Month: December 2008

And the Liberal Press Actually Expect Us To Take Them Seriously?

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From today’s Wall Street Journal:

FROM THE MEDIA RESEARCH CENTER’S CYBERALERT.
File this one under “Deluded Expectations.” During MSNBC’s coverage of the terrorist attacks in Mumbai, India, on Nov. 27, daytime anchor Alex Witt seemed frustrated that the election of Barack Obama 23 days earlier — and the accompanying “global outpouring of affection, respect, hope” — had not caused an end to terrorist violence.

Talking with correspondent John Yang, who was covering the Obama side of the story, Witt conceded that while “you certainly can’t expect things to change on a dime overnight….There had been such a global outpouring of affection, respect, hope, with the new administration coming in, that precisely these kinds of attacks, it was thought — at least hoped — would be dampered down. But in this case it looks like Barack Obama is getting a preview of things to come.”

[This item, by the MRC’s Rich Noyes, was posted Monday morning on the MRC’s blog, Newsbusters.org]

It almost seems like a parody of liberals’ blind worship of Obama to actually expect that The One’s election would mean terrorists hanging up their bomb belts, peace around the world, lions lying down with lambs, and so forth. For his part, Yang delicately pointed out the more valid concern that “the enemies of the United States, those who don’t care for the United States no matter who’s leading it, would try and test the United States” during the transition from Bush to Obama.

Here’s the full exchange, that took place at about 2:55pm EST on Thursday, Thanksgiving Day, after Yang reported on how Obama was being fully briefed by the Bush administration on the terrorist attacks:

ALEX WITT: You know, John, and it’s interesting because there are many who had such an optimstic and hopeful opinion of things, and you certainly can’t expect things to change [snaps fingers] on a dime overnight, but there are many who suggested that with the outgoing Bush administration and the incoming Obama administration there would be something of a lull in terrorism attacks. There had been such a global outpouring of affection, respect, hope, with the new administration coming in, that precisely these kinds of attacks, it was thought — at least hoped — would be dampered down. But in this case it looks like Barack Obama is getting a preview of things to come.
JOHN YANG: He’s — it’s a rude awakening, a very, sort of, sober reminder of what he’s going to be facing in just a few weeks. And there is some concern also, there had been some concern, that during this period, during this, the transition period, between Election Day and Inauguration Day, that the enemies of the United States, those who don’t care for the United States no matter who’s leading it, would try and test the United States, would try to take advantage of this period, and I think that may be one thing that we’re seeing right now.
WITT: Okay, John Yang there in Chicago, following President-elect Barack Obama’s Thanksgiving Day dinner having been interrupted by all of this news from Mumbai. John, thank you very much.

Find the article on the Wall Street Journal’s website here.

Modified Mortgage Re-Default Rate More Than 50%

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The Comptroller of the Currency issued the following report regarding mortgages that were modified in 1Q 2008 in order to supposedly help the homeowners stay in their homes. The results are dismal. Yet I’m sure our President-Elect and Democrat Congress will push forward with plans to do this on a large scale, backed by government (our) $’s.

WASHINGTON — Comptroller of the Currency John C. Dugan said today that new data shows that more than half of loans modified in the first quarter of 2008 fell delinquent within six months.

“After three months, nearly 36 percent of the borrowers had re-defaulted by being more than 30 days past due. After six months, the rate was nearly 53 percent, and after eight months, 58 percent,” the Comptroller said in remarks at the Office of Thrift Supervision’s National Housing Forum today.

Mr. Dugan spoke during a panel discussion with OTS Director John Reich, Federal Reserve Board Vice Chairman Donald Kohn, FDIC Chairman Sheila Bair, and Federal Housing Finance Agency Director James Lockhart.

A key question, Mr. Dugan said, is why is the number of re-defaults so high? “Is it because the modifications did not reduce monthly payments enough to be truly affordable to the borrowers? Is it because consumers replaced lower mortgage payments with increased credit card debt? Is it because the mortgages were so badly underwritten that the borrowers simply could not afford them, even with reduced monthly payments? Or is it a combination of these and other factors?”

Read the full report here.

New Deal Economics

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A great op-ed piece by Amity Shlaes in the Wall Street Journal responding to Paul Krugman’s incessant campaigning on why New Deal spending works. Unfortunately our President-Elect seems to subscribe to Mr. Krugman’s brand of misguided economics.

Some highlights from the WSJ piece:

The New Deal is Mr. Obama’s context for the giant infrastructure plan his new team is developing. If he proposes FDR-style recovery programs, then it is useful to establish whether those original programs actually brought recovery. The answer is, they didn’t. New Deal spending provided jobs but did not get the country back to where it was before.

This reality shows most clearly in the data — everyone’s data. During the Depression the federal government did not survey unemployment routinely as it does today. But a young economist named Stanley Lebergott helped the Bureau of Labor Statistics in Washington compile systematic unemployment data for that key period. He counted up what he called “regular work” such as a job as a school teacher or a job in the private sector. He intentionally did not include temporary jobs in emergency programs — because to count a short-term, make-work project as a real job was to mask the anxiety of one who really didn’t have regular work with long-term prospects.

The result is what we today call the Lebergott/Bureau of Labor Statistics series. They show one man in four was unemployed when Roosevelt took office. They show joblessness overall always above the 14% line from 1931 to 1940. Six years into the New Deal and its programs to create jobs or help organized labor, two in 10 men were unemployed. Mr. Lebergott went on to become one of America’s premier economic historians at Wesleyan University. His data are what I cite. So do others, including our president-elect in the “60 Minutes” interview.

Later, Lee Ohanian of UCLA studied New Deal unemployment by the number of hours worked. His picture was similar to Mr. Lebergott’s. Even late in 1939, total hours worked by the adult population was down by a fifth from the 1929 level. To be sure, Michael Darby of UCLA has argued that make-work jobs should be counted. Even so, his chart shows that from 1931 to 1940, New Deal joblessness ranges as high as 16% (1934) but never gets below 9%. Nine percent or above is hardly a jobless target to which the Obama administration would aspire.

What kept the picture so dark so long? Deflation for one, but also the notion that government could engineer economic recovery by favoring the public sector at the expense of the private sector. New Dealers raised taxes again and again to fund spending. The New Dealers also insisted on higher wages when businesses could ill afford them. Roosevelt, for example, signed into law first his National Recovery Administration, whose codes forced businesses to pay an above-market minimum wage, and then the Wagner Act, which gave union workers more power.

As a result of such policy, pay for workers in the later 1930s was well above trend. Mr. Ohanian’s research documents this. High wages hurt corporate profits and therefore hiring. The unemployed stayed unemployed. “If you had a job you were all right” — the phrase we all heard as children about the Depression — really does capture the period.

Great stuff, and scary in terms of the plans our future President has for this country. Read the full article here.