Category: Uncategorized

You may now feel free to flap your arms and fly about the country:

The Securities and Exchange Commission took the dramatic step early Friday of temporarily banning the routine practice of betting against company stocks. The move, announced on the agency’s Web site, may well be unprecedented and a reflection of regulators’ concern about the widening scope of the financial crisis as entreaties come from all quarters to stem a swarm of short-selling.

This is a dead horse that deserves beating and beating well. The markets are not free in the USA. They never have been. More regulation of what are already very over-regulated markets is not going to ward off the inevitable economic bust that always follows economic booms. Since a) the Austrians were correct, and b) the USA has recently enjoyed the longest and most artificially prolonged financial boom in history, it shouldn’t be too terribly hard to realize what we have seen thus far is merely the camel’s nose in the tent.

I’m just curious if this ban is temporary in the “road work ahead – lane closed” sense or in the “extraordinary expenditures – income tax” sense.

It usually comes down to economics in the end:

Homeowners may despair as turmoil in the property market slashes value off their houses, but new research shows they could have the weak economic climate to thank for helping them hang on to their spouse. Data from the Office of National Statistics suggests that an unforseen consequence of falling house prices is a lower rate of divorce among married homeowners over the past 10 years…. Divorce accounts for around 6pc of all house sales in the prime property market, rising to 13pc among houses valued at more than £1m and 18pc among houses valued at more than £2m.

This doesn’t surprise me. There don’t seem to be too many women walking away from functional marriages simply because they’re “not happy” when there is little prospect for easy post-marital financial security. As societal wealth is annihilated – or more precisely, as the veil is stripped from the illusion of societal wealth – we can expect to see a return towards more conservative social mechanisms since there were economically rational reasons they came to be developed in the first place.

So, add increased marriage rates and lower divorce rates to the probable consequences of the fiat bubbles bursting. While there are certainly numerous systemic obstacles inhibiting marriage, such as the family courts, market forces always overwhelm law and social policy in the end.

I have no doubts that Obama is a fraud. He’s pretty obviously the sort of presentable black individual that every white liberal wants to fall all over themselves helping, who happens to be a con man that expects and is always prepared to take full advantage of that help. There’s one at every private school. I’d never questioned if Obama had written his own books or not, but it seems I probably should have:

Prior to 1990, when Barack Obama contracted to write “Dreams From My Father,” he had written very close to nothing. As an undergraduate, Obama had written what he justifiably calls some “very bad poetry.” He published nothing under his own name in The Harvard Law Review, where he served as an editor and as president. And after leaving Harvard, he published nothing in its review or in any law journal.

Then, in 1995, this untested 33 year-old produced what Time magazine has called – with a straight face – “the best-written memoir ever produced by an American politician.”

The public is asked to believe Obama wrote this on his own. I do not buy this canard for a minute, not at all. In writing a book on intellectual fraud, “Hoodwinked,” I developed an eye for literary humbug, and “Dreams” serves up an eyeful….

I have attempted to contact Dystel without success, but it is highly unlikely she re-wrote the book. Whoever did almost assuredly shared many of Obama’s sentiments, spoke his language and spent considerable time reworking the text. I had never even thought of Bill Ayers as a likely ghostwriter until I ordered his memoir, “Fugitive Days,” and began to read it. He writes very well and very much like “Obama.” Unlike “Dreams,” however, where the high style is intermittent, “Fugitive Days” is infused with the authorial voice in every sentence. That voice is surely Ayers’

It would simply be too hilarious if it turns out that Ayers rewrote Obama’s book in order to complete the contract that Obama couldn’t. No doubt some professional textual analysis is in order here.

In related news, archeologists today discovered a stone tablet containing the Lex Concido Rex, which apparently codified the imperial laws banning species extinction proclaimed by one Dens Ingens, a dinosaur emperor from the Gwaag Dynasty:

Stock market speculators will not be allowed to profit from the falling share prices of banks and insurance companies, financial regulators have announced…. The City regulator introduced a ban on the “short-selling” of banking and other financial shares on the London stock market. Short-selling is essentially a form of betting; a technique used by hedge funds and speculators to profit from falling share prices.

And once more history repeats itself. If prices are going down, why, it must be the speculators! Why not just have done with it and pass a law forbidding stock prices to decline that also gives everyone ten billion dollars? It would be nearly as effective.

An IQ guy attempts to work it out:

[T]hese are the facts concerning Obama’s LSAT score while attending Law School at Harvard University. We do not know his actual LSAT score; however, after much research, we found that the average LSAT score for all Harvard students is 171. The percentile rank for an LSAT score of 171 at Harvard is 98.8%.

MENSA will accept LSAT scores as a means of qualifying for MENSA membership. (MENSA also accepts up to 200 various IQ tests and other tests of cognitive function as well.) The LSAT score required for MENSA membership is equal to a percentile of 95% or higher. Thus, basing Obama’s estimated LSAT score of 171 ranks him in the top 98.8% (percent/percentile) range which is clearly above the lowest acceptable LSAT percentage rank of 95%, which clearly affirms that Obama has a qualifying intelligence quotient that would allow him acceptance into MENSA.

Since MENSA accepts various IQ Tests as well as other cognitive tests to qualify for MENSA membership it is safe to estimate that Obama’s IQ Score could range anywhere from a low IQ score of 130 based on the Stanford Binet IQ Test, Revision 5, to a high IQ score of 148 based on the Cattell IQ Test.

What the IQ guy failed to account for is the fact that Harvard University practices affirmative action. PBS Frontline reports: “The gap in SAT scores persists even at the highest levels of achievement. A study of the 1989 applicants to five highly-selective universities found that white candidates’ average combined SAT score was 186 points higher than the corresponding SAT average for African American applicants.”

Furthermore, the New York Times reports that “At the best schools, by contrast, efforts to diversify the student body translate into a 400-point bonus for minority students on the SAT tests.”

That 98.8 ranking, according to the average Harvard LSAT, translates to an estimated 138 IQ, which is equivalent to a combined pre-1996 SAT score of 1310. That’s pretty good, if not spectacular. However, note that this very same 98.8th percentile is only 1290 when taken directly from the pre-1996 SAT. [There is a dichotomy between the reported 98.8 percentile IQ equivalence on the LSAT and the 98.8 percentile on the pre-1996 SAT. Since Mensa accepts the 95th percentile on the LSAT as evidence that one is in 98th percentile in intelligence, it’s clear that the SAT-IQ conversion, based as it is on a broader population sample, is the more accurate and 1290 is the correct figure] Due to affirmative action, however, one must reduce that score by at least 186 points. (400 seems extreme; I suspect the NYT article is talking about the new SAT, which isn’t valid for the purposes of this comparison.) Thus, giving Obama the benefit of the doubt drops his score to 1104, which is equivalent to an IQ of 116. That’s not bad, but it is significantly less intelligent than Hillary’s 140 IQ, as well as being lower than George W. Bush’s 125 IQ (1206 SAT).

Before one points to the fact that Obama ranked highly in his class, it’s important to keep in mind that Bill Bradley was a Princeton Rhodes Scholar despite his 485 Verbal SAT and mediocre 103 IQ. Academic success, like every other kind of success, is just as much about hard work and determination as it is about intellectual firepower, but Barack Obama’s supporters obviously shouldn’t be attempting to make their case for him on the basis of what is, based on the available information, probably an IQ of between 115 and 120, only one standard deviation above the norm. Of course, this estimate is based on averages which don’t necessarily apply to a single individual; Obama could lay the matter to rest by simply permitting his scores to be released to the public.

If his intelligence is so incredibly important, as some of his more visibly insane supporters insist, then surely the senator should inform us precisely how intelligent he is. Because he demonstrates his ignorance and a less-than-impressive intelligence nearly every time he opens his mouth despite his handlers’ attempts to retroactively fix his statements: “The fact that we have reached a point where the Federal Reserve felt it had to take this unprecedented step with the American Insurance Group is the final verdict on the failed economic philosophy of the last eight years.”

First, AIG didn’t fail because of the economic philosophy of the last eight years. Alan Greenspan goosed the markets by expanding the money supply while Clinton was president and Ben Bernanke has further loosened monetary policy since. Second, that “unprecedented step” was taken with the American International Group.

UPDATE – Upset Obama admirers should note two things. First, a 116 IQ still indicates an intelligence that is well above average. It’s hardly an insult. Second, I am not a Republican, much less a McCain supporter, and have never even voted for a Republican for president.

UPDATE II – Obama graduated from my mother’s alma mater, where everyone takes the various college prep tests. He was not a National Merit Scholar, a National Merit Semifinalist or an Outstanding Participant. This indicates a ceiling on his SAT percentile at 96.9, which indicates a maximum possible SAT score of 1230 and maximum IQ of 129.

Nor is it a reflection of the free market. Nicolas Kristof correctly hammers the corporate pirate crew:

But one of our broad national problems is rising inequality, and it is exacerbated by corporate executives helping themselves to shareholders’ cash. Three decades ago, C.E.O.’s typically earned 30 to 40 times the income of ordinary workers. Last year, C.E.O.’s of large public companies averaged 344 times the average pay of workers…. “Compare the massive destruction of wealth for shareholders to what he gets at the end of the day,” said Lucian Bebchuk, the director of the corporate governance program at Harvard Law School. A central flaw of governance is that boards of directors frequently are ornamental and provide negligible oversight….

These Brobdingnagian paychecks are partly the result of taxpayer subsidies. A study released a few weeks ago by the Institute for Policy Studies in Washington found five major elements in the tax code that encourage overpaying executives. These cost taxpayers more than $20 billion a year.

Absurdly high CEO pay, which we have recently seen has absolutely nothing to do with actual corporate performance and may in fact be a reasonable predictor of future disaster, isn’t comparable to stratosphereic athletic salaries. In the case of the athlete, the well-compensated individual is responsible for creating much of the value. In the case of the CEO, they are usually skimming off the value.

Those who have never sat on a corporate board or had much contact with the executive class don’t realize that the executive class is largely parasitical; they are the remoras on the capitalist shark. Their power is the result of government interference in the free markets, which among other things forces families to sell their capital assets due to the inheritance tax and causes firms seeking investment to work with a very small number of favored Wall Street entitities if they wish to find funding. And, of course, one can’t hope to find funding without first installing a properly “professional” executive team and corporate board….

The executive class is not, for the most part, capitalist, it can be more accurately understood as a sort of pirates union that is loosely allied in common cause against the capitalists who actually own the companies that they are systematically pillaging under the guise of “managing” them. Until this distinction between executives and owners is properly understood by the American people, the irresponsible rape-and-pillage will continue to the detriment of the shareholders, the employees, the economy and even the government.

Marty Peretz of the New Republic actually thinks that it’s deregulation that caused the current financial crisis, rather than the Federal Reserve suppressing interest rates and the obvious moral hazard of the Fannie/Freddie structure. But then, he also thinks Ronald Reagan deregulated the airlines:

[T]he fault goes back to Bill Clinton who took up the call of deregulation and ran with it. Like with everything he did he did not look back. No, that’s a bit unfair. It goes back to Ronald Reagan who (not single-handedly but with the boy geniuses at his side) destroyed the airline industry in America.

If you happened to read my column last week, then you would know that it was President Carter who signed the Airline Deregulation Act of 1978. But, you know, it’s so easy to mistake the executive act of firing air traffic controllers with a legislative act passed by the House and Senate… if you’re a journalist.

Biden and the Democrats are operating on a fundamentally false principle:

The Republican party and some of the blogs and others on the far right, are trying very hard to paint a picture of this man, they’re trying the best as they can to mischaracterize who he is and what he stands for. All this stuff about how different Barack Obama is, they’re not just used to somebody really smart. They’re just not used to somebody who’s really well educated. They just don’t know quite how to handle it. Cause if he’s as smart as Barack is he must not be from my neighborhood.

And they wonder why they’re losing. As I noted yesterday, the entire Democratic Party’s campaign is foundering in part because they don’t understand a basic fact. Barack Obama simply is not very smart. He’s an affirmative action candidate, he can’t speak off the cuff, and if his test scores are ever released, it will almost surely be shown that he’s not only less intelligent than Bill Clinton and Al Gore, he’s less intelligent than John McCain, John Kerry, and George Bush. Quite possibly Sarah Palin too.

Obama doesn’t turn average Americans off because he’s black or because he’s too smart. He turns them off because he’s a fraud. Obama’s aloofness, which is easily mistaken for snobbishness, quite likely stems from a basic fear of being exposed for being far less than he pretends to be. I mean, how many spectacularly dumb moves does the guy have to make, how many incredibly stupid things does he have to say, before people begin to realize that he isn’t even as smart as the average politician?

Someone who is truly intelligent doesn’t duck debates or townhall face-offs with an old man like McCain. If Obama was anywhere nearly as bright as he pretends, he’d eagerly embrace the chance to make McCain look half-senile in front of a national audience. His fear of his mask being removed could be hidden when he had a big lead and a tactical defense for not debating, but now that he’s trailing a bit, his unwillingness tends to strongly support the suspicions that have been aroused by his attempt to conceal his intellectual history.

AL wants to know if the current economic crisis was engineered:

I’m not normally one for conspiracy theories, but expansion of a socialist government usually involves nationalizing major industries, right? But it wouldn’t fit the American model of socialism to do it by fiat. Instead, it would be done Hollywood style: Run a monetary policy that causes the industry to go off the cliff so that Super Fed can “save” it by nationalizing the biggest players.

Is this plausible, or am I going too heavy on the sauce?

No, this is merely the result of the long, ongoing shift from a free market capitalist model, in which the private owners bear the risks and rewards of business ownership to a managed market corporatist one where the elite owners and managerial reap the rewards while transferring any losses to the taxpayers. This naturally has the effect of creating a strip-mine mentality, wherein the elite must make hay while the sun is shining. As anyone versed in Keynesian economics knows very well, the model isn’t a sustainable one but it is justified by those who benefit from it because in the long run everyone is dead. Unfortunately for today’s Americans, the long run is arriving at last. As Spengler has repeatedly pointed out, this crisis no surprise and anyone who understands the demographic basis of American finance knew it would happen sooner or later. The babyboomers were always bound to break the system, that they should so richly merit the concomitant suffering from its collapse is merely the icing on the cake.

These bail-outs – and there will be more – are not intended to be long-term fixes nor is the transference of corporate ownership to the American people the long-term goal, they are instead the equivalent of propping up artificial lighting so that the hay can be harvested as long as possible. The inevitable collapse will be delayed until the harvesters can safely head for the exits. What comes next is unknown. History suggests a conventional strong-man dictatorship in one ideological form or another but it would appear that the structure of the North American Union is intended to prevent that from happening.

The reason AIG, Fannie, and Freddie were bailed-out while Lehman was not is because the Lehman failure would not end the harvesting. Merril Lynch wouldn’t have been bailed out either, even if it hadn’t been purchased for quarters on the dollar. But the three other failures might have brought about the end game due to the nature of the investments they were supporting. Don’t worry, it will happen soon enough, although not tomorrow, next month, or even next year. The market forces take time, especially when powerful organizations are desperately trying to stave them off, but they always win in the end.

Miss McArdle is entirely correct in the body of her post on correctly apportioning blame for the recent financial debacles. But as for that title, well, I’m confident it’s just a typo. She’s not generally the too-clever-by-half sort. But I laughed, I did:

Obama goes for the jungular

Obama is seeking to blame the current crisis on the Bush Administration

The blame for the problematic state of the economy lies squarely with the Federal Reserve. It should be abolished and the money power returned to the several States; if it is not, the nation will go bankrupt and be broken by forces much stronger than mere partisan politics. The Bush administration can quite reasonably be blamed, however, for granting the taxpayer guarantee to Fannie and Freddie debt, as well as for its literally criminal decision to keep those massive liabilities off the Federal books.

I am truly enjoying the Obama campaign. Between the “lipstick on a pig” experiment in self-immolation and the recent decision by the Great Speechifier to carry his teleprompter around like a childhood blankie, it just keeps getting better every day. I’m won’t say I share the despair of his Democratic devotees, but I am starting to think I might just feel a little bereft without him in the headlines after the first week in November. He’s such a natural unintentional comedian.