Bill Clinton campaigns for McCain

Well, not exactly . . . but if the former President rebuffs Obama’s calls for him to denounce the use of his words in a McCain ad, then we’ll all know who Clinton really supports for President.

(ht: JM)

What kind of loan rate could I get now?

To test Nancy Pelosi’s hypothesis that after eight years of President Bush the economy is in far worse shape than it was under President Clinton at a time of “budget surpluses,” I went to Lending Tree to see what kind of mortgage terms I could get to buy my first home today. 

It was the spring of 1996 and I was newly stationed at Fort Hood, Texas along with my very pregnant wife who was one month away from delivering our first child.  We found the home we wanted to buy in Harker Heights, just a few miles east of post.  The purchase price was $110,000, and because we were only going to be there a few years, a 30-year loan made little sense.  So we bought the home on a 15-year fixed-rate VA mortgage of 8.0%, zero points and zero down.  If I remember correctly, the monthly payment ended up being $1,211.

So what kind of offer did I get today in the midst of this horrible financial crisis?  I got four offers, the lowest of which was a 15-year fixed-rate VA mortgage of 6.0%, zero points and zero down, yielding a monthly payment of $948.20.  Yes, that’s right, as bad as everyone says the economy is today, I can get the same mortgage as I had twelve years ago for about $250 a month less than I was paying 12 years ago in the midst of a “great” economy.

But what about the rise in prices of real estate, you might argue?  Good question.  So I checked Realtor.com to see what my old house might cost today.  While that particular home isn’t currently on the market, another home with the same floorplan and in the same subdivision is listed at $139,000.  Plugging that amount into the 6.485% effective annual percentage rate of the mortgage I was offered today and I could buy my old home again today for $1,209.69 a month–about a dollar less than what I was paying for the same home in 1996.

A little perspective is in order.  Maybe that’s why, while politicians are in disarray, Drudge reports that “calm returns” to Wall Street.  Could the people be smarter than the politicians? 

UPDATE:

Welcome Instapunditeers!  Take a look around.  I’m back online after a hiatus in Baghdad.  Take a look around and stop by from time to time.

Propping up bad credit with more debt

There seems to me to be a fundamental flaw in the bailout plan recently defeated.  At its very heart, our current financial problems are a crisis in the confidence in credit, and yet the government’s proposed response is to prop up bad credit with even more debt.

A restoration in confidence in credit is not going to come from the borrowing of more money but through an infusion of capital.  That is why proposals like cutting the capital gains tax and the corporate tax rate make inherently more sense than the additional borrowing of the equivalent of the entire GDP of the Netherlands.

Fold and re-deal

If you play poker like I do from time to time, you have experienced a hand so bad that you wish you could draw five entirely new cards.*  The more I ponder yesterday’s (in)action in the House, the more I realize that the cards we Americans hold in Washington–that is, our representatives in Congress along with the Administration–is so bad that I want an entirely new hand.

*In five card draw you can normally draw only three cards, four if you show the ace in your hand.  Our hand in Washington contains no aces.

UPDATE:

The Music City Oracle agrees:  Can anyone state an argument for not removing the leaders of both parties in the House from their respective positions?

Victor Davis Hanson surveys the Washington landscape:  An entire generation of leadership is failing, as the world watches aghast.

Peter Wehner concurs:  We are in one of the most dispiriting moments I have ever witnessed in Washington, when political authority seems to be collapsing all around us.

We may be at one of those points in time when we see a major realignment of political parties.  While today it certainly looks more likely that Barack Obama will be elected President than it did yesterday, I’m watching voters express outrage toward Washington and Wall Street that doesn’t contain within it a call for a larger liberal Democratic government.  I can imagine over the next four years that we could witness the emergence of a populist, anti-Washington group that is absolutely agnostic toward the concept of Washington involving itself either for or against any sort of social issues.  I could get behind such a movement.

Call me a skeptic

The precise cure to what ails America’s financial health is beyond my ability to prescribe.  However, I’m not troubled that the House defeated the proposed bailout bill–and my reason for thinking so should resonate with many Democrats.

Let me first put the recently defeated bill into perspective.  How big is $700 billion?  This source reports that to date America has spent $583 billion to fight the war in Iraq.  That’s right, we taxpayers are being asked to add an immediate expense to the federal budget that is more than $100 billion greater than has already been spent on more than five years of war.  This bill is unprecedented in size.

So why is a bailout bill–and particularly, this bailout bill–absolutely essential now?  When it gets right down to it, the answer to this question should alarm Democrats (and even many Republicans):  Because the Bush administration warns that absolute global catastrophe will follow if we do nothing. 

Sound familiar? 

Two weeks ago I suspect that fewer than one percent of Americans could have even named the Secretary of the Treasury whose dire predictions now demand immediate action, and we’re to trust him that this particular bill will solve our future financial problems?  Sure, dozens of other knowledgeable financial experts have echoed Secretary Paulson’s concerns.  But again, how many supposed experts six years ago produced reams and reams of data and analyses that the failure to confront Saddam Hussein right then and there would lead to catastrophe?  At least that debate took place over a period of months– it was 18 months from the fall of the Twin Towers to the attack into Iraq–and yet we’re supposed to take the Administration at face value with less than two weeks to evaluate its claims?  In terms of dollars per days of debate, this bailout bill is undoubtedly the most expensive endeavor ever attempted in the history of the United States.

This debate is about an enormously large bill with unknown and far reaching consequences.  No one in the Administration or Congress has yet explained how it will protect Americans from a financial cataclysm that itself, isn’t even very well defined.  Call me a skeptic, but while I’m willing to believe that a very bad economy is just around the corner, I’m not at all convinced that this bill fixes it without the “cure” creating even more short and long-term problems of its own. 

While I’m willing to be convinced, I simply don’t trust this Administration on matters of domestic spending and oversight or this Congress on pretty much any matter at all.  In that regard, I’m having trouble understanding how my friends in the other party aren’t similarly skeptical. 

(To be fair, 40% of them apparently were apparently skeptical of the bill.  Although you wouldn’t know that from the House Democratic leadership, even as some of her closest friends and allies deserted her on this vote.  ht: GR)