Quote Of The Day

Saturday, September 19, 2009

Mark Levin Speaks On Conservatisim, Taking Back The Republican Party

POTUS Won't Talk To Fox News - To Much Reality?

Friday, September 18, 2009

CNN's Wolf Blitzer Gets Blitzed On Jeopardy

Glenn Beck - Tree Of Revolution

Great American Theater!

Border Waste Reruns - Taxpayers For Common Sense

Border Waste Reruns
Volume XIV No. 38: September 18, 2009

Jimmy Buffet could have testified at this week’s hearing about ongoing federal border protection initiatives. As you watched the same old song and dance about Department of Homeland Security (DHS) spending commence before lawmakers, you could almost hear him sing: “Wasting away again on the border wall. Searching for the lost section of fence. Some people say that Boeing’s to blame, but I know – it’s our own damn fault.”

With the benefit of updated numbers and dates, the House Homeland Security Committee learned that seven years and more than $4 billion in, DHS’s Secure Border Initiative (SBI) is (still) broken. SBI is comprised of a system of cameras and sensors known as SBINet and a steel “pedestrian” fence erected on more than 600 miles of the southwestern U.S. border.

Lawmakers heard an all too familiar tale of waste and woe. The average cost of pedestrian fencing has jumped from $3.5 to $6.5 million per mile, and costs for vehicle fencing have doubled. The Government Accountability Office (GAO) testified that the sensors used in the SBINet system still suffer from too many false detections and are vulnerable to bad weather despite the fact that the military has effectively used camera and sensor technology to track enemy movements for years at a much lower cost. But it didn’t stop there, the sad song continued:

  • Full deployment of SBINet is now projected for 2016—seven years after the original contract with Boeing was scheduled to end;

  • The pedestrian fence has been breached more than 3,000 times so far, with each repair costing at least $1,300;

  • A long-overdue DHS study estimates the costs of maintaining the fence over a 20-year period at $6.5 billion— which is likely a low ball.

Sadly, even the new price tag may not tell the whole story. As our analysis of fence costs points out, maintenance estimates by the Congressional Budget Office and U.S. Army Corps of Engineers put that figure at $8 billion years ago, before the same labor and materials price hikes that have bumped up the cost of fence construction.

Problems with SBINet are due in large part to a contract that even a Boeing spokesman admitted was “awkward.” That’s a bit of an understatement: The delays and cost overruns have made the project a poster child for problems with “lead systems integrator” contracting strategy, where one company acts as a “system integrator” that tries to cobble together several different projects completed at different times and with different subcontractors. Incredibly, DHS just renewed Boeing’s contract for another year, despite a string of failures that has dogged the contract almost since its 2006 inception.

The fundamental question, of course, is whether the fence actually works. The unfortunate answers range between “no” and “not sure”. Because the SBINet technology still isn’t functional, border patrol agents are forced to work with outdated and ineffective technology, decreasing the border’s effectiveness. And the border patrol hasn’t yet created a way to quantitatively measure whether or not the pedestrian fence is actually keeping people out. The number of people caught trying to cross the border actually declined in several sectors before the fence went up, showing only that those numbers are influenced by factors other than the existence of a 14-foot steel wall.

Like too many expensive national security projects, Congressional commitments to the border fence were made in a fiscal vacuum. Yet Senators exacerbated irresponsible spending by inserting a requirement that would add another 300 miles of pedestrian fence at a cost of some $40 billion. Even though they’ve seen this one before, maybe lawmakers should review the hearing transcript: When asked whether the American taxpayer had benefitted from spending on SBI, the GAO analyst replied with an unequivocal “No.”

Let us know what you think.

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Sunday, September 13, 2009

Obama's Squandered Summer - Dr. Frank Rich

While we waited for the Great Speech, he let the silly season run amok': 'When trouble lurks, No Drama Obama stays calm as everyone around him goes ballistic. Then he waits - and waits - for that superdramatic moment when he can ride to his own rescue with what the press reliably hypes as The Do-or-Die Speech of His Career. Cable networks slap a countdown clock on the corner of the screen and pump up the suspense. Finally, Mighty Obama steps up to the plate and, lo and behold, confounds all the doubting bloviators yet again by (as they are wont to say) hitting it out of the park. So it's a little disingenuous for Obama to claim that he is not distracted by the 24-hour news cycle. What he's actually doing is gaming it for all it's worth. ... In the meantime, a certain damage has been done - to Obama and to the country.' With a large drawing of the president awaking from a slumber amid chaos.

'A Reporter at Large -- Eight Days: The battle to save the American financial system' - James B. Stewart

READ OF THE WEEK -- In tomorrow's issue of The New Yorker, James B. Stewart has a 24-page, 19,000-word 'A Reporter at Large -- Eight Days: The battle to save the American financial system,' from Friday, Sept. 12 to Friday, Sept. 19, 2008. Stewart wrote the bestselling 'Den of Thieves' and won the 1988 Pulitzer Prize for Explanatory Journalism for Wall Street Journal stories about Ivan Boesky, Michael Millken and the insider-trading scandals of the '80s.

Stewart begins: 'The most important week in American financial history since the Great Depression began at 8 A.M. on a Friday in the middle of September last year. I have pieced together this account of it from scores of interviews with participants and observers. Many of the principals agreed to be interviewed, including Henry Paulson, who was Secretary of the Treasury; Ben Bernanke, the chairman of the Federal Reserve System; and Timothy Geithner, who was president of the New York Federal Reserve. As time has passed, memories inevitably have been colored by hindsight and efforts to shade the truth, to affix blame and claim credit, but, as one Treasury official told me, referring to himself and his colleagues, 'For better or worse, we're the ones responsible. The more accurately the story is told, the better our policies will be received.''

SUNDAY, SEPT. 14: 'Lehman's C.E.O., Dick Fuld, had had months to find a buyer and hadn't done so. Now that Bank of America had set its sights on Merrill Lynch and Barclays was procedurally hung up, the only way to save Lehman would be for the government to essentially take an ownership stake-a step that would amount to nationalization and one for which the government says it did not have authority. As the Treasury official described the situation, 'The model had always been Bear Stearns. It was obvious you needed JPMorgan to make that happen. Now we didn't have a JPMorgan. So could we just recapitalize Lehman and keep it going? Do you leave Dick Fuld in place? How would that look? The run was already in progress. There was no reason to think our money would restore confidence in Lehman. As Geithner said, you can't lend into a run. So there were really two issues: legal and practical. Paulson insists that we didn't have the legal authority, and I won't question that. But, even if we did have the authority, it wasn't practical. All the Fed money in the world wasn't going to stop a run on Lehman.' Referring to a Lehman failure, the Treasury official said, 'We knew it would be awful.' At the same time, after months of turmoil, anyone still owning Lehman stock or commercial paper had to be considered a speculator. Perhaps investors would stop assuming that the government would bail out every wayward financial institution and adjust their risk-taking accordingly. 'Everybody in some part of their brain thought it was a good thing for Lehman Brothers to go under,' the Treasury official said. 'Was this ten per cent of the brain? I don't know. . . . But the thought was there somewhere.' At noon, Steven Shafran, a senior adviser at the Treasury, text-messaged his colleagues, 'We lost the patient.'' ...TUESDAY, SEPT. 16: 'That afternoon, President Bush, accompanied by Josh Bolten and Joel Kaplan, his chief of staff and deputy chief of staff, and by Keith Hennessey, the director of the National Economic Council, sat down with Paulson and Bernanke in the Roosevelt Room of the White House. 'So what is going on in our financial system, and what are we going to do?' Bush asked. Paulson regularly delivered updates to the White House, but from the outset of his tenure as Treasury Secretary he had been making policy to an extraordinary degree. Bush saw himself as a wartime President, and he was deeply involved in defense issues. The economy was secondary. One person who worked with Bush for many years said, 'My sense is, this came up in the final months of an eight-year term. He was so ground down by Katrina, the war in Iraq. He was just out of gas.' A government official added, 'Hank Paulson and the Treasury were unilaterally making economic policy for the Administration. There was no influence from the White House.' 'A.I.G. is about to fail,' Paulson told Bush, warning that a potential collapse was likely to be catastrophic, especially with markets still highly unstable after the Lehman failure. Bernanke explained A.I.G.'s credit-default swaps and the likely consequences that A.I.G.'s failure would have on major U.S. and European banks. He also described the limits on the Fed's powers to deal with an institution like A.I.G. 'How have we come to the point where we can't let an institution fail without affecting the whole economy?' Bush wondered aloud. Bernanke reiterated that what had begun as a subprime-mortgage problem in the U.S. was emerging as a global crisis, which made it even harder for the Fed to combat the problems on its own.

'When Bernanke and Paulson finished, Bush said, 'Sometimes you have to make the tough decisions. If you think this has to be done, you have my blessing.' But, as he rose to leave, he said, 'Someday you guys are going to need to tell me how we ended up with a system like this. I know this is not the time to test them and put them through failure, but we're not doing something right if we're stuck with these miserable choices.' ...

'At 6 P.M., most of the House and Senate leadership, summoned on short notice, gathered in Senate Majority Leader Harry Reid's conference room for a briefing by Paulson and Bernanke. Paulson announced that the Fed had decided to loan A.I.G. $85 billion and essentially seize control of the company under the Fed's emergency powers. Bernanke pointed out that A.I.G. stock was one of the ten most widely held in 401(k) retirement accounts. Reid put his face in his hands. 'I hope you understand this does not constitute formal approval by Congress to take action,' he said. 'Do you have eighty-five billion?' Representative Barney Frank asked. 'I have eight hundred billion,' Bernanke said, referring to the Fed's balance sheet. Senator Christopher Dodd twice asked how the Fed had the authority to lend to, and take control of, an insurance company. Bernanke argued that the Fed had emergency powers to aid any company as long as there was a 'systemic risk,' and gave a brief tutorial on a little-known section of the Fed's authorizing statute. Bernanke said that even this step might not be enough. Legislation authorizing additional aid probably would be needed as well.' ...

WEDNESDAY, SEPT. 17: 'At six that evening, Bernanke met with his top aides-Donald Kohn; Kevin Warsh; Scott G. Alvarez, the general counsel; and Michelle Smith, the spokesperson-with Paulson and Geithner participating by speakerphone. 'We cannot do this alone anymore,' he said. 'We have to go to Congress and get some authority.' Paulson hadn't yet taken any concrete steps to enlist legislators to authorize a government rescue. Paulson reiterated his concern about getting congressional leaders to go along. 'I spoke to Harry and Nancy'-Harry Reid and Nancy Pelosi, the House Speaker-'and the political advisers,' he said. 'If the Treasury and the Fed say it's an emergency and we need help, and help doesn't come, it would further destabilize the markets. You don't go public until you're reasonably certain you'll get what you're asking for.' Bernanke was growing agitated. 'Hank! Listen to me,' he interrupted. 'We are done!' It was the first time Fed officials had heard him raise his voice. 'The Fed is already doing all that it can with the powers we have,' Bernanke continued. One participant recalled, 'Ben gave an impassioned, linear, rigorous argument explaining the limits of our authority and the history of financial crises in the U.S. and abroad.' That history showed that efforts to resolve such crises 'are successful only when overwhelming force from all parts of government is brought to bear,' the participant said. 'It was an encyclopedic tour de force.' It was as though Bernanke were the professor and Paulson the student. Bernanke's comments lasted about fifteen minutes, and Paulson was uncharacteristically silent until near the end. 'Got to go,' he said, and hung up.'

THURSDAY, SEPT. 18: 'The Fed group reconvened at six-thirty that morning. They had decided the night before that repetition would be helpful, so Bernanke started on the same lecture. Thirty seconds into it, Paulson interrupted. 'Ben, Ben, Ben . . . ' Bernanke stopped talking. 'I've done some thinking,' Paulson said. 'You and I should go see the President and then go to Congress tonight and ask for more authority.' At 10:15 a.m., President Bush delivered a two-minute televised statement outside the Oval Office, his first public pronouncement since the crisis began, which concluded: 'Our financial markets continue to deal with serious challenges. As our recent actions demonstrate, my Administration is focussed on meeting these challenges. The American people can be sure we will continue to act to strengthen and stabilize our financial markets and improve investor confidence.' When staffers again huddled in Paulson's office, Paulson wanted to know what ideas they had come up with. Asian and European markets were continuing to plunge, with banks and insurers bearing the brunt of the losses. ...

'At 7 P.M., Bernanke, Paulson, and [the chairman of the Securities and Exchange Commission, Christopher] Cox met with congressional leaders in Speaker Pelosi's conference room, overlooking the Mall. After photographers and press representatives were asked to leave, Paulson addressed the group. 'We are in danger of a broad systemic collapse, and action needs to be taken urgently to head it off,' he said. 'We need the authority to spend several hundred billion.' Cox invoked his former colleagues' memories of September 11th. 'We did extraordinary things then for the good of the country,' he said. 'This is what has to happen again, even if it is just weeks before an election.' Bernanke pointed out that he was a historian and a student of the Great Depression. 'The kind of financial collapse that we're now on the brink of is always followed by a deep, long recession,' he said. 'If we aren't able to head this off, the next generation of economists will be writing not about the thirties but about this.' Someone asked what the scenario looked like. Bernanke was cautious. He didn't want to be accused of exaggerating the danger. 'You could see a twenty-per-cent decline in the stock market, unemployment at nine to ten per cent, the failure of G.M., certainly, and other large corporate failures. It would be very bad.' The tone of the two most powerful men in the financial world was as frightening as their words. Questions shifted to Paulson. What are you going to do with the money?

'Paulson stressed the need to buy toxic assets, but resisted questions about how that would work. Spencer Bachus, the ranking member of the House Committee on Financial Services, asked about injecting capital directly into banks. Paulson said that he would consider it. The legislators pressed on how much money would be needed. Paulson finally said, 'Several hundred billion means several hundred billion.' 'You've got to understand, Mr. Secretary,' Barney Frank said. 'This cannot be seen as just a Wall Street bailout.' He said that executive compensation and foreclosures needed to be addressed. 'There's too much anger out there,' he added. Paulson didn't want to get sidetracked by issues that he considered extraneous to the immediate crisis. He knew that if the government tried to cap pay then no one on Wall Street would participate-a state of affairs that Frank later said he found 'terribly depressing.' 'Without a functioning banking system, things will get much worse on Main Street,' Paulson countered. He also stressed that congressional action had to be taken before the markets opened on Monday, or more major institutions might collapse. And what would happen if such legislation failed in Congress? Paulson paused for a moment. 'In that case, God help us all.'

'Barney Frank and Chris Dodd indicated that Congress would coöperate, but with some conditions. According to the Times, Majority Leader Reid added, 'You have no idea what you're asking me to do. It takes me forty-eight hours to get the Republicans to flush the toilet.' The meeting lasted ninety minutes. Reid, Pelosi, and Paulson agreed to speak at a press conference. Someone suggested that a Republican also speak, but Richard Shelby, of Alabama, a conservative and the ranking Republican on the Senate Banking Committee, interjected, 'Y'all don't want me to speak.' The laughter helped lighten the mood. The group agreed to make only brief, general comments about what was discussed at the meeting.' ...

'EPILOGUE: 'Bernanke and Paulson both told me that the effects of Lehman's collapse were worse than they anticipated, and they had expected them to be bad. The question persists: Could Lehman's collapse have been avoided? Paulson and Bernanke have argued that it couldn't. The Fed has statutory emergency powers to lend to non-banks, but only against what it deems adequate collateral. Lehman, unlike A.I.G., with its healthy insurance businesses, didn't have such collateral. This argument seems to have first surfaced on October 15th, in a speech by Bernanke and in a statement attributed to Paulson by the wire service Market News International. 'There's no law that any of us could have used,' Paulson reiterated to me. But Lehman clearly had some solid collateral, even if not enough for a government takeover of a collapsing firm. ... Paulson and other regulators stress, however, that there was no buyer to play the role for Lehman that JPMorgan Chase had played in the rescue of Bear Stearns. Had Paulson said from the outset that a government-assisted deal was possible, a buyer might have emerged. Instead, he summoned Wall Street's chief executives to the Fed, where he said emphatically that there would be no government assistance, as had already been indicated to the press. If this was simply a tough negotiating tactic, Paulson may have overplayed his hand. He succeeded in getting the Wall Street firms to coöperate, which would have provided welcome political cover from likely hostile reaction to another government bailout, but he failed to secure a buyer. Still, he came close. An orderly sale of Lehman to Barclays, with backing from Wall Street, the U.S., and perhaps the British government, might have been within reach. If so, at the highest levels of the American and British governments there was a breathtaking failure to communicate.

'Paulson, Geithner, and Bernanke worked tirelessly to save Lehman-within the limits that they believed to be feasible. And those limits, in light of the public hostility toward bailouts of any kind, were formidable. As the Treasury official told me, 'With Lehman Brothers, you said the market has to police itself. It was a disaster. With A.I.G., you say you have to protect the system, and that's a disaster! It's a Hobson's choice. You're not going to win.' Even so, Geithner says, 'If we had had the authority to prevent a system threat, I would have been prepared to act despite the political costs.' Today, it is widely accepted that the failure of Lehman was indeed a disaster. Its unintended and unforeseen consequences-the run on money-market funds most of all-could arguably have been avoided. Yet saving Lehman would not have addressed the broader problem: the capital shortage in the global banking system. It took a crisis of Lehman's proportions to motivate Congress to act, and, even then, it voted down the TARP legislation the first time.'

More Tomorrow Here - http://www.newyorker.com/