|You Ain't Seen Nothing Yet||Liberal Condescension Isn't the Problem|
by Christopher Chantrill
February 05, 2010 at 6:31 pm
REMEMBER when your liberal friends used to writhe on the floor in a foaming rage? They were outraged because the Iraq War never got into the federal budget, but got slipped in through the back door with supplemental appropriations.
Now theres a new game in town. Advanced conservatives are going to class to learn how to throw themselves on the floor about the losses at the governments mortgage giants, Fannie and Freddie: $400 billion and counting. Now that these GSEs are flat broke, why doesnt the president add the $5 trillion in Fannie/Freddie mortgage-backed debt in the National Debt, they ask?
This Monday, February 1, the president published the federal budget for the fiscal year 2011 starting October 1. In that budget the feds will account for the bailout of Fannie and Freddie. But the cost will not appear in the headlline number of $3.8 trillion in spending. Instead, Obamas guys will snuck it into the outlays for the recently concluded FY 2009.
The only place you will be able to see what really happened will be usgovernmentspending.com, which is not a government website.
Our noble rulers have developed not one but two plausible narratives to account for Fannies and Freddies losses at the real-estate casino. Theres the Congressional Budget Office (CBO) version. And theres President Obamas Office of Management and Budget (OMB) version.
The cunning rascals arent going to chuck an indigestible $400 billion loss into the budget. And they arent going to stack the GSEs debt into the National Debt. Oh no. They are too smart for that.
The CBO, in its August 2009 baseline, began to treat Fannie and Freddies operations for the first time as if they were being conducted by a federal agency rather than a private corporation. They have estimated that Fannie and Freddie added $291 billion to Federal Outlays in FY 2009. And CBO has estimated $99 billion in spending on Fannie and Freddie for FY 2010 through 2019. That comes in just a little shy of $400 billion.
Not surprisingly, the presidents OMB has found a less costly way of accounting for the Fannie/Freddie debacle.
At OMB they have computed the cost of the Fannie/Freddie bailout merely from the actual cost of buying preferred stock from the mortgage giants. In FY 2009, writes the CBO director, the Treasury provided a total of $95.6 billion in cash outlays to the two entities for the purchase of preferred stock and warrants to buy common stock. So that is what OMB put into its final report of spending for 2009.
For the future, OMB estimates a further $65 billion in outlays to support Fannie and Freddie in 2010-2019.
Frankly, Im shocked.
Leaving aside the minor difference of $229 billion in accounting between CBO and OMB, Im surprised that the cost to the federal government of righting Fannie and Freddie is so low.
In fact, if I were a politician on the way up, a young version of Sen. Chris Dodd (D-retiring) or Rep. Barney Frank (D-unashamed), I would say, as Barney Frank said back in 2003, that it was time for the government to roll the dice.
I do think I do not want the same kind of focus on safety and soundness that we have in OCC [Office of the Comptroller of the Currency] and OTS [Office of Thrift Supervision]. I want to roll the dice a little bit more in this situation towards subsidized housing. . . .
Why not? If the only cost to the federal government of offering affordable housing to millions of impressionable voters is a mere accounting item of two to three percent of GDP once in a generation, whats not to like?
But wait, you say! What about the cost of all the Fannie/Freddie debt that the Federal Reserve System has bought up in the last year? What about the cost of all the banks that the FDIC has taken over? You are right; the costs will be substantial. But they arent budget costs. They arent appropriations. They are insidious costs that will diffuse through the economy as inflation and as increased banking fees. How do you explain that in a campaign commercial?
But I am not discouraged. I have faith in the new generation of independent conservative politicians. Someone, a Palin or a Brown, perhaps, will figure out how to frame the Fannie Freddie issue and turn it into a death panel for our Democratic friends. Pat Buchanan said it best back in August:
Of Sarah Palin it may be said: The lady knows how to frame an issue.
Of Sen. Scott Brown (R-MA) the same may also be said. Maybe thats the big difference between a populist like Palin or Brown and a populist like President Obama. One kind knows how to frame an issue. The other kind knows how to strike an attitude.
Buy his Road to the Middle Class.
[W]hen I asked a liberal longtime editor I know with a mainstream [publishing] house for a candid, shorthand version of the assumptions she and her colleagues make about conservatives, she didn't hesitate. Racist, sexist, homophobic, anti-choice fascists, she offered, smiling but meaning it.
Harry Stein, I Can't Believe I'm Sitting Next to a Republican
[T]he way to achieve a system of determining admission to the public schools on a nonracial basis,
Brown II, 349 U. S., at 300–301, is to stop assigning students on a racial basis. The way to stop
discrimination on the basis of race is to stop discriminating on the basis of race.
Roberts, C.J., Parents Involved in Community Schools vs. Seattle School District
[T]he Liberal, and still more the subspecies Radical... more than any other in these latter days seems under the impression that so long as he has a good end in view he is warranted in exercising over men all the coercion he is able[.]
Herbert Spencer, The Man Versus the State
[To make] of each individual member of the army a soldier who, in character, capability, and knowledge, is self-reliant, self-confident, dedicated, and joyful in taking responsibility [verantwortungsfreudig] as a man and a soldier. — Gen. Hans von Seeckt
MacGregor Knox, Williamson Murray, ed., The dynamics of military revolution, 1300-2050
[The Axial Age] highlights the conception of a responsible self... [that] promise[s] man for the first time that he can understand the fundamental structure of reality and through salvation participate actively in it.
Robert N Bellah, "Religious Evolution", American Sociological Review, Vol. 29, No. 3.
[In the] higher Christian churches... they saunter through the liturgy like Mohawks along a string of scaffolding who have long since forgotten their danger. If God were to blast such a service to bits, the congregation would be, I believe, genuinely shocked. But in the low churches you expect it every minute.
Annie Dillard, Holy the Firm
[Every] sacrifice is an act of impurity that pays for a prior act of greater impurity... without its participants having to suffer the full consequences incurred by its predecessor. The punishment is commuted in a process that strangely combines and finesses the deep contradiction between justice and mercy.
Frederick Turner, Beauty: The Value of Values
Within Pentecostalism the injurious hierarchies of the wider world are abrogated and replaced by a single hierarchy of faith, grace, and the empowerments of the spirit... where groups gather on rafts to take them through the turbulence of the great journey from extensive rural networks to the mega-city and the nuclear family...
David Martin, On Secularization
What distinguishes true Conservatism from the rest, and from the Blair project, is the belief in more personal freedom and more market freedom, along with less state intervention... The true Third Way is the Holy Grail of Tory politics today - compassion and community without compulsion.
Minette Marrin, The Daily Telegraph
These emerge out of long-standing moral notions of freedom, benevolence, and the affirmation of ordinary life... I have been sketching a schematic map... [of] the moral sources [of these notions]... the original theistic grounding for these standards... a naturalism of disengaged reason, which in our day takes scientistic forms, and a third family of views which finds its sources in Romantic expressivism, or in one of the modernist successor visions.
Charles Taylor, Sources of the Self
There was nothing new about the Frankish drive to the east... [let] us recall that the continuance of their rule depended upon regular, successful, predatory warfare.
Richard Fletcher, The Barbarian Conversion
The Union publishes an exact return of the amount of its taxes; I can get copies of the budgets of the four and twenty component states; but who can tell me what the citizens spend in the administration of county and township?
Alexis de Tocqueville, Democracy in America