|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.
But I saw a man yesterday who knows a fellow who had it from a chappie
that said that Urquhart had been dipping himself a bit recklessly off the deep end.
Dorothy L. Sayers, Strong Poison
Civil Societya complex welter of intermediate institutions, including businesses, voluntary associations, educational institutions, clubs, unions, media, charities, and churchesbuilds, in turn, on the family, the primary instrument by which people are socialized into their culture and given the skills that allow them to live in broader society and through which the values and knowledge of that society are transmitted across the generations.
Francis Fukuyama, Trust
Tear down theory, poetic systems... No more rules, no more models... Genius conjures up
rather than learns... Victor Hugo
César Graña, Bohemian versus Bourgeois
We have met with families in which for weeks together, not an article of sustenance but potatoes had been used; yet for every child the hard-earned sum was provided to send them to school.
E. G. West, Education and the State
When we began first to preach these things, the people appeared as awakened from the sleep of agesthey seemed to see for the first time that they were responsible beings, and that a refusal to use the means appointed was a damning sin.
Finke, Stark, The Churching of America, 1776-1990
When we received Christ, Phil added, all of a sudden we now had a rule book to go by, and when we had problems the preacher was right there to give us the answers.
James M. Ault, Jr., Spirit and Flesh
A writer who says that there are no truths, or that all truth is merely relative, is asking you not to believe him. So dont.
Roger Scruton, Modern Philosophy
As far as the Catholic Church is concerned, the principal focus of her interventions in the public arena is the protection and promotion of the dignity of the person, and she is thereby consciously drawing particular attention to principles which are not negotiable...
[1.] protection of life in all its stages, from the first moment of conception until natural death; [2.] recognition and promotion of the natural structure of the family... [3.] the protection of the right of parents to educate their children.
Pope Benedict XVI, Speech to European Peoples Party, 2006
At first, we thought [the power of the West] was because you had more powerful guns than we had. Then we thought it was because you had the best political system. Next we focused on your economic system. But in the past twenty years, we have realized that the heart of your culture is your religion: Christianity.
David Aikman, Jesus in Beijing
But the only religions that have survived are those which support property and the family.
Thus the outlook for communism, which is both anti-property and anti-family, (and also anti-religion), is not promising.
F.A. Hayek, The Fatal Conceit
Conservatism is the philosophy of society. Its ethic is fraternity and its characteristic is authority the non-coercive social persuasion which operates in a family or a community. It says we should....
Danny Kruger, On Fraternity
Families helped each other putting up homes and barns. Together, they built churches, schools, and common civic buildings. They collaborated to build roads and bridges. They took pride in being free persons, independent, and self-reliant; but the texture of their lives was cooperative and fraternal.
Michael Novak, The Spirit of Democratic Capitalism