- The Washington Times - Friday, March 13, 2009



President Obama’s gamble? I don’t think so (“Obama’s gamble,” Op-Ed, Tuesday). In fact, I doubt that Mr. Obama or most members of his party even realize they are gambling. Rep. Barney Frank became the poster child for liberal financial ignorance when he announced publicly that “systemic risk” was a theoretical term, and why bother even considering reform at Freddie Mac and Fannie Mae. This mind-set continues in the Democrat-controlled Congress when the highest priority is to spend $800 billion to pay off political constituencies rather than take a couple of weeks debating how best to spend the borrowed money. The last remaining corrupt and incompetent Republicans go along with the ruse and even defend the pork publicly while the fuse on the global quadrillion of derivative bets gets shorter.

You know that expression the liberals like to quote to justify their actions: “We are all in this together.” Apparently, we are. All that stuff about diversification and risk management turned out to be a ruse. Your foreign stocks tanked along with your U.S. stocks, and if you fell back on bonds, they also may have tanked because of the credit market freeze-up. All of those diverse assets you held became more connected, not less, and that quadrillion-dollar blob of credit derivatives did not guarantee anything but financial annihilation. The annihilation will occur when those derivatives unwind, and they will, because the underlying assets are now junk.

Things are not going to get better until after the fire burns out, and it is just starting. As Tony Blankley points out, the numbers are way too large to affect with yet another bailout of borrowed money. In fact, the public has become well aware that the politicians are clueless and corrupt and ever larger Keynesian infusions are stimulating nothing but more fear.



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