs funding. It would increase spending on what Alaska calls "intensive needs" students (students with high-cost special requirements) from $26,900 per student in 2008 to $73,840 per student in 2011. That almost triples the per-student spending in three fiscal years. Palin's original proposal, according to the Anchorage Daily News, would have increased funds slightly more, giving intensive needs students a $77,740 allotment by 2011.
Education Week: A second part of the measure raises spending for students with special needs to $73,840 in fiscal 2011, from the current $26,900 per student in fiscal 2008, according to the Alaska Department of Education and Early Development.
Unlike many other states, Alaska has relatively flush budget coffers, thanks to a rise in oil and gas revenues. Funding for schools will remain fairly level next year, however. Overall per-pupil funding across the state will rise by $100, to $5,480, in fiscal 2009. ...
Carl Rose, the executive director of the Association of Alaska School Boards, praised the changes in funding for rural schools and students with special needs as a "historic event," and said the finance overhaul would bring more stability to district budgets.
According to Eddy Jeans at the Alaska Department of Education and Early Development, funding for special needs and intensive needs students has increased every year since Palin entered office, from a total of $203 million in 2006 to a projected $276 million in 2009.
Those who claim that Palin cut special needs funding by 62 percent are looking in the wrong place and misinterpreting what they find there. They point to an apparent drop in the Department of Education and Early Development budget for special schools. But the special schools budget, despite the similar name, isn't the special needs budget. "I don't even consider the special schools component [part of] our special needs funding," Jeans told FactCheck.org.
"The special needs funding is provided through our public school funding formula. The special schools is simply a budget component where we have funding set aside for special projects," such as the Alaska School for the Deaf and the Alaska Military Youth Academy. A different budget component, the Foundation Program, governs special needs programs in the public school system.
And in any case, the decrease in funding for special schools is illusory. Palin moved the Alaska Military Youth Academy's ChalleNGe program, a residential military school program that teaches job and life skills to students under 20, out of the budget line for "special schools" and into its own line. This resulted in an apparent drop of more than $5 million in the special schools budget with no actual decrease in funding for the programs.
Not a Book Burner One false rumor accuses then-Mayor Palin of threatening to fire Wasilla's librarian for refusing to ban books from the town library. Some versions of the rumor come complete with a list of the books that Palin allegedly attempted to ban.
The story is false on several fronts: Palin never asked that books be banned; the librarian continued to serve in that position; no books were actually banned; and many of the books on the list that Palin supposedly wanted to censor weren't even in print at the time, proving that the list is a fabrication.
It's true that Palin did raise the issue with Mary Ellen Emmons, Wasilla's librarian, on at least two occasions. Emmons flatly stated her opposition both times. But, as the Mat-Su Valley Frontiersman (Wasilla's local paper) reported at the time, Palin asked general questions about what Emmons would say if Palin requested that a book be banned. According to Emmons, Palin "was asking me how I would deal with her saying a book can't be in the library."
Emmons reported that Palin pressed the issue, asking whether Emmons' position would change if residents were picketing the library. Wasilla resident Anne Kilkenny, who was at the meeting, corroborates Emmons' story, telling the Chicago Tribune that "Sarah said to Mary Ellen, 'What would your response be if I asked you to remove some books from the collection?' "
Palin characterized the exchange differently, initially volunteering the episode as an example of discussions with city employees about following her administration's agenda. Palin described her questions to Emmons as "rhetorical," noting that her questions "were asked in the context of professionalism regarding the library policy that is in place in our city."
Actually, true rhetorical questions have implied answers (e.g., "Who do you think you are?"), so Palin probably meant to describe her questions as hypothetical or theoretical. We can't read minds, so it is impossible for us to know whether or not Palin may actually have wanted to ban books from the library or whether she simply wanted to know how her new employees would respond to an instruction from their boss. It is worth noting that, in an update, the Frontiersman points out that no book was ever banned from the library's shelves.
Moreover, although Palin fired Emmons as part of a "loyalty" purge, she rehired Emmons the next day, and Emmons remained at her job for two-and-a-half more years. Actually, Palin initially requested Emmons' resignation in October 1996, four days before the public discussion of censorship. That was at the same time she requested that all four of Wasilla's department heads resign. Palin described the requests as a loyalty test and allowed all four department heads to retain their positions.
But on Jan. 30, 1997, three months after the censorship discussion, Palin informed Emmons and Wasilla's police chief, Irv Stambaugh, that they would be fired. According to the Chicago Tribune, Palin did not list censorship as a reason for Emmons' firing. Palin rehired Emmons the following day. Emmons continued to serve as librarian until August 1999, when the Chicago Tribune reports that she resigned.
So what about that list of books targeted for banning, which according to one widely e-mailed version was taken "from the official minutes of the Wasilla Library Board"? If it was, the library board should take up fortune telling. The list includes the first four Harry Potter books, none of which had been published at the time of the Palin-Emmons conversations. The first wasn't published until 1998.
In fact, the list is a simple cut-and-paste job, snatched (complete with typos and the occasional incorrect title) from the Florida Institute of Technology library Web page, which presents the list as "Books banned at one time or another in the United States."
Closet Secessionist?
Palin was never a member of the Alaskan Independence Party – which calls for a vote on whether Alaska should secede from the union or remain a state – despite mistaken reports to the contrary. But her husband was a member for years, and she attended at least one party convention, as mayor of the town in which it was held.
The party's chair originally told reporters that Palin had been a member, but the official later retracted that statement. Chairwoman Lynette Clark told the New York Times that false information had been given to her by another member of the party after she first told the Times and others that Palin joined the AIP in 1994. Clark issued an apology on the AIP Web site.
The director of Alaska's Division of Elections, Gail Fenumiai, confirms that Palin registered to vote in the state for the first time in May 1982 as a Republican and hasn't changed her party affiliation since. She also told FactCheck.org that Palin's husband, Todd, was registered with AIP from October 1995 to July 2000, and again from September 2000 until July 2002. (He has since been registered as undeclared.)
However, the AIP says Todd Palin "never participated in any party activities aside from attending a convention in Wasilla at one time."
There is still some dispute as to whether Sarah Palin also attended the AIP's 1994 convention, held in Wasilla. Clark and another AIP official told ABC News' Jake Tapper that both Palins were there. Palin was elected mayor of Wasilla two years later. The McCain campaign says Sarah Palin went to the 2000 AIP convention, also held in Wasilla, "as a courtesy since she was mayor."
As governor, Palin sent a video message to the 2008 convention, which is available on YouTube, and the AIP says she attended in 2006 when she was campaigning.Didn't Endorse Pat BuchananClaims that Palin endorsed conservative Republican Pat Buchanan for president in the 2000 campaign are false. She worked for conservative Republican Steve Forbes.
The incorrect reports stem from an Associated Press story on July 17, 1999, that said Palin was "among those sporting Buchanan buttons" at a lunch for Buchanan attended by about 85 people, during a swing he took through Fairbanks and Wasilla.
Buchanan didn't help matters when he told a reporter for the liberal publication The Nation on Aug. 29: "I'm pretty sure she's a Buchananite." But in fact, she wasn't.
Soon after The AP story appeared, Palin wrote in a letter to the editor of the Anchorage Daily News that she had merely worn a Buchanan button as a courtesy to her visitor and was not endorsing him. The letter, published July 26, 1999, said:
Palin, July 26, 1999: As mayor of Wasilla, I am proud to welcome all presidential candidates to our city. This is true regardless of their party, or the latest odds of their winning. When presidential candidates visit our community, I am always happy to meet them. I'll even put on their button when handed one as a polite gesture of respect.
Though no reporter interviewed me for the Associated Press article on the recent visit by a presidential candidate (Metro, July 17), the article may have left your readers with the perception that I am endorsing this candidate, as opposed to welcoming his visit to Wasilla. As mayor, I will welcome all the candidates in Wasilla.
Palin actually worked for Forbes. Less than a month after being spotted wearing the "courtesy" button for Buchanan, she was named to the state leadership committee of the Forbes effort. The Associated Press reported on Aug. 7, 1999:
The Associated Press, Aug. 7 1999: State Sen. Mike Miller of Fairbanks will head the Alaska campaign chairman for Republican presidential candidate Steve Forbes, campaign officials said. Joining the Fairbanks Republican on the leadership committee will be Wasilla Mayor Sarah Palin, and former state GOP chairman Pete Hallgren, who will serve as co-chairs.
Still, after nine years, the truth has yet to catch up completely.
No Creationism in SchoolsOn Aug. 29, the Boston Globe reported that Palin was open to teaching creationism in public schools. That's true. She supports teaching creationism alongside evolution, though she has not actively pursued such a policy as governor. In an Oct. 25, 2006, debate, when asked about teaching alternatives to evolution, Palin replied:
Palin, Oct. 25, 2006: Teach both. You know, don't be afraid of information. Healthy debate is so important and it's so valuable in our schools. I am a proponent of teaching both. And you know, I say this too as the daughter of a science teacher. Growing up with being so privileged and blessed to be given a lot of information on, on both sides of the subject – creationism and evolution. It's been a healthy foundation for me. But don't be afraid of information and let kids debate both sides.
A couple of days later, Palin amended that statement in an interview with the Anchorage Daily News, saying:
Palin, Oct. 2006: I don't think there should be a prohibition against debate if it comes up in class. It doesn't have to be part of the curriculum.
After her election, Palin let the matter drop. The Associated Press reported Sept 3: "Palin's children attend public schools and Palin has made no push to have creationism taught in them.
It reflects a hands-off attitude toward mixing government and religion by most Alaskans.
The article was headlined, "Palin has not pushed creation science as governor." It was written by Dan Joling, who reports from Anchorage and has covered Alaska for 30 years.
That E-mail Author Switching gears: Almost 100 readers have written to ask us if the many claims made about Palin in an e-mail written by someone named Anne Kilkenny are true. We can tell you that Kilkenny is a real person. (She was quoted by the Chicago Tribune, as we said above.)
According to the New York Times, she's a Democrat. According to Kilkenny herself, Palin "has hated me since back in 1996, when I was one of the 100 or so people who rallied to support the City Librarian against Sarah's attempt at censorship."
We're still analyzing Kilkenny's claims, and we will be posting something on this soon.
Republished with permission from factcheck.org.
SourcesSutton, Anne. "Governor signs revamped education package into law." Anchorage Daily News, 28 Mar. 2008.
Holland, Megan. "Intensive needs funding examined." Anchorage Daily News, 12 Jan. 2008.
Cavanagh, Sean. "Alaska Legislators Overhaul Funding." Education Week, 29 Apr. 2008.
Hawkins, John. "This Is The Sarah Palin Bikini Shot You Are Looking For And, No, It's Not Real." Right Wing News, 2 Sept. 2008.
Godel, Addison. "elizabeth - american flag bikini rifle." Posted on flickr Web site, accessed 8 Sept. 2008.
Joling, Dan. "Palin has not pushed creation science as governor." The Associated Press, 3 Sept. 2008.
Hayes, Christopher. "Sarah Palin, Buchananite." The Nation "Capitolism" Web site, 29 Aug. 2008.
Palin, Sarah. "Letters from the People." Anchorage Daily News. 26 July 1999; 5B.
The Associated Press: "Forbes sets Alaska leadership team," 7 Aug 1999.
Kizzia, Tom. "'Creation science' enters the race."
Anchorage Daily News, 27 Oct. 2006.
Paulson, Michael. "Sarah Palin on faith, life and creation." The Boston Globe, 29 Aug. 2008.
Tapper, Jake. "Another AIP Official Says Palin Was at 1994 Convention." ABCNews.com, 2 Sept. 2008.
Tapper, Jake. "Members of 'Fringe' Alaskan Independence Party Incorrectly Say Palin Was a Member in 90s." ABCNews.Com, 1Sept. 2008.
Komarnitsky, S.J. "Wasilla Keeps Librarian, But Police Chief Is Out." 1 February 1997. The Anchorage Daily News, 8 Sept. 2008.
Stuart, Paul. "FROM THE ARCHIVE: Palin: Library Censorship Inquiries 'Rhetorical'." 18 December 1996. Mat-Su Valley Frontiersman, 8 Sept. 2008.
White, Rindi. "Palin Asked City Librarian Whether She'd Ban Books." 7 September 2008. The Chicago Tribune, 8 Sept. 2008.
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Monday, September 8, 2008
Ban on Political Endorsements by Pastors Targeted
Here is the Washington Post article about a plan to force a legal challenge to the way the IRS has broken through the wall that separates the church and state in America, and my comment at the end that was posted on the Washington Post website:
Ban on Political Endorsements by Pastors Targeted
By Peter Slevin
Washington Post Staff Writer
Monday, September 8, 2008; Page A03
CHICAGO -- Declaring that clergy have a constitutional right to endorse political candidates from their pulpits, the socially conservative Alliance Defense Fund is recruiting several dozen pastors to do just that on Sept. 28, in defiance of Internal Revenue Service rules.
The effort by the Arizona-based legal consortium is designed to trigger an IRS investigation that ADF lawyers would then challenge in federal court. The ultimate goal is to persuade the U.S. Supreme Court to throw out a 54-year-old ban on political endorsements by tax-exempt houses of worship.
"For so long, there has been this cloud of intimidation over the church," ADF attorney Erik Stanley said. "It is the job of the pastors of America to debate the proper role of church in society. It's not for the government to mandate the role of church in society."
Yet an opposing collection of Christian and Jewish clergy will petition the IRS today to stop the protest before it starts, calling the ADF's "Pulpit Initiative" an assault on the rule of law and the separation of church and state.
Backed by three former top IRS officials, the group also wants the IRS to determine whether the nonprofit ADF is risking its own tax-exempt status by organizing an "inappropriate, unethical and illegal" series of political endorsements.
"As religious leaders, we have grave concerns about the ethical implications of soliciting and organizing churches to violate core principles of our society," the clergy wrote in an advance copy of their claim obtained by The Washington Post.
The battle over the clergy's privileges, rights and responsibilities in the political world is not new. Politicians of all stripes court the support -- explicit or otherwise -- of religious leaders.
Allegations surface every political season of a preacher crossing the line.
What is different is the Alliance Defense Fund's direct challenge to the rules that govern tax-exempt organizations. Rather than wait for the IRS to investigate an alleged violation, the organization intends to create dozens of violations and take the U.S. government to court on First Amendment grounds.
"We're looking for churches that are serious-minded about this, churches that understand both the risks and the benefits," Stanley said, referring to the chance that they could lose their coveted tax-exempt status or could set a precedent.
Stanley said three dozen church leaders from more than 20 states have agreed to deliver a political sermon, naming political names.
"The sermon will be an evaluation of conditions for office in light of scripture and doctrine. They will make a specific recommendation from the pulpit about how the congregation would vote," he said.
"They could oppose a candidate. They could oppose both candidates. They could endorse a candidate. They could focus on a federal, state or local election."
Such endorsements are prohibited by a 1954 amendment to the Internal Revenue Code that says nonprofit, tax-exempt entities may not "participate in, or intervene in . . . any political campaign on behalf of any candidate for public office."
In a Sept. 3 letter to two United Church of Christ pastors in Ohio who are organizing the challenge to the ADF, Stanley appealed to them, "as one Christian brother to another," to abandon their criticism. He asserted a "constitutional right to speak freely from the pulpit" and said IRS rules "stifle religious expression."
Former IRS lawyer Marcus S. Owens, however, opposes the ADF's strategy and its legal reasoning. Working with the Ohio-based clergy, he contends that the Supreme Court would be unlikely to overturn appellate court rulings on the issue or a related precedent of its own.
Owens also criticizes ADF and its lawyers for "actively advising churches and pastors that they should violate the tax law and offering to explain how to do that. The tax system would be shut down if you allowed attorneys to counsel people on how to violate the tax law."
Owens, a former director of the IRS office that regulates tax-exempt organizations, will ask the tax agency to investigate ADF lawyers for "this flagrant disregard of the ethical rules." He is joined by former IRS commissioner Mortimer M. Caplin and Cono R. Namorato, who headed the office of professional responsibility at the IRS until 2006.
The two Ohio pastors, the Rev. Eric Williams and the Rev. Robert F. Molsberry, have called for hundreds of clergy to preach on Sept. 21 about the value of the separation of church and state.
Joe Conn, a spokesman for Americans United for Separation of Church and State, calls "Pulpit Freedom Sunday" a "stunt" that is part of an effort by the religious right to build a church network that will "put their candidates into office. It's part of the overall game plan."
"This is an extraordinarily reckless scheme that they are promoting," Conn said. "The federal tax law is clear. Churches are charitable institutions that exist to do charitable things. That does not include politics. Political groups do politics."
The Alliance Defense Fund is a legal consortium that considers itself the antithesis of the American Civil Liberties Union. It spends more than $20 million a year to underwrite legal battles and train lawyers to push the country in socially conservative directions.
Founded in 1994 by Christian conservatives including James C. Dobson of Focus on the Family and William R. Bright, founder of Campus Crusade for Christ, the ADF has challenged same-sex marriage initiatives, stem cell research and rules that limit the distance protesters must keep from abortion patients. It helped the Boy Scouts ban gay Scout leaders.
Defining its latest mission, the ADF declared that pastors have "too long feared" the loss of tax exemptions.
"We're not encouraging any congregation to violate the law," Stanley said. "What we're encouraging them to do is exercise their constitutional right in the face of an unconstitutional law."
++++++++++++++++++
My comment posted on the Washington Post website:
"The power to tax, is the power to destroy."
That sums up the IRS rule.
If we had true separation of church and state, the courts would recognize that just as the church cannot dictate to the government in its affairs, neither can the government dictate to the church in its affairs.
In short, what goes on in the pulpit is beyond the governement's grasp. It is walled off from interferring in the church; it is impotent concerning what can be preached.
But we don't have that in America. We have a government that violates the separation by dictating to churches what they can, and cannot say. And they hold the power of taxation - the power to destroy - at their heads as a loaded gun, ready to kill the church through taxation.
The leftists on this thread are truly disgusting. They are incapable of applying the separation as a real wall - sealing off the government from interfering in the churches' doctrine and freedom of speech.
Where were these defilers of the First Amendment when they watched the Rev. Dr. Jeremiah Wright?
This is one of those times when you just have to put your beliefs into the courtroom. The federal court system is not just a legal arena, it is a pubic arena where concepts, and principles, are debated for national consumption through our open hearing process.
It is time to put squarely before the American people the choice of allowing the leftists to stop the First Amendment at the churches' door, or telling the leftists that Freedom of Speech in America applies to churches - churches that through the separation of church and state are beyond the grasp of government.
-30-
Ban on Political Endorsements by Pastors Targeted
By Peter Slevin
Washington Post Staff Writer
Monday, September 8, 2008; Page A03
CHICAGO -- Declaring that clergy have a constitutional right to endorse political candidates from their pulpits, the socially conservative Alliance Defense Fund is recruiting several dozen pastors to do just that on Sept. 28, in defiance of Internal Revenue Service rules.
The effort by the Arizona-based legal consortium is designed to trigger an IRS investigation that ADF lawyers would then challenge in federal court. The ultimate goal is to persuade the U.S. Supreme Court to throw out a 54-year-old ban on political endorsements by tax-exempt houses of worship.
"For so long, there has been this cloud of intimidation over the church," ADF attorney Erik Stanley said. "It is the job of the pastors of America to debate the proper role of church in society. It's not for the government to mandate the role of church in society."
Yet an opposing collection of Christian and Jewish clergy will petition the IRS today to stop the protest before it starts, calling the ADF's "Pulpit Initiative" an assault on the rule of law and the separation of church and state.
Backed by three former top IRS officials, the group also wants the IRS to determine whether the nonprofit ADF is risking its own tax-exempt status by organizing an "inappropriate, unethical and illegal" series of political endorsements.
"As religious leaders, we have grave concerns about the ethical implications of soliciting and organizing churches to violate core principles of our society," the clergy wrote in an advance copy of their claim obtained by The Washington Post.
The battle over the clergy's privileges, rights and responsibilities in the political world is not new. Politicians of all stripes court the support -- explicit or otherwise -- of religious leaders.
Allegations surface every political season of a preacher crossing the line.
What is different is the Alliance Defense Fund's direct challenge to the rules that govern tax-exempt organizations. Rather than wait for the IRS to investigate an alleged violation, the organization intends to create dozens of violations and take the U.S. government to court on First Amendment grounds.
"We're looking for churches that are serious-minded about this, churches that understand both the risks and the benefits," Stanley said, referring to the chance that they could lose their coveted tax-exempt status or could set a precedent.
Stanley said three dozen church leaders from more than 20 states have agreed to deliver a political sermon, naming political names.
"The sermon will be an evaluation of conditions for office in light of scripture and doctrine. They will make a specific recommendation from the pulpit about how the congregation would vote," he said.
"They could oppose a candidate. They could oppose both candidates. They could endorse a candidate. They could focus on a federal, state or local election."
Such endorsements are prohibited by a 1954 amendment to the Internal Revenue Code that says nonprofit, tax-exempt entities may not "participate in, or intervene in . . . any political campaign on behalf of any candidate for public office."
In a Sept. 3 letter to two United Church of Christ pastors in Ohio who are organizing the challenge to the ADF, Stanley appealed to them, "as one Christian brother to another," to abandon their criticism. He asserted a "constitutional right to speak freely from the pulpit" and said IRS rules "stifle religious expression."
Former IRS lawyer Marcus S. Owens, however, opposes the ADF's strategy and its legal reasoning. Working with the Ohio-based clergy, he contends that the Supreme Court would be unlikely to overturn appellate court rulings on the issue or a related precedent of its own.
Owens also criticizes ADF and its lawyers for "actively advising churches and pastors that they should violate the tax law and offering to explain how to do that. The tax system would be shut down if you allowed attorneys to counsel people on how to violate the tax law."
Owens, a former director of the IRS office that regulates tax-exempt organizations, will ask the tax agency to investigate ADF lawyers for "this flagrant disregard of the ethical rules." He is joined by former IRS commissioner Mortimer M. Caplin and Cono R. Namorato, who headed the office of professional responsibility at the IRS until 2006.
The two Ohio pastors, the Rev. Eric Williams and the Rev. Robert F. Molsberry, have called for hundreds of clergy to preach on Sept. 21 about the value of the separation of church and state.
Joe Conn, a spokesman for Americans United for Separation of Church and State, calls "Pulpit Freedom Sunday" a "stunt" that is part of an effort by the religious right to build a church network that will "put their candidates into office. It's part of the overall game plan."
"This is an extraordinarily reckless scheme that they are promoting," Conn said. "The federal tax law is clear. Churches are charitable institutions that exist to do charitable things. That does not include politics. Political groups do politics."
The Alliance Defense Fund is a legal consortium that considers itself the antithesis of the American Civil Liberties Union. It spends more than $20 million a year to underwrite legal battles and train lawyers to push the country in socially conservative directions.
Founded in 1994 by Christian conservatives including James C. Dobson of Focus on the Family and William R. Bright, founder of Campus Crusade for Christ, the ADF has challenged same-sex marriage initiatives, stem cell research and rules that limit the distance protesters must keep from abortion patients. It helped the Boy Scouts ban gay Scout leaders.
Defining its latest mission, the ADF declared that pastors have "too long feared" the loss of tax exemptions.
"We're not encouraging any congregation to violate the law," Stanley said. "What we're encouraging them to do is exercise their constitutional right in the face of an unconstitutional law."
++++++++++++++++++
My comment posted on the Washington Post website:
"The power to tax, is the power to destroy."
That sums up the IRS rule.
If we had true separation of church and state, the courts would recognize that just as the church cannot dictate to the government in its affairs, neither can the government dictate to the church in its affairs.
In short, what goes on in the pulpit is beyond the governement's grasp. It is walled off from interferring in the church; it is impotent concerning what can be preached.
But we don't have that in America. We have a government that violates the separation by dictating to churches what they can, and cannot say. And they hold the power of taxation - the power to destroy - at their heads as a loaded gun, ready to kill the church through taxation.
The leftists on this thread are truly disgusting. They are incapable of applying the separation as a real wall - sealing off the government from interfering in the churches' doctrine and freedom of speech.
Where were these defilers of the First Amendment when they watched the Rev. Dr. Jeremiah Wright?
This is one of those times when you just have to put your beliefs into the courtroom. The federal court system is not just a legal arena, it is a pubic arena where concepts, and principles, are debated for national consumption through our open hearing process.
It is time to put squarely before the American people the choice of allowing the leftists to stop the First Amendment at the churches' door, or telling the leftists that Freedom of Speech in America applies to churches - churches that through the separation of church and state are beyond the grasp of government.
-30-
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