BLAME THE ECONOMISTS. Yes, blame the economists:

What we are witnessing, in the broadest sense, is the bankruptcy of modern economics. Its conceit has been that we had solved the problem of stability. Oh, there would be periodic recessions, but the prospects of a major economic collapse were negligible because we knew how the system worked and could take precautionary steps to prevent it. What's been so unsettling about the present crisis is that it has not conformed to the standard model of business cycles and has not submitted to familiar textbook solutions ..

The word that best epitomizes mainstream "macroeconomics" .. is demand. If weak demand left the economy in a slump, government could rectify the situation by stimulating more demand through tax cuts, higher spending or lower interest rates. If excess demand created inflation, government could suppress it by cutting demand through more taxes, less spending or higher interest rates.

Economists of this tradition watch consumer and business behavior. Are car sales soft? How much are companies raising prices? What about profits? The $152 billion "stimulus" program earlier this year was a classic exercise in "demand management." It didn't work well mainly because this crisis originated in frightened financial markets. Massive losses on mortgage-related securities caused some financial institutions to fail. As fear spread, financial institutions grew wary of dealing with each other because no one knew who was solvent and who wasn't.

I'm guessing that Robert Samuelson isn't aware that Hayekian economics -- an economics which is NOT epitmized by "demand" -- has not failed us, and in fact not only anticipated the current crisis, but explains artificial booms as creators of financial crises.

A lot more could be said about the failures of modern economics, and the explanatory successes of Hayekian economics in the current period.  But what is most troubling about the failed discipline of economics is that none of this will or can do anything to change the entrenched sociological system which rigidly locks economics into a mathematical pseudo-science which priviledges easy to grade 4th rate math constructions -- along with easy to evaluate "I'm smart" exercises in career making via 4th rate mathematical publications and dissertations.

The truth needs to be told about economics, but count on the mainstream economists not to tell it -- or even to acknowledge their titanic scientific failure. 

Titanic.  Looks like I've inadvertantly run into exactly the right word there.

READ ALSO this and this and listed to this.

BONUS:  Friedrich Hayek's classic take down of modern macroeconomics, his Nobel Prize address "The Pretence of Knowledge".

EVERYONE SHOULD READ what Mark Levin wrote today about the financial crisis and the Bush / Democrat money grab.

And anyone who wants to know what happened with Fannie Mae and the mortgage finance industry don't miss this excellent EconTalk discussion between Russ Roberts and Arnold Kling.

UPDATE:  John McCain should spend his every last campaign dollar running this ad over and over in every market in the country:

WHAT DO "COMMUNITY ORGANIZERS" DO? They create gigantic financial crises -- using your tax money.  Meet Barack Obama and friends.

UPDATE:  More on ACORN and Obama.

A GREAT INTERVIEW with Sarah Palin's parents.  These are better people than the typical people you find in politics.

THE BAILOUT MONEY will come from the Middle East and China. 

The operational philosophy of the U.S. government continues to be:  drive up consumption now and leave our children and grandchildren living far more impoverished lives later.

HELP STIMULATE THE AMERICAN ECONOMY. Think only Wall Street needs to serve the country in this time of need?  Think again.  It's time for all good Americans to do their patriotic part by selling their own "distressed assets" to the U.S. Treasury at well beyond book value.  Got a sh*pile you haven't been able to unload?  Sell it to Henry Paulson.

UPDATE:  What the Congress is buying.

WARREN BUFFETT TO THE TAXPAYER  -- you losers need to ante up a few hundred billion dollars so we can get this little poker game going again.

ECONOMIST STEVEN HORWITZ explains the makings of the financial crisis in "An Open Letter to My Friends on the Left."

BONUS:  Alan Bock -- what happened.

Also, how it happened, the video:

THE DISGUSTING BARNEY FRANK.  Why isn't this man bathing in hot tar?

UPDATE:  John Fund on Barney Frank and original sin.

VIDEO:  Democrats in Congress acting as agents of Freddie & Fannie, blocking a Republican effort to stop the madness in 2004.

THEY'VE GOT YOUR MONEY

THIS WOULD MAKE A GREAT MCCAIN-PALIN AD:

QUOTE OF THE DAY

What macroeconomic theory says that we run the risk of a Depression if we don't have a bailout? ..  If macro is a genuine discipline, it has to consist of something more rigorous than "If Bernanke is worried, then so am I."

-- Arnold Kling

Kling was likely responding to this embarrassing post from Harvard macroeconomist Greg Mankiw.  A lot of smart people believe a lot of stupid things -- and it's just a fact that there exists no consensus "science" of macroeconomics, just a patchwork of rival "I'm smart" exercises in what from the perspective of the professors in the math department is just 3rd rate mathematical gymnastics.  Microeconomists around the country almost universally don't believe in it, and those that teach it do so primarily because they get paid to do so.  And what the economists teach their undergraduates is almost without exception something very different from what the elite macroeconomists teach to their grad students.  This tells us something very important about the non-science status of macroeconomics.  Unlike real science, there is no scientific consensus.  Unlike real science, most in the discipline don't believe in it.  Unlike real science, grad students are taught something different than the undergraduates are taught.  The public needs to know this.

The fact that "Ben is at least as smart as any of the economists who signed that letter [against the $700 billion bailout]" gives us no reason at all to have confidence in the theoretical understanding behind Bernanke's actions at the Fed.  None.

UPDATE:  The socialists and the corrupt class have another $700 billion of your money.

ALSO:  Bruce Bartlett -- the case for the bailout.  Note well that you don't have now a lick of the mathematical fashion show which is macroeconomics to understand Bartlett's argument -- nor do you have to be the smartest guy in the room.  This stuff has nothing to do with being the "smartest" math drone in the faculty lounge.  It's age old knowledge, know almost forever to non-economists in the financial sector.  No need to bow down to whatever whim crosses the mind of the "smart" economists -- who, as I've suggested, are considered "smart" when it comes to economics for reasons which are completely bogus from the point of view of science and economic understanding.

AND THIS:  The Bush / Democrat Congress bailout for Wall Street is now down to 24% support.

THE HOUSING BUBBLE / FINANCIAL CRISIS IN 4 EASY STEPS.

IF BARACK OBAMA WERE A REPUBLICAN this is all you would hear about for the next week.  Begin watching at about 1:15 into the clip.

Of course, Obama isn't a Republican, and this will be the one and only time you ever do hear about it, unless you're an alternative media watcher or listener.

BEST LINE of the Presidential debate:

Senator Obama has the most liberal voting record in the United States Senate. It's hard to reach across the aisle from that far to the left.

LIVE BLOG -- THE PRESIDENTIAL DEBATE

8:00  Well, that's enough for tonight.  Tomorrow we've got soccer.

7:57  Here's the debate transcript -- Obama without all the Nixon creepiness, McCain without the steely passion, conviction, and self-assurance.

7:55  Could you tell the house was full of kids while I live blogged this?  Chaos.

7:54  Michelle Malkin live blogged the debate here.  And Vodkapundit live blogged it here.

7:48  This is clever.  Obama's spin team has a pre-packaged, pre-written talking point, criticizing McCain for "talking about the past" when talking of his association with Henry Kissinger,  a topic McCain got into when responding to a pre-scripted Obama attack point about McCain and his "advisor" Henry Kissinger.  I don't think I've seen this before, a debate point constructed in order to get a candidate to talk in a way that sets up the launch of a post-debate attack.  Clever.

7:47  Wow.  McCain already has a post debate ad out -- a good one.  Via Ace.

7:42  So what are other people saying?  "Obama comes across as bland and policy speak" -- Nina Easton of Fortune on Fox.  Rick Brookshire:  "the debate seemed very generational. Obama sounded young and forceful, McCain sounded old and forceful. If age entails experience and knowledge, a point McCain tried to make, then he wins. I wonder how he sounded to someone 35 and younger. I am 53, and I felt I was listening to Ronald Reagan, or my father. Obama sounded a college professor -- a TA. "

7:37  I'm happy it's over.  Lot's there, but needed more jokes.  McCain's relentless passion and seriousness has left me worn out.  McCain wins on intensity and stamina and mastery of every topic discussed.  Obama.  He bored me.  And when he didn't bore me, he gave me that somewhat creepy Nixon feel.  Not a confidence builder for the American people.

7:36  Obama will extend the Great Society to all of the world.  Wow.

7:33  McNeil-Lehrer seems happy to let Obama filibuster, when he's rambling, and doesn't have much to say, and goes from topic to topic.  McNeil-Lehrer isn't doing Obama any favors.

7:30   "This is the greatest country on earth, but .. ".  Any sentence that starts like that is a loser with the majority of Americans.  Obama, you're a loser.

7:27  McNeil-Lehrer wasn't such a typical representative of left / Democrat media think as he's been in prior years.  And he's mostly stayed in the background.  A good very professional job.  Not many folks like this left in journalism.

7:25  Off putting facial mugging by Obama.  If you've got something to say, say it.  Don't mug.

7:24  The college sophomore is boring me again.  I'm trying to check out the live blogging by Vodka Pundit.

7:21  More idiot stammering from Obama.  Off putting.  Ah, ah, ah.  Ah.  Not a confidence builder.

7:19  McCain is coming across as a man who knows himself and knows the issues.  Obama, not so much.

7:18  Ann Althouse is also live blogging the debate.  My interest must be flagging.  Obama is boring me.

7:17  Is Obama winning this on radio?  Nixon did.

7:15  Obama's giving me that Nixon vibe again.  It's Nixon vs. Kennedy.

7:14  McNeil-Lehrer decides to get out of the way.  Good.

7:13  McCain senses the same thing I did, and makes a stab at a joke about the Obama seal.

7:10  McCain needs to tell a roundhouse joke, and put Obama away for the debate.  I can just imagine Reagan doing it right now, letting the audience express their sense that Obama really is a kind of a rookie fool, who's just a bit in over his head.

7:08  I actually find McCain's passionate contempt and disbelief at Obama's ignorance and bad judgment to be deeply effective.  It makes you think there must really be something to it -- that Obama's bad judgment and ignorance really matters in deciding this election.

7:05  I'm judging this thing mostly on feel and style and debating effectiveness, the thing goes to fast to much engage the particulars of the substance.

7:02 The lefties must be very disappointed with Obama, he's done little to say all the kinds of things that sets their hearts to going pitter-patter when it comes to the American military and America's place in the world.

7:01  Obama fumbles talking about a mother and her dead son.  He seems to know he's stumbling and not coming off well talking about such things on the same stage with McCain.

6:58  McCain tells the very effective story about his opposition to Reagan on the Marines in Lebanon.  McCain effectively goes through his record of courageous and seemingly sensible foreign policy stands on a series of tough calls.

6:57  McCain scores again, pointing out Obama's ignorance about the history of the Pakistani state.

6:55  Obama lies about his position on invading Pakistan, comes up wish a really weak shot at McCain on singing about bomb, bomb Iran.  Where's the ability to score with a joke, people?

6:54  McCain scores taking Obama to school on Afghanistan, saying the same strategy Obama rejects in Iraq will be required in Afghanistan -- Obama's plan of just more troops is a loser without an intelligent strategy.

6:52  Why does McCain always start so slow in these things?  It seems he needs to be provoked, and only then will he untie his hands, and engage.

6:51  Obama does a weak college sophomore move, weakly talking over McCain when McCain had the floor, and then giving up.  Not classy.

6:49  Yep, Obama is giving me that Nixon vibe.

6:47  Obama listening in the split screen while McCain speaks looks like Nixon in the debate with Kennedy -- his head keeps wiping back and forth, and he doesn't come across as assuring, genuine or trustworthy.

6:43  McCain is counter punching effectively.  He's strongest when he's energized and roused to punch hard.  McNeil-Lehrer let Obama go on and on and on -- but cuts off McCain right in the middle of a dismantling of McCain, separates the two, and then lets Obama take shots at McCain.  The referee, well known to everyone, is leans left and leans Democrat -- and the reffing here seems to reflect that.

6:41  The're mixing it up on Iraq now.  Obama is giving a set speech, which weaves a set of effective talking points and sound bites.

6:37  McCain seems to think Federal spending is the crux of the problem with the economy, showing either weak economic understanding, or poor political judgment in his failure to take Obama and the Democrats down on the corrupt misregulation of the money and finance sectors.  At least McCain could do the very minimum and explain how spending connects up with the financial crisis.  A  disconnected mention of borrowing from China isn't enough.

6:36  Obama scores by linking big themes to particular issues -- "our values" with tax cuts and health care.  Wish McCain had the capacity for doing this.  Oh, we do miss Ronald Reagan.

6:35  More Obama stammering.  Not a confidence booster.

6:33  Where's the funny?  McCain crushed Obama during the Rick Warren debate by scoring repeatedly with the audience when he made them laugh.  McCain needs to lighten up and ease the tension -- we're happy people out here John.  Make us laugh.

6:31  Obama tries to toss out a pre-scripted line about being "liberal" because he's opposed Bush's bad proposals.  The line went flat, and didn't land.  A minor flub.

6:30  More annoying stammering from college sophomore Barack Obama.

6:29  McCain is convincing when he speaks of particular examples, such as cost-plus contracts, and he speaks with such passion and conviction it's convincing.

6:27  We'll the idea that this was a foreign policy debate clearly got thrown out the window by McNeil-Lehrer.

6:25  The more he confronts Obama, the better McCain does -- and the worse Obama comes across.  When McCain asserts that Obama isn't telling the truth, he's believable -- Obama comes off less convincing.

6:25  When he mixes it up with Obama, McCain comes across as a man with conviction, a genuine man who's telling the truth.

6:23  What's wrong with the sound?  Obama's voice doesn't match up with his image on the screen.  Awkward.

6:22  Obama sounds like he's running for the college student body, with is stammering.

6:21  McCain is coming on with passion on earmarks -- the passion and the conviction totally overwhelms Obama's narrow points about the detail.

6:20  McCain gives a good explanation with a good example -- Ireland and the economic advantages of low taxes in the global economy.

6:19 In the split screen, Obama looks like a school boy.  The more McCain punches directly and like an adult who belongs there, he kills.

6:18  After apologizing, McCain punches back, gets his passion back  -- he's throwing roundhouses here, and scoring big points.

6:17  Right now I'd score this in Obama's favor.

6:16  McCain left the barn door open, and Obama just drove through it, pointing out the insignificant role of earmarks in the disaster which is the Federal budget.

6:15  McCain is rambling and unfocused.  He's got the Fannie Mae corruption issue right there in his lap, and he's failing to pick it up.  Instead he goes to the large theme issue of overspending and earmarks -- but fails to tell anyone how this links up with the economic crisis.

6:13 McCain is really letting me down.  He just had a great opening to directly tag Obama on the mortgage crisis, and he dropped the ball.

6:11 McCain is right about responsibility, but he is incapable of driving home specifics that give us confidence that he knows what needs to be done -- or knows how to take advantage of an issue overwhelmingly favorable to the Republicans.

6:10  BS alert -- Obama blames everything on the American system of free enterprise -- and those who advocate it.

6:08  McCain fails to give us any principles underlying his approach to the socialization of the housing mortgage industry.

6:07  McCain seems nervous and not well prepared.

6:05  BS alert -- Obama blames everything on Bush and McCain.

6:04 Not much of a debate yet -- Obama is giving us a rehearsed speech.

WHAT WOULD HAYEK SAY? Well, part of what he'd say is this.  But don't be misled, Hayek would say a whole lot of other things as well.  And Hayek wasn't a fan of (non-benign) deflation, and he certainly saw a role for the central bank in stopping a liquidity crisis.  So, once again, don't be misled.  Instead?  Why not read some Hayek or the next best thing, Roger Garrison on Hayek and the boom and bust cycle.

IT'S NOT A BAILOUT ANYMORE, IT'S A LEFTIST CHRISTMAS TREE.

A THUMBS DOWN for the Paulson plan from leading academic economists.

COMPARE:  Free market economist on the bailout.  And more "free market" reactions here.

THE ANT AND THE GRASSHOPPER -- THE UPDATED 2008 EDITION.

JAMIE GORELICK RECIEVED A MILLION DOLLAR sweetheart loan from Countrywide while an executive at Fannie Mae.

So why don't we have some prosecutions here, already?  Quotable:

Countrywide was the nation's biggest mortgage firm and was the biggest supplier of mortgage securities to Fannie Mae under an exclusive "strategic agreement" reached by the two firms in July 1999. Under the deal, Countywide agreed to deliver a large portion of Fannie's annual loan volume in exchange for special financing terms.

Together, the two firms took a series of steps in recent years that loosened their underwriting standards, including several reductions in requirements for documentation of borrower incomes that critics say led to a wave of fraud. The U.S. financial system buckled this month under the weight of hundreds of billions in mortgage loans to borrowers who can't pay them back.

While Countrywide was developing a closer working relationship with Fannie Mae, the company also had created a special path to handle loan applications from influential figures. The "Friends of Angelo" program channeled loan applications from celebrities, public figures and sports stars -- often singled out by Mr. Mozilo -- to a department where the borrowers received special treatment, sometimes including lower interest rates and a reduction in fees.

UPDATE:  A grand jury is investigating.

"AN ORDER OF EXCESS AND RECKLESS BEHAVIOR" brought on in no small measure by the Federal Reserve -- so says Dallas Federal Reserve Bank President Richard Fisher:

"The seizures and convulsions we have experienced in the debt and equity markets have been the consequences of a sustained orgy of excess and reckless behavior, not a too-tight monetary policy .. Rates held too low, too long during the previous Fed regime were an accomplice to that reckless behavior.''

It sounds like someone has been reading his Friedrich Hayek, and would do well reading a good measure more.

A CALL TO ARMS: "TAKE BACK AMERICA."

UPDATE:  A half dozen "free market economists" weigh in on the bailout and the financial crisis.

Richard Epstein -- what happened.

QUOTE OF THE DAY:  "We turned good renters in to bad home owners."

A bailout for ACORN?

Fannie Mae corruption everywhere.  Also, are we trying to save Pets.com?

WHY IS PRESTOPUNDIT SO !&*! DAMN ANGRY?  I'm !&*! damn angry because the !&*! damn government created a financial crackup that cost neighbors their homes, cost friends their jobs, and for a period of months this year put prostitutes on my little middle class street in a house which banks had flipped and foreclosed on multiple times.

I'm !&*! damn angry because the !&*! damn government created a financial crackup that suckered family members into losing large sums of money in unsustainable sectors of the economy.

I'm !&*! damn angry because I've been explaining to folks for years what the the !&*! damn government was doing and all anyone wanted to talk about was global warming, Iraq, or how great the economy and the stock market were doing.

I'm !&*! damn angry because the !&*! damn government has been run by people who represent themselves as champions of a soundly-regulated free market economy, and all the while the government has been aggressively pursuing economically illiterate Keynesian macro policies and effectively criminal klepto-socialist regulatory and redistributive micro policies.

I'm !&*! damn angry because the !&*! damn economically illiterate macroeconomic policies pursued by the !&*! damn government over the last decade come right out of the textbooks of the most "highly credentialed" economists at the top economic department in America.

I'm !&*! damn angry.  But being !&*! damn angry doesn't stop me from enjoying a !&*! damn joke or two:







More here and here.

WaMu HAS BEEN SEIZED BY THE FDIC -- key facts:

Chief Executive Officer Kerry Killinger .. steered WaMu into subprime mortgages, only to discover .. that the thrift was lending to many unqualified borrowers ..

WaMu's .. held large amounts of mortgages made in U.S. regions where housing prices have fallen sharply, such as California.

WaMu has $53 billion in option adjustable-rate mortgages, a type of loan particularly vulnerable to default, as well as $16.1 billion in loans made to subprime borrowers.

"LET THEM FAIL"  -- top Hayekian economist Peter Boettke.

A MODEST PROPOSAL. MY AMENDMENT to the bailout plan:  add a clause tying the pension of the President and the members of Congress to the financial success of the plan.  If Bush is right, and all of these junk mortgage securities turn out to be undervalued, then the taxpayers come out big financial winners.  In that case, Bush and the Congress can get their pensions. 

But if these securities are actually over valued, and it ends up costing taxpayers money, Bush and the Congress forfeit their pensions to help defray the massive costs of their terrible financial judgment.

As Milton Friedman often pointed out, people tend to make better decisions when their own money is on the line, and they tend not to make such good decisions when they are deciding with other people's money.

UPDATE:  Chrisj comments:  "One principle that's central to the market bailout is this notion that risk and reward go together.  Why should this not also apply to the folks in government?  Do you think we'd get a little more risk aversion if the president, SecTreas, Fed Chief, and everybody in congress's future pay and pension was tied to the outcome?"

GEORGE BUSH: I may be a dimwitted, incompetent mediocrity at everything else, but trust me, I'm a genus when it comes to investing in real estate and junk mortgages.  No George, you're also an incompetent dimbulb when it comes to real estate and mortgage finance.  Please resign your office, and make these bad bets with your own money.

UPDATE:  Former Bush Treasury Secretary Paul O'Neill on George Bush and the mortgage meltdown:  "I don't think he understands or knows much about any of this and it shows."

QUOTE OF THE DAY:

"The country has run out of qualified buyers .. [and] the numbers of people who are entering their prime trade-up purchase years (ages 36-43) is decreasing until 2016." -- Century 21 agent Nancy Ulrich.

ECONOMIC HISTORIAN ROBERT HIGGS points out that credit is flowing just fine -- and credit is being supplied by the private market at record and near record levels.  So what if things are beginning to level off?:

One might object that a leveling off, after a long period of steady, rapid growth does constitute a substantial change in credit-market conditions. True, enough. But we must also recognize that the rapid growth of credit during the years from 2001 to 2007 was scarcely a healthy development. In fact, this effusion of credit fueled the housing bubble and countless other malinvestments that now must be liquidated, because without a continuation of the very-easy-money regime, these projects cannot be brought to completion or, if already complete, operated without further loss.That malinvestments must now be liquidated merely reflects the mistakes made in the past, induced by bad government policy at the Fed and other credit-related agencies, such as Fannie and Freddie. Of course, some of the necessary adjustments will be painful for the parties directly involved. But the huge bailout now being concocted in Congress will only compound the errors of the past by keeping some malinvestments on life support, deferring the day that lenders must write off bad debts, and preventing the entire financial system from returning to a semblance of economic viability without ongoing subsidies and bailouts that impoverish the taxpayers and threaten the entire economy.For now, however, the important point to recognize is that the sky is not falling. Lenders continue to lend at high rates, and the economy continues to operate reasonably well. If people panic and allow Congress to exploit the hyped-up fears of the moment, however, much worse outcomes may be brought about ..

Of course, we been at the tipping point of the artificial boom / inevitable bust -- which is putting the inevitable train wreck of the misregulated mortgage industry into play -- and these stresses, along with the massive socialist intervention of the government, are showing up in the credit market.

STEVE CHAPMAN on the bailout:

This plan would nationalize the money-losing part of the financial sector, to the benefit of capitalists who have made spectacularly bad decisions - fostering more bad decisions in the future. It would add to the liabilities of a government that is already living way beyond its means. It would give unprecedented power to a couple of officials who have proved highly fallible in trying to avert this alleged crisis. And it poses the risk of abuse and corruption because the government has no way to gauge the value of what it will buy.

Nor is there any guarantee the plan would work.

LYNDON JOHNSON and the Fannie Mae story.

CALL HIM GEORGE HERBERT HOOVER WALKER BUSH.   The President is following the same bailout playbook used by Herbert Hoover in the early 1930s:

Consider what happened during the 1930s. In the fall of 1931, the Hoover administration realized that financial institutions no longer held the trust of depositors, investors, businessmen or each other. These organizations were losing deposits so rapidly that the financial system faced complete collapse. These organizations needed to cleanse their balance sheets of assets, which under current conditions, had little immediate value and could not be used to raise cash.

In January 1932, the Hoover administration created the Reconstruction Finance Corp., an entity authorized to extend loans to all depository institutions in the nation. The RFC could accept as collateral a broad array of assets, including those deemed to be of little immediate worth but of potential long-term value. During its first year, the RFC lent nearly $1.5 billion and acquired equity stakes in thousands of financial institutions. As a share of the capital of the financial industry, this lending would be the equivalent of roughly $100 billion today. During its second and third years, the RFC extended loans to banks and acquired equity positions in financial institutions amounting to more than $3 billion dollars, equal to roughly $200 billion today.

The financial crisis slowed temporarily, but the bleeding continued. Bankers restricted lending to entrepreneurs, consumers and each other. Industrial production plummeted. Unemployment skyrocketed. The financial meltdown resumed, forcing the president to declare a national "banking holiday."

It's worth reiterating the theme of this historical analogy in stark terms. In the past, we faced a similar situation and employed similar policies. The policies marked a deepening of the downturn, not an end to the agony. The policies signaled the demise of the financial system and the need to construct new institutions.

ILLEGAL ALIENS AND THE MORTGAGE CRISIS -- the story no one will tell.  The worst hit area in Orange County, California -- with housing prices down 50% in one year and whole blocks wiped out by foreclosure -- is the city of Santa Ana, ground zero of the illegal alien invasion in OC.

IT'S ABOUT TIME JOHN MCCAIN TOOK ON THE NY TIMES.

The next step is to pull their press passes -- and shut them down as the biggest violators of American campaign finance regulations in American history.  I don't believe in those laws, but the NY Times does.  It should get a taste of them, good and hard.  The NY Times is by far the largest financial contributor to Barack Obama and the Democrat party -- massively violating campaign contribution limits -- and the NY Times should be padlocked until it stops making these massive financial contributions to the Obama campaign.

ACE explains the financial meltdown (language warning).

BANKS ARE SELLING FORECLOSED HOMES for 30% less than the amount owed to the bank in Orange County, CA.

THERE'S A REASON WASHINGTON MUTUAL IS ON THE VERGE OF BANKRUPTCY --  they've made lots of deals like this one. 

It seems ever month or so I read of another bad real estate deal -- with Washington Mutual taking a huge financial bath on both sides of it.

ECONOMISTS AGAINST THE GIVEAWAY -- a list dominated by U. of Chicago economists.

Note well what snobs economists are: it looks like only economists at the most "elite" schools were asked to sign.  Another example of the rule which holds that the greater the absence of true merit defining an elite, the more work which is applied to sustaining the divisions of rank.

But let's speak truth to power.  "Elite" university mathematical economics is the great Hollywood back lot of science, a grand phony edifice of imitation science, behind which lies empty dirt and a few bare planks .. and nothing.

IT TURNS OUT OBAMA DOES HAVE EXECUTIVE EXPERIENCE --  working with anti-American terrorist Bill Ayers on a Chicago education project whose aim included the left wing radicalization of school children.

You can't make this stuff up, folks. More here, via Instapundit.

BARACK OBAMA, SR. --  an important new profile from the Boston Globe:

On a hot July weekend nearly 40 years ago, Barack Obama Sr. was shopping on a busy Nairobi street when he ran into his friend and mentor Tom Mboya, one of Kenya's most charismatic political leaders. The two chatted for several minutes and Obama kidded him that his car was illegally parked.

"I told him, 'You are parked on a yellow line. You will get a ticket," Obama, the late father of the US presidential candidate, would later testify, according to press accounts at the time. And then the two men parted.

Minutes later, Mboya was shot twice and died in a pool of blood. It was a crime that convulsed the newly independent nation and would, in Obama's eyes, trigger a steep decline in his own promising career. Then 33, and a freshly minted government economist, he testified in the ensuing trial, an act which probably enraged those responsible for Mboya's assassination ..

FIVE YEARS AGO RON PAUL explained exactly what was happening, predicting the current financial meltdown almost to a letter. 

It's sobering to reflect on the fact that Paul was likely the only man in all of Congress who really understood what what taking place.

Paul, of course, is likely also the only man in Congress who understands a lick of economics, most especially valid macroeconomics.

ALSO:  Catherine England and Jay Cochran nailed the problems at Fannie and Freddie in 2001.

THIS ISN'T THAT COMPLEX FOLKS --  Bloomberg's Kevin Hassett tells the story of the financial meltdown:

The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally ..

Take away Fannie and Freddie, or regulate them more wisely, and it's hard to imagine how these highly liquid markets would ever have emerged. This whole mess would never have happened ..

Back in 2005, Fannie and Freddie were, after years of dominating Washington, on the ropes. They were enmeshed in accounting scandals that led to turnover at the top. At one telling moment in late 2004 .. the Securities and Exchange Comiission's chief accountant told disgraced Fannie Mae chief Franklin Raines that Fannie's position on the relevant accounting issue was not even ``on the page'' of allowable interpretations ..

What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.

If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed.

But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter ..

THE MCCAIN CAMPAIGN -- THE NY TIMES IS NOT A NEWS ORGANIZATION.

True.  So lets pull some press passes, already.  You're not giving press passes to the DNC or to official Obama staffers, why give them to unofficial Obama staffers and unofficial DNC members?

Let's play hardball, guys.  This isn't beanbag.  And your not playing against honest and decent Americans.

THE CASE AGAINST HENRY PAULSON --