Leverage, Credit - It's Almost Like "Banking"

Paul Krugman and "Calculated Risk" seem to be willful in their misunderstanding of the latest Treasury scheme.  The gist, as reported in the WSJ:

...one leading idea is to establish separate funds to be run by private investment managers. The managers would have to put up a certain amount of capital. Additional financing would come from the government, which would share in any profit or loss.

And here is the Calculated Risk analysis lauded by Krugman:

By offering low interest non-recourse loans, these public-private entities can pay a higher than market price for the toxic assets (since there is no downside risk). This amounts to a direct subsidy from the taxpayers to the banks. It is amazing how many different ways they've tried to recycle the same bad idea.

"No" downside risk?  Surely that depends on the level of non-recourse funding offered to supplement the equity contribution of the investors.  Yes, if the private-sector partners need only pony up $100 in order to secure $10 billion in non-recourse Federal loans, I would say they are not exposed to any downside risk.  But suppose the Feds think they can get more bang for their restructuring buck by leveraging up these investment pools by 2-1.  In that case, the private partners will put in, hypothetically, $10 billion; the Fed will then lend another $20 billion to the investment pool.  Thus funded, the investment manager can then acquire up to $30 billion in assets as part of the Fed effort to grease the credit markets.

Does the non-recourse feature amount to a subsidy?  Well, a subsidy compared to what?  Plenty of investment vehicles operate on a non-recourse basis every day.  That aside, the Fed is providing a put on the underlying assets at a strike of 67% of the purchase price; one presumes they have some right to approve the assets being acquired and one hopes they know what they are doing, because the investment manager clearly has an economic incentive to buy high-variance assets. 

Just as an example, suppose the manager accumulates $30 billion of assets that fall to $20 billion in price.  The Fed can call its loan, collect all of its $20 billion, and the equity investors will be wiped out.  Contra Krugman, that is sort of the opposite of "no" downside risk.  However, if the assets fall to $15 billion the equity investors are wiped out and the Fed loses $5 billion, so the investor downside is limited.

And where's the upside?  The article asserts that the Treasury may join the investment pool as an equity investor as well, which is fine.  Personally, I think the government's upside would be a restored financial system and a vibrant economy but heaven forbid somebody makes money while that happens.

Is the low interest rate on the loan also a subsidy?  Again, compared to what?  The motivation of the exercise is that markets are not working so the lender of last resort is stepping into the breach.  Presumably the Fed is offering a better rate than would be available elsewhere since no one else is offering these loans because we are in the midst of a crisis.  One might as well ask whether the fire department shows up to battle blazes at a subsidized rate.

Clearly this program has the potential to turn into a give-away, as government officials recognize:

The Fed and the Obama administration also are mulling whether to expand the TALF to existing distressed assets, also known as legacy assets. Such a move could allow the Fed to provide low-interest loans to investors who use the money to purchase distressed mortgage-backed securities or commercial real-estate loans. But such a move also would raise many new questions, among them the amount of protection the Treasury would offer against such risky assets. As a result, the idea might not move forward.

I liked the mother of all term repo idea last fall, so I like this variation of it.  I suspect Krugman will simply moan, whine, and misrepresent any idea other than nationalization.

[END OF THREAD]

Comments

[Sue]

But I do covet your thoughts and prayers for my family.

Posted by: hit and run | March 04, 2009 at 11:03 AM

You've got them.

[Extraneus]

Good luck, hit.

[Old Lurker]

"raising the total enjoying lots of extra free time to very close to 2.5 million since the election."

At 2.5M jobs lost, the symetry with 2.5K lost on the Dow, and 25% lost in all stocks, and 25% lost in home values (all with liberal rounding) means that all the dots line up nicely.

Now lets see if it holds when 2's become 3's.

[centralcal]

What terrible news, Hit. You will be in my thoughts and prayers. I think about Glenda's daughter and how she ended up "better off" after her travails. I hope the same holds true for you and that it doesn't take as long!

[Rick Ballard]

Hit,

The empty slot previously filled by Glenda's daughter on my prayer list has been filled. I'll add a prayer that it be emptied even more quickly this time.

I would commend Davey Crockett's admonition upon his departure from Tennessee.

[narciso]

Yes Clarice, that's been as obvious as night follows day, and we can be darn sure, it won't be for any good cause. You tax and strangle with regulation what you don't want, you subsidize what you do; through the stimulus program. You must have had some flashbacks when you saw that logo from your travels abroad. Holdren, seems more like a sorcerer, than any rationale humane scientist, much less the President's
scientific advisor

[Old Lurker]

Hit, so sorry. Assume thoughts and prayers from the Lurkers.

I can send beer each Thursday. If we can find six other JOMers, we can keep you covered.

[Thomas Collins]

My thoughts and prayers are with you and your family, hit and run. And the upbeat tone of your posts despite a tough situation reminds me not to gripe about petty, day-to-day annoyances.

[narciso]

i'll be praying for you too, Hit,

[Ranger]

I think a lot of the market bounce is the rash of stories about congressional resistance to Obama's Taxandspendathon. Earlier this week it looked like a done deal, and the market tanked. Now it looks like he may only get part of it, so things are coming back.

BTW, if Feingold is honestly caucusing with the Dem rebels, that is an indication of just how radical Obama's ideas are. He is one of the hard core "progressives." My guess is he is getting bombarded with negative feedback over the Porkulus bill from back home.

[Caro]

Oh, Hit. My thoughts and prayers. Yes, thank goodness for the JOM community.

[Enlightened]

So is Bambi pretty much up to snuff as far as appeasing every leftwing and/or radical dipshit, grievance-monger wet dream? I wish he'd finish his lists of Things To Do, and Invisible Money To Give so those of us not on Planet Gaia can get on with Shoveling Shit For America.

Excuse me while I go meditate at the throne of Rush before I go and earn the big bucks on loan from The Messiah.

[hit and run]

Well, Rick, mrs hit and run's family has convinced themselves that they can muscle us into performing the latter half of Crockett's admontion.

Oh, and as to the first part, I would love to tell my employer to do just that, execpt the General Release Agreement my severance is based on includes language that says, "The performance of the Company's obligatinos under this Agreement are expressly contingent upon the Employee not making any negative or disparaging comments regarding the Company...to any third party..."

I wish them the best.

[MikeS]

Anyone know why the market is up...

My guess is 14 Dem Senators criticizing the Obama budget would cause a little blip at least.

[sbw]

Hit, sorry to hear the news.

I'm hoping the David Gergen spot opens for you, or that you can follow the Glenda relative route and win public office... no, not sure it would be the best fit for you.

You know you always have a free meal from many JOMers like me as you wander around the country, waiting for St. Jane's Island to open.

[Enlightened]

Hey Hit - Praying for you, and if I end up having any say in who my Hopey-Changy taxes bailout - I'm designating you as the beneficiary.

Maybe we can start a national list designating to whom we want our Patriotic Dollars to stimulate.

[MikeS]

Shoveling Shit For America.

Sounds like a bumper sticker we'll never see on a Prius.

[Pagar]

Hit, Sorry to hear your news, our prayers will come from experience, I got mine almost 17 years ago to the day. Mine was on a second career so that helped. We came through it and our life overall has been better, IMO. Hope yours works out the same way.

[DebinNC]

Reading this makes me even surer Michael Steele is out of his depth. I wish Jane could bottle her optimism and send a gallon to me.

[Enlightened]

Ok, a little OT, but relative in a way -

My hubby and I have noticed whilst watching the idiot box, that there is a MAJOR increase in commercials related to "Our Digestive Health" the unspoken dirty little secret of shitting "regularly".

So we are kinda wondering - what is it with this need to shit regularly, and master cleanse our bowels to be really healthy?

I see dots connecting to The New Liberal Brain Trust......shovels 'n stimulation 'n all....

[narciso]

I'm a little fuzzy now, who did we want to get the RNC chair again, that guy from South Carolina, seems mighty appealing right
about now.

[Rick Ballard]

Rich,

I think you were correct last night on GE. Exposure in eastern Europe plus exposure in the submerging markets = great pain. I believe that I would toss in some loss of income due to fewer miles flown as well. Those nice, high profit, jet engines just don't wear out in the hangar.

Here's a nice conflation of the two factors. BTW - the Chicoms are lying about honoring contracts. Just like they're lying about domestic passenger traffic. Both very much akin to their lies about GDP "growth". Although I do believe that the price of a pig has gone to eight chickens.

[Enlightened]

Ya know - I am ok with Michael Steele and I am sick and tired of the GOP adopting leftwing liberal principles of personal destruction.

Steele needs to back-off the whole Rush issue and STOP responding to the MSM and leftwing haters. Rush can take care of Rush. Steele needs to take care of a lot more than that - and he needs to do it in a positive manner, out of range of the uber-psycho MSM.

We simply need to ignore these mental midgets and press forward with a conservative agenda - not a continuous rebuttal to leftwing MSM poo-flinging retards. If we stop giving them the attention (and buckets of poo)they crave they will have no recourse but to feed on their own - at which they are really quite adept.

[clarice]

narciso, I still think Steele will be fine. He made a mistake and we all do from time to time, but overall he's bright, articulate and capable.

He learned a valuable lesson about the media I am sure..and about Rush who I am sure he never listens to. Rush noted that with respect to Cantor, the media interviewer had totally distored (lied) about what Rush had said, even to the point of posting online a faked transcript.

[Pagar]

Mike S, In keeping with the Obama desire to have shovel ready projects.

http://babalublog.com/2009/03/senate-dems-overwhelmingly-award-17-million-to-pig-odor-research/

Narciso, O/T but any thoughts on the Cuba political shakeup?

[Enlightened]

Oh brother. 799 MILLION dollars to enhance our sidewalks, bike paths and just generally "beautify"????

That's cool. Enhancing sidewalks. Is that like hiring someone to scrape off gum and spit and dog shit and etc? So instead of encouraging men not to huck up loogies and spit them onto the sidewalk, or enforcing dog pooper scooper laws, and maybe fining gum-spitters - we are just gonna hire, hire hire "sidewalk enhancers".

Brilliant! I love it. Planet Gaiatopia here we come!

[kim]

Incendiary, and ugly were words worthy of a flaming leftist, clarice. Those words didn't just fall accidently out of his mouth. On some level, he believes it. The Republicans aren't going to get back into power by just hanging around; anger has got to burn down the prevailing mainstream press paradigm, and belonging to it isn't the solution.

I like Michael Steele a lot, too. But those words betrayed a mindset that is not going to win this for us.

Remember what I said a coupla days ago? Does fire melt Steele. Well, if fire won't do it, ugly might.
===================================

[MikeS]

Steele needs to create a counterpart to the White House hit squad that has been orchestrating this diversion.

I can think of a counter "Hit" squad leader who has just become available and who is well qualified to counter the White House propaganda group.

[kim]

Also, if you're so sure Steele never listens to Limbaugh, maybe someone should suggest to him that he should give him a listen now and then. I don't listen to Rush, either, but maybe I should, too.

Incendiary, and ugly. How ironic those words were.
=================================================

[PaulL]

Rush just issued a challenge to Obama to debate him and offered to send his own private jet to pick him up.

[Pofarmer]

When Ohio utility companies, and AEP get hit with these "carbon permit user fees", the next step is to hit the Public Utilities Commission of Ohio (PUCO) and get rate hikes. So who pays?

What if the state agencies don't let the Utility companies raise rates to compensate?>

[Pofarmer]

Narcisco

I don't think ANYBODY has a handle on commodity prices, nobody. It could go either way. Now, with the clown show in the Congress and Whitehouse, we SHOULD be seeing higher oil prices. However, currently we are destroying demand quicker than we're losing supply. There is no current signs that this will let up.

[Ignatz Ratzkywatzky]

narciso, I still think Steele will be fine.

I don't. He has never impressed me as a strategist, organizer or leader. He strikes me as one of those superficially impressive lightweights. His senate run in 06 seemed especially lame.
But of course how could the Republican establishment, which can never cause offense, can a black guy? Excluding a scandal, we're stuck with him.

[kim]

Furthermore, if he doesn't listen to Limbaugh, where the Hell does he come off criticizing and characterizing him.

As for judgement, what does it say about Steele's judgement if he'll say such inflammatory words about a popular conservative leader? Especially if he doesn't listen to him.
======================================

[Enlightened]

Well, truth be told, I don't fault Michael Steele for associating ugly and incendiary with Rush's promotion (and others in the GOP) of Barack The Magic Negro. I know the whole run-up to that spoof and how Rush promoted it. However Rush meant to use it, it was and is insulting to black men. And Mr. Steele is black. It would be highly unfair for anyone to assume Mr. Steele should not be insulted by it, even though the MSM and Rush haters used it ad nauseum to prove how insulting it was to The One.

Michael Steele just needs to get to work, and ignore the obvious planned attack on the GOP by way of Rush.

[Ranger]

Well, Rush just put Obama in an unwinable situation. It is now on record that the administration wants to make him the leader of the Rs. Rush just said, ok, if you want me as the leader of the opposition, then lets have a debate.

If Obama refuses, then Rush isn't the leader of the oppositoin. If Obama accepts... well then, the fun really begins.

[kim]

Heh, I'd far rather have Rush debate Obama than Steele debate Obama.

Does it occur to anyone that Steele is part of the problem rather than part of the solution? Incendiary and ugly. I feel pyromaniacal and Medusish.
=================================

[Ranger]

Oh, and if the White House keeps calling Rush the leader of the Republicans, and Obama won't debate him, then Rush can just call Obama a coward until he does.

[kim]

Are you saying, Iggie, that Steele can't separate his race from his position?

Look, I like Michael Steele, too, but his defenders here are putting up jokes in his defense.
======================================

[Enlightened]

I listen to Rush all the time. He is funny, irreverant, self-deprecating, highly intelligent, and has had a remarkable life including members of his family. He pushes buttons, he can sound ugly and incendiary to weak-kneed pussies that get their daily enemas from Media Matters.

When people rely on snippets, as does the leftard MSM and the current Messianic Administration - inevitably facts will get lost in translation. The left has mastered the art of mis-information through snippetry.

It is up to Steele and every conservative out there to only report FACTS. Be prepared and do not lose the narrative by relying on snippets. Steele is at a turning point right now and effective immediately his actions will frame his immediate future.

The main thing is - Just shut up about Rush! Let the leftards swallow that news cycle like the bottom feeders they are. Michael Steele needs to organize the RNC and stay the f--k away from poo flinging monkeys.

[Ignatz Ratzkywatzky]

I don't think ANYBODY has a handle on commodity prices, nobody. It could go either way.

True Po.
But narcisco, there is always a cap on how high a commodity can rise.
I'm in timber and can provide an example.
There was a supply shock in the early 1990s when the courts essentially shut down the supply of logs from government land due to environmental lawsuits. In the space of a few months log prices doubled, tripled and in some cases quadrupled depending on species.
I had longtime foresters and timber buyers telling me that the new prices were now a baseline under which prices would never drop.
Except that metal studs suddenly became profitable and OSB took over a bigger share of the market from plywood and timber companies found they had more capacity on their own lands than they thought and builders and homeowners changed materials and non industrial private timber owners came into the market since the price was sky high. Timber declined from the peak of 1992 until it was back to its inflation adjusted long term trend line. (It's now well below that line but that's another story).
A commodity such as oil can be maniplated in the short term and it can also rise for legitimate supply and demand issues but markets always equalize eventually.

[kim]

Sorry, Iggie, in my rage I directed a comment at you that should have been at enlightened. Steele can't use racial sensitivity as an excuse for his comments. Sorry. No way.
===========================================

[kim]

Ironically, and because of Ranger's marvelous point, shutting up about Rush is exactly the wrong thing to do.

Why be embarrassed at a man who cries 'fire' in a crowded theatre, that is burning down around us?
===============================================

[clarice]

It is not the role of the head of the RNC to mobilize support in the way that a candidate or commentator does--His role, I think, is fund raising, organizing, dispensing money where it will most aid the parties' chances and setting strategies for a nationwide appeal,

Rush is very popular. Deservedly so. And I love him and appreciate what a great job he does.
Steele should not have joined in the criticism of him, but he should set his own course and agenda for they are not identical with Rush'.

[Ignatz Ratzkywatzky]

Are you saying, Iggie, that Steele can't separate his race from his position?

No, kim. I'm saying that chicken Republican leadership won't seperate Steele from his position because of his race, or more precisely, their fear of being called racist.

[Enlightened]

See - Rush has already taken the story back to where it belongs. Bambi against Rush with half his brain tied behind his back.

How many times have the Democrats, aided by the drive-bys and dipshits like Media Matters tried to bring down Rush and failed miserably? It's like watching someone on 400mg of Thorazine bang their head against the same brick wall every day for twenty years. All they get in the end is a bump on their melon with shit for brains and the wall just keeps standing there - harkening.

[MikeS]

Rush is FINALLY starting to talk about the exaggerations, misstatements, dirty tricks, and inaccuracies (or as Kim said yesterday, lies) the Administration is using to justify his economic plans.

[kim]

I like all these fire metaphors. Oh, Shiva, we pray for renewal.
=======================================

[bad]

Politico:

By February, Carville and Begala were pounding on Limbaugh frequently in their appearances on CNN.

Neither Democrat would say so, but a third source said the two also began pushing the idea of targeting Limbaugh in their daily phone conversations with Emanuel.

Conversations and email exchanges began taking place in and out of the White House not only between the old pals from the Clinton era but also including White House senior adviser David Axelrod, Deputy Communications Director Dan Pfeiffer, Press Secretary Robert Gibbs and Woodhouse.

The White House needed no more convincing after Limbaugh’s hour-plus performance Saturday, celebrated on the right and mocked on the left, at the Conservative Political Action Conference, where he re-stated his hope Obama fails.

“He kicked this into full-gear at CPAC by reiterating it,” said a senior White House official of Limbaugh.

By Sunday morning, Emanuel elevated the strategy by bringing up the conservative talker, unprompted, on CBS’s “Face the Nation” and calling him the “the voice and the intellectual force and energy behind the Republican Party.”

This how our WH spends its time in the midst of the worst financial catastrophe EVAH!!

[Ignatz Ratzkywatzky]

Sorry, Iggie, in my rage I directed a comment at you that should have been at enlightened.

Well, I answered anyway. :)

[Enlightened]

Steele can't use racial sensitivity as an excuse for his comments. Sorry. No way.

The hell he can't.

[kim]

Right, Iggie, I mistook Enlightened's comment for yours.
================================

[Sue]

I would commend Davey Crockett's admonition upon his departure from Tennessee.

Posted by: Rick Ballard | March 04, 2009 at 11:31 AM

Me too!

[kim]

Heh, Enlighteded, how right you are.
==================================

[Ignatz Ratzkywatzky]

By Sunday morning, Emanuel elevated the strategy by bringing up the conservative talker, unprompted, on CBS’s “Face the Nation” and calling him the “the voice and the intellectual force and energy behind the Republican Party.”

This is a misguided strategy by the Dems. It's the same childish poll driven tripe (authored by the same childish pols) that got Clinton in so much trouble and helped them lose congress in 94. Only it's worse, because there is no they can win or look presidential against a radio talk show host; to them he's the original tar baby.
They should have asked Harry Reid's opinion before they embarked on this.

[jean]

Well just bless his heart (RUSH) I can't wait for Gibbs reply

[Old Lurker]

As a Marylander, we loved Michael Steele as Lt. Governor. But that's like saying in the Land of the Blind, the one eyed man is king.

He spent three years at seminary but did not take the vows for RC priesthood.

Maybe that's a clue about his willingness to break kneecaps.

[Enlightened]

Kim - Are you serious? Barack Obama or Jeremiah Wright or Al Sharpton are the only black men entitled to racial sensitivity?

Michael Steele probably couldn't give two shits about it, but he has every right to be insulted by a racially-charged satire. And if he was, he has a right to call it ugly or incendiary which is usually how racism is defined. His error was in pandering to the MSM and the leftwing drool brigades, and allowing his personal opinion to lengthen a contrived news cycle. Hopefully he learned his lesson and now he needs to re-group.

[centralcal]

I have been a long time and loud supporter of Michael Steele. I sent a personal congratulatory email when he was elected RNC Chairman.

Forget all the Rush nonsense and distraction. Rush and Steele kissed and made up.

Michael LOST ME COMPLETELY when he sat there nodding as Hughly compared the Republican Convention to Nazi Germany. Steele said not one word of rebuttal.

I cannot tell you how disappointed I am in Steele.

[MayBee]

Hit! Oh no. I'll be thinking of you, buddy.

[bad]

HELLLOOOOOOOO people!!! We are post racial now.

[MayBee]

If I ran the world, no Republicans would comment on either Michael Steel or Rush Limbaugh for the foreseeable future. Let Rahm play his little game by himself for a while.

[DebinNC]

But of course how could the Republican establishment, which can never cause offense, can a black guy?

That Steele and Obama are both black guys is part of the problem imo. Obama appears composed, dignified, and careful (to a fault) with his words. Steele (to me) seems (physically) hyper and "slouchy" and verbally undignified (hoping to attract "one-armed midgets", the economy is "in the crapper", "drill, baby, drill"..). But his unjustified faith in his abilities/wisdom and willingness to publicly reject advice are big red flags.

[Enlightened]

Maybee - Exactly.

I wish Rush would have challenged mini-Bambi Rahm to the debate. Afterall, we know that Rahmbini is the brain behind the Bambi curtain.

[MikeS]

The Administration benefits when attention is diverted away from them. In only 6 weeks they've shown us more dishonesty and incompetence than we saw in 8 years of the previous administration and it' scaring the hell out of everybody.

[Enlightened]

OT - Drew at AoS has a link to Blackfive showing a video of GWB greeting the troops and Bambi greeting them - compare and contrast.

We are in deep, shovel-on-the-ground, shit. I pray for 4 years but I am not optimistic.

[Enlightened]

Seriously - go to Blackfive's video if you want a snicker-doodle. LUN

[Rick Ballard]

Ignatz,

They might ask Tiny Tom Daschle about it as well. Steele faces his first test in about one year. If he does poorly in candidate selection and vetting then I'll start calling for his head. I sort of like the separation of Steele, as one "face of the party" from Rush. Steele is playing to the Muddled Moronic Mass - there is no need for him to play strongly to the base at the moment. He realizes that taking seats requires moving 5% of the MMM emos away from the CBIC and that "sound, well found and convincing argument" ain't exactly the right tool for the job.

If he abandons principle in order to move the MMM then he deserves a measure of wrath. If he can move them without abandoning principle then he gets an ovation.

I support a response to Rush attackers of "listen to him and then we'll talk". It would be very nice to see his audience go to 30 million.

[glasater]

Hit~
I would like to echo the eloquent comments from the regulars above. My prayers are with you and your lovely family.

Perhaps some advice from John Rutledge--a frequent commentator on Fox Business and a wealthy entrepreneur said on one recent show--no matter your thoughts on the economy and how Zero is destroying wealth--check out every program that is "out there" on offer from the government. Take advantage of anything that might apply to your field. You will not be compromising your principles--you just be going with the flow for the time being.

[kim]

I actually think a good plan now might be to rehabilitate Bush. Dissecting the lies told about him, and comparing and contrasting his rule with that of Obama is going to bring the 'good old days' into sharp relief. And it will highlight the disinformation campaign that got us into this fix.
===============================================

[Enlightened]

OK - Obviously some GOP'ers are paying attention, and hopefully they have reigned in Steele as well:

Boehner: (Via The Corner)

“Political operatives in the White House are trying to divert attention away from the challenges facing our economy, the sinking stock market, and the irresponsible spending binge they are presiding over. This diversionary tactic will not create a single job or help a single family struggling in today’s economic crisis. That’s where our focus should be. President Obama has said we must change the way Washington operates in order to address the challenges we are facing. In the midst of a deepening recession, White House staff should have higher priorities than this cynical strategy.”

Bravo. Once again the GOP

[centralcal]

Enlightened: I saw that video over the weekend and just loved it!

I think Rush just did to Obama what he did to Dingy Harry.

[Enlightened]

..the GOP...um lost my train of thought and I thought I deleted that....

Too much coffee today.

[centralcal]

Snort! Rush just read the lost jobs data and asked where is the "saved" jobs data.

[Enlightened]

I knwo this is a really stupid question....is there a government office that records the number of available jobs per week?

Wouldn't a accurate jobs report include jobs lost against jobs available?

[DebinNC]

Snort! Rush just read the lost jobs data and asked where is the "saved" jobs data.

Caller answered it: "government" where jobs are being added by the second.

[Extraneus]

I realize I've lead a very sheltered life, but is "congress-critter" a common term? I've only ever seen it here, but Rush used the term at about 12:50, and it made me wonder....

[Amused bystander]

Kim you are right about Bush, I have been thinking that myself.

If we are to turn the tide, this will have to come up sooner or later, if only due to the fact that the Media created Obama--and the whole mess around him--by a non stop assault on Bush. If they lied about Obama, if they lied about the Dems complicity in this crisis, then they lied about Bush too.

Any comparison of Bush to Obama clearly shows the difference between the two men, and shows in in about 5 seconds, as vid from AoS most emphatically demonstrates. Just the sound of O's voice or the sight of his arrogant carriage is grating; one does not even have listen to what he is actually saying for the contempt to rise. I bet there are a great many people out their who now secretly wish he was in the Oval Office, and are surprised that they feel this. We should provoke them into asking themselves just why they feel this.

It would be a good time as well to get the speeches of Reagan out there again. Nothing speaks so much to the times as these.

(Full disclosure: I did not join the Conservative branch of the Hate Bush crowd. I think he was a fine president--one of the best.)

[Ignatz Ratzkywatzky]

Rick,

I've watched Steele's career with some interest and was impressed with him when he was lt gov of Maryland. However the bigger the stage has gotten the less impressed I've been (although I'm sure he is a fine individual); I suspect the Peter Principle at work.
I hope i'm wrong about him, but frankly I don't even care if he appeals to the muddle. He can be an absolute creep ala Howard Dean as long as he is effective and inovative ala Dean. The most effective party leaders shut their mouths and organize behind the scenes and let the elected pols and the talking heads be the frontmen. So far he seems more interested in the opposite.

[Porchlight]

Extraneus,

I've seen it on the web for as long as I can remember, and have heard it in conversation occasionally. But I pretty much only hang out at righty blogs so who knows.

Amused,

A friend gave me a bumpersticker a few months ago from the 1984 campaign: "President Reagan - Bringing America Back." (The bumpersticker version of this button.) I'm seriously considering replacing my McCain sticker with it. I don't want McCain's name on my bumper anymore but I do want something good there to catch people's eyes. None better than R.W. Reagan.

[Boatbuilder]

The attack on Rush may be a mistake, but it is deliberate and planned. When Obama made that reference to the House Republicans "just listening to Rush" I thought it was a gaffe--Obama running his mouth without thinking.
Now I am convinced that it was the first step in their planned strategy.
A demagogue needs a public enemy to vilify. Bush is gone. Rush is (in their playbook) a fat, rich white loudmouth with a drug habit and a couple of failed marriages, and a record of saying outrageously un-PC things about blacks, women, the poor, hispanics, environmentalists, animal lovers, children, and apple pie. Who better?
Rush can defend himself. He should say nothing at all about Michael Steele, and Michael Steele should respond to all efforts to bait him on the issue by calling it a "distraction from the failures of the Obama administration and the Democrat-controlled congess."
Boehner hit the right note.

[jean]

Porchlight, What a great idea I'm going to the Reagan Library in the middle of March.I would be happy to see what nifty bumper stickers they have.If so I will be happy to get one for you and mail it to you

[Sue]

Awesome video of Bush and the troops.

[Enlightened]

Ok, so it appears to me that Rahmbini, in his daily fish-wraps with Carville, Begala and Axelrod had/has a target list of conservatives that need to be marginalized via personal and/or professional destruction.

Cabinet appointments to anyone that can start and sustain a news cycle that ends in the destruction of:

Palin
Limbaugh
Jindal
Steele
Huckabee
Paul
Romney

A lot of energy is being outlaid to accomplish these within the next two years.

Conservatives have a very short time to subvert these tactics.....effectively.

[Porchlight]

Thank you, jean! How kind of you. I hope you enjoy your visit - I would love to go there myself someday.

[Extraneus]

Paul's on the Enemies List?

[Enlightened]

Hey all - how can we rally the troops and take down Media Matters Limbaugh Wire? We need to axelturf the crap out of it.

[Enlightened]

Not sure if Paul is actually on the Enemies List, I just listed the 5 most influential conservatives, (as per a google search) plus a few on the cusp....

[MikeS]

I don't doubt the President's honesty, so I have to assume that someone has been feeding him the bogus information that he keeps passing on to the public. It seems to me that an investigation is in order. Wasn't the CIA or the Treasury or somebody supposed the vet the President's speech, to a joint session of Congress, for inaccuracies?

[hit and run]

Ranger:
Oh, and if the White House keeps calling Rush the leader of the Republicans, and Obama won't debate him, then Rush can just call Obama a coward until he does.

Well, whether you think that McCain was ineffective or that the situation is different -- Obama easily skated on the "challenge to 10 debates" from McCain, even when McCain essentially called him a coward for ducking them.

[Amused bystander]

yes Porch, I am with you. Ronnie is looking better with every year that passes. Sent from the Almighty if you ask me.

Enlightened: How do we fight it?

One thing is to tag the MSM for the greater part of the responsibility for this whole disaster.

Another is to broaden the pool of targets.

But attacking Rush may just be the mistake of their lives.

He just might get a national audience that is much wider than his current one. He sure would be up to it, particularly if he got a little help form FOX. It they were smart they would give him his own weekly show. Put it on Sunday mornings or something. This is probably too intelligent an idea to happen though.

I do not listen to him much, but that is because I do not lesten to the radio.

I loved the CPAC speech though. I think that he will not turn off people at all, at least not the ones we must reach. I think that his clear use of language works, and his respect for the average American shines through. He is a big boy, he will love a fight like this.

I wish we could get people like Palin and Rudy out there too.

Steele should set up something where these people do webcasts instead of going on the MSM shows. Maybe Fred could moderate?

Let them attack. This time fight back.

[bgates]

If we stop giving them the attention (and buckets of poo)they crave they will have no recourse but to feed on their own

That's one vote for continuing the George W Bush approach to public relations, then.

[Charlie (Colorado)]

Extraneus, I first heard "congress critter" from jerry Pournelle in his Galaxy columns in the late 70's (?).

Catching up, Po and bad, the point is that we yes we all of us are going to end up being hit by the mortgage losses no matter what, and the notion of writing off part of a mortgage, contrary to popular (uninformed) opinion, is not a new idea. The difficulty is that with the MBS stuff, there's no legal mechanism for doing so. It's dual to the business about "present the note" as a delaying mechanism to prevent foreclosure: if you can't find an entity that owns the damn mortgage, there's no one to negotiate it down with. The people who wrote the MBS have a fiduciary duty to the people who hold the securities: it they write it down without some legal justification, they just open themselves to lawsuits.

So we need a legal mechanism to manage that. The mechanism in the law and Constitution for renegotiating contracts in insolvency is bankruptcy.

Okay, so you don't like that. Fine. Then those banks can become insolvent. When they become insolvent, then the stockholders lose, sure, but then the FDIC puts these banks into receivership; FDIC has to provide the cash to manage the liquidation. Your bank -- assuming it survives -- or the successor bank organized by FDIC, will pay for it through higher FDIC premiums (which means you pay for it through higher fee), and FDIC is going to go back to the well because it doesn't have enough reserves, so you'll pay for it via taxes or deficits.

Or FDIC can default, and we'll pay for it through the massive banking collapse we've managed to dodge so far. And you'll pay for it as your bank deposits disappear, like they used to before FDIC.

In other words, not doing something is not an option. No such option exists. It's a dead parrot.

Okay, it sucks. I think gravity kinda sucks too.

[Enlightened]

"That's one vote for continuing the George W Bush approach to public relations, then."

Perhaps. I think Steele was unwise to insert his personal opinion on the Rush issue.

OTOH - Boehner made a fabulous, factual statement that put these stupid asses right in their place.

Now we just need the party to join forces and stay focused and on task.

Let Rush take care of the poo-flingers, something he loves and does better than anyone else.

[Sue]

Who was it that mentioned the "smart" theme? Colin Powell is on board. He is urging "smart power" in the budget. I didn't click the link. I have no desire to find out what Powell thinks "smart power" is. It's at Drudge if anyone is interested.

[Soylent Red]

Catching up here...

1. Steele, in my book, has much to do to redeem himself. I am one of his greatest supporters, but a comparison of the Republican convention to the Nazi Party? That should have drawn at least a "Have you seen an Obama rally lately?"

If a weak-sister Beltway candy ass was the answer, we could have simply elected Specter.

2. Rush is going to crucify Obama. Rush, as a radio personality, does not have to produce results, only kibbutz. Nobody is voting in 2010 on whether Rush's foreign policy or economic fixes have worked or not.

At the risk of being called a racist, Rush is Obama's tarbaby (all life's lessons are encapsulated in Uncle Remus stories). The more Obama struggles and fights him, the most he will get drawn in. And that only benefits Rush, as more an more people will tune him in just to hear what he's going to say next.

3. The only thing conservatives need to do or say is to point out the failures of Big Government programs in the past and present and tie Obama to the philosophy of Big, Stupid Government. Return to a states' rights and laissez faire platform. Get government out of the way of the success of the people, and so forth. What Reagan (and before him Goldwater) suggested is as relevant, if not more, than ever.

[PaulL]

Rush today repeatedly referred to Rahm Emanuel as a ballerina.

I don't recall McCain essentially calling Obama a coward. But I'm sure that Rush won't hesitate to.

[Enlightened]

OK here's me in my truther hat. Is it possible these assclowns are setting Rush up as far as the Not-To-Be-Called-Fairness-Doctrine? I'm just wondering if The Ballerina has a more devious plan in place and Rush might get outflanked if he isn't paying attention.

[Pofarmer]

The mechanism in the law and Constitution for renegotiating contracts in insolvency is bankruptcy.

Okay, so you don't like that. Fine.

Actually, I'm fine with the Bankruptcy part. The thing is, I don't like the govt picking the winners and losers. Either way, tons of money is going to evaporate. I'd rather the market decide than govt beauracrats decide. The whole system broke, govt mandates and beauracrats broke it. Expecting them to "fix" it is just crazy. Oh, and this also goes directly to the Mankiw post. By doing these cram downs and such now, we are assuming a bottom. NOBODY knows that.

[Pofarmer]

2. Rush is going to crucify Obama. Rush, as a radio personality, does not have to produce results, only kibbutz. Nobody is voting in 2010 on whether Rush's foreign policy or economic fixes have worked or not.

Kind of what I've been thinking. There's not much of a way this works out well for Obama.