Saturday, September 27, 2008

Remembering My Dad

One year ago today, my Dad died and I miss him something awful.

We were not what one would say was close for the majority of years. We were Father and Son. In the last few years, we started to talk as adults who just happened to be related. He told me about his life and life in general and in those moments we became friends. We talked openly about his impending death and when he died I was okay with it.

My little sister called me at 4:15 A.M. to say that Dad, who had been admitted to the local hospital the afternoon before, had taken a turn for the worse. She suggested I might want to skip work and make the eight hour drive home. I said let's wait to see what happens because he was a strong man.

I laid back in bed to sort out what I had heard. At 4:30 A.M., my little sister called back to say that Dad had died.

For a year, I've been okay with my Father's death because we had talked about it and he was wanting to die, he had lived long enough, and didn't want any more. I was okay with that. Until this past Thursday when at work, during an unrelated moment alone, I totally lost it. I started shaking and crying and hearing his voice in my head. The last couple days have been hard, but I'm getting by and getting better as I remember.

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

McCain-Obama First Debate Lowest Viewing Audience Ever

Fewer people watched the first in the series of McCain-Obama 2008 Presidential debates in all 55 of 56 largest TV viewing markets in this country served by the major networks ABC, CBS, NBC, FOX, PBS, CNN, Telemundo, TeleFutura, and BBCA than watched the Bush-Kerry debate four years ago. So says James Hibberd's The Live Feed.

As I surfed the blogosphere today, I realized many did not watch the debates because they had other obligations, like work or children, that prevented their viewing the hour and one-half event. Often, the intent was to watch the debate on You Tube, the videos of which are too often cut and presented in segments so one is never sure if one is seeing the entire video content.

Indigo Continuum, another of my blogs used as a library archive for very long documents that don't fit well here has the entire debate as transcript and full video for all to use without comment from me. The video is as it was broadcast and the transcript as presented in a major international newspaper.

Video and transcript at Indigo Continuum.

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Friday, September 26, 2008

McCain Won First Debate and Here's Why

According to CBS News/Knowledge Network, voters who haven't made up their minds after years of this presidential campaign cycle think the debate Friday in Oxford, Mississippi was won by Barack Obama. The Atlantic and Marc Ambinder report,

Who would make the right decisions about the economy?
68% - Obama
41% - McCain

Who would make the right decisions about Iraq?
49% - Obama
55% - McCain
Now that the numbers are out in the open, let us recall the subject of this first debate was 'Foreign Policy'. When we look at the numbers from that perspective, we see something quite different -

Who would make the right decisions about Iraq?
55% - McCain
49% - Obama

Just for fun, from the foreign press:

Kevin Connely of the BBC wrote, " the foreign policy section of the debate, it seemed to me John McCain emerged a clear winner, although there were individual issues like Iraq on which the Democratic contender more or less held his own... Mr Obama's answer on Russia rambled quite a bit and veered off into a dissertation on the need to develop alternative energy sources - not his first of the night... On foreign policy it all seemed a little clearer, although I should say Mr McCain won on points..."

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Senator, you are no Henry Kissinger

Barack Obama put words in the mouth of former Secretary of State Henry Kissinger at Friday's foreign policy debate in Oxford, Mississippi. Barry said Dr. Kissinger, a McCain advisor, advocated talking to Iran and Pres. Achmadinejad at the presidential level without preconditions.

John McCain's responded, Henry Kissinger has been my friend for 35 years, I know Henry Kissinger. Henry Kissinger would never say, 'Sit down and talk with Achmedinejad without preconditions'. It was vaguely reminiscent of the Benson/Quayle debate. I was waiting for, 'Senator, you are no Henry Kissinger'.

When McCain challenged him on that point, Obama said, "Let's take a look."

Okay, let's.

The Weekly Standard's The Blog tonight has this reaction from Henry Kissinger to Barack Obama's ludicrous remarks about what he, Henry, thinks,

Henry Kissinger believes Barack Obama misstated his views on diplomacy with US adversaries and is not happy about being mischaracterized. He says: "Senator McCain is right. I would not recommend the next President of the United States engage in talks with Iran at the Presidential level. My views on this issue are entirely compatible with the views of my friend Senator John McCain. We do not agree on everything, but we do agree that any negotiations with Iran must be geared to reality."
Oh, so very sorry, Barry. Bitch slapped again. That's gotta hurt.

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

I have a bracelet, too, says Obama

John McCain told the story during the debate Friday night of the Soldier Bracelet he wears. Barack Obama jumped in and said he has a bracelet, too.

But, then he can't remember the name of the soldier. Sgt. Ryan David Jopek, 20 years old, was killed Aug 2, 2006 in Iraq by an IED. The bracelet also has these words, "All gave some - He gave all."

Bad form, Barry, to forget the name of the soldier you have promised to remember.

Michelle Malkin and The Weekly Standard Blog also have noted the 'Me, too!' moment.

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Thursday, September 25, 2008

Exploding Philly Tube Steaks, Game Goes On

Phillies ballpark, Citizens Bank Park, was forced to evacuate by suspicious franks. On Pattison Street between Darien and 11th Streets, several packages of unknown content were found near a ticket office. Police shutdown access to these streets and evacuated all the people in the area outside the park. Inside the park, though, the Phillies and Atlanta Braves along with the fans continued the game.

Phillies VP of Operations Michael Stiles said,
"It was clear from when we looked at it at first glance and when you looked at the debris afterwards, there was packaging and duct tape; I don't see many hot dogs sold here with duct tape. We just did what we felt was appropriate."
What was inside the hotdogs? Well, you don't want to know. No, really. You don't want to know.

The Philadelphia Police Bomb squad took the foil wrapped weenies and blew them to smithereens.

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Wednesday, September 24, 2008

Meanwhile, back in Iraq...

As the U.S. and much of the world fret over the financial market meltdown, Iraq approved a new law paving the way for provincial elections. The last provincial elections were boycotted by most Sunni and some Shiite. The boycott left the majority government control in the hands of Shiite religious parties and Kurds.

The legislation had been held up over disputes over control of Kirkuk and the oil resources in Kurdistan. The breakthrough came when the legislators agreed to postpone the decision of how to incorporate the semi-autonomous Kurdish area claimed by Arabs, Turkomen and Kurds. The parliamentarians also agreed to work within the framework of the Iraqi Constitution which proved to be the deal maker. "Every side had fears but these fears have disappeared after the inclusion of legal guarantees," said Kurdish legislator Khalid Shewani. "We thank God that we reached this agreement."

Equally important and meeting a U.S. goal, the law separates mosque and state. This is a major development and break with Islamic doctrine. Islam is not just a religion, but an entire social and religious system in which personal and public life of individuals and the state are inextricably knotted together. The use of religious authorities, mosques, and governmental agencies and institutions is forbidden under the new agreed upon law.

This is all very good news out of Iraq and it is being lost in our own overblown worries about the value of our overpriced investments, possessions, and ill prepared retirement plans.

Update 9-25/08:
Thursday Investor's Business Daily, Meanwhile in Iraq, Posted Thursday, September 25, 2008 4:20 AM PT

Good news is no news these days, especially when it comes from Iraq. So you might have missed the story about the political breakthrough in the Iraqi parliament, which approved legislation to hold a new round of provincial elections early next year.

Now most of the Sunnis have turned against violence, cast their lot with the democratic process and are ready to take a larger role in the national life. "The coming elections will change the Iraqi political map," said one Sunni lawmaker.

This is the key point: They will change the map peacefully — not through car bombs, but through the ballot box.

Dare we say that democracy is advancing in Iraq? And isn't this a shining example of the "reconciliation" that Barack Obama, among others, still claims to be waiting for?

Obama admitted earlier this month that President Bush's troop surge had succeeded "beyond our wildest dreams" in reducing violence. But he insisted that it had yet to produce the desired political dividends.
I had the news from Yahoo a day earlier and IBD sorta stole my title, but I'll let it slide ... this time.

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Tuesday, September 23, 2008

FBI Investigating Market Meltdown Corps

G-men have launched an investigation into four of the major financial institutions that set-off the Wall St. crisis which, in turn, initiated the $700,000,000,000.00 Bush bailout plan. The Associated Press has found out that the
"FBI is looking at potential fraud by mortgage finance giants Fannie Mae and Freddie Mac, and insurer American International Group Inc. Additionally, a senior law enforcement official said Lehman Brothers Holdings Inc. also is under investigation."
The investigation, still in the early stage, involves the financial institutions and the money guys who ran them into the ground. FBI Director Robert Mueller said last week that twenty-four big money corporations were under investigation. Today's announcement brings the number to twenty-six. FBI spokesfolk say the financial institutions may have "misrepresented their assets." Ya think!

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.


Clay Aiken is gay!

Who knew? I mean, besides everybody.

Beyond that, who cares?

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Biden Fails U.S. History

Joe Biden, Barry O's VP running mate, according to AP, recently told CBS News,
"When the stock market crashed, Franklin D. Roosevelt got on the television and didn't just talk about the, you know, the princes of greed. He said, 'Look, here's what happened.'"
That might be good enough for a graduate school history seminar, but it just isn't true in real life. Herbert Hoover(R) was the President in 1929 when the stock market crashed. Franklin D. Roosevelt(D) was elected to the Presidency two years later. Television was not yet a marketable reality. TV had its public debut a full decade after Black Tuesday at the 1939 New York World's Fair.

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Bailout is Far More Than a Financial Bailout

Nearly a trillion dollars intended to be transferred from the pockets of American taxpayers to bailout investment mortgages. The intention is to ward off an entire global financial market meltdown.

It may work or it may not, but the proposal will also be the largest transfer of Constitutional authority from the Legislative branch to the Executive branch since the New Deal and the single most important transfer since the War Powers Act.

In this short and simple proposal lies lies ultimate destruction of the American experiment in free enterprise and democracy. Section 8, establishes the authority of the Treasury Secretary as "non-reviewable." Section 9, terminates the Sec. 8 authority after two years. However, as we have seen so many time in the past 200 plus years, anytime Congress has given up authority and responsibility granted it by the Framers of the Constitution, Congress is loath to accept the return of the authorities and responsibilities. As the old saw goes, there is nothing so permanent as a temporary government program.

From the New York Times, Text of Draft Proposal for Bailout Plan:

September 21, 2008
Text of Draft Proposal for Bailout Plan


Section 1. Short Title.

This Act may be cited as ____________________.

Sec. 2. Purchases of Mortgage-Related Assets.

(a) Authority to Purchase.--The Secretary is authorized to purchase, and to make and fund commitments to purchase, on such terms and conditions as determined by the Secretary, mortgage-related assets from any financial institution having its headquarters in the United States.

(b) Necessary Actions.--The Secretary is authorized to take such actions as the Secretary deems necessary to carry out the authorities in this Act, including, without limitation:

(1) appointing such employees as may be required to carry out the authorities in this Act and defining their duties;

(2) entering into contracts, including contracts for services authorized by section 3109 of title 5, United States Code, without regard to any other provision of law regarding public contracts;

(3) designating financial institutions as financial agents of the Government, and they shall perform all such reasonable duties related to this Act as financial agents of the Government as may be required of them;

(4) establishing vehicles that are authorized, subject to supervision by the Secretary, to purchase mortgage-related assets and issue obligations; and

(5) issuing such regulations and other guidance as may be necessary or appropriate to define terms or carry out the authorities of this Act.

Sec. 3. Considerations.

In exercising the authorities granted in this Act, the Secretary shall take into consideration means for--

(1) providing stability or preventing disruption to the financial markets or banking system; and

(2) protecting the taxpayer.

Sec. 4. Reports to Congress.

Within three months of the first exercise of the authority granted in section 2(a), and semiannually thereafter, the Secretary shall report to the Committees on the Budget, Financial Services, and Ways and Means of the House of Representatives and the Committees on the Budget, Finance, and Banking, Housing, and Urban Affairs of the Senate with respect to the authorities exercised under this Act and the considerations required by section 3.

Sec. 5. Rights; Management; Sale of Mortgage-Related Assets.

(a) Exercise of Rights.--The Secretary may, at any time, exercise any rights received in connection with mortgage-related assets purchased under this Act.

(b) Management of Mortgage-Related Assets.--The Secretary shall have authority to manage mortgage-related assets purchased under this Act, including revenues and portfolio risks therefrom.

(c) Sale of Mortgage-Related Assets.--The Secretary may, at any time, upon terms and conditions and at prices determined by the Secretary, sell, or enter into securities loans, repurchase transactions or other financial transactions in regard to, any mortgage-related asset purchased under this Act.

(d) Application of Sunset to Mortgage-Related Assets.--The authority of the Secretary to hold any mortgage-related asset purchased under this Act before the termination date in section 9, or to purchase or fund the purchase of a mortgage-related asset under a commitment entered into before the termination date in section 9, is not subject to the provisions of section 9.

Sec. 6. Maximum Amount of Authorized Purchases.

The Secretary’s authority to purchase mortgage-related assets under this Act shall be limited to $700,000,000,000 outstanding at any one time

Sec. 7. Funding.

For the purpose of the authorities granted in this Act, and for the costs of administering those authorities, the Secretary may use the proceeds of the sale of any securities issued under chapter 31 of title 31, United States Code, and the purposes for which securities may be issued under chapter 31 of title 31, United States Code, are extended to include actions authorized by this Act, including the payment of administrative expenses. Any funds expended for actions authorized by this Act, including the payment of administrative expenses, shall be deemed appropriated at the time of such expenditure.

Sec. 8. Review.

Decisions by the Secretary pursuant to the authority of this Act are non-reviewable and committed to agency discretion, and may not be reviewed by any court of law or any administrative agency.

Sec. 9. Termination of Authority.

The authorities under this Act, with the exception of authorities granted in sections 2(b)(5), 5 and 7, shall terminate two years from the date of enactment of this Act.

Sec. 10. Increase in Statutory Limit on the Public Debt.

Subsection (b) of section 3101 of title 31, United States Code, is amended by striking out the dollar limitation contained in such subsection and inserting in lieu thereof $11,315,000,000,000.

Sec. 11. Credit Reform.

The costs of purchases of mortgage-related assets made under section 2(a) of this Act shall be determined as provided under the Federal Credit Reform Act of 1990, as applicable.

Sec. 12. Definitions.

For purposes of this section, the following definitions shall apply:

(1) Mortgage-Related Assets.--The term “mortgage-related assets” means residential or commercial mortgages and any securities, obligations, or other instruments that are based on or related to such mortgages, that in each case was originated or issued on or before September 17, 2008.

(2) Secretary.--The term “Secretary” means the Secretary of the Treasury.

(3) United States.--The term “United States” means the States, territories, and possessions of the United States and the District of Columbia.

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Monday, September 22, 2008

Alinsky's Rules of (Dis)Order

Saul Alinsky is called the "father of modern American radicalism." Alinsky (1909-1972)developed the strategies and tactics used by many radical groups in America today taking advantage of the vast unfocused emotional energies of the great masses of people. Hillary Clinton is a big fan and Barack Obama is, so far, the most thorough practitioner of Alinsky's principles.

The son of Saul, L. David Alinsky wrote a letter to the Boston Globe newspaper that was published Aug 31, 2008. He wrote:

ALL THE elements were present: the individual stories told by real people of their situations and hardships, the packed-to-the rafters crowd, the crowd's chanting of key phrases and names, the action on the spot of texting and phoning to show instant support and commitment to jump into the political battle, the rallying selections of music, the setting of the agenda by the power people. The Democratic National Convention had all the elements of the perfectly organized event, Saul Alinsky style.

Barack Obama's training in Chicago by the great community organizers is showing its effectiveness. It is an amazingly powerful format, and the method of my late father always works to get the message out and get the supporters on board. When executed meticulously and thoughtfully, it is a powerful strategy for initiating change and making it really happen. Obama learned his lesson well.

I am proud to see that my father's model for organizing is being applied successfully beyond local community organizing to affect the Democratic campaign in 2008. It is a fine tribute to Saul Alinsky as we approach his 100th birthday.

Alinsky's work is used primarily by anti-government and anti-corporate interests to transform society. The Alinsky model is a set of behaviors and principles that are intended to create an emotional commitment to victory no matter the cost. Most people currently see the strategies as unacceptable Communist and Socialist propaganda methods. Truth is, the Alinsky rules for radicals are apolitical and amoral. The rules are double edged and can cut both ways. So far, only the radical liberal leftist elements of society and politics have used the rules. It's time Conservatives begin to read, understand, and use the same principles. There's an old dictum: fight fire with fire. There is no defense for many of the Alinsky tactics other than the Alinsky tactics.

Alinsky's Rules for Radicals
By Craig Miyamoto, APR, Fellow PRSA

RULE 1: "Power is not only what you have, but what the enemy thinks you have." Power is derived from 2 main sources - money and people. "Have-Nots" must build power from flesh and blood. (These are two things of which there is a plentiful supply. Government and corporations always have a difficult time appealing to people, and usually do so almost exclusively with economic arguments.)

RULE 2: "Never go outside the expertise of your people." It results in confusion, fear and retreat. Feeling secure adds to the backbone of anyone. (Organizations under attack wonder why radicals don't address the "real" issues. This is why. They avoid things with which they have no knowledge.)

RULE 3: "Whenever possible, go outside the expertise of the enemy." Look for ways to increase insecurity, anxiety and uncertainty. (This happens all the time. Watch how many organizations under attack are blind-sided by seemingly irrelevant arguments that they are then forced to address.)

RULE 4: "Make the enemy live up to its own book of rules." If the rule is that every letter gets a reply, send 30,000 letters. You can kill them with this because no one can possibly obey all of their own rules. (This is a serious rule. The besieged entity's very credibility and reputation is at stake, because if activists catch it lying or not living up to its commitments, they can continue to chip away at the damage.)

RULE 5: "Ridicule is man's most potent weapon." There is no defense. It's irrational. It's infuriating. It also works as a key pressure point to force the enemy into concessions. (Pretty crude, rude and mean, huh? They want to create anger and fear.)

RULE 6: "A good tactic is one your people enjoy." They'll keep doing it without urging and come back to do more. They're doing their thing, and will even suggest better ones. (Radical activists, in this sense, are no different that any other human being. We all avoid "un-fun" activities, and but we revel at and enjoy the ones that work and bring results.)

RULE 7: "A tactic that drags on too long becomes a drag." Don't become old news. (Even radical activists get bored. So to keep them excited and involved, organizers are constantly coming up with new tactics.)

RULE 8: "Keep the pressure on. Never let up." Keep trying new things to keep the opposition off balance. As the opposition masters one approach, hit them from the flank with something new. (Attack, attack, attack from all sides, never giving the reeling organization a chance to rest, regroup, recover and re-strategize.)

RULE 9: "The threat is usually more terrifying than the thing itself." Imagination and ego can dream up many more consequences than any activist. (Perception is reality. Large organizations always prepare a worst-case scenario, something that may be furthest from the activists' minds. The upshot is that the organization will expend enormous time and energy, creating in its own collective mind the direst of conclusions. The possibilities can easily poison the mind and result in demoralization.)

RULE 10: "If you push a negative hard enough, it will push through and become a positive." Violence from the other side can win the public to your side because the public sympathizes with the underdog. (Unions used this tactic. Peaceful [albeit loud] demonstrations during the heyday of unions in the early to mid-20th Century incurred management's wrath, often in the form of violence that eventually brought public sympathy to their side.)

RULE 11: "The price of a successful attack is a constructive alternative." Never let the enemy score points because you're caught without a solution to the problem. (Old saw: If you're not part of the solution, you're part of the problem. Activist organizations have an agenda, and their strategy is to hold a place at the table, to be given a forum to wield their power. So, they have to have a compromise solution.)

RULE 12: Pick the target, freeze it, personalize it, and polarize it." Cut off the support network and isolate the target from sympathy. Go after people and not institutions; people hurt faster than institutions. (This is cruel, but very effective. Direct, personalized criticism and ridicule works.)
In Elko, Nevada on Sep 17, 2008, Obama exhorted his minions, "I want you to argue with them and get in their face." An audacious attempt to create hostilities between political groups and socio-economic classes. Pure Alinsky.

An article in Investors Business Daily today says that Alinsky emphasized that his rules had to be translated into everyday real life situations. Barack Obama is doing just that on a very large scale on a very large national stage.

Obama has already translated several of Alinsky's rules into battle tactics, including:

• Rule: "Rub raw the resentments of the people; search out controversy and issues." In the mortgage meltdown, for instance, Obama vows to prosecute "predatory lenders" for "abusing" minority borrowers. He's also stoking class resentment by painting Wall Street and other executives as villains.

• Rule: "Pick the target, freeze it, personalize it, and polarize it." In an ad to woo Hispanic voters, Obama demonized Rush Limbaugh by falsely claiming he made racist statements against immigrants.

• Rule: "A mass impression can be lasting and intimidating." This explains why Obama moved his acceptance speech to a football stadium and bussed in 85,000 supporters. Alinsky's son was so impressed, he praised Obama for learning his father's "lesson well."

• Rule: "Multiple issues mean constant action and life" for the cause. This is why Obama never harps on one issue, as Hillary did with health care. His platform is packed with grievances from "economic justice" to "reproductive justice" to "environmental justice."
Do not fear Alinsky's rules, learn them, use them. The rules work just as well for Conservative principles and goals as they do for the Liberal Socialist agenda of Barack Obama and the Democrats.

And it helps to know the enemy.

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.

Sunday, September 21, 2008

Bush Warned of Financial Failure, Dems Ignored Warnings

George W. Bush (R., MBA, POTUS) has been warning of the dangers implicit in the quasi-government sponsored enterprises Fannie Mae and Freddie Mac since 2001. This year alone, he has called for changes 17 times and was ignored by the Democrat controlled Congress. It isn't in Democrats best interest to solve problems under a Republican administration, so they did nothing. In fact, Senate Majority Leader Harry Reid despairingly said Sept 17, "no one knows what to do."

From the White House News (h/t Gateway Pundit):

Just the Facts: The Administration's Unheeded Warnings About the Systemic Risk Posed by the GSEs

For many years the President and his Administration have not only warned of the systemic consequences of financial turmoil at a housing government-sponsored enterprise (GSE) but also put forward thoughtful plans to reduce the risk that either Fannie Mae or Freddie Mac would encounter such difficulties. President Bush publicly called for GSE reform 17 times in 2008 alone before Congress acted. Unfortunately, these warnings went unheeded, as the President's repeated attempts to reform the supervision of these entities were thwarted by the legislative maneuvering of those who emphatically denied there were problems.


April: The Administration's FY02 budget declares that the size of Fannie Mae and Freddie Mac is "a potential problem," because "financial trouble of a large GSE could cause strong repercussions in financial markets, affecting Federally insured entities and economic activity."


May: The President calls for the disclosure and corporate governance principles contained in his 10-point plan for corporate responsibility to apply to Fannie Mae and Freddie Mac. (OMB Prompt Letter to OFHEO, 5/29/02)


January: Freddie Mac announces it has to restate financial results for the previous three years.

February: The Office of Federal Housing Enterprise Oversight (OFHEO) releases a report explaining that "although investors perceive an implicit Federal guarantee of [GSE] obligations," "the government has provided no explicit legal backing for them." As a consequence, unexpected problems at a GSE could immediately spread into financial sectors beyond the housing market. ("Systemic Risk: Fannie Mae, Freddie Mac and the Role of OFHEO," OFHEO Report, 2/4/03)

September: Fannie Mae discloses SEC investigation and acknowledges OFHEO's review found earnings manipulations.

September: Treasury Secretary John Snow testifies before the House Financial Services Committee to recommend that Congress enact "legislation to create a new Federal agency to regulate and supervise the financial activities of our housing-related government sponsored enterprises" and set prudent and appropriate minimum capital adequacy requirements.

October: Fannie Mae discloses $1.2 billion accounting error.

November: Council of the Economic Advisers (CEA) Chairman Greg Mankiw explains that any "legislation to reform GSE regulation should empower the new regulator with sufficient strength and credibility to reduce systemic risk." To reduce the potential for systemic instability, the regulator would have "broad authority to set both risk-based and minimum capital standards" and "receivership powers necessary to wind down the affairs of a troubled GSE." (N. Gregory Mankiw, Remarks At The Conference Of State Bank Supervisors State Banking Summit And Leadership, 11/6/03)


February: The President's FY05 Budget again highlights the risk posed by the explosive growth of the GSEs and their low levels of required capital, and called for creation of a new, world-class regulator: "The Administration has determined that the safety and soundness regulators of the housing GSEs lack sufficient power and stature to meet their responsibilities, and therefore…should be replaced with a new strengthened regulator." (2005 Budget Analytic Perspectives, pg. 83)

February: CEA Chairman Mankiw cautions Congress to "not take [the financial market's] strength for granted." Again, the call from the Administration was to reduce this risk by "ensuring that the housing GSEs are overseen by an effective regulator." (N. Gregory Mankiw, Op-Ed, "Keeping Fannie And Freddie's House In Order," Financial Times, 2/24/04)

June: Deputy Secretary of Treasury Samuel Bodman spotlights the risk posed by the GSEs and called for reform, saying "We do not have a world-class system of supervision of the housing government sponsored enterprises (GSEs), even though the importance of the housing financial system that the GSEs serve demands the best in supervision to ensure the long-term vitality of that system. Therefore, the Administration has called for a new, first class, regulatory supervisor for the three housing GSEs: Fannie Mae, Freddie Mac, and the Federal Home Loan Banking System." (Samuel Bodman, House Financial Services Subcommittee on Oversight and Investigations Testimony, 6/16/04)


April: Treasury Secretary John Snow repeats his call for GSE reform, saying "Events that have transpired since I testified before this Committee in 2003 reinforce concerns over the systemic risks posed by the GSEs and further highlight the need for real GSE reform to ensure that our housing finance system remains a strong and vibrant source of funding for expanding homeownership opportunities in America… Half-measures will only exacerbate the risks to our financial system." (Secretary John W. Snow, "Testimony Before The U.S. House Financial Services Committee," 4/13/05)


July: Two Bear Stearns hedge funds invested in mortgage securities collapse.

August: President Bush emphatically calls on Congress to pass a reform package for Fannie Mae and Freddie Mac, saying "first things first when it comes to those two institutions. Congress needs to get them reformed, get them streamlined, get them focused, and then I will consider other options." (President George W. Bush, Press Conference, The White House, 8/9/07)

September: RealtyTrac announces foreclosure filings up 243,000 in August – up 115 percent from the year before.

September: Single-family existing home sales decreases 7.5 percent from the previous month – the lowest level in nine years. Median sale price of existing homes fell six percent from the year before.

December: President Bush again warns Congress of the need to pass legislation reforming GSEs, saying "These institutions provide liquidity in the mortgage market that benefits millions of homeowners, and it is vital they operate safely and operate soundly. So I've called on Congress to pass legislation that strengthens independent regulation of the GSEs – and ensures they focus on their important housing mission. The GSE reform bill passed by the House earlier this year is a good start. But the Senate has not acted. And the United States Senate needs to pass this legislation soon." (President George W. Bush, Discusses Housing, The White House, 12/6/07)


January: Bank of America announces it will buy Countrywide.

January: Citigroup announces mortgage portfolio lost $18.1 billion in value.

February: Assistant Secretary David Nason reiterates the urgency of reforms, says "A new regulatory structure for the housing GSEs is essential if these entities are to continue to perform their public mission successfully." (David Nason, Testimony On Reforming GSE Regulation, Senate Committee On Banking, Housing And Urban Affairs, 2/7/08)

March: Bear Stearns announces it will sell itself to JPMorgan Chase.

March: President Bush calls on Congress to take action and "move forward with reforms on Fannie Mae and Freddie Mac. They need to continue to modernize the FHA, as well as allow State housing agencies to issue tax-free bonds to homeowners to refinance their mortgages." (President George W. Bush, Remarks To The Economic Club Of New York, New York, NY, 3/14/08)

April: President Bush urges Congress to pass the much needed legislation and "modernize Fannie Mae and Freddie Mac. [There are] constructive things Congress can do that will encourage the housing market to correct quickly by … helping people stay in their homes." (President George W. Bush, Meeting With Cabinet, the White House, 4/14/08)

May: President Bush issues several pleas to Congress to pass legislation reforming Fannie Mae and Freddie Mac before the situation deteriorates further.

* "Americans are concerned about making their mortgage payments and keeping their homes. Yet Congress has failed to pass legislation I have repeatedly requested to modernize the Federal Housing Administration that will help more families stay in their homes, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance sub-prime loans." (President George W. Bush, Radio Address, 5/3/08)

** "[T]he government ought to be helping creditworthy people stay in their homes. And one way we can do that – and Congress is making progress on this – is the reform of Fannie Mae and Freddie Mac. That reform will come with a strong, independent regulator." (President George W. Bush, Meeting With The Secretary Of The Treasury, the White House, 5/19/08)

*** "Congress needs to pass legislation to modernize the Federal Housing Administration, reform Fannie Mae and Freddie Mac to ensure they focus on their housing mission, and allow State housing agencies to issue tax-free bonds to refinance subprime loans." (President George W. Bush, Radio Address, 5/31/08)

June: As foreclosure rates continued to rise in the first quarter, the President once again asks Congress to take the necessary measures to address this challenge, saying "we need to pass legislation to reform Fannie Mae and Freddie Mac." (President George W. Bush, Remarks At Swearing In Ceremony For Secretary Of Housing And Urban Development, Washington, D.C., 6/6/08)

July: Congress heeds the President's call for action and passes reform of Fannie Mae and Freddie Mac as it becomes clear that the institutions are failing.
It's that Democrat math getting in the way again.

Politico writes today that Treasury intends the proposed bail-out solution be extended to foreign banks and monitary institutions. Treasury Secretary Henry Paulson told George Snuffleupagus on ABC's "This Week with George Stephanopoulos" coverage of foreign-based banks is in the interest of the American public.

"If a financial institution has business operations in the United States, hires people in the United States, if they are clogged with illiquid assets, they have the same impact on the American people as any other institution."

"That's a distinction without a difference to the American people. The key here is protecting the system. ... We have a global financial system, and we are talking very aggressively with other countries around the world and encouraging them to do similar things, and I believe a number of them will. But, remember, this is about protecting the American people and protecting the taxpayers. and the American people don't care who owns the financial institution. If the financial institution in this country has problems, it'll have the same impact whether it's the U.S. or foreign."
Okay, here's the good news. Many outside the United States were planning to use this financial crisis in the U.S. as a bargaining chip, as leverage, to force the U.S. to stand down as the world's leading nation and economy. As the Secretary said, this is "global financial system" and those countries like Russia, China, the Arab countries, are outof luck. Without us, the U.S., they fail too, but much faster.

The life of Indigo Red is full of adventure. Tune in next time for the Further Adventures of Indigo Red.