Broken Thumb Blog

The funniest thing came through my radio the other day. It shouldn't have been funny; every President since Truman has done it, and I should have expected it. Nonetheless I laughed indeed when I heard mention of the "George W. Bush Presidential Library."

Immediately I had a vision of Derek Zoolander and his Center for Kids Who Can't Read Good. Given all the materials that the GWB people will call "classified files which must be hidden to preserve the people of this good nation and to keep them safe from the evildoers," I wondered what small sample of memoribilia and documentation will researchers and guests find in the Bush Presidential Library.

Below are a scant few of the small number of items I expect to be on display or otherwise available to the public.

Captain America, published by Marvel Comics, issues 1-current (bet that Steve Rogers would've found Osama by now)
Flight Suit and Banner with "Mission Accomplished."
Handwritten Letter from GWB to Mike Brown, Dir. of FEMA, dated August 3, 2005. "My Dearest Brownie,..."
The Texas Chainsaw used to massacre Crawford brush.

While it is this man's personal prerogative to establish the library, I wonder how much about the Bush Presidency we will learn that we don't already know. Given that the administration has hidden and deleted as much as possible during his tenure in the Oval Office, we probably already know as much as we ever will. What we do know is probably not worth enshrining and re-visiting. I suspect the whole thing will amount to little more than a sanitized retrospective of a legacy unworthy of commemoration.

I recognize that as a Republican I am supposed to fawn over the man, this great "Compassionate Conservative." However, I am one of those pesky--but true--Conservatives who cannot stand the way GWB expanded the scope and size of the federal government, waged an unnecessary foreign war at great cost in blood and treasure, and willfully circumvented Constitutional limits meant to constrain the elected agents of a tyranny of the majority.

At least I can laugh at the irony.

So, the federal government has strong-armed some banks into postponing foreclosures, all foreclosures for qualified borrowers, for 30 days.

It will always bother me that politicians can be elected with scarcely more than a modicum of education in macroeconomics. However, their ignorance is a reflection of our own; so I reiterate here that we deserve the representation we elect.

If people were smart enough to read their loan documents, explore their obligations, and inquire of disinterested parties (i.e. their own accountants) then we wouldn't be in this mess. Instead, a wholesale belief in the financial stability of homeownership encouraged bad government policies and predatory lending practices. Add to this mix the loose money tendencies of the Fed and you have a recipe for disaster.

The government created the primary purchasers of mortgages in the secondary market --namely Fannie Mae/Freddie Mac-- and provided them the liquidity for tranching of mortgages. The government encouraged increased housing demand by offering mortgage interest tax deductions. The government failed in its banking oversight role. The government failed in its SEC oversight of the securitized mortgages.

The way the market should work is as follows: Banks foreclose. The available supply of properties increases, at lower average prices. More informed entrants enter the market for fixed-rate mortgages to buy properties at the lower prices. The demand rises to meet the available supply at the new market clearing price.

Rather than let the market clear itself out, the government is jumping back into the fray. It is indirectly creating a price floor which will eventually give way and prices will plummet further.

I understand the government's rationale. It feels the need to uphold the promise of homeownership it has made. It feels the need to rescue banks from their poor lending policies. It feels the need to support local tax rolls. It feels the need to shelter people from eviction.

However, I personally am offended that the government would rescue people (borrowers, banks, and local governments) from the consequences of their unfortunate decisions. Where will be my bailout? I have a car loan that needs to be paid off. I think someone took advantage of me. How about my student loans? I was promised by the government that education was a good thing, but boy I could eat out more often if I answered that letter in my mailbox promising lower student loan payments. Golly, if they snooker me, shouldn't the government help me out?

For anyone curious to know how this will end, review the economic history of Japan from 1990-2005.

Bruce Chapman of Seattle's Discovery Institute has penned a nice overview of the primary process (both Democratic and Republican) in Washington State. I recommend it for all of you who may be interested in what's going on here.

As for the Potomac Primary tomorrow, I foresee a Huckabee win in Virginia (the sizeable military vote for McCain notwithstanding) and more than a few of the proportional delegates from Maryland going his way. DC belongs to Senator McCain't-Yet-Close-the-Deal.