Bernanke's "Rookie Mistake?"

For the last two weeks the Federal Reserve Board and the European Central Bank have been adding massive liquidity to the financial markets.  Yet the Fed declared that “declared that inflation was their paramount challenge just two weeks ago,” as Bloomberg’s Craig Torres writes.

"It was a rookie mistake,’’ said Kenneth Thomas, a lecturer in finance at the University of Pennsylvania’s Wharton School in Philadelphia. The Fed "underestimated liquidity needs" of investors and the fallout from the housing recession, he said, adding, "This demonstrates the difference between book-smart and street-smart."

Well, that’s one man’s opinion.  But the Fed’s job is to fight inflation while making sure that there isn’t a market meltdown.  Based on results so far, it seems to have achieved this.

The big deal right now is that the Treasury yield curve has gone positive, whereas the Libor yield curve is still inverted.  That means that the Fed Funds rate at 5.25 percent is nearly 400 basis points above today’s 1 month Treasury bill rate of 1.5 percent.  A week ago, the T-bill rate was at 5.0 percent.

The thing to remember about the Fed is that it is playing with your money.  Back in 1907 during the crash J. Pierpont Morgan forced his banker buddies into a room and they did triage on the corporations that were caught in the liquidity squeeze. They lent money to the businesses that were solvent and refused to bail out the ones that were insolvent.  And they did it with their own money.

Imagine that happening today!

Climate Change Deniers

It’s turning out to be a rough year for the Climate Change Deniers, you know, the chaps who deny that the main driver of the Earth’s climate is the Sun.  And it’s a bit embarrassing when a blogger, albeit an older, well-qualified blogger shows up NASA and its claim that 1998 was the warmest year in US history.  Roy Spencer explains:

First, NASA’s James Hansen and his group had to fix a Y2K bug that a Canadian statistician found in their processing of the thermometer data. As a result, 1998 is no longer the warmest year on record in the United States - 1934 is.

Amanda Carpenter got to interview Steven McIntyre, who runs climateaudit.org, and to lead him through his interactions with NASA’s Goddard Institute of Space Studies.

What comes out clearly is that NASA doesn’t really want anyone looking at how they came up with the numbers.  McIntyre knew about the difficulties of normalizing temperature data, given the vagaries of weather stations and their locations, and he was interesting in finding out how NASA adjusted their data.

So, that type of adjustment is a statistical issue that interests me. And, so I wrote to NASA in May and asked them for the source code for the adjustment software that they used to fix these stations and they refused to provide it.

Why on earth, you wonder?  Well, it’s not really remarkable. Data adjustments are fiendishly difficult to do well, and the chances are that NASA’s adjustment is a fudge.  Naturally, they are reluctant to give anyone the chance to look through their data and find problems with it.  Bureaucrats are self-selected for the quiet life.  They don’t want to have to spend all their time explaining their mistakes.

And they were right.  They should never have let that chap Steven McIntyre near their data or anything else.

The bigger problem is that the whole temperature series that is used to validate the global warming hypothesis is probably a gigantic fudge, guided by the knowledge that “of course” the planet is getting warmer, and of course a comprehensive and mandatory global government program is needed to save the planet.

Maybe, of course, the planet is getting warmer, and maybe man is responsible for a good deal of it.  And maybe the Greenland icecap will melt and maybe we will all have to run for higher ground.

That’s an awful lot of maybes when you are proposing to compel people to change their way of life at a cost of trillions of dollars

Dem Dodges on School Choice

Presidential candidate and United States Senator Joe Biden (D-DE) sent his children to private schools.  Why not to government schools, Joe, like the government schools you force everyone else’s kids to go to?  Kathryn Jean Lopez has the answer.

Well, you see, Biden’s wife and daughter were killed in a car accident and so his two children were living with his sister.  His sister worked at a private school and so it was just the right thing to do to send them to a private school.  Said Biden at a Democratic debate:

My kids would not have gone to that school were it not for the fact that my wife and daughter were killed and my two children were under the care of my sister who drove them to school every morning.

When his children were older Biden sent them on to Catholic high school.

“I’m a practicing Catholic — it was very important to me they go to a Catholic school, and they went to Catholic school.”

Yeah.  Well, Senator, I’m a practicing libertarian conservative and it goes against the grain for me to see little children forced to go to crumbling, incompetent, dangerous government schools.

In Britain things have got so bad that parents are having their children’s school uniforms lined with Kevlar to guard against knife attacks.

Children are now going to school with body armor.

You see, Senator, those parents are practicing parents.  It is very important to them that their children not be attacked and harmed at school.  But of course most parents aren’t as rich as United States Senators and they can’t afford to send their kids to safe private schools.

And after all, the votes and the contributions of union teachers are really much more important than the education of “invisible” poor kids.

Rove on Rush

Karl Rove was on the Rush Limbaugh Program today for about 15 minutes, and spoke about what it was like to be in the White House, and work for President Bush.

Then Rush Limbaugh asked Rove what he would “like people to know about the president that they don’t know.”  Rove replied:

Look, the thing the American people need to know about him is he is just as passionate today about doing his job of protecting America and of growing the economy and being focused on big reforms that will make America better and safer and stronger in the years ahead, as he was in the day that he came in, and he walks into that office and lights up that building with — you know, it sounds corny, but it’s inspiring to work around him.  He’s got a wonderful spirit. He’s got a great sense of humor. He treats people with the greatest respect and dignity, and that goes from the guy swabbing out the floors on the first floor of the White House to, you know, some foreign head of state. He treats everybody with respect and dignity, and he sets such a wonderful tone and serves as a wonderful model for people who work around him.

That is something to think about.

But the big takeaway of the interview is the things the Rove had to say about Hillary Clinton.  He was so direct and so prepared that you might think he was conducting a campaign briefing for the Republican candidates for 2008. 

He said that, even though it is very difficult to win three presidential elections in a row, Hillary Clinton faces a huge hurdle:

There is no front-runner who has entered the primary season with negatives as high as she has in the history of modern polling.

Then he went into some of the negatives on Hillary.  On domestic policy:

Senator Clinton voted against the prescription drug benefit for seniors. Senator Clinton voted against allowing people to save tax-free for their out-of-pocket medical expenses. Senator Clinton opposes giving every American a standard health deduction so that they can deduct from the cost of their income taxes, their insurance premiums...  Yet Senator Clinton, who deems to lecture this president on health care, opposed allowing people to do either save tax-free for their out-of-pocket medical expenses, or, she also opposed — she also opposes — allowing there to be a tax deduction for people to take off their income tax costs of their insurance premiums.  She’s against having a level playing field so that the guy who has to pay for health care for his family or her family out of their own pocket, gets the same tax break the big corporations get for providing health insurance to their employees.  She’s against allowing people to buy health insurance across state lines like we routinely buy auto insurance today so you can shop for the cheapest price and the best product for your family’s needs.

Then on foreign policy:

You know, this is a woman who has been less than supportive of the policies that those men and women who are in the frontlines of the global war on terror fighting.  This is like a woman who has opposed the Patriot Act that gave us the tools to defend the homeland.  This is a woman who opposes the terrorist surveillance program that allowed us to listen in on the conversations of bad people who are calling into the United States.  She opposed the FISA reforms that would allow us to listen into communications and see the communications of international terrorists who are communicating with other international terrorists, even outside the country whose messages simply happened to flow through US telecom networks. 

What are the odds that a lot of people are going to be parsing these remarks of Rove very carefully over the next few days?

Time to Curb "Sanctuary Nation?"

The United States has laws to identify and pick up illegal aliens and deport them.  But they don’t work, reports Michelle Malkin.

The reason they don’t work is because open-borders interests have sabotaged them by restricting funding for them, objecting to them on civil liberties grounds, and pushing local and state governments to forbid public employees from checking them to verify citizenship status.

This is yet another case of America’s big problem.  Want to know what it is?  Liberals get to exempt themselves from any law they don’t like. 

It’s the civil disobedience idea.  Liberals are so ethical that they have the moral stature to non-violently violate laws they don’t like.  After all if you are ethical, and all liberals are, then it stands to reason that any law you don’t like must be immoral and unjust.

The so-called “sanctuary cities” are liberal jurisdictions where liberal councils and state legislatures flagrantly order public employees to ignore federal laws intended to empower law-enforcement to identify, capture,  and deport illegal aliens. 

As Malkin reports, the sanctuary city concept is causing Rudy Giuliani a problem right now because New York City is a sanctuary city and has been ever since Ed Koch declared it a sanctuary in 1989.

Giuliani actually filed suit against the feds when Congress passed a law that “forbade local governments from barring employees from cooperating with the INS.”

In January 2000, the Supreme Court rejected his appeal, but Giuliani vowed to ignore the law.

Some day, one day, Americans are going to have to bite the bullet and insist that liberals obey the laws, even the ones they don’t like. 

Maybe the 2008 election would be a good time to run the idea up the flagpole and see if the American people salute.

Beyond Rove, The Hard Thinking

Beyond the Rove Myth, there is reality, and Fred Barnes dishes it out.  Political advisers like Karl Rove can’t make a silk purse out of a sow’s ear. 

They can advise a candidate or a party how best to deal with a situation. But they can’t change the situation. And they can’t transform the circumstances at the time of an election.

Karl Rove can’t do magic, like make political realignments happen.  But Karl Rove certainly helped. Five elections out of six ain’t nothing.  If the Republican Party becomes the majority party again it will help to have a Karl Rove on hand.

But the real traction will come from political ideas and politicians who can speak to the American people, appeal to their better natures, and show them how to be the best they can be.

It is up to conservatives to start doing the thinking and the writing that will provide the firepower to a new generation of US politicians.

My own idea is this.  We conservatives need to bake a three-tier cake of political ideas.

• The philosophical tier, that must meet and beat the secular modernism of the academic middle class.  My candidate to lead this up political philosopher Roger Scruton who combines the conservatism of Burke and the modernism of Kant.
• The emotional tier, that must shame and blame the adolescent, diminished-responsibility culture of the academic middle class.  My candidate for this is George Gilder and his 1970s books on sexual suicide.  Yes, thirty years ago, before he got into high tech, Gilder forecast the child-dearth of the modern welfare state based on his analysis of its negation of men as husbands and providers.
• The mechanical tier, that must out-analyze and advocate at the policy analysis level.  This is actually already pretty well achieved.  Conservatives know what to do, and we have the programs pretty well outlines: privatize the welfare state with private pensions, private health care, and private education.

That’s all it takes, so let’s get going.

Now They Tell Us

The much-typed “surge” is working.  Even the global MSM is noticing, as  Instapundit Glenn Reynolds observes.  “There seems to be a lot of turnabout going on, all of a sudden,” he writes.

Exhibit A is this cover story in Germany’s Der Spiegel:

Ramadi is an irritating contradiction of almost everything the world thinks it knows about Iraq — it is proof that the US military is more successful than the world wants to believe. Ramadi demonstrates that large parts of Iraq... are essentially pacified today.

Well, do tell.  Der Spiegel’s reporter Ullrich Fichtner goes on.  It’s a story that the world doesn’t really want to hear, he writes,

a different story, a story of Americans who came here as liberators, became hated occupiers and are now the protectors of Iraqi reconstruction.

The glorious thing about the world’s hegemonic class, the international academic middle class and its bribed apologists in the center-left political parties, is that it can turn on a dime.

It can say at one moment that Bush is a liar and the worst president in history.  One week it can have a fawning media breathlessly reporting the latest political ploy of Democrats in Congress to end the war.

The next week we can have the same people writing with wide-eyed innocence, that things aren’t as bad as “everyone” thought.  Why, maybe Ronald Reagan wasn’t a complete dunce, maybe government control of everything wasn’t such a good idea after all, maybe the Americans are making progress in Iraq.

In fact, the next step is to say that Ronald Reagan didn’t achieve that much after all.  Or that if the right people had been in charge in Iraq then the whole thing could have been wrapped up much sooner.

Yes, we’ll be seeing that pretty soon.  Democrats will be elbowing people out of the way to get to a microphone to declare that they were in favor of the “surge” strategy all along and had been trying to get the stupid Bush administration to adopt it for three years without success.

What we, the great unwashed, should understand is that the people we are dealing with represent a ruling class in its declining phase.  Softened by the perquisites of power they are just trying to keep the game going a few years longer.  Almost everything they have foisted upon us has been a miserable and expensive failure: government pensions, government education, government welfare.

But by golly it has got them votes and it has got them power.

You can’t argue with that.  For now.