- The Washington Times - Wednesday, November 25, 2009

AVOIDING RISK

“For anyone who wondered if last winter’s federal seizure of the financial services industry would have adverse economic consequences, an answer is now available,” Wall Street Journal columnist George Melloan writes.

“The credit market has been tilted to favor a single borrower with a huge appetite for money, Washington. Private borrowers, particularly small businesses, have been sent to the end of the queue,” Mr. Melloan said.

“The Federal Reserve, which supervises some 7,000 banks, has been telling bankers that they must cut risk. The most spectacular step in that effort was the Fed announcement last month that it will evaluate the salaries of bank officers on how carefully they manage risk.

“By official definition, Treasury securities are risk-free, so how better to manage risk than to pad your bank’s portfolio with Treasury securities, which is what bankers are doing. Under the new management from Washington, bankers who take a flyer on a venture that might some day become an Apple, Microsoft or Google will risk not only their depositors’ money, but a possible pay cut. Banking has been captured by the nanny state, which means that its potential for contributing to economic growth and job creation has been sharply curtailed, even as its potential contribution to government growth has been expanded.

“The federally dictated risk-aversion was under way even before the Fed began monitoring banker paychecks. According to the Fed’s September flow-of-funds report, commercial banks were net buyers of Treasury securities to the tune of $25 billion on an annualized basis in the second quarter. They were net buyers of federal agency paper - think Fannie Mae and Freddie Mac - at an annualized rate of a whopping $185 billion, contributing mightily to federal efforts to keep these miscreants afloat. Meanwhile, private lending, which once was the mainstay of banking, was shrinking at a $392 billion annual rate.”

NEWS BLACKOUT

The Media Research Center’s Rich Noyes reports that the broadcast networks have been silent about revelations of scientific fraud by leading advocates of global warming.

“As of Tuesday morning, the broadcast networks still haven’t uttered a single word about the revelations late last week of e-mails showing scientists on the left-wing side of the global warming debate plotting to hide data and silence those on the other side in an effort to prop up the notion of a ‘consensus’ on the issue,” Mr. Noyes said at www.mrc.org.

“But when the liberal side of the debate charged that their opponents were involved in a ‘conspiracy’ to tilt the debate in their favor, those same networks eagerly jumped on the story and castigated the evil ‘deniers.’

“In 2007, as Brent Baker chronicled at the time in the MRC’s CyberAlert, the broadcast-network evening newscasts jumped to hype a House Committee on Oversight and Government Reform hearing meant to publicize a report from two far-left groups about how the Bush administration supposedly suppressed science about the dire threat of global warming - as if that view wasn’t getting plenty of play in the mainstream media. …

“On Monday, the New York Times ran a front-page story about the exposure of the censorious tactics of left-wing climate scientists, but that night the networks refused to notice. Double standard, anyone?”

ABOUT THOSE JOBS

“At first it was just an unverifiable assertion. Now it turns out to have been a case of bureaucratic ineptitude and possible fraud. Transparency and accountability aren’t working out the way President Barack Obama had hoped,” Caroline Baum writes at www.bloomberg.com.

“The administration was already skating on thin ice when it announced on Oct. 30, with great fanfare, that 640,329 jobs had been created or saved as a result of the $787 billion American Recovery and Reinvestment Act,” the writer said.

“Not 640,000, or even 640,300. Six-hundred-forty-thousand- three-hundred-and-twenty-nine.

“Asked about accumulating reports of phony jobs in phantom districts, Mr. Obama told Fox News’s Major Garrett that ‘this is an inexact science.’

“Turned into an exact one by his administration, I might add.

“Even Vice President Joseph R. Biden Jr. had the good sense to round up to the nearest million, which puts the number of jobs created or saved in line with ‘government and private forecasters’ estimates’ for the Recovery Act.

“Local newspapers across the country started to notice problems with the, er, jobs. Small stuff, like jobs that weren’t created and congressional districts that don’t exist. You have to admire the consistency.

“Watchdog.org, a collection of independent journalists covering state and local government, has put together a ‘Guide to the Stimulus, District by (Phantom) District.’ Overall, the group found that 440 phantom districts in 50 states, the District of Columbia and four U.S. territories received $6.4 billion and created or saved - let’s consolidate to ‘craved’ - 30,000 jobs. That works out to $213,333 per job. Think how much easier, not to mention transparent, it would have been to hand out that kind of real money to real people who will spend it!”

GOING SLOW

“Question: why is it that on every issue save one, the Obama administration has had its foot on the gas, pressing ahead with all manner of speed and urgency?” Tom Bevan asks in a blog at www.realclearpolitics.com.

“Eight hundred billion worth of taxpayer money had to be rammed through Congress to avoid an economic apocalypse, we were told. No delay could be tolerated in revamping one-sixth of the American economy with health care reform. It needed to be done by August, the president initially said, before letting his self-imposed deadline slip to the end of the year.

“But on Afghanistan, the administration has said just the opposite: Things must be taken slow; the problem must be studied from every angle; and all possible deliberations must be made before coming to any conclusion.

“Why hasn’t the same logic applied to the administration’s approach to health care, for example?” Mr. Bevan said.

“When pressed as to why the decision-making process has been so drawn out, the White House has said that sending troops into harm’s way is a momentous, life-or-death decision - which it is - and that the president wants to make sure all relevant information has been considered.

“But how does that reasoning square with the fact that Obama already sent troops into harm’s way back in March when he deployed an additional 21,000 soldiers to Afghanistan? That was a life-or-death decision as well, no? Was he not deliberative enough the first time around?”

Greg Pierce can be reached at 202/636-3285 or [email protected]

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