Where's Eliot Ness When You Need Him?

Joe Scarborough asks and no liberal/supporter of Obama has a good answer: Why were a couple hundred reporters scouring Wasila for dirt on Palin while no one dug up anything on Obama and his corrupt Chicago connections? Anyone? Anyone?



At least Blagojevich has got a mob lawyer (h/t Ace). Eliot Ness?

(thanks to my friends at NewsBusters for this)


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Seen On eBay: For Sale, 1 'Illinoise' Senate Seat

Yup, Iowahawk is at it again. Per usual, beware the colorful language.

CHICAGO - The ongoing corruption probe into Illinois governor Rod Blagojevich took a dramatic turn this evening, as federal agents working for US Attorney Patrick Fitzgerald announced that they had seized the governor's eBay account. It is as yet unknown how the latest seizure will effect the outcome of the case.

IOWAHAWK EXCLUSIVE! RUSH UPDATE!

Oh, and apparently Dick Durbin is also for sale. He still works.


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Obama & 'Blago-gate': What Did He Know & When Did He Know It?

Not even in office and already the Obama campaign is doing the tango with a special prosecutor. Awesome.

Over at The Volokh Conspiracy, Jim Lindgren has a handy, pocket-sized timeline of Rod Blagojevich's Senate-seat bribe scheme. This is a great legal guide to exactly what we know about this case.

Like Lindgren, I honestly hope the story fits Obama's claims that he knew nothing about what was going on. But if he did, now's the time to come clean.

Keep denying, and my schadenfreude-istic tendencies will start to show.

(h/t Gabriel Malor @ Ace)


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Corrupt Change You Can Believe in

Another dirty Chicago Democrat close to Barack Obama?

But seriously, what did you expect?


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'Economists Have Abandoned Principle'

Oliver Hart, Harvard econ professor & Luigi Zingales, Chicago Booth finance professor:

This year will be remembered not just for one of the worst financial crises in American history, but also as the moment when economists abandoned their principles. There used to be a consensus that selective intervention in the economy was bad. In the last 12 months this belief has been shattered.

Practically every day the government launches a massively expensive new initiative to solve the problems that the last day's initiative did not. It is hard to discern any principles behind these actions. The lack of a coherent strategy has increased uncertainty and undermined the public's perception of the government's competence and trustworthiness.

Yup. You can say that again. "Willy-nilly" is the operative hyphenated word.


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More Examples Of Liberals Being Ubertolerant

Another one of the many myths of liberalism is that they, and only they, are open minded and tolerant and enlightened in the glory of their many graduate degrees and minorities (both racial and sexual) and on and on, etc., amen.

Of course, the truth is that they are only tolerant if you share their doctrinaire liberal beliefs. Otherwise, you might get "crucifixed."

Consider the response of one girl's classmates to her "McCain Girl" t-shirt, worn, unbeknownst to them, as a social experiment. This experiment was conducted in Oak Park, a suburb of Chicago.

"One person told me to go die. It was a lot of dying. A lot of comments about how I should be killed," Catherine said, of the tolerance in Oak Park.

But students weren't the only ones surprised that she wore a shirt supporting McCain.

"In one class, I had one teacher say she will not judge me for my choice, but that she was surprised that I supported McCain," Catherine said.

If Catherine was shocked by such passive-aggressive threats from instructors, just wait until she goes to college.

Yup, those liberals, so tolerant and open minded.

Look, see how enlightened they are compared to the redneck, backwoods, no-nothing, conservatives living in flyover country.

The message from these liberals (like some of the gay liberals) is clear: Join us in our dogmatic groupthink, or else.

(h/t Amanda B.)


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Alternative To The Bailout: Fiscal Darwinism

From a historical perspective, here is the doubt I have about today's economic crisis:

I do not believe that policy makers understand the current economic crisis any better than policy makers did before & during the Great Depression.

All I'm saying is that our increasingly complex understanding of the economy is matched by an equally complex economy. If we truly understood our current economy better than policy makers in the past understood theirs, then we would never have market failures, because smarter policy makers would have averted them.

The corollary that flows from this theory is that I do not trust policy makers to do anything that will actually improve the situation or cause the economy to recover better or faster than a natural market correction.

University of Chicago economist Casey B. Mulligan makes sense to me:

In the somewhat more recent past, economists thought that the non-financial sector in a modern economy revolved around financial markets, despite the facts that only 4 percent of the workforce was employed in the financial sector (including insurance and real estate), and even today that sector employs only 6 percent of the total. President Bush and supporters of the recent massive Wall Street bailout plan still believe Wall Street to be the center of the entire economy.

Economic research over the last couple of decades rejects this belief. It has shown that the financial and non-financial sectors experience quite independent changes, especially over the short and medium term. Take for example the promised yield on the best commercial paper. Fluctuations in this yield are critically important to persons in the financial sector (such as money market traders), but have hardly anything to do with activity outside of that sector. Since World War II, the correlation between the inflation-adjusted commercial paper yield and subsequent inflation-adjusted growth of GDP per capita is zero. That is, GDP growth has been high following high yields just as often as it has been low. It is equally hard to detect a correlation between stock returns, long term bond returns, or commodity returns and subsequent GDP growth. Quite simply, history has shown that the non-financial sector can do well when the financial sector does poorly, and vice versa.

In order to find good predictors of non-financial sector performance, and GDP growth generally, we look to the non-financial sector itself. One of those predictors is the profitability of non-financial capital, or the “marginal product of capital” as we economists call it. The marginal product of capital after-tax is a measure of how much profit (revenue net of variable costs and taxes) that each unit of capital is producing during, say, the last year. When the marginal product of capital after-tax is above average, subsequent rates of economic growth (and subsequent marginal products of capital) also tend to be above average.

Since World War II, the marginal product of capital after-tax averaged between 7 and 8 percent per year. During 2007 and the first half of 2008 – exactly the time when financial markets had been spooked by oil price spikes and housing price crashes – the marginal product had been over 10 percent per year: far above the historical average. Compare this to the marginal product of capital in 1930-33 (the years of Depression-era bank panics): 0.5 percentage points per year less than the postwar years and significantly less than in 1929. The marginal product of capital was also below average prior to the 1982 recession (in this case, far below average) and prior to the 2001 recession. Thus, the surprise was not that GDP continued to grow 2007-8 despite the bleak outlook from Wall Street’s corner of the world, but that GDP growth failed to be significantly above the average. More important from today’s perspective is that much capital in America continues to be productive, and that this will likely permit Americans to advance their living standards as they have in years past. The non-financial sector today looks nothing like it did in 1930.

The weak correlation between asset prices and non-financial sector performance and the strong profitability of today’s non-financial capital are two good reasons to scoff at the idea that the non-financial sector will collapse because of the recent events on Wall Street, and even better reasons to scoff at the Bernanke-Paulson-Bush idea that a massive bailout of financial firms is the key to avoiding a non-financial collapse. Wall Street’s woes are and will be largely limited to Wall Street. The Bush administration should not use the power of the IRS to force the rest of us to board Wall Street’s sinking ship.

Of course, six percent of the workforce is bigger than zero, so a Wall Street mess has indirect effects on the non-financial sector as it absorbs former Wall Street employees and finds alternatives to the financial services Wall Street once provided. But, as long as the government does not get in the way, the marketplace will quickly react to provide the non-financial sector with financial services, even if the main players in that marketplace are no longer named Lehman, Merrill, or Goldman. There are two basic obstacles that Washington might create in this process, both of which are included in the Bernanke-Paulson-Bush proposal. One is to pile on regulation and further impede entry by new firms that might provide financial services to the non-financial sector in the years ahead. The second is to impose a heavy tax burden on the non-financial sector to pay for Wall Street subsidies. The Treasury and the Fed should let Wall Street drown alone, to be replaced by new financial service providers who can swim as robustly as are non-financial American businesses.

(emphasis added)

This feels right--it appeals to the fiscal libertarian in me.

We may yet look back on this "bailout" and conclude, as we have in so many other instances, that the prescription was worse than the disease.


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NB #8: The Latest On Annenberg Gate

This whole Annenberg paper's story really intrigues me. With my historical background (as a historian-in-training) I'm fascinated by the politics and interplay between the Obama campaign, Bill Ayers, the University of Illinois and now, Mayor Richard Daley. Anyway, my latest post on the topic is up:

Update: Still No Movement on Ayers-Obama Annenberg Papers

Will the university grant unlimited access to the papers? This this access come before the election? Who is the anonymous donor? Will anything be redacted from the documents? -- All of these questions come before we even get at the papers themselves and get a clearer picture of the Ayers-Obama relationship.


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