Drowning, Not Waving

Megan McArdle is doing what Megan McArdle loves best, arguing with another blogger. Nothing calls attention to one's self like playing the victim, and McArdle eagerly enters the fray.

Felix Salmon discusses the sad case of a man who clearly cannot pay his mortgage and demands:

So this is what I'd like to ask Megan McArdle, and others who like to extol the moral virtues of paying one's debts: just how much of your life's savings should you give these snakes before they take your house?

Oooh, he demands an answer! What is a po' little ole blogging gal to do when attacked in the national press? Provide evidence? Unleash Blogging Fists of Fury? Bury him in cogent, fact-based argument? Let's see:

I don't really understand the question.

Heh. We are not surprised.

I am in favor of people are financially able to keep the house without getting foreclosed on, keeping the house rather than getting foreclosed upon. The guy in question clearly cannot, given that he lost his job and has no tenant for the property in question. Obviously he should have walked away immediately.

Yes, if you lose your job, you and your family should immediately abandon your house.

Indeed, I don't understand why he didn't, since the article makes no mention of any suggestion or promise that accepting a modification that didn't reduce his payment, would later qualify him for one that did. And since it's pretty clear that Mr. Vellucci cannot afford much of any payment at all, it's not clear why he--or Felix--thinks he should have gotten one. Modifications are supposed to be a deal that makes both sides better off by avoiding the huge costs of foreclosure, not a vehicle for transferring wealth from bondholders or bank shareholders to people we like better. The latter is what the progressive income tax is for.

Kudos for the snappy little comeback, even if it is both wrong and unfair. Naturally McArdle fails to mention the gross manipulations perpetrated by the mortgage industry. They are irrelevant. Corporations must be let off the hook always, or the banks will suffer. The individual is always on his own. Also ignore the fact that mortgages were sliced, diced, slapped with a fake rating, sold, leveraged, failed, and were bailed out by taxpayers. Just because you can.

Felix Salmon is being a tiny bit unfair to McArdle, whose indignation was aimed at a wealthy woman who wanted to walk away from her contracts while continuing her upper-class lifestyle. McArdle is careful to attack those who merit it here, hoping that her eager readers will apply her disdain and scorn for people with mortgage troubles to everyone, deserving or not. In return, McArdle is unfair to Salmon, both taking the example of the other to extrapolate beyond the specifics. I do not condemn Salmon; I think we have more than enough evidence from the McArdle oeuvre to assume she operates in bad faith and with no sympathy for anyone not named McArdle. Or, perhaps, Suderman, although I wouldn't count on that and neither should Mr. Suderman.

Do I feel sorry for Mr. Vellucci? Very sorry.

She has historically had so much sympathy for the poor.

Illness is usually framed by complaints about large medical bills, but for most people income loss is at least as great a problem, and often a much bigger one.

"Illness is framed by"? You become ill, you lose your job, but you're just "framing" the situation, not stating it? And when you lose your job because you are ill and can't work, that has nothing to do with the cost of being ill? McArdle returns to the glory days of her inept, inaccurate, inane "take-down" of Elizabeth Warren's bankruptcy study, which McArdle amply demonstrated that she either would not or could not understand. But being wrong has never bothered our princess before, and McArdle is still against helping the consumer when she can help the banker.

And Mr. Vellucci seems to have been a financial naif who was given bad-to-fraudulent advice at every turn. What happened to him is tragic, and I wouldn't be sorry to see the folks who defrauded him spend some time in the pokey.

But the implied combination of tiny savings, minimal income, and inability to find a paying tenant in a real-estate market with a sub-2% vacancy rate, does not suggest that the solution to his problems is a mortgage modification. I'm not sure what the servicer could have done, other than foreclosed outright. Or what Felix thinks this has to do with people who decide to default on their mortgages so that they'll have more money to spend on cruises and new furniture.

I sure hope McArdle's landlord isn't underwater and planning to sell the house out from under her or hand it back to the bank, tossing her and her boyfriend, dog and kitchen gadgets out on the street. That would be just tragic. Funny, but tragic.

Jews For Jesus

Jonah Goldberg saw Avatar, but don't expect any run-of-the-mill ranting against its eco-friendly theme. Unfortunately for lazy, dilatory Jonah, everyone else already did that and he is forced to come up with something that hasn't already been regurgitated by all the other wingunt welfare recipients. But Jonah is nothing if not flexible, in thought if not in body. Even though he is stuck with Ross Douthat's sloppy seconds, he manfully ejects his latest intellectual exercise upon the world, making him less than a chunky Reese Witherspoon but greater than a walking man-carpet.

The film has been subjected to a sustained assault from many on the right, most notably by Ross Douthat in the New York Times, as an “apologia for pantheism.” Douthat’s criticisms hit the mark, but the most relevant point was raised by John Podhoretz in The Weekly Standard. Cameron wrote Avatar, says Podhoretz, “not to be controversial, but quite the opposite: He was making something he thought would be most pleasing to the greatest number of people.”

What would have been controversial is if — somehow — Cameron had made a movie in which the good guys accepted Jesus Christ into their hearts.

What the hell? Jonah is Jewish. Why on earth is he proselytizing for Christians? What does he think will happen to people of his religion if the right gets its way and makes Christianity a state religion? Would synagogues lose their tax exemption? Would Jewish holidays no longer be respected? Or would he simply have to suffer the public slights from a people who identify themselves through the exclusion and persecution of others?

Of course, that sounds outlandish and absurd, but that’s the point, isn’t it? We live in an age in which it’s the norm to speak glowingly of spirituality but derisively of traditional religion. If the Na’Vi were Roman Catholics, there would be boycotts and protests. Make the oversized Smurfs Rousseauian noble savages and everyone nods along, save for a few cranky right-wingers.

I’m certainly one of those cranky right-wingers, though I probably enjoyed the movie as cinematic escapism as much as the next guy.

But what I find interesting about the film is how what is “pleasing to the most people” is so unapologetically religious.

I suppose he is trying to say that when the savage converts the Christian the left is happy, but when the Christian converts the savage, only a few noble, pure souls like Goldberg care. It's amazing that a Jewish guy ignores the forced conversions, outlawing of others' religions, and scapegoating those of minority religions but after all, this is the man who mitigated Hitler to try to make the left look worse.

Jonah's point, which he reaches eventually after digressions into philosophy, cartoons, Darwin, and, of course, Al Gore, seems to be that the right has moral unity but the left is in moral chaos. They need traditional religion to pass on morality and even to survive. Therefore Avatar is stupid and the left is immoral and the Right is right. And all this fake scholarship and pontificating is in the service of an essay on a movie.

The Corner mocks analysis of pop culture but also revels in it, eager to repackage everything in their own brand, an imaginary world of uniformity and conformity. They hate the real world because most of the people in it refuse to play along with their delusions.

A Dangerously Weak Mind

A Cornerite spends some time with the family:

"They Just Took My Money" [John J. Miller]

That's what my 8-year-old son said about the sales tax on the ride home from Borders a few minutes ago. He had a $10 gift card from Christmas, bought a Clone Wars book for $7.99, looked at the receipt, and wondered why he still didn't have a full $2.01 on it.

This is how conservatives are made.

That's also how bad, dim-witted citizens are made, who use city services but think they don't have to pay for them. No doubt Miller lectured his son that the government stole his holiday gift money; it seems to be a conservative trait to teach your children to grow up both full of entitlement and utterly unwilling to acknowledge that someone will have to pay for their clean water, roads, cops, teachers and everything else civilization provides for them.

Stop paying taxes, fire all the teachers, and use your Borders card to buy homeschooling materials. The child should be playing with string and buttons and building tree forts to shove girls out of anyway.

The Best Advice Always Comes From Interested Parties

Shall we fisk Megan McArdle? Let's!

James Altucher has a lengthy column on why you should rent rather than buy. Shorter version: there are a lot of hidden costs, and outside of the bubble, housing has not historically been a great investment. The phenomena that made it a great investment for some people (the emptying out and then filling up of cities, the introduction of self-amortizing mortgages, rising and then plummeting interest rates, and the special status of mortgage debt after 1986) will not indefinitely continue to push prices up; most of them have played out. Over the long run, housing prices cannot grow much faster than incomes.

Who is this Jame Altucher and why should we believe what he says? McArdle does not provide his bona fides, so we must do the job ourselves. What a surprise, Mr. Altucher is a hedge fund manager. In McArdle's mind, that makes him perfectly trustworthy because, as she says, such people never would operate out of self interest, for fear of losing money for their firms. The fat fees and bonuses such people derive from suckering the rubes is somehow overlooked. One can't think of everything, I suppose.

I agree with all of this. You should not buy a house because "renting is throwing your money away" or because you expect the house to become a cash cow. As an investment, housing is a good form of forced savings, but do not expect price appreciation to make you rich--nay, not even if it made your parents and all your neighbors rich.

Forsooth, 'twould be folly indeed to expect housing to make one rich in these parlous times. Verily and a hey-nonny-nonny!

But these articles, and the homeownership-skeptics (of which I am sort of one) often give short shrift to the benefits of owning.

McArdle is a professional skeptic, always questioning the status quo and conventional wisdom. Which makes me wonder why she has been so dead-set to buy a house of late, and would have bought one if her investments hadn't crashed with the stock market.

Renting has hidden costs, too. Outside of New York, with its massive stock of professional landlords hamstrung by restrictive rent rules, renting means you usually have to move every few years, because the landlord wants to live in the house again, or is selling it, or wants to raise the rent too much in the hope that you'll be too lazy to move. Moving costs a ton of money, between the movers (now that I'm getting old and creaky), the new furniture that is inevitably required, and the old furniture that cannot be fit into the new house and must be thrown away. Moving also soaks up a month or so of your time on each side of the move, which needs to be factored in for both lost income and sheer misery.

I remember her move. It took her weeks to pack, an incomprehensible situation, and she had to move twice because one apartment was unlivable. We won't wonder at her habit of throwing away furniture, since we know she believes wholeheartedly in cheap cardboard and plywood furnishings.

Then there is the inability to have your house the way you want it. Sure, it's not like we could afford high-end appliances. But if we owned our house, I might be able to hope that someday we would acquire a water heater bigger than a thimble, rather than hopelessly resigning myself to shallow, lukewarm baths. I might also be able to sink screws into the ceiling for a hanging potrack, install blackout curtains so that I could sleep later than 6 am in the summer, and otherwise make the house over more to my specifications. But the owners are fond of their home the way it is, so it stays.

In the South we call this "po' mouthing." If a lady complains about her poverty or sighs that she just can't afford what everyone else has, we assume she's putting on airs and is both greedy and without gratitude for God's blessings. Bad breeding, McArdle.

Furthermore, why doesn't she just buy a bigger water heater and arrange with the landlord to cut the rent in recompense? Or just throw caution to the wind and buy the damn thing on her own dime? Hot baths are obviously important to her, and someone who will spend $20 for a pound for salt will surely be willing to pay a few hundred dollars for something so essential to daily life. It certainly would be cheaper than buying a house.

For a long time, I didn't care so much about this. I liked the freedom renting gave me. But once you're committed to a city, and another person, that freedom starts looking overrated.

Oh, please. McArdle always wanted a house and any attempts to deny it are futile. Archives don't lie, unlike bloggers. However the point of our story is not McArdle's bad breeding or Galtian willingness to suffer cold baths rather than risk benefiting her landlord. The point is this:

Rather than spend $100,000-to-$200,000 on a home's initial cost -- and that has become completely illiquid as long as you own the house -- you can put that money in a portfolio of diversified real estate investment trusts, including residential investment trusts, if you truly believe in the housing market.

The hedge fund manager recommends renting so you will have more money to put into investments. Maybe into hedge funds! Do you believe in housing or don't you? If so, don't buy a house, invest in mortgages instead. That's worked out so very well so far.

Oh Conflict Of Interest, how elusive you are to those trained to avoid you. When you don't understand or acknowledge your own conflicts of interest, you studiously avoid recognizing others' as well.

It's All About Me

Shorter Scarlet O'McArdle: Sending poor men and women off to die in an illegal and immoral war to maintain one's illusion of safety is fine. Having to put up with annoying security measures when flying is outrageous.

Priorities

Our libertarian princess Megan McArdle is back at work, analyzing economic events so you don't have to. We are graced with another post on health care costs and how Medicare is doooooooomed!!, although it's a little difficult to determine her point since she tries to imply it, not say it. That's not exactly a winning strategy in journalism, which purports to find out what is happening and pass it on to the rest of the world, but when you say things like "Medicare will be bankrupt soon and health care reform will kill your granny," people respond with facts and statistics that make you look silly. Much better to link to someone who quotes someone who says something that you want to pour into your audience's ear like poison.

Yes, money is wasted in the current health care system, McArdle admits, but cuts will mean people will die due to rationing. Cutting unessential medical treatments will lead to millions of deaths. Finding cheaper ways to handle paperwork will kill your Granny. Using government power to lower prices will mean you'll spend your last year in agony and then die a hideous death. In the back of our minds, of course, we all realize that rising insurance rates will kill us, no insurance will kill us, rescission will kill us, pre-existing conditions will kill us, and not fighting for national health will kill us, but come on people, it's profit for corporations we're talking about here, not survival of the middle class.

Perhaps Medicare will go bankrupt if we don't do anything about it. Maybe we will have to end all public welfare because we are just treading water until the country realizes that all that money in the financial system went poof! and won't come back, and that the outsourced jobs aren't coming back either. But make no mistake, the end of "entitlements" is a goal, not an unfortunate side effect. If you can make millions off financial trickery, get the taxpayer to hand you billions more, and then tell them that you can't afford to pay for their health care any more, the end of social security and medicare is merely another step towards achieving your goal of amassing as much personal wealth as humanly possible.

Much like the intellectual right, the American consumer is no longer as important as he thinks he is. Corporate CEOs routinely go on CNBC and inform their acolytes that they expect more and more of their profits to come from abroad. When they can no longer wring any more money from us they'll have no use for us at all, except as cannon fodder to fight for their access to oil.

"Scoop" McArdle

Megan McArdle compares the CBO to ratings agencies like Moody's to prove that because bankers are crooked, the government is wrong about the cost of health care insurance reform. It's not worth going into, but her journalistic instincts are worth a mention.

It was totally legitimate for securities issuers to go to Moody's and say, "What kind of rating does this tranche get?" But at some point, the relationship got too close. Many allege that this is because of conflicts of interest, or financial malfeasance; I withhold judgment on these accusations. Whatever the cause, it has become clear that if raters and the rated work too closely together, the ratings begin to bear less and less resemblance to actual reality.

She does not find out the facts and draw a conclusion, she "withhold[s] judgement," a high-sounding way of avoiding research and unfortunate conclusions. If you don't know the facts you won't have to ever change your mind or feel uncomfortable about your decisions. "Whatever the cause"--what a convenient phrase. "New Orleans drowned--whatever the cause, it was a bad thing." "Wall Street gutted the financial system--whatever the cause, we must give them more money." "I drank underage, got a suspended license, couldn't register my car, couldn't repair my car, and therefore couldn't drive my new car---whatever the cause, Pennsylvania sure is stupid."

Season's Greetings

Before I get back to work, a little Megan McArdle:

Since cash-for-clunkers probably moved auto purchases forward, rather than generating actual new demand for autos, this considerably dampens hopes for a "V" shaped recovery.

Who was hoping for a V-shaped recovery? Larry Kudlow? Fox News? Everyone else seems to have realized this a very long time ago.

Another post trying to make money through Amazon. Isn't using one's work blog for personal gain a breach of journalism ethics? Not that it matters; no doubt the Atlantic thoroughly understands that hucksters must follow their heart, if they haven't already sold it off in the organ market.

There's a post on doctors as cartels that would take too much work to deal with. I need the brain space for more important work, like figuring out if I have enough tissue paper and ribbon.

Less Tall Megan

Less Self-Aware Megan McArdle: Tee hee, you have a mote in your eye.

(Honestly, is there anything more ridiculous than McArdle criticizing others' poor writing, while ignoring her own endless parade of errors?)

Mentally Absent McArdle: Isn't everything that women of my age, class and pretensions do just fascinating?

More Of A Twit McArdle: Much like my quote of the week and product of the week, I was too, uh, busy to keep up with Twitter. But now you can read my every thought.

Contract Law

I wish I had more time to go over this post in depth but I'll have to keep it brief. Megan McArdle is still insisting that corporations should be able to break contracts with individuals if it would help ensure their survival, but individuals must never break contracts with corporations. McArdle drooled at the thought of GM going bankrupt so they could shaft their union members. She encouraged and abetted the banks' rape of the taxpayer to keep themselves afloat after all their bad loans and investments. But now it's immoral for an individual to act in his best interest financially. Just as she wants the individual to bear all burden for taxes, she wants the individual to be the only one obligated to honor contracts. It's sick and pathetic.

McArdle sees her credit score as a gauge of personal worth. She worried the banks will make it harder to get a loan for her future house. She has no idea her old world is gone, destroyed by her heroes of the banking industry. People will default in greater numbers whether they want to or not. McArdle will suffer more than most because she has invested far more than most in the financial industry--not just her job and money, but also her ego and social status. This will not end well for her, and nobody deserves her fate more.

Right For The Wrong Reasons

Megan McArdle blathers on:

This [health care reform] bill is, at this point, hideously unpopular. I'm pretty sure you've got a bunch of senators who would really, really love not to vote for it. Ultimately, the moderates had a very good alternative to negotiated agreement, and the progressives didn't, and that was crystal clear from Day 1. That meant the progressives were never, ever going to get very much. This was not a failure of political will or political skill. It was the manifestation of a political reality that has long been obvious to everyone who wasn't living in a fantasy world. If progressives decide that the lesson from this is that they haven't been sufficiently demanding and intransigent, they are going to find themselves about as popular with the rest of America as the Bush Republicans, and probably lose their party the House next year.

She's right about the fate of health care reform, although she doesn't have the faintest reason why. She thinks the nation doesn't want health care reform when it does, but she must know deep down that drug companies, insurance companies, hospitals and doctors didn't want national health care and that is why it didn't have a chance. Like many people of limited intelligence, McArdle thinks in terms of her people winning versus her enemy winning. The larger issue of the health of the nation and its citizens is far, far over her head.

Shocking

Digby posts a comment from a reader:

At this point, it's simply not possible for me to believe that the Dems are actually falling for this "I'm so very sorry..." act. The only explanation for why [Joseph Lieberman] keeps getting let back in is that they actually /want/ him around to play "bad cop," so that they can say to progressives "we tried, but we just couldn't get that black sheep Joe on board."

I mean, is it possible that, despite public appearances, Holy Joe really is a genuine Democratic team player--it's just that the Dems aren't on our team, here? Think about it: if it wouldn't be for Joe, the Dems wouldn't have an excuse to not pass progressive reforms. If he didn't exist, The Village would have to invent him.

She replies:

I think there's something to this. [etc. etc.]

You think? Could it be that the rich don't want to have less money and power? Could they be pretending to act in good faith? Could our politicians really be greedy and selfish?

I guess we'll have to think real hard about this for a year or three before deciding that the rich and powerful don't care about the poor and powerless, and actively work to keep their money and privileges.

Money Is Power

Go read Glenn Greenwald if you haven't already, because he points out the obvious--nobody ever had any intention of giving us what the rest of the industrialized world already has: universal health care. (At a lower cost.) Why? Because they don't have to. Americans will swallow whatever diversionary tactics are thrown at them, debate the issue endlessly, and then sadly and eagerly accept whatever the elite tell them, to explain away all their earlier elite little lies. It's why Megan McArdle's posts debating minute details and breathlessly following the plan's ups and downs are a joke. They're a delaying tactic, busy work, useless chatter about nothing.

Liberals have been just as delusional. The people with money and power will not give any of it up unless they are forced to do so. Expecting them to give up billions in profits is insane. It takes money and political backing to hold office. "The people" do not provide most of that money. Let's take another look at The List, Obama's major campaign contributors.

University of California $1,591,395
Goldman Sachs $994,795
Harvard University $854,747
Microsoft Corp $833,617
Google Inc $803,436
Citigroup Inc $701,290
JPMorgan Chase & Co $695,132
Time Warner $590,084
Sidley Austin LLP $588,598
Stanford University $586,557
National Amusements Inc $551,683
UBS AG $543,219
Wilmerhale Llp $542,618
Skadden, Arps et al $530,839
IBM Corp $528,822
Columbia University $528,302
Morgan Stanley $514,881
General Electric $499,130
US Government $494,820
Latham & Watkins

Greenwald says:

Of all the posts I wrote this year, the one that produced the most vociferious email backlash -- easily -- was this one from August, which examined substantial evidence showing that, contrary to Obama's occasional public statements in support of a public option, the White House clearly intended from the start that the final health care reform bill would contain no such provision and was actively and privately participating in efforts to shape a final bill without it. From the start, assuaging the health insurance and pharmaceutical industries was a central preoccupation of the White House -- hence the deal negotiated in strict secrecy with Pharma to ban bulk price negotiations and drug reimportation, a blatant violation of both Obama's campaign positions on those issues and his promise to conduct all negotiations out in the open (on C-SPAN). Indeed, Democrats led the way yesterday in killing drug re-importation, which they endlessly claimed to support back when they couldn't pass it. The administration wants not only to prevent industry money from funding an anti-health-care-reform campaign, but also wants to ensure that the Democratic Party -- rather than the GOP -- will continue to be the prime recipient of industry largesse.

Rich people have games they like to play. Polo. Lacrosse. Chess (if they're bright enough). The stock market, their own personal OTB. And politics. It doesn't matter who wins the elections because the winner will take orders from the money people no matter which side he or she is on. But it sure is fun to watch the rubes get all worked up over who wins, the left's impotent candidate or the right's impotent candidate. And it does manage to fool the lower classes into believing that they actually have a say in the decisions that affect whether or not they will live or die. (By the way, we are the lower classes.)

There is no Republican or Democrat. There is the rich and powerful and ruthless, and there is their victims. This is what the facts tell us. Only our desire to think we are powerful and good and special keeps us from acknowledging it.

ADDED:

Chris Floyd:

Thus it is now [Tony] Blair's contention that there is no charge to answer concerning the origins of the war; all this WMD guff is meaningless. He would have found "other arguments" to persuade Britons to follow George W. Bush into the war that American militarists had long been planning.

Blair's admission has drawn a remarkable response from another Establishment mandarin, Sir Ken Macdonald, who served for five years as Director of Public Prosecutions under Blair's government – and now works in private practice at a major law firm…alongside Tony Blair's wife, Cherie. The headline in The Times puts it plainly: "Intoxicated by power, Blair tricked us into war." In his column, Macdonald writes:

The degree of deceit involved in our decision to go to war on Iraq becomes steadily clearer. This was a foreign policy disgrace of epic proportions and playing footsie on Sunday morning television does nothing to repair the damage. It is now very difficult to avoid the conclusion that Tony Blair engaged in an alarming subterfuge with his partner George Bush and went on to mislead and cajole the British people into a deadly war they had made perfectly clear they didn’t want, and on a basis that it’s increasingly hard to believe even he found truly credible.

...Mr Blair’s fundamental flaw was his sycophancy towards power. Perhaps this seems odd in a man who drank so much of that mind-altering brew at home. But Washington turned his head and he couldn’t resist the stage or the glamour that it gave him. In this sense he was weak and, as we can see, he remains so. Since those sorry days we have frequently heard him repeating the self-regarding mantra that “hand on heart, I only did what I thought was right”. But this is a narcissist’s defence and self-belief is no answer to misjudgment: it is certainly no answer to death. “Yo, Blair”, perhaps, was his truest measure.

Macdonald also gives us a sneak peek inside the workings of the elite, with observations that doubtless apply equally well across the ocean:

In British public life, loyalty and service to power can sometimes count for more to insiders than any tricky questions of wider reputation. It’s the regard you are held in by your peers that really counts, so that steadfastness in the face of attack and threatened exposure brings its own rich hierarchy of honour and reward. Disloyalty, on the other hand, means a terrible casting out, a rocky and barren Roman exile that few have the courage to endure. So which way will our heroes jump?

We must hope in the right direction — for it is precisely this privately arranged nature of British Establishment power, stubborn beyond sympathy for years in the face of the modern world, that has brought our politics so low. If Chilcot fails to reveal the truth without fear in this Middle Eastern story of violence and destruction, the inquiry will be held in deserved and withering contempt.

The most basic needs we have--to belong, to feel good about ourselves, to feel important--are routinely and easily exploited to manipulate us. The elite knows that if they offer the lower classes a leader who flatters them, makes them feel good and important, the leader can then do whatever he wants and the little people will only make excuses and explain away the damaging facts.

Being Kris Kringle

Posting will be erratic until Christmas. I am knee-deep in (very enjoyable) work.

Asse(t)s

Megan McArdle, who informed us that the taxpayer must pay for bad bets made by investment banks or the entire financial system will collapse, tells us people must live up to their obligations and repay debts. Commenter JoshinHB tries to explain to McArdle's extremely confused followers that the problem was not Fannie Mae.

Megan McArdle (Replying to: Nimed) December 12, 2009 9:55 AM
The worst villains in this process--the people who indisputably knew that they were defrauding the investors in securitized loans--are the mortgage brokers who do not have particularly flash lifestyles.

Reply

JoshinHB (Replying to: Megan McArdle) December 12, 2009 11:04 AM
"The worst villains in this process--the people who indisputably knew that they were defrauding the investors in securitized loans--are the mortgage brokers "

The mortgage brokers are not the villains, they were cogs in a machine built by Wall Street.

The villains are the Wall Street wizards that took loan securitzation to new levels, and created a new type of fractional reserve lending.

http://arxiv.org/PS_cache/arxiv/pdf/0904/0904.1426v1.pdf

The mortgage brokers actions were dictated by WS, which needed new loans to keep their leverage machine going.

As the bubble progressed, the quality of loans had to decline. The safest loans were made first, then the almost safest, then the marginally ok, then the not safe at all, then the "there's no way this is going to get paid back".

WS knew this and didn't care as long as the leverage machine was cranking out billion dollar profits.

McArdle does not do the very simple, obvious, utterly necessary step of following the money. Her vision is so limited and thinking so narrow that she simply accepts the most flattering explanation available for the current crises.

In some ways, I wonder if we aren't looking too hard for an answer. The fact is, asset markets display bubbles. They display bubbles without a modern fractional reserve banking system to provide leverage (Tulip mania, South Seas bubble, Albanian ponzi schemes). They display bubbles without much outright fraud. (The tech bubble). They display bubbles in lab experiments where students trade imaginary financial instruments for picayune returns. Bubbles seem to be a feature of asset markets. And when the bubbles are in full force, they draw working capital from investments that would ordinarily be attractive, but can't compete with annual returns in excess of 20%.

This certainly isn't the first real estate bubble. The history of the 19th century is rife with land speculation--and catastrophic collapse. Before we had the stock market bubble of the 1920s, we had the great Florida Real Estate Bubble, which was the beginning of the state's ascendance to one of the biggest states in the union. Accounts of the bubble in books like Galbraith's Great Crash or Frederick Lewis Allen's brilliant Only Yesterday, sound eerily similar to the Florida real estate bubble we just lived through.

[snip]

The Florida real estate bubble was amplified by the rivers of gold pouring into America from Europe. In our own decade, we have Asian central banks and Asian savers pouring their capital into our markets. When central banks buy dollars, they don't want to park them by taking a flyer on a tech stock; they invest in some form of fixed income security, aka debt. That led to an expansion of credit markets.

Given that house prices are basically set by the size of the monthly payment that buyers can afford, rather than some deeper notion of intrinsic value, it's hardly surprising that looser credit caused house prices to rise--nor that, in the wake of WorldCom, the recent history of steady appreciation in American real estate led naive buyers and lenders to think that housing was "safe". The ingredients of a bubble are always, to some extent, sui generis, but they have a common theme: the price of something starts going up in a way that deludes investors into thinking they've found a sure thing.

So I don't think the problem is some intrinsic lack of investment opportunities in the United States. Rather, I think that markets sometimes miscalculate. In the long run, however, the bubbles burst, and people's appetite for speculative bets on asset price appreciation abates. Unfortunately, we're usually left with a hell of a hangover when it happens.

If there were a prize for Greatest Stupidity In A Professional Capacity, these paragraphs would surely make the cut. Asians save too much of their money, so we had a housing bubble. It utterly ignores the actions of everyone that McArdle just so happens to support, coincidentally vilifies everyone McArdle personally dislikes, and reduces her audience to a respectful, awe-filled appreciation. ("That's a heck of a post, Megan".)

Tribal Behavior

Tiring of pretending to know about the economy and pretending to know about cooking, Megan McArdle pretends to know about politics.

I was talking to a libertarian friend yesterday who is a professor in the midwest, and we were marvelling at just how delusional many Obama voters seem to have been about what he was going to accomplish. Don't get me wrong--I certainly don't approve of everything Obama has done. But the guy got elected to be president of the United States, not Prime Minister of Sweden. Anyone who seriously entertained the notion that the procedural obstacles to enacting legislation in the United States would suddenly fall away--along with the essentially center-right politics of the American voter--is probably not mature enough to be driving.

Can she get through even one post without claiming superiority to most of the rest of the world? Probably not.

Yet Obama's progressive base is incredibly demoralized by the inability to pass sweeping cap and trade and health care legislation without input from conservatives, or special interest groups. To me, it seems obvious that they should still be strongly supporting Obama and Democrats, for all their flaws. But it doesn't seem to be obvious to them, and it looks like they're not going to mobilize for 2010 the way they did in 2008, even if Congress manages to pass some monstrous kludge of a health care bill in the new year.

[my bold]

This is authoritarianism, manifesting itself through decisions and actions. You support your tribe no matter what, because they are your tribe. Without them you are alone and powerless, but with them you can feel protected, wanted and important.

But sometimes the tribe must rid themselves of one of their own if he is too corrupt, McArdle says. Democrats must toss Baucus off the back of the bus for their own good, something that she says Republicans are swift to do. Her commenters provide the plentiful evidence to counter this bit of delusional thinking, but to no avail. McArdle identifies with conservatives, so she conveniently "forgets" about the multitude of conservative politicians caught in horrible acts. My tribe good, your tribe bad. Any conflicting facts are flushed down the memory hole.

Merciful Release

The scene of the crime.

Those Happy, Golden Years

Roger Ailes--the one that is not going to hell--gives us a sample of one of the children's books the National Review is peddling to its gullible audience. Most of the books are reprints of stories over a century old and a number of the stories are racist, which National Review assures us is merely an expression of respect for African American culture.

Isn't it just like liberals to diminish genuine racial and cultural diversity in the name of respecting it? That's what they've done with Huckleberry Finn, perhaps the greatest anti-slavery novel ever written, now tarred as "racist." And that's what they did with the tales of "Uncle Remus" -- a collection of African American folktales, many with roots in Africa itself, adapted and compiled by Joel Chandler Harris in the 1880s. Beloved by generations of Americans, black and white, these funny but pointedly moral stories about Brer Rabbit, Brer Fox, Brer B'ar and Brer Wolf were akin to - and on a par with -- Aesop's fables. The problem, as modern liberals saw it, was the use of black dialect, and the fact that the title character and fictional narrator of the stories, Uncle Remus himself, was a kindly old slave. So "politically incorrect" have these stories come to be seen that a hugely popular 1946 film version, Disney's Song of the South, has never been released on video -- though many consider it one of that studio's animation masterpieces. As for the stories themselves, they were banned from most schools and libraries in the 1960s, becoming almost unobtainable.

But, the National Review assures us, these stories are not watered to down to make them less offensive to the people being stereotyped as imbiciles.

All 185 stories from the 8 original "Uncle Remus" books exactly as Joel Chandler Harris wrote them (no "PC" fixes, like in some other editions)

Just to make sure that other famous classics of children's literature don't disappear from the earth, the National Review is also selling lavish editions of Thornton Burgess's timeless tales of woodland creatures. And guess what you'll find in these stories as well?

Unc' Billy Possum sat at the foot of the great hollow tree in which his
home is. Unc' Billy felt very fine that morning. He had had a good
breakfast, and you know a good breakfast is one of the best things in the
world to make one feel fine. Then Unc' Billy's worries were at an end, for
Farmer Brown's boy no longer hunted with his dreadful gun through the Green
forest or on the Green Meadows. Then, too, old Granny Fox and Reddy Fox had
moved way, way off to the Old Pasture on the edge of the mountain, and so
Unc' Billy felt that his eight little Possums could play about without
danger.

So he sat with his back to the great hollow tree, wondering if it wouldn't
be perfectly safe for him to slip up to Farmer Brown's hen-house in the
dark of the next night for some fresh eggs. He could hear old Mrs. Possum
cleaning house and scolding the little Possums who kept climbing up on her
back. As he listened, Unc' Billy grinned and began to sing in a queer
cracked voice:

"Mah ol' woman am a plain ol' dame--
'Deed she am! 'Deed she am!
Quick with her broom, with her tongue the same--
'Deed she am! 'Deed she am!
But she keeps mah house all spick and span;
She has good vittles fo' her ol' man;
She spanks the chillun, but she loves 'em, too;
She sho' am sharp, but she's good and true--
'Deed she am! 'Deed she am!"

"You'all better stop lazing and hustle about fo' something fo' dinner,"
said old Mrs. Possum, sticking her sharp little face out of the doorway.

"Yas'm, yas'm, Ah was just aiming to do that very thing," replied Unc'
Billy meekly, as he scrambled to his feet.

Just then out tumbled his eight children, making such a racket that Unc'
Billy clapped both hands over his ears. "Mah goodness gracious sakes
alive!" he exclaimed. One pulled Unc' Billy's tail. Two scrambled up on
his back. In two minutes Unc' Billy was down on the ground, rolling and
tumbling in the maddest kind of a frolic with his eight children.

Right in the midst of it Unc' Billy sprang to his feet. His eyes were
shining, and his funny little ears were pricked up. "Hush, yo'alls!" he
commanded. "How do yo'alls think Ah can hear anything with yo'alls making
such a racket?" He boxed the ears of one and shook another, and then, when
all were still, he stood with his right hand behind his right ear,
listening and listening.

"Ah cert'nly thought Ah heard the voice of an ol' friend from way down
Souf! Ah cert'nly did!" he muttered, and without another word he started
off into the Green Forest, more excited than he had been since his family
came up from "Ol' Virginny."

It's good to know that National Review is scouring the earth to reprint and preserve for all time the true classics of the Golden Age of America from before the age of political correctness. Thanks to those damn liberals you can barely find books now that teach your children how shiftless, lazy, thieving and mush-mouthed African Americans are. No doubt Michael Steele has already picked up a few copies for his kids.

Salt In The City

The hardest thing to do in this life is to tell the truth. We frequently don't like what the truth tells us so we ignore it or explain it away. It takes a strong person to accept facts that give him or her pain and fear. But the alternative is maintaining a constant, exhausting vigilance for anything that pierces the bubble of self-delusion. Accepting the truth means you can let down the facade, but it also means letting in the pain, and many, many people are utterly unwilling to make that choice.

A Side Note About Exotic Salt
When I said I "cook with" Maldon sea salt, I did not mean that I toss it in the water with my pasta, or use it to brine my turkey. Sea salt is a finisher--you put a little of it in when you're done cooking and ready to serve, or toss it in cold dishes. If your recipe calls for salt at the start of the process--though with a few exceptions, I'm agin' it--use kosher or ordinary table salt. A box of sea salt should last you at least six months, unless you're serving a crowd every night. Some of my correspondents were a tad confused on this, so I thought it was worth clarifying before some unhappy soul tossed three tablespoons of fleur de sel into their pasta water, and came looking for my head.

If Megan McArdle didn't have to impress the world with her exclusive tastes, she wouldn't have to write such a silly post. She could do what everyone else does--use ordinary kosher salt, like Alton Brown tells them to, and save the exotic salts for table use. But no, she must use Maldon for cooking and an even more exclusive salt for the table, and then lie* and say that she meant Maldon for table, not cooking. She's like Carrie Bradshaw in a tutu, aping the haute couture set but not part of it, and looking ridiculous in the process. It is unnecessary, futile and an enormous waste of human energy.

*I must leave open the possibility that she did not mean "for most cooking" when she said it, but if she is just making everything up as she goes along, that is useful to know as well.

A Little Ross

Ross Douthat, In Short: As the working class sinks into the underclass, I think we can pick up some votes.

Family Values

We will spare you the many posts on health care that McArdle is churning out between wedding errands since most of them consist of McArdle throwing sand or yelling "look over there!" and running away. The post on credit card debt is not a travesty but ignores the drawbacks to negotiation. There is one interesting post, however.

My ever-so-clever fiance illustrates why glossy mags should not do profiles of government officials: they have no idea what the hell they're talking about. In most cases, this doesn't matter, because celebrities don't have any idea, either; you can't actually screw up, say, Barbra Streisand's hazy and whimsical notions about foreign policy, or Jenny McCarthy's atrocious opinions on immunology. Unfortunately, the CBO and the OMB do have a kind of logic, twisted though it may be, so it's an excellent place for reporters to go badly astray: [snipped quote].

(McArdle believes that if she announces a conflict of interest it is somehow cancelled out, and she need never mention it again.)

Her link is very helpful because it lets us better understand McArdle's new milieu--the world of tea baggers and their friends. P. Suderman takes pen in hand to complain that journalists make mistakes in their work. I hope to heaven that he does not cast his loving eyes upon the work of his wife-to-be, because he might find himself utterly disillusioned. But perhaps we worry unnecessarily; P. Suderman's biggest concern might not be error, for he mainly frets that Obama officials are being presented as cool, a quality he obviously envies and desires.

I typically like Esquire, but John Richardson's current profile of former CBO-chief and current Office of Management and Budget head Peter Orszag shows just how desperately major media outlets are trying to make government look and seem cool in the Obama era.

It seems Republicans have always complained that liberals are considered cool and conservatives are not. I can remember complaints that the media loved Clinton because he played a saxophone and had lots of hair, while dull Bush the Elder was so out of touch that he'd never seen a bar code scanner. Conservatives thought Bush was cool and insist Palin is cool as well because they are anti-intellectual, but priding yourself on keeping Granny and GrandPop's moral values, clothing and cultural tastes is not and never has been cool, and deep down inside they know it perfectly well. Since P. Suderman makes his living by pretending to be intellectual, he does not even have the anti-elite option.

It's a fill-in-the-blanks, Washington-specific variation on Esquire's signature celebrity puff piece: You couldn't quite substitute Orszag for Angelina Jolie—the subject of Ron Rosenbaum's "worst celebrity profile ever written"—but it's the same basic idea. There's almost no new content (the one interesting factoid is that Orszag seems to have supported a much smaller stimulus package), and the primary aim isn't to deliver information or insight, but to put a sheen of glossy cool on the subject. At one point, Richardson takes readers on a tour of OMB's offices and breathlessly recites headlines from the resumes of the agency's top officials—Harvard! Yale! Clinton White House! Oxford! Harvard again!—as if to say, hey, reader, you should be impressed.

Well, I'm not, especially since Richardson gets one of his few significant attempts at substance flat wrong. The piece begins in July, with its hero receiving bad news: Current CBO chief Doug Elmendorf tells Congress that health care reform will not bend the cost curve—in direct opposition to what Orszag has repeatedly said. At the end of the piece, however, all is resolved. October rolls around and the CBO decided that health care reform will "bend the cost-curve," and that it "will save the government at least $81 billion over ten years, maybe more."

Only one problem with that last bit: CBO never said any of it.

[blah blah blah increase in spending blah CBO]

In other words, Orszag never actually got the particular piece of good news the piece claims he did. But maybe it doesn't matter now that he's got the fact-challenged puffery of Esquire hacks on his side.

That'll show all those cool kids in the student lounge, who threw popcorn at the P. Suderman Tribe as they left their Young Republicans committee meeting. The tribesmen in his comments are less interested in P. Suderman's painful self-contemplation and more interested in obscene photo captioning, keeping alive the libertarian tradition of perpetual adolescence.

The Political Family

Arthur Silber is discussing tribalism again, and all of his posts on the subject are essential reading, for political behaviors are actually tribal behaviors. (And tribal behaviors are familial behaviors.) His dynamics of tribalism:

ONE: To the degree that membership in a particular tribe or tribes is important to a person's sense of identity, that person believes that his own tribe(s) is inherently and uniquely good. To the degree that tribal membership is a critical element of personal identity, all members of all tribes are convinced this is true of those tribes to which they belong.

TWO: Insofar as the tribe's centrally defining characteristic(s) (race, religion, political beliefs, etc.) are concerned, all other tribes that differ with regard to these characteristics are necessarily inferior and wrong. This has an especially critical implication: at first with regard to these centrally defining characteristics, and inevitably in a more general sense, the individual members of all other tribes are necessarily inferior to and less worthy than the members of one's own tribe(s).

THREE: The basic dynamics of all tribes are the same. This applies to all tribes in two different critical respects. It is true of dynamics within the tribe -- that is, of those particular mechanisms which create and maintain tribal identity and cohesiveness -- and it is also true of how one tribe views itself and behaves in relation to other tribes.

FOUR: The major mechanism by which any tribe creates and maintains tribal identity and cohesiveness is obedience: the requirement that each member of the tribe conform his thinking and behavior in accordance with the major elements of the tribe's belief system.

As for the actual characteristics of the tribe, we like to think they are the ideal, the positive qualities of the people, but invariably they are the qualities the powerful want the powerless to have. The elite certainly do not hold themselves to the same standards of patriotism, duty and bravery, or kindness, charity and morality. The heroic ideals are the qualities the abuser wants in his victim; unquestioning acceptance and obedience, an absence of critical thought, violent, cruel and avaricious, sexualized and obedient.

Holiday Cheer

Megan McArdle's holiday gift guide has already been thoroughly mocked, but never let it be said that I ignore my duty in my (self-appointed) task. To the mocking, away!

Presents For People Who Haven't Done You A Favor

McArdle gives us a list of "stocking stuffers," for those relatives and friends who will dig deep down into their stocking on that happy morn and immediately have to be rushed to the hospital because some idiot decided to turn their Christmas stocking into a Bag Of Knives. Evidently McArdle puts a grater, a ceramic slicer, coffee grinder blades and a hand chopper into her loved ones' stockings instead of small presents. She should throw a head of cabbage in there as well. McArdle also gives egg separators. I'm not sure why. Why not those wood chopsticks that come all stuck together, or a box of plastic knives, or an orange plastic shrimp deveiner? Be creative!

Presents For People Who Might Do You A Favor

These presents exist mainly to impress McArdle's good taste and kitchen skill upon her audience. She must have lose tea leaves, not bagged. She is a (kind of a) chef and must have good knives and a knife block. McArdle has finely and highly developed taste buds, and must have good wines, freshly ground coffee, sea salt, freshly ground pepper, exotic spices, and lighter, more delicate baked goods. We all like good foods if we can afford them, but her salt is about $20 a pound.

Right now I'm using Maldon sea salt for most things, and pink Himalayan salt for dishes that demand a lighter flavor.

Then she's using a very expensive salt in cooking, in which the nuances of the flavors will be lost. Cook's illustrated says you're better off using an inexpensive sea salt and save the expensive stuff for table use. As for the Himalayan pink sea salt--as a Tbogg commenter points out, it's actually rock salt from Pakistan, for which she pays about $15 a pound.

Himalayan salt is a marketing term for rock salt from Pakistan, which began being sold by various companies in Europe, North America, and Australia in the early 21st century. It is mined in the Khewra Salt Mines, the second largest salt mine in the world, located in Khewra, Jhelum District, Punjab, Pakistan, about 300 km from the Himalayas, about 160 kilometres from Islamabad, and 260 kilometres from Lahore, and in the foothills of the Salt Range.

The salt sometimes comes out in a reddish or pink color, with some crystals having an off-white to transparent color. It is commonly used for cooking similar to regular table salt, brine, and bath products.

[snip]

More recently, large crystal rocks are also used as Salt lamps. A salt lamp is a lamp carved from a larger salt crystal, often colored, with an incandescent bulb or a candle inside. The lamps give an attractive glow and are suitable for use as nightlights or for ambient mood lighting. The largest producers of this product are located near to the source in Pakistan, with Poland and Iran also offering variations.

Heh.

I'm getting bored, so let's speed this up. She also recommends knives that will explode into razor sharp shreds when your kid drops one while washing the dishes, says you should have a wood cutting board so you can grow a nice variety of food-borne diseases, discount dented cookware, and a mixer she travels with so she can lecture relatives about their appliances in person.

Presents For People Who Have Done You Favors

These are a bunch of very expensive items for people who do a great deal of cooking and entertaining. People who do a great deal of cooking and entertaining know what will work best for them and don't need a wanna-be Sally Quinn to tell them.

Ultimately McArdle has my sympathy, for it seems all her culinary efforts fall on deaf ears, so to speak.

A smaller oven also heats faster, cooks faster, and uses less energy than a big stove, particularly if you're using an electric. Peter, whose affection for crunchy frozen things far outstrips mine, uses [the countertop oven] practically every night.

Do they enjoy their Himalayan pink sea salt on their pizza rolls and bagel bites?

Where Charity And Love Reside

We see that Jonah Goldberg has signed up for another book, called The Tyranny of Cliches. I understand why cliches such as "do unto others as you would have them do unto you" and "love one another" irk Jonah so. It's hard work screwing money of the suffering middle class, and weekend jaunts to Paris, while most enjoyable, cannot compensate for the constant nagging liberals inflict on the world. Love, peace and charity are the oldest and hoariest of cliches, meant to elevate the inferior and drag down the superior. Why should they help anyone else? Why can't they kill other people? Why should they try to understand anyone who is different? They don't want to and they're not going to. All this talk of how conservatives have no empathy--don't they know that that's a good thing? It's the only way they can ignore suffering, both their own and everyone else's.

Hell Freezes Over

I can't find anything good to mock and it is SNOWING!!!. I'm going to go play in the fluffy flakes until I'm too cold, which will be about six minutes later.

That Which We Hold Dear

Everyone has little things they hold dear to their hearts. A stuffed animal or a book from childhood. Old letters, souvenirs, a favorite dress or shirt. Mementos of loved ones no longer alive. Megan McArdle is merely human, and also has something that has great personal meaning and a warm, loving connotation: executive compensation.

Losers like Bank of America and GM may have to go hat in hand to Ken Feinberg, begging for handsome paychecks for their employees, but luckily for the top echelon at Goldman, which has returned its tainted government fund, they . . . well, apparently they have to go hat in hand to their shareholders, begging for handsome paychecks for their employees.

[snipped quote]

I'm a little confused as to why Goldman Sachs shareholders would be developing sudden scruples about compensation. It's not like it just occurred to Goldman this year that every Christmastime they could shower their employees with more money than the average worker sees in a lifetime. If you hold Goldman stock, you presumably knew this was coming.

Perhaps it's just that they can.

Surely in the free marketplace of ideas and services, people are paid what they are worth. That is why executives were paid so much in the past--they took on tremendous risks, which would harm their earning potential if failure actually happened. Therefore when they fail they must earn less, or the free market isn't free and moral hazard will stalk the land, eating the the fruit of the free market and pooping the pellets of excessive risk and market failure.

And just who owns these companies anyway? The shareholders! Should the owners be told what to do by their workers? It's unionism, that's what it is. They're demanding higher pay and good benefits, which will harm the bottom line of the company, thereby risking the failure of the company. Yes, McArdle said that the investment banks must be bailed out, which would also be a moral hazard, but that was because the banks were too big to fail. Now the executives are too big to fail, and must be bailed out with higher compensation, or else the entire luxury goods market could fail. The risks to our economy are just never ending, which makes it a very good thing that McArdle is here to do the thinking for us and the public relations for investment banking executives.

Paul Krugman advanced a theory about income inequality that I found unconvincing: that a major contributor to its growth in the latter 20th century was simply cultural change; people at the top earned more because everyone thought it was okay to earn more.

I still find it pretty unconvincing. But if shareholders start voluntarily limiting investment banking compensation, to the point where it actually falls materially in aggregate, I may change my mind.

McArdle doesn't give us a reason for rejecting Krugman's theory but we're used to that. At least we know that if all executives start earning less money, McArdle will realize she was wrong. After all, she's said in the past that a cultural shift might be a factor in rising executive compensation. She might easily change her mind yet again.

Going Galt

Rod Dreher has left the Dallas Morning News to join the John Templeton Foundation, a rather odd group that seem to be trying to apply scientific inquiry to religion. I thought faith precluded a search for proof. Where's the virtue in belief if you try to find evidence? No doubt we'll soon find Dreher explaining that because some religious paintings are beautiful and everyone like beautiful things, endorphins prove God exists.

The War That Came To Dinner

Everything seems connected today.

There is a fascinating and easy to understand article on the largest oil field in the world here. Our country operates on the assumption that growth will make the economy healthy and we need a steady and steadily rising supply of oil to ensure that growth. Less oil and interruptions in oil delivery will seriously harm an already damaged economy. It will make a few people very rich, however, as prices rise and the global snatch-and-grab begins. It might not be the oil that will do us in, it might be the wars we are going to fight so that our military and corporations and consumers have enough oil.

Not that we want to fight wars, we just have to, as Arthur Silber says sarcastically. We need oil to maintain our country and the world needs the US to protect them, because we are good and love freedom.

How exactly do you leave that region of the world more quickly by involving yourself in ever more complicated and numerous ways? The answer is that you don't. But as my previous article stated, we aren't leaving. Obama and the U.S. government are not unlike the dreaded house guest who insistently tells you he's going home in just another week or two -- honestly, he is, and how could you possibly not believe him? -- even as he redecorates your extra bedroom at notable cost and takes over several of your closets for many of his most precious belongings. You hear his words, and you see what he does -- and your heart sinks as you realize that a life of independence, a life that is yours, is gone.

[snip]

For Kristol as for Obama, the impersonal, unanswerable forces of history have placed this "special burden" on America's shoulders. We don't want to run the world, but no one else is sufficiently special or unique to do the job; as Kristol so wretchedly and dishonestly put it, it was all just "our bad luck." We had to do it -- for the good of everyone who lives on Earth. This is the all-purpose disinfectant for crimes of staggering magnitude: the U.S. murders more than a million innocent Iraqis, but we did it for the Iraqis' "own good"; we torture, but we only do it because our enemies leave us no choice -- and we learn very early that the infliction of pain is the path to moral improvement, most especially for the improvement of those weaker than ourselves.

[snip]

Thus do domination, control and power serve as their own justification. This is what Kristol believes, it is what Obama believes -- and he told you he believed all this two and a half years ago -- and it is what everyone in the American ruling class who wields power believes.

Since we are good, we will be forced to justify our actions by telling ourselves how bad the Muslims are, since anyone from the Middle East is of course our enemy in our attempts to protect the world.

So it would seem that the perfect Muslim immigrant in France is one who cleans the house, picks up the trash, attends to the infant or, increasingly, fixes the computer, heals the sick and runs the bank, and then disappears in a wisp of smoke, before his presence, his beliefs, his customs, his way of dress, his "noise and smell" offend the particular sensibilities of the general population. France is not alone in wishing that its Muslims were invisible. As anyone who has visited Western Europe in the past few years will tell you, the "Muslim question" is a matter of grave concern.

European Muslims have unintentionally revived a whole genre of nonfiction--the alarmist tract, billed as a "searing" yet "necessary" exposé on Europe's impending demise now that it has allowed so many millions of Muslims to settle on its shores. The titles are each more ominous than the last: The Rage and the Pride, by Oriana Fallaci (2002); Eurabia: The Euro-Arab Axis, by Bat Ye'Or (2005); Londonistan, by Melanie Phillips (2006); Menace in Europe: Why the Continent's Crisis Is America's Too, by Claire Berlinski (2006); and While Europe Slept: How Radical Islam Is Destroying the West From Within, by Bruce Bawer (2006). The authors rely mostly on tabloid or newspaper accounts; the arguments are simple, or, more accurately, simplistic, and the preferred method of inference is extrapolation.

The latest offering in this genre is Reflections on the Revolution in Europe: Immigration, Islam, and the West, by Christopher Caldwell, a senior editor at The Weekly Standard and a regular contributor to the Financial Times, The New York Times Magazine and many other publications. However, just as Chirac and Sarkozy prefer to say more carefully what Le Pen says bluntly, Caldwell articulates in polite and embellished language what Bawer and others have been saying aggressively for years: Europe is being overrun by Muslim immigrants; these immigrants show no sign of assimilating to European culture and social mores; and as a result, Europe is in danger of becoming an outpost of the Islamic empire.

Of course our own homegrown or imported racists at The Corner just adore Londonistan and musical theater critic Mark Steyn has created a new career out of writing that we will drown in brown babies.

If I have a purpose in writing this blog, it is to point out that the lies are never ending and if we succumb to them we will be utterly lost. The elite will provide scapegoats for the angry populace if conditions worsen greatly, and it will fall upon each and every one of us to take a stand and refuse to buckle down under authority or popular pressure. Most people will go along with the crowd, so anyone who is strong enough must stand up and fight back when the time comes.