Chris and Barney—Redux

Immediately after the stock market crash of 2008, the resultant failures of huge investment banks, and the follow-on tax-payer bailouts of many “too big to fail” institutions, I wrote:

Those of us who pay for 70 percent of government don’t ask for much, but we’d love to see the new president stress and/or force responsible actions for all of the bad guys in this drama—less debt at an individual level; ethical behavior among lenders; reform among politicians who worry more about their reelection than their country, and regulation of Wall Street’s children of Gordon Gekko whose extreme hubris and greed led us all into this mess.

Now, almost two years later, we're still waiting. The geniuses who were part of the problem have crafted a financial reform bill that will do nothing to punish the irresponsible behavior of those who precipitated the original crisis and even less to help avoid another debacle in the years ahead.

The fact that Chris Dodd and Barney Frank are the primary authors of the proposed legislation speaks volumes about modern day Washington and the clear lack of leadership by the Obama administration. Both Dodd and Frank were at least partially culpable for the original crash and have done nothing to redeem themselves in the intervening months. Their proposed legislation is a replay of the health care legislation that the Democrats rammed down the throats of a less than enthusiastic public—too big, too ambiguous, misdirected, and worse of all, solving the wrong problem while leaving the taxpayers (a continually shrinking percentage of the populace as a whole) on the hook for wrong-doing by the Wall Street masters of the universe.

Nicole Gelkina summarizes the situation nicely:

The compromises hammered out by Sen. Chris Dodd (D-Conn.) and Rep. Barney Frank (D-Mass.) and others don't address their bill's fatal flaws -- starting with the bill's disastrous effort to end taxpayer bailouts.

The obvious— and correct—way to end Wall Street rescues is to let a failed financial firm go bankrupt. That is, the people who invested in a failed company—including bondholders, people owed money on derivatives and other lenders—should take the losses.

Instead, Congress would "end" bailouts by directing the feds to rescue the creditors to any failed "too big to fail" financial company. Later, the feds would make the failed firm's competitors pay the cost.

Don't buy the claim that this is similar to our 80-year-old system of deposit insurance. Deposit insurance is meant to protect mom-and-pop savers, not sophisticated global investors. And because there are only so many small-scale American savers with a finite amount of cash saved up, any single bank's risk of having to make good on a failed firms' FDIC-insured deposits is limited, and roughly predictable.

By contrast, Dodd-Frank would force financial institutions to shoulder an unknowable and unpredictable risk -- but one that stands a good change of being huge.

Worse, the approach encourages wild risk-taking -- and penalizes prudence.

Perfect! Encouraging wild risk-taking and penalizing prudence. That’s what got us in this mess in the first place.

Luckily, Dodd chose not to run for re-election (he’ll be gone in November) but Frank is unassailable in his district, and President Obama has a minimum of 2.5 years to do even more damage. And folks wonder why the markets are roiled, unemployment remains close to 10 percent, and the economy is stagnant.

The Kitten

With a solemn look and steely-eyed determination, Secretary of State Hillary Rodham Clinton appeared before the media to announce new U.N. sanctions against Iran. Reuters reports:

"We can, we believe, slow down and certainly interfere with and make much more difficult their continuing nuclear program through these sanctions," Clinton said. "At the same time, we do want them back at the negotiating table.

Are you getting a feeling of déjà vu? Over the past 16 months, the Obama administration has tried and failed to negotiate with Iran. During that same period they have flailed about, trying to convince the “international community” to step up and do something. The result? Charles Krauthammer comments:

In announcing the passage of a U.N. Security Council resolution imposing sanctions on Iran, President Obama stressed not once but twice Iran's increasing "isolation" from the world. This claim is not surprising considering that after 16 months of an "extended hand" policy, in response to which Iran accelerated its nuclear program -- more centrifuges, more enrichment sites, higher enrichment levels -- Iranian "isolation" is about the only achievement to which the administration can even plausibly lay claim.

"Isolation" may have failed to deflect Iran's nuclear ambitions, but it does enjoy incessant repetition by the administration. For example, in his State of the Union address, President Obama declared that "the Islamic Republic of Iran is more isolated." Two months later, Vice President Biden asserted that "since our administration has come to power, I would point out that Iran is more isolated -- internally, externally -- has fewer friends in the world." At the signing of the START treaty in April, Obama declared that "those nations that refuse to meet their obligations [to the Non-Proliferation Treaty, i.e., Iran] will be isolated."

Really? On Tuesday, one day before the president touted passage of a surpassingly weak U.N. resolution and declared Iran yet more isolated, the leaders of Russia, Turkey and Iran gathered at a security summit in Istanbul "in a display of regional power that appeared to be calculated to test the United States," as the New York Times put it. I would add: And calculated to demonstrate the hollowness of U.S. claims of Iranian isolation, to flaunt Iran's growing ties with Russia and quasi-alliance with Turkey, a NATO member no less.

And the administration continues to grasp at straws, suggesting that Brazil (yep, that’s the same Brazil that until Barack Obama was elected was a staunch U.S. ally instead of an impediment) and Turkey (yep, that’s the same Turkey with a newly installed Islamist leadership with regional ambitions of its own) would be there to help. Help? Is standing four square with Iran’s Mahmoud Amadinejad help? In the through-the-looking-glass world of Barack Obama, I suppose it is.

But our President persists in attempting to craft a negotiated settlement. Walter Russell Mead comments:

Those who think we can reach a ‘grand bargain’ with Iran that would either stop the nuclear program or enable us to coexist peacefully with a nuclear Iran are, I fear, making the same failure that the 1930s and 1940s peace campaigners made about the Nazi and Soviet regimes. They are confusing the legitimacy of the grievances that helped the Iranian regime seize power with the aims of the regime once in place. This regime is, I fear, a tiger not a kitten. Concessions and consideration don’t make it more moderate; they tell it that you fear it, tell it that its tactics of pressure and threats work, and encourage it to raise its demands.

Now fortunately the Iranian regime doesn’t command a great power the way the Nazis had Germany and Stalin had the Soviet Union. But Iran’s strategic location gives it a power to harm US interests and the international system far in excess of its power potential by more conventional measurements. (If Iran somehow switched places with Australia, we could and would pay a lot less attention to its goals; location, not intrinsic power, is what makes Iran a big deal.) I don’t think we can ignore this regime and unless it substantially scales back its ambitions I don’t see how we can coexist with it peacefully much longer.

President Obama is going to have a tough time with this one. His current policy of seeking sanctions while gathering international support is less a policy than a way of marking time. There is no clear and obvious way forward, and Iran is doing everything it can (with Hamas, with Turkish and Brazilian diplomacy, with anything else it can gin up) to muddy the waters and throw the US off-track. As President Obama and Secretary Clinton try to make the agonizing decisions that almost inevitably lie ahead, I’m afraid the appeasers will be back. We can neither threaten Iran now nor seek regime change, they will say. It’s all our fault anyway because we outraged Iranian nationalism by our thoughtless acts in the past. If we can simply understand Iran’s legitimate concerns and give it what it rightfully wants then it will calm down. After all, it is only aggressive and hostile because the poor dears feel so threatened.

These arguments have led to millions of deaths and launched world wars in the past. Neither President Obama nor anybody else should listen to them this time unless those who make them show that they are aware of the disastrous results of this counsel in the former times and have prepared detailed and convincing arguments about why this time is different — and why this particular tiger is really a kitten who just needs to be loved.

The real problem, I think, is that with every month that passes, the real kitten (at least in the perception of the “international community”) is the United States under the leadership of Barack Obama. That perception can and will lead to war.

Distance

In one of the best pieces I’ve read about Barack Obama, Dorothy Rabinowitz of The Wall Street Journal addresses the uneasy feeling that many Americans (including yours truly) get when they observe the Obama administration’s approach to this country and the world. The article, aptly entitled “The Alien in the White House” has “nothing to do with delusions about his birthplace cherished by the demented fringe.” Rather, it considers Obama’s ideological roots. She writes:

The deepening notes of disenchantment with Barack Obama now issuing from commentators across the political spectrum were predictable. So, too, were the charges from some of the president's earliest enthusiasts about his failure to reflect a powerful sense of urgency about the [Gulf] oil spill.

There should have been nothing puzzling about his response to anyone who has paid even modest critical attention to Mr. Obama's pronouncements. For it was clear from the first that this president—single-minded, ever-visible, confident in his program for a reformed America saved from darkness by his arrival—was wanting in certain qualities citizens have until now taken for granted in their presidents. Namely, a tone and presence that said: This is the Americans' leader, a man of them, for them, the nation's voice and champion. Mr. Obama wasn't lacking in concern about the oil spill. What he lacked was that voice—and for good reason.

Those qualities to be expected in a president were never about rhetoric; Mr. Obama had proved himself a dab hand at that on the campaign trail. They were a matter of identification with the nation and to all that binds its people together in pride and allegiance. These are feelings held deep in American hearts, unvoiced mostly, but unmistakably there and not only on the Fourth of July.

From the beginning of his successful campaign for the presidency, those of us who took the time to examine his few real accomplishments, his very thin political record, and his questionable associations viewed Barack Obama for what he is: an ideological partisan who believes fervently in the far Left image of Amerika—a hegemonic superpower, an oppressor of people of color, and environmental outlaw, a corporatist society in which a privileged few hold sway over those who are "less fortunate.”

And now, some of those who swooned when he gave soaring speeches about “hope and change” are beginning to get uneasy. Does a competent leader, when faced with a serious environment and technological crisis, suggest that he’s meeting with experts to better understand “whose ass to kick.” Does a true leader send his attorney general to prosecute those who are in the middle of trying to fix the problem. That’s a recipe for CYA on the part of everyone at BP, and CYA is not the attitude that a experienced leader wants to inculcate at the moment. Could Obama really be that stupid? Or is he so ideologically driven that he believes that these horrid corporate criminals must be taken down even as they try mightily to fix the problem they caused.

I regret to state that Barack Obama is a far worse President than I though he’d be. Early on, I thought he might grow into the job. Instead, he seems to be growing away from it. To many Americans, he is an alien.

During his world tour of European and Arab capitals (a visit to the little satan, Israel, was out of the question) our President, in tone and in substance, in speech after speech, castigated his own country for its arrogance and insensitivity. Rabinowitz comments:

They were the words of a man to whom reasons for American guilt came naturally. Americans were shocked by this behavior in their newly elected president. But he was telling them something from those lecterns in foreign lands—something about his distant relation to the country he was about to lead.

The truth about that distance is now sinking in, which is all to the good. A country governed by leaders too principled to speak the name of its mortal enemy needs every infusion of reality it can get.

Unless Barack Obama begins to understand that this “distance” represents his fatal flaw, he will be defeated in November, 2012—and based on his first 18 months in office, that will not be a bad thing.

Fiction

As we watch the Western world rev-up it’s anti-Israel rhetoric, demand UN sanctions and all the rest, I get an uncomfortable feeling of déjà vu. All of the events associated with the delivery of “aid” to Gaza—the purposeful provocation, the necessary but clumsy response, the “deaths of innocents” who just happened to be armed with axes and guns and just happened to attack the Israelis in a transparent attempt to force them to counter-attack—has become a well worn and effective narrative for Hamas and its left-leaning supporters in the media.

Rich Lowry provides commentary:

Yesterday's "aid convoy" incident off the coast of Gaza wasn't about bringing humanitarian supplies to the terrorist-ruled territory. It wasn't even about Israel.

It was about Turkey's determination to position itself as the leading Muslim state in the Middle East.

Three ships of that six-ship pro-terror convoy flew Turkish flags and were crowded with Turkish citizens. The Ankara government -- led by Islamists these days -- sponsored the "aid" operation in a move to position itself as the new champion of the Palestinians.

And Turkish decision-makers knew Israel would have to react -- and were waiting to exploit the inevitable clash. The provocation was as cynical as it was carefully orchestrated.

And yet, our President and his Secretary of State subscribe to the fiction that Turkey remains our friend and partner in the Middle East.

Richard Fernandez looks at the bigger picture. He contends that the political elite in the West, aided and abetted by the MSM, have become delusional. They want to believe a fictional narrative, and in the end, it will get us all in very big trouble. He begins by writing about the narrative:

As a result, any moderately well informed individual knows that there is no Islamic extremism, nor even terrorism. There are only man made disasters. Everybody knows that we can borrow our way out of debt, that the welfare state is the sustainable wave of the future; that Egypt has no border with Gaza through which it can provide supplies if it wanted; that the UN has kept Hezbollah from importing hundreds of missiles into Lebanon; that the thought of a handful of Jews has kept hundreds of millions of oil-rich Muslims from attaining prosperity; and that Global Warming is the main danger facing the planet Earth. That these assertions are untrue hardly matters; that they are indisputable is what seems to count. For who shall dispute them?

Reality might. And therein lies the problem.

Here’s what is going to happen with one hundred percent certainty. All of these lies will explode with considerable force in the faces of political establishment. Nothing can prevent it. Just as reality eventually exposed the hollowness of the financial bubble and showed that nothing was “too big to fail,” eventually it will demonstrate to our extreme cost, that no lie can be maintained forever. That is the real reason anyone should really care about what happened on the “peace flotilla.” We are as corrupt as a preacher in a whorehouse. It ain’t what we don’t know that will hurt us, it’s what we know that ain’t so that will drive the dagger into our hearts.

Over the years I've written about the "through the looking glass" world of those who believe the narrative. Things become very worrisome indeed when those on the other side of the looking glass are making decisions that will sooner or later collide with reality.