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THE FOUNDATION

“Every new regulation concerning commerce or revenue; or in any manner affecting the value of the different species of property, presents a new harvest to those who watch the change and can trace its consequences; a harvest reared not by themselves but by the toils and cares of the great body of their fellow citizens. This is a state of things in which it may be said with some truth that laws are made for the few not for the many.”  - James Madison

PATRIOT PERSPECTIVE
Bailout Basics

By Mark Alexander

“For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac... and the sheer magnitude of these companies and the role they play in the housing market... If Congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system, and the economy as a whole.”  - John McCain arguing for passage of the Federal Housing Enterprise Regulatory Reform Act (S. 190) which he co-sponsored in 2005.

While Sen. McCain is being pilloried by his opponent, Barack Hussein Obama, for asserting (correctly) last week that the fundamentals of most U.S. economic sectors are sound, clearly, Sen. McCain has understood for years that irresponsible lending practices for U.S. housing posed “enormous risk... to the housing market, the overall financial system, and the economy as a whole.”

While Obama was out politicking this week, ostensibly itching for a debate that he’d been avoiding all summer, McCain suspended his campaign to work with Republicans in Congress, outlining conditions for an agreement that would both protect the American taxpayer and thwart a meltdown of the U.S. economy. So, “Country First” is not just a campaign slogan...

The enormous risk that Sen. McCain warned of in 2005 has now become a financial crisis of staggering proportions. That crisis can trace its roots to Bill Clinton’s signature on legislation making it easier for minority constituents with ubgone21 to obtain mortgages. In 1995, he had his Treasury Secretary, Robert Rubin, rewrite the lending rules for the Community Reinvestment Act, opening the flood gates of mortgage lending to unqualified borrowers.

This legislation, in effect, applied affirmative action to the lending industry, which is to say that the current crisis is NOT a “free market failure” but the result of socially engineered financial policy by the central government. The financial markets welcomed their new customers with open arms, fueling a real estate boom across the board.

These so-called “subprime mortgages,” which were offered at variable interest rates, were widely perceived as good investments. Investors used the high-risk instruments to secure assets in other markets fueling profits for investment banks and mortgage lenders. The subprime market thus expanded rapidly and the mortgage instruments were used by other firms as collateral for investments in stocks, commodities and the like.

Unfortunately, no one questioned the pell-mell regulatory system of oversight for these transactions until large cracks appeared in our economy’s foundation, the first being the collapse of Countrywide, the nation’s largest subprime lender. Then banks and mortgage lenders large and small began downsizing, dumping assets and closing their doors. Bear Stearns filed for bankruptcy. Fannie Mae and Freddie Mac, holders of trillions of dollars in mortgages, were bailed out with 200 billion taxpayer dollars. Lehman Brothers filed for bankruptcy, and insurance giant AIG was given an $85-billion taxpayer prop to keep it solvent.
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This morning, as Congress is debating whether to implement the Democrat-backed “bailout plan” or the Republican-backed “workout plan,” Washington Mutual Inc. has been seized by the Federal Deposit Insurance Corporation (FDIC) after collapsing under the weight of reams of bad mortgages. WaMu, listing $307 billion in assets, becomes the largest bank failure in U.S. history. The FDIC sold WaMu’s assets for $1.9 billion to JPMorgan Chase & Co., which bought Bear Stearns Cos. earlier this year.

(Congressional Republicans might also consider repeal of Sarbox, the Sarbanes-Oxley Public Company Accounting Reform and Investor Protection Act of 2002, which has maintained a choke hold on financial institutions and is high on the list of proximate causes for the failure of Countrywide and Bear Stearns.)

The serious economic calamity confronting our nation, and the world, is being labeled a “credit crisis.” But we are on the verge of a crisis of cascading confidence in the U.S. economy, which, in the absence of aggressive intervention, could, no, will result in a dramatic recession affecting every sector of the U.S. and, eventually, world economy.

The catastrophe looming just over the horizon is indeed that big, and we must all hope that the solution is big enough to interrupt the domino effect already underway.

The question that must be asked, however, is whether the people’s confidence in their government is sufficient to thwart this cascading effect. Far more often than not, in the inimitable words of Ronald Reagan, “Government is not the solution to our problem. Government is the problem.” Of course, the only institution big enough to address a problem of this magnitude is the government.

Perception v. Reality

Essentially, perception defines value, and the shared confidence in our perception of the value of one major sector of our economy, the housing market, has eroded dramatically.

To understand the notion of perceived value, consider all that paper we call currency. If I walk into a store and pull out one of these pieces of paper with Ben Franklin’s picture handsomely printed upon it, the store proprietor will accept that paper in trade for some of his products or services because he believes it to have intrinsic value (which it once did, when it was backed by hard assets - gold and silver). But make no mistake: The value of that piece of paper is nothing more than it is perceived to be. Thus, if the proprietor’s confidence in that perception becomes diminished, he may begin to think such a piece of paper is worth only half its face value, or perhaps nothing at all.

And if my paper is perceived to have no value, I will not be able to do commerce in this or any other store.

For two decades, our confidence in the perceived value of pieces of paper called mortgages has been growing rapidly, and because the prevailing perception has been that a house will be worth more tomorrow than it is today, financial institutions have aggressively enabled buyers to assume mortgages to purchase houses. (Actually, mortgages are now traded electronically as binary data - value that!)

However, in recent years, confidence in the perceived value of real estate has outpaced reality, as mortgage defaults have trended upward. That realization has resulted in what now has become a precipitous erosion of confidence in the value of real estate, and consequently, housing market values have collapsed in many areas of the country where they were unduly inflated.

While perception can be shaped and molded, reality is finite. The reality, in this case, is that a house and its outstanding mortgage are worth not a nickel more than a buyer is willing to and capable of paying for it.

Thus, the devaluation of mortgages has had an enormous financial impact on institutions that trade in “packaged mortgages,” and consequently, on other institutions that trade with them, and, well you get the picture. The dominos have begun to fall.

Moreover, in an effort to keep their domino standing, because of the potential that any new lending would result in additional foreclosure exposure if the housing market continues to decline, banks have tightened lending in order to preserve the capital necessary to cover the cost of a growing number of foreclosures. This constriction of the money supply extends far beyond the housing markets, as loans for business development and expansion are also drying up.

This combination of events creates the perfect economic storm, and it has dire consequences for all Americans.

Consequences of cascading confidence

Confidence in the perceived value of financial instruments, which are the foundation of our economy, is calculated minute by minute by indices such as Dow Jones, Standard and Poor’s, and other measures of financial markets. These measurements amount to investor confidence indices, polls of investor perception about the strength and stability of the economy. The stability and direction of these indices are a good indication of investor confidence.

If the indices indicate significant instability of investor confidence, that instability can cause the financial markets to collapse in a single day. (See: “Great Depression.”)
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Here, it’s important to note that the vast majority of Americans are among the “investor class.” This isn’t just about “the rich.” Whether you trade millions of dollars in securities daily or like cream in your coffee, you are a shareholder in our economy.

Thus, the plan proposed by President George W. Bush and Treasury Secretary Henry Paulson - waiting for majorities in Congress to determine the details - is an effort to stabilize investor confidence by authorizing up to $700 billion in guarantees for institutions holding mortgages. In effect, this will relieve lenders of liability for mortgages considered to be at risk of default - about five percent of all mortgages.

It is hoped that Republicans can succeed in crafting legislation that is more workout than bailout, the former requiring much more market accountability, as proposed by Sen. McCain and former House Speaker Newt Gingrich.

President Bush addressed the nation Wednesday evening with a concise explanation of the current crisis:

“This is an extraordinary period for America’s economy. Over the past few weeks, many Americans have felt anxiety about their finances and their future. I understand their worry and their frustration. We’ve seen triple-digit swings in the stock market. Major financial institutions have teetered on the edge of collapse, and some have failed. As uncertainty has grown, many banks have restricted lending. Credit markets have frozen. And families and businesses have found it harder to borrow money. We’re in the midst of a serious financial crisis... So I’ve proposed that the federal government reduce the risk posed by these troubled assets, and supply urgently needed money so banks and other financial institutions can avoid collapse and resume lending. This rescue effort is not aimed at preserving any individual company or industry - it is aimed at preserving America’s overall economy. It will help American consumers and businesses get credit to meet their daily needs and create jobs. And it will help send a signal to markets around the world that America’s financial system is back on track.”

What about a free-market solution?

I concur, of course, with the principled objections from free-market advocates and hope that free-market solutions will be re-implemented in conjunction with the necessary mortgage backup. If not, the cure may be worse than the disease. After all, it was the suspension of free-market principles that got us into this mess.

But I agree with President Bush’s comments regarding the necessity of intervention: “I’m a strong believer in free enterprise. So my natural instinct is to oppose government intervention. I believe companies that make bad decisions should be allowed to go out of business. Under normal circumstances, I would have followed this course. But these are not normal circumstances. The market is not functioning properly. There’s been a widespread loss of confidence. And major sectors of America’s financial system are at risk of shutting down.”

Further, he is correct in this assessment: “More banks could fail, including some in your community. The stock market would drop even more, which would reduce the value of your retirement account. The value of your home could plummet. Foreclosures would rise dramatically. And if you own a business or a farm, you would find it harder and more expensive to get credit. More businesses would close their doors, and millions of Americans could lose their jobs. Even if you have good credit history, it would be more difficult for you to get the loans you need to buy a car or send your children to college. And ultimately, our country could experience a long and painful recession.”

It is worth noting that $700 billion is a bargain compared to the implications for taxpayers if the economy spirals into a severe recession - or worse.

Can any of this colossal expense be recovered?

Fortunately, there are real assets backing up these mortgages - bricks and mortar, and the land upon which the foundations rest - but this is no “deal for taxpayers.”

While much of this mortgage backing may be recovered, as was the case with the savings and loan bailout of 1989, to suggest that the “taxpayers will be paid back” is ludicrous.

Congress is going to serve as the “watchdog” over the dispensing and recovery of these funds? Can you say, “fox in the henhouse”?

Even if Congress sets up a “trust fund” in order to use recovered funds to pay down the debt incurred to back financial institutions, we should consider that “lockbox” to be as safe as the Social Security Trust Fund lockbox. Every dime paid into Social Security has been spent on government programs, leaving that fund with a bunch of IOUs.
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No doubt, every dime recovered from the private sector will be treated as revenue to expand government programs, and the debt will be left on the books.

To pay for the bailout, Democrats are sure to demand higher taxes from “the rich Wall Street fat cats who got us into this mess.” While this mess clearly ended on Wall Street, it didn’t start there, but, undeterred, the Democrats will always bank on this observation from George Bernard Shaw: “A government which robs Peter to pay Paul can always depend on the support of Paul.”

And, of course, if the current plan to restore economic confidence does not succeed, you know the Demos have “Plan B.” Don’t ask...

What role have politicians played?

One staple of the Democrats’ political playbook is the use of scare tactics to rally constituencies. Indeed, Obama and other Demos have been dishing out a steady stream of dire economic rhetoric in order to keep their constituents in line. Undoubtedly, all that economic hyperbole has influenced public perception of our economy and confidence in our economy. High on the list of issues President Bush discussed with candidates McCain and Obama Thursday was a request that they (read: “Obama”) cease and desist using the economic problems as political fodder.

It is our hope that the candidates will, indeed, arrive for debate in Oxford, Mississippi, this evening and begin the debate with a unified statement on economic recovery; then Sen. McCain can proceed to eviscerate Obama on foreign policy.

Footnote: There are significant, albeit unspoken, national security implications of a precipitous economic decline in the U.S. Where the our economy goes, the world economy follows, and their will be significant national security consequences. For example, if China’s economy contracts more rapidly than at present, keeping pace with U.S. economic decline, the consequences will likely be some significant internal and external “mischief” scripted by the Communist Party. As for India and Pakistan...you get the picture.

GOVERNMENT & POLITICS
News from the Swamp: Catchall spending bill

The Associated Press reports, “The House passed a $630 billion-plus spending bill Wednesday that wraps together a record Pentagon budget with aid for automakers and natural disaster victims, and increased healthcare funding for veterans returning from Iraq and Afghanistan.” The spending bill passed 370-58, perhaps in part because of 2,322 earmarks for $6.6 billion. The bulk of the bill allocates $488 billion for the Pentagon, $40 billion for Homeland Security and $73 billion for veterans and for military bases. It funds most government programs at fiscal 2008 levels through 6 March. President George W. Bush is expected to sign it if the Senate approves.

Also included in the bill was a loan of $25 billion for the auto industry to help factories comply with tougher EPA mileage standards. Republicans complained that lawmakers had only a few hours to look over more than 1,000 pages of the bill and its accompanying tables and explanations. Debate then lasted less than one hour. It does, however, prevent the feared lame-duck session after the 4 November election.

There is more good news: The aforementioned bill allows the ban on offshore drilling to expire. Pressure has been on Congress to do just this since the spring, in the face of skyrocketing gas prices. In July, President Bush lifted the executive ban on offshore drilling enacted by his father. Democrats had tried to pass a bill that would keep the ban while pretending to get rid of it, but they ended up giving a major victory to minority Republicans in an election year.

Lest Americans pop the champagne corks just yet, however, House Majority Leader Steny Hoyer (D-MD) said that restoring the ban on offshore drilling “will be a top priority for discussion next year.” We say go ahead and try, Steny.
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New & notable legislation

On Tuesday, the Senate passed legislation by a 93-2 vote that would prevent 20 million people from being hit with the Alternative Minimum Tax (AMT). The “cost” of the one-year reprieve is $64 billion. Also included are tax breaks for renewable energy and natural disaster victims. The legislation faces a stiffer challenge in the House, where what the Associated Press laughably calls “fiscally conservative Democrats” want this tax relief paid for by an increase in other revenues (read: taxes). Memo to the AP: Fiscally conservative policy would be to cut spending, not to take more money from one taxpayer to give it to another.

From the Left: Obama and the Free Radical

It turns out the empty suit that is Barack Obama isn’t so empty after all - it’s full of skeletons (our apologies for the mixed metaphor). In a Wall Street Journal editorial this week, Ethics and Public Policy Center senior fellow Stanley Kurtz uncovered the latest set of bones, noting that although Obama had authored two autobiographies, the Chosen One had never written about his “most important executive experience”  - serving as Chairman of the Board for the Chicago Annenberg Challenge (CAC). Why omit this shining example of the Great Community Organizer’s leadership of an institution that pumped more than $100 million into his community? Well, perhaps it’s related to his close association at CAC with Bill Ayers, the unrepentant domestic terrorist and former Weather Underground member.

We have previously exposed Ayers’s extensive history with this 60s-era radical leftist faction, a group that advocated and executed actions aimed at violently overthrowing the U.S. government. Ayers only narrowly dodged prosecution for his role in Weather Underground on a serendipitous legal technicality. Years later, in the mid-90s, Ayers would help establish CAC, whose ostensible goal was to improve Chicago schools. In reality, Kurtz notes, “CAC’s agenda flowed from [Ayers’s] educational philosophy, which called for infusing students and their parents with a radical political commitment, and which downplayed achievement tests in favor of activism.”

During the Democrat primary debates earlier this year in Philadelphia, Obama disavowed ties to Ayers, claiming, “This is a guy who lives in my neighborhood... He’s not somebody who I exchange ideas from [sic] on a regular basis.” However, Kurtz points out that CAC archives clearly show that Ayers and Obama were partners: “As CAC chairman, Mr. Obama was lending moral and financial support to Mr. Ayers and his radical circle.” Sen. Obama is apparently eager to keep this particular skeleton from seeing the light of day, as evidenced by his attempts to characterize good-faith inquiries into ties with Ayers as “guilt-by-association” attacks. Still, as Kurtz stresses, this isn’t about guilt by association: It’s about guilt by participation - in this case, with the free radical Bill Ayers.

From the ‘Non Compos Mentis’ File

While speaking to the National Jewish Democratic Council in Washington, DC, this week, impeached federal judge and current Florida Congressman Alcee Hastings, a member of the Congressional Black Caucus, had this to say about the GOP vice-presidential candidate: “If Sarah Palin isn’t enough of a reason for you to get over whatever your problem is with Barack Obama, then you d*** well had better pay attention. Anybody toting guns and stripping [sic] moose don’t care too much about what they do with Jews and blacks.”

Naturally, Hastings quickly retreated behind a spokesman, who explained that Hastings was simply trying to argue that Jews and blacks should work together behind Obama because Palin is an “extremely conservative woman who is out of touch with mainstream America.” If such rants are part of “mainstream America,” we’re glad we can say we’re a bit out of touch, too.

During the same event, Rep. Stephen Cohen (D-TN) also spoke. He was one of several Leftists who claimed recently that Jesus was a community organizer. This week, Cohen, who is not a Christian, took his assertion further, saying, “A lot of what Jesus talks about is wonderful - talks about helping people and lifting them up and caring about people who are sick and all those things. He’s a great Democrat.” The Wall Street Journal’s James Taranto debunks this myth: “In fact, the modern Democratic Party dates only to 1828; its predecessor, Jefferson’s Democratic-Republican Party, to 1792. Jesus was born within a few years of 1, so he could not have been a Democrat.”
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Regulatory Commissars: Endangered species

Under pressure from animal rights groups and a U.S. District Judge, the Fish and Wildlife Service has requested that gray wolves be put back on the endangered list. The Sierra Club, Defenders of Wildlife, the Humane Society of the United States and other groups claim that the wolf-restoration program in effect for the past 10 years has not sufficiently rescued the animal from extinction.

Federal authorities had previously contended that wolves were no longer in any danger. But despite these findings, Judge Donald Malloy issued an injunction against public wolf hunts in Montana, Wyoming and Idaho pending the resolution of the lawsuit. In arguing their case for continued federal protection, the plaintiffs point to an unexplained dip in wolf populations over the past year.

According to federal rule, when wolves were taken off the endangered list in February, state agencies became responsible for monitoring the population. Malloy, doubting the three states’ capability of adequately protecting the wolf from hunters, placed the matter back under federal control. If Malloy agrees with the Fish and Wildlife Service’s request, the agency would then re-evaluate wolf populations in the region over the course of months, or even years, before making a decision.

In other news, DNA testing on Montana grizzly bears has revealed that the animal is not endangered, as previously thought. The animals have been on the endangered list since 1975. Apparently, scientists had never conducted ecosystem-wide studies of how the grizzly population was faring. Now, after a five-year study, the U.S. Geological Survey has found that there is no evidence that the population ever was in danger. Removing them from the endangered list, however, will be easier said than done.

NATIONAL SECURITY
Holy Defense Week, Batman!

Iran commemorated the start of the Iran-Iraq war this week with a series of parades, static displays of military hardware, and speeches by various political and military leaders, the celebration all collectively known as Holy Defense Week. While the festivities are primarily intended for internal public consumption in Iran, the regime used the occasion to thump its chest towards the West. The commander of the Islamic Revolutionary Guard Corps Navy, Admiral Ali Fadavi, warned that “Iran has completely planned to confront any U.S. ships,” and that “Iranian missiles can hit U.S. warships in the Persian Gulf, the Sea of Oman and the Indian Ocean.”

In other Iranian news, Iran’s state-owned Islamic Republic of Iran Shipping Line (IRISL) was finally designated as a supporter of proliferation by the U.S. State Department earlier this month. Stuart Levey, Under Secretary for Terrorism and Financial Intelligence, explained, “IRISL’s actions are part of a broader pattern of deception and fabrication that Iran uses to advance its nuclear and missile programs. That conduct should give pause to any financial institution or business still choosing to deal with Iran.”

Finally, it wouldn’t be the UN without at least one wing-nut despot railing against the United States. This week it was Iran’s President Mahmud Ahmadi-Nejad, who claimed that “the bullying powers have created the world’s problems, but... the American empire is reaching the end of its road.” Earlier in the week Ahmadi-Nejad had told a credulous Larry King, “[H]ostility has not been from our end, we have always been interested in having friendly relations.” King didn’t ask the obvious questions about the Khobar Towers bombing, Iran’s role in arming and training Iraqi insurgents to kill Americans, or Iran’s continued #1 ranking on the list of terror sponsors.

North Korea is back in business

Joining that other original Axis of Evil member, Iran, in thumbing their noses at the world, North Korea continues its march toward a capability to hit the West with nuclear weapons. By this time, is anyone really surprised?

According to South Korean press reports, North Korea has tested the engines for an intercontinental ballistic missile (ICBM) capable of hitting the U.S. West Coast. This news comes on the heels of a report last week from Jane’s Defense Weekly that identified a previously unknown launch site that reportedly has a mobile launch pad and a 10-story tower that could support North Korea’s largest missiles. Of course, a 2006 UN Security Council resolution demanded that North Korea “suspend all activities related to its ballistic missile program,” but it is more likely that the North put the paper with the resolution to better use by feeding parts of their starving population with it.

In related developments, last Friday North Korea confirmed that it is restarting a key reactor at its Yongbyon nuclear facility and says it no longer cares if the country is removed from the U.S. terrorism blacklist - as if it ever did. The NoKos have also banned International Atomic Energy Agency inspectors from the site. Combined with the ICBM work, and given that North Korea has already tested a nuclear device, this news indicates that the North is getting uncomfortably close to being able to incinerate cities such as Seattle, San Francisco and Los Angeles. We can only hope that the dead-but-getting-better Dear Leader, Kim Jong-Il, or whoever is running North Korea, comes to his senses before the U.S. is forced to take action.
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Profiles of valor: USA Sgt. Bodani

Then-Specialist Jack Bodani of the United States Army was on patrol in Afghanistan marking mine fields, when an IED tore through his Humvee, injuring all of the soldiers inside. Waiting insurgents immediately directed small arms fire and mortar rounds at the wounded convoy. Burned on his ears and legs and initially knocked out by the blast, Bodani was the first soldier away from the vehicle, but when he realized there was a soldier unaccounted for he returned to give aid. With the help of his gunner, Bodani saved the soldier stuck in the Humvee just before the heat from the fire began setting off ordnance and rifle ammunition in the vehicle. As the soldiers gathered under cover, they found that the only one with a weapon was the medic, who was running toward the Humvee. However, she fell wounded as well. Bodani raced over, picked up her and her rifle and got her to safety while returning fire on the enemy. Because of his courageous actions no American soldiers were lost that day. Bodani, now a Sergeant, was awarded the Bronze Star with Combat V for Valor.

This week’s ‘Alpha Jackass’ award

So Joe Biden has had a sniper-fire incident of his own... On Monday, he relayed to the National Guard Association his firsthand understanding of the war in Afghanistan. Earlier this year, he claimed, “my helicopter was forced down, with a three-star general and three senators at 10,500 feet in the middle of those mountains.” The implication was that the chopper had come under fire. In reality, however, Biden’s adventure was akin to Hillary Clinton’s whopper about landing under sniper fire in Bosnia in 1996. In fact, a snowstorm forced Biden’s copter to land, and his group headed back to a U.S. Air Base in a motorized convoy instead. Oops.

Immigration front: McCain v. Obama

Lost in the noise of the banking scandal, one of the election’s major issues has all but disappeared from the news and the Internet: illegal immigration. A comparison of the two major presidential candidates’ immigration positions finds more in common than at odds. But there are some differences.

Both are clearly set on granting a “path toward citizenship” to all illegals with “clean records,” but John McCain promises first to secure the borders and arrest and deport our estimated two million criminal illegals first, while Barack Obama mentions neither. Both candidates list a vague series of steps would-be citizens must take on their path, one of them being learning English.

While both want to increase legal immigration, Obama also favors a guest worker program to meet the employers’ needs for temporary workers - as long as new workers don’t negatively affect American workers’ wages. Obama would also grant unspecified labor rights to temporaries.

The candidates would both employ some type of “tamper-proof” electronic ID-verification system, allowing employers to determine the status of their workers with ease, and they each pledge stiff sanctions for scofflaw employers.

The biggest difference is that Obama wants to continue the current system that gives preference based on “family reunification,” the system in place since 1965. For example, if a father is separated from his family who remained at home, his family gets first crack at legal status over someone who doesn’t have the family connection already established. The flaws in this approach are many, and, we think, obvious. McCain wants to return to something like the system previously in place that was based on applicants’ education levels and job skills.

Of course, platforms and promises are notoriously difficult for newly elected officials to remember. Wise voters always compare a candidate’s promises to his record - even one so short as Obama’s. Candidates’ votes on all major issues can be viewed on the American Conservative Union’s Web site.
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BUSINESS & ECONOMY
Biden says ‘no’ to clean coal

Democrat vice-presidential nominee Joe Biden has been true to form this week, stumbling into several more gaffes. He called the Obama campaign ad mocking John McCain for not using a computer “terrible” before backtracking. He told a Virginia crowd that “Barack Obama ain’t taking my shotguns, so don’t buy that malarkey.” He added, “If he tries to fool with my Beretta, he’s got a problem.” And at a rally in Ohio he outright opposed Obama’s support for clean coal here in the U.S. The first two gaffes are laughable; the third is serious policy.

Biden was asked by a supporter, “Senator, wind and solar are flourishing here in Ohio, so why are you supporting clean coal?” Biden responded, “We’re not supporting clean coal. Guess what? China’s building two every week - two dirty coal plants. And it’s polluting the United States. It’s causing people to die.” He continued, “No coal plants in America. Build them, if they’re going to build them, over there. Make them clean.” This was after telling Virginia miners three days earlier that coal could “meet our needs domestically for the better part of the next 100 to 200 years.” Indeed, the “official” Obama-Biden position is support for clean coal.

During the primaries, Biden also opposed clean coal, saying, “I don’t think there’s much of a role for clean coal in energy independence,” he said. “But I do think there’s a significant role for clean coal in the bigger picture of climate change.” Investor’s Business Daily sums it up: “So using clean coal to save the earth is fine, but using it to generate America’s power is not. It’s OK for coal to generate Chinese power for the Chinese economy as long as we help make their power plants clean but don’t build any new clean plants here. Got it?”

This week’s ‘Braying Jackass’ award

“If you’re a young person looking at the future of this planet and looking at what is being done right now, and not done, I believe we have reached the stage where it is time for civil disobedience to prevent the construction of new coal plants that do not have carbon capture and sequestration.”  - the Populist Potentate of Eco-theology, Al Gore

McCain v. Obama on trade

When it comes to trade, Senators John McCain and Barack Obama have one thing in common: Both would like to trade their current jobs for a significant promotion. Here, however, most similarities end.

A strong proponent of free trade, McCain describes himself as an “unashamed and unabashed defender” of NAFTA (North American Free Trade Agreement). He supports establishing a free-trade agreement with the European Union and backs free-trade agreements pending with Colombia and South Korea, noting Bogota’s importance as an ally in South America and Seoul’s in both Iraq and Northeast Asia.

Meanwhile, Obama hopes to renegotiate NAFTA to improve labor and environmental standards, and he has indicated he would employ future trade agreements to do the same. He supports strengthening bilateral relations with Columbia but opposes the pending free-trade agreement with that nation due to violence targeting union leaders (despite the fact that this violence has dropped significantly). Additionally, Obama claims the pending agreement with South Korea does not go far enough in paving the way for American autos, beef and rice to penetrate the Korean market.

McCain strongly supports nurturing trade with China, voted to establish permanent normal trade relations with that nation, and opposes focusing too intently on overvalued Chinese currency. Obama also supports trade with China but has cosponsored legislation calling for negotiations with China to revalue its currency.

Finally, regarding displaced workers, McCain favors creating “lost-earnings buffer accounts,” funded by unemployment insurance taxes, and providing temporary unemployment coverage. Obama supports giving retraining assistance to employees in industries prone to job dislocation, and backs improving the healthcare tax credit for dislocated workers. Both candidates support creating flexible education accounts to assist with employee training.
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Democrats snub Colombia

Given a golden opportunity to follow through on establishing free trade with our strongest ally in Latin America, congressional Democrats, with few exceptions, instead chose to snub Colombian President Alvaro Uribe during his visit to the United States this week. House Speaker Nancy Pelosi (D-CA), Senate Majority Leader Harry Reid (D-NV), and so-called experts on Latin affairs Sen. Chris Dodd (D-CT) and Gov. Bill Richardson (D-NM) avoided meeting with Uribe. Supposedly, anti-union violence in Colombia angered card-carrying Democrats, causing their impertinence to President Uribe, but it’s no coincidence that labor unions are historically among the top three largest contributors to Democrats. For his part, Barack Obama conceded to a phone conversation with Uribe but declined to publicize his doing so, no doubt hoping for media anonymity.

Conversely, President Bush, Commerce Secretary Carlos Gutierrez, and vice-presidential candidate Sarah Palin warmly welcomed Uribe, showing they, at least, know how to treat an American ally. Having the door wide open to strategic partnership with this friend, Democrats would do well to place our national interests above their desire to fill party coffers. Or is that too much to ask?

CULTURE
Around the nation: New York gun suit

In 2006, the city of New York sued 27 small gun retailers in Pennsylvania, Ohio, Virginia, Georgia and South Carolina, claiming that their illegal gun sales and lax screening practices created a public nuisance in the city. Recently, the last of the 27 defendants reached an out-of-court settlement with the city. In the settlement, the holdout agreed to tougher rules for selling guns based on the stricter standards Wal-Mart, the nation’s largest gun seller, adopted earlier this year in a voluntary agreement with a group called Mayors Against Illegal Guns.

What impact might the Wal-Mart code have on the potential liability of gun retailers in general? A case taught in torts class in every law school may shed some light on the subject. In 1932, what is known as “The T.J. Hooper case” involved the loss of tugs and barges at sea because the tugs where not outfitted with radio receivers which would have enabled them to receive a weather-warning broadcast by the weather service. Had they received the warning they would have sought shelter. In 1932, radio receivers were new and most tugs did not have them. The decision rendered by the great jurist Learned Hand held that the lack of radio receivers was the direct cause of the loss of the tugs and barges. The case has been interpreted as where the custom and usage of an entire industry is below the standard of reasonable care, it cannot be used as a defense. In other words, the Wal-Mart code may set the new standard for custom and usage for the retailing of firearms.

From the Leftjudiciary: Discrimination case

On 19 September, a federal district court judge in the District of Columbia did what Congress refused three times in 2007 to do: Extend protection of Title VII (of the 1964 Civil Rights Act) to transsexuals. Clinton appointee Judge James Robertson found that David Schroer, a retired Army Special Forces colonel who applied for a position as an anti-terrorism and international crime specialist at the Congressional Research Service at the Library of Congress, had been discriminated against. After Schroer accepted the job, he disclosed his intention to become “Diane” via sex-change surgery. The offer of employment was then withdrawn - by the (genuine) woman who would have been his boss. Schroer subsequently sued, despite acknowledging that there was “a bit of a disconnect” between his work and his surgery.

The Library of Congress argued and federal courts have consistently ruled that Title VII protection does not apply to transsexuals, reasoning that the Act was intended only for traditional concepts of sex - discrimination against a man because he is a man or against a woman because she is a woman. At least that was the case until Judge Robertson decided that staying within the text and intent of Title VII “is no longer a tenable approach to statutory construction.” Although he denied doing so, Robertson based his decision, in part, on the belief that a person’s sex is transitory and is based on factors other than a person’s chromosomes. He went on to rule that illegal discrimination “because of sex” now includes discrimination because of a change in sex.

This ruling discards a well-settled body of law upon which employers have justifiably relied for many years. In so doing, it adopts a bogus theory of sex and imposes this theory on American society by judicial fiat. A date has yet to be set for a hearing concerning the damages the Army will pay.
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Village Academic Curriculum: Conservative plan

For the last 20 years, the strategy employed by conservatives to combat liberal bias on college campuses has been, in large part, an expensive failure. The situation is beginning to change, however, as a promising new tactic has been devised to counter the anti-West tone in academia. The approach involves funding tenured conservative professors to teach Western-friendly classes for all comers in hopes of establishing a wider audience for the programs. One example is the Program in Western Civilization and American Institutions at the University of Texas. Another is the attempt currently underway in Colorado Springs to publish an anthology of classic texts. Still another is the Program on Freedom and Free Societies at Cornell.

The Manhattan Institute created the Veritas Fund for Higher Education, which will funnel donations to projects such as those in Austin, Colorado Springs and Cornell. So far, Veritas has spent $2.5 million on 10 campuses. The effort is not a political one, per se. Rather, it seeks to broaden students’ worldview and offer alternatives to the race, gender and class warfare that has dominated higher education for so long. As The New York Times puts it, “Their goal is to restore what conservative and other critics see as leading casualties of the campus culture wars of the 1980s and ‘90s: the teaching of Western culture and a triumphal interpretation of American history.” Sounds worthy to us.

And last...

Last week, we reported that vegetarians and vegans are six times more likely to suffer brain shrinkage than their meat-eating neighbors. (And about half a dozen conservative vegetarians wrote in to give us a piece of their mind.) This week, the militant vegetarians at People for the Ethical Treatment of Animals (PETA) have called for the famous ice cream maker Ben & Jerry’s to replace the cow’s milk in their products with human breast milk. PETA claims it would lessen the suffering of dairy cows as well as benefit human health. “The fact that human adults consume huge quantities of dairy products made from milk that was meant for a baby cow just doesn’t make sense,” said PETA Executive Vice President Tracy Reiman, adding, “Everyone knows that ‘the breast is best’.” Realizing PETA was milking the issue, Ben & Jerry’s declined, but thanked them for expressing themselves.

Veritas vos Liberabit - Semper Vigilo, Fortis, Paratus, et Fidelis! Mark Alexander, Publisher, for The Patriot’s editors and staff. (Please pray for our Patriot Armed Forces standing in harm’s way around the world, and for their families - especially families of those fallen Soldiers, Sailors, Airmen, Marines and Coast Guardsmen, who granted their lives in defense of American liberty.)