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Wizbang Podcast #77

Sorry for the long absence. I was busy. I hope I can keep it up again. Here's what I thought you'd like to hear about today:

  1. What's Really Going on in Basra?
  2. What Really Went on at Bear Stearns?
  3. What would a Hillary Presidency Look Like?
  4. What's Really Going on with FISA?
  5. What's Really Going on with Real ID?

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What's Really Going on in Basra?

The anti-war media, like the NY Times and the Washington Post, have been spinning the recent uptick in violence in Iraq as a loss for the Americans and the Iraqi government, and a win for Muqtada al-Sadr. Here is the Times on April 1:

Last week, Iraq's defense minister, Abdul Kadir al-Obeidi, conceded that the government's military efforts in Basra met with far more resistance than expected. Many Iraqi politicians say that Mr. Maliki's political capital has been severely depleted by the Basra campaign and that he is in the curious position of having to turn to Mr. Sadr, a longtime rival, for a way out.

David Price writing at Dean's World, in a post headlined: Sadr's Triumphant Surrender writes

I haven't seen the media swoon this hard over a militant anti-American in decades. Is Sadr the new Che?

To get another view of events in Iraq, I listened to the Pentagon podcast recording of a press conferences in Iraq with Major General Rick Lynch.


We've heard from him before on the Wizbang podcast. He has a rather direct approach to events on the ground, a refreshing change from the spin of the Times. Lynch has been in charge of the area south of Baghdad for the past 13 months. In this clip he summarizes the progress he has made over that time, in terms of numbers of attacks per day, down from 25 to 2, or a 90% reduction.

Play clip.

In that clip Gen. Lynch attributes the end of hostilities to his success on the battlefield. In the minds of the press, the violence stopped because Sadr told his side to stop. Both are true, of course, but it's a matter of what caused what. He is also asked about reconciliation with his enemies. He has an interesting response.

Play clip.

He clearly is not happy with Iran sending munitions to kill his soldiers. And an unhappy General Lynch is going to make the enemy in Iraq very unhappy.

What Really Went on at Bear Stearns?

The recent melt down of the investment bank Bear Stearns as a result of a gradual, and then suddenly quite steep decline in the value of their asset base, which included many derivatives based on mortgage backed securities. Here is a somewhat simplified description of the events by the head of the Federal Reserve, Ben Bernanke,


here describing the events that lead up to the merger of Bear into JP Morgan Chase on Sunday March 16 for $2 a share, down from $160 a share less than 12 months ago. The focus is on a liquidity crisis. Their assets on the books were significant, but they could not get access to them when they needed them due to other firms not wanting to do business with them.

Play clip.

So the fed extended liquidity to Bear to help them get to the weekend, when they then assisted with negotiations for the merger with JP Morgan Chase. But what is the taxpayer at risk in this arrangement? There is talk of a $30b bailout by the Fed. In fact what happened was the Fed extended credit terms and received assets in return that were "marked to market". This is a term in the financial community that reflects the valuing of an asset from its book value to how much a willing buyer would pay for it. Here is Bernanke explaining that to Senator Tim Johnson of South Dakota. The Senator's speech is slurred due to the emergency brain surgery that saved his life in 2006. Back then, he was rushed to the hospital to repair serious bleeding in the brain. That he has recovered well enough to conduct questioning at this hearing is remarkable. He asks some excellent questions. The first question is about risk to the taxpayers, and the other is about the Moral Hazard problem. This is the economic term for the idea that if the government helps one firm out of a jam, others will behave in a more risky manner, knowing that they will get the same treatment if they get in trouble. Regulators take extra care to prevent the creation of a moral hazard by preserving risk.

Play clip.

Later on, the Chairman of the Securities and Exchange commission, Christopher Cox discusses role of the SEC and the capitalization of Bear Stearns. Bear Stearns was in fact solvent throughout the crisis. The problem was that no other firm would lend them cash, even if the loan was backed by solvent assets, like treasury securities, the most risk-free investment in existence.

Play clip.

Keep these facts in mind when you hear people like Hillary Clinton and others claim that the fed bailed out Wall Street, but can't afford to bail out Main Street. Speaking of Hillary Clinton, our next topic is...

What would a Hillary Presidency Look Like?

I am not a fan of Hillary Clinton. As my Wizbang colleagues have repeatedly pointed out, she is notto be trusted. Here she is on Jay Leno's show talking about a mythical 11 year old boy's remarks to here. Thanks to Rus Roberts at Cafe Hyak for pointing out this clip, also available on Wizbang Blue.

Play clip.

What that remark points out is Hillary's total confidence that she can fix any and all problems. If someone's hourly wage is too low, just legislate a higher one. If the firm that employs the person can only pay a fixed amount, legislate no reduction in hours. As Rus identifies, this is foolishness on stilts:

I wish Jay Leno had pointed out that the cut in hours was the result of passing the minimum wage--that it was as inevitable as gravity. I wish he'd said that the story showed how the minimum wage is a false promise of prosperity. I wish he'd pointed out that fighting isn't enough, caring isn't enough, that prosperity can't be legislated any more than self-interest can be made illegal. I wish Jay Leno had said that when you find yourself in a hole, the first thing to do is to stop digging.

And if that little boy really exists, I'd like to tell him that a Senator fighting for you is a losing proposition. You have to fight for yourself. If your Mom wants more money, she needs to go back to school or work a second job. And as for you, stay in school. It's the best way to avoid earning the minimum wage.

What's Really Going on with FISA?

The Democrats in Congress have blocked the renewal of a modification of the Foreign Intelligence Surveillance Act, or FISA. As a result, the process of watching and listening to terrorists in foreign countries is more difficult now that it was before Congress mandated that the modifications expire. Here is a clip from Attorney General Michael Mukasey appearance at the Commonwealth Club of San Francisco. This section is part of the question and answer session after the speech. There are two issues that are holding up the FISA modifications. The first is the ability to listen to phone conversations of suspected terrorists when the conversation signal goes through wires in the United States, and the second is immunity from lawsuits against the phone companies who provide the access to those lines. This clip deals with the immunity issue.

Play clip.

Later on Mukasey also talks about the need to know what the terrorists are talking about. He is asked if we profile muslims at airports.

Play clip.

He clearly takes is personally.

What's Really Going on with Real ID?

There is a lot of bunk out there on the subject of the Real ID Act, which is Homeland Security's attempt to improve the identity cards people use to board planes, cash checks, and authenticate potential employees, namely drivers licenses. Here is the Governor of Montana on NPR blowing smoke about the Act:

Play clip.

He is right that this is an unfunded mandate. In fact, that is probably his primary objection. He'd like to get money to pay for the infrastructure that will be required to support Real ID. What he is not saying is what the act actually will do. For that, we can listen to a speech at the Heritage Foundation on January 16 by Stewart Baker, Assistant Secretary for Policy, U.S. Department of Homeland Security. Governor Schweitzer is not telling the truth about Real ID. Surprised?

Play clip.

So it's not just a matter of some high school students faking ID's. There will be an online authentication process to ensure that a document presented is what was issued. The objections to Real ID are from governors holding the fed's hostage for money to buy systems to track identities, and from others who are using the threat of big government to scare people and prevent the adoption of safe and effective means of issuing identification cards. I recommend listening to the entire presentation at the Heritage web site.

That's it for now, podcatchers. I'm Charlie Quidnunc reporting from Mercer Island.

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