So the Wall Street Journal editorial page thinks Senator Brownback is wrong to put a hold on the nomination of Frank Ricciardone as ambassador to Turkey, issuing an editorial averring that while “the Senator is free to criticize and oppose this nomination … Mr. Ricciardone deserves an up-or-down vote on the floor.” The editorial goes on to claim that Mr. Brownback’s hold on Mr. Ricciardone may “make Mr. Brownback feel good, but it undermines the executive’s ability to function and American foreign policy.”
Well, in this fight, sign me up with Senator Brownback. To begin with, the idea that American foreign policy is somehow undermined by the lack of an ambassador in Ankara is quaint. If America needs to communicate with the Turks, there are plenty of avenues, from phone calls to e-mail to the dozens of other American government officials based in Turkey.
But beyond that, if Mr. Ricciardone isn’t a nominee worth using every parliamentary procedure available under the rules to block, who is? This blog understands this perhaps better than any other forum; it was at CONTENTIONS that Joshua Muravchik posted, back in May 2007, a report of Mr. Ricciardone’s preposterous claim, as American ambassador in Cairo, that “[h]ere in Egypt as in the U.S., there is freedom of speech.”
That post prompted a memorable New York Sun editorial headlined “Recall Ricciardone,” reporting:
In the same television interview, Mr. Ricciardone was asked how he could watch the execution of Saddam Hussein. He replied, “Personally, I’m against execution in principle. My personal reaction is that it is abominable.” It was a strange reply, since the ambassador hadn’t been asked for his personal views of the death penalty.
The interviewer also asked whether the ambassador had heard the Egyptian song “I hate Israel,” whose lyric include “I love Yasser Arafat” and “I hate Ehud Barak.” The ambassador’s response, according to the transcript on the embassy’s Web site, was “Yes. I also watched his latest movie on a web site.” He went on to say, according to the transcript, “It is sort of interesting. I enjoyed it.”
An earlier Sun editorial, in 2004, “Ricciardone’s Return,” described the diplomat’s clumsy and counterproductive performance on the Iraq front.
Anyway, I share the concern of the folks at the Journal about undermining American foreign policy. I just think that confirming Mr. Ricciardone is way more likely to undermine American foreign policy than Mr. Brownback’s hold on him will.
The problem is that anxiety is not helped by someone telling the anxious person not to be anxious. That only metastasizes the anxiety.
The problem is that if the banks can’t/won’t lend,then the government has to lend to our corporations directly. The money that the government is feeding to the banks is disappearing/being hoarded before it can be loaned. REPEAT/right now the treasury need to borrow money and loan it directly to corporations. For a little while////
JPod is wrong again. The litany is not impessive. It is the stuff that has already caused the market to drop JPod’s threatened 2500 points.
Bush can’t quell anxiety because his incompetence is what many people are most anxious about.
Bush should stay out of sight unless he has something new to say. His latest cameo just cost the market another 250 points.
Government can’t solve this issue with more spending or another so called New Deal. The incentives in the economy have to be changed to get us out of this quagmire. To put it bluntly, greed got us into this problem and greed will get us out. We need to cut taxes on all capital to boost investment and economic activity. Ultimately, jobs and more jobs is what is going to produce the demand for loans and is what is going to prompt businesses to expand. So policies that will boost job creation are the ones we need now. Not artificial government spending programs that will prolong the recovery, like cutting interest rates to negative whatever or government transfer payments or unproductive government jobs. We need pro-growth policies such as cutting capital gains, dividends, corporate taxes, death taxes, and the top rate on income to generate the economic activity, boost the stock market that will create the jobs that can bring about the sustainable growth we need.
Is he still in the White House? Shouldn’t he be packing for the trip to Texas?
Lessee, got my fishin pole, my cool cowboy hat, my churchkey…Yep thassall! Wonder why that crowd if forming on the lawn? Good lord, they don’t want me to talk to the press again, do they? Okay, well, who wrote it this time? No big words I hope.
Anxiety is not helped by you accusing the next president of being a muslim terrorist. Meo-con scorched earth politics are disgusting.
I reminds me about the time I was taking swimming lessons. The more the instructor yelled relax! relax! relax! I became more tense.
Look I am a died in the wool conservative. I have been since 1980. If Obama becomes president and he undertakes actions that are at the core contrary to everything that I believe in, I still hope that it works for the good of the country.
I think Bush should have spent his time talking about William Ayers or Tony Rezko or Jermiah Wright. You know, something really relevant and important.
Stephen, what do you do,TODAY,to get money to companies/individuals who need to borrow.?
Steven — while I mostly agree with your assessment, the word “greed” is not what I would use.
In fact, I think we must put it this way. What got us into this mess was government policies that not only encouraged the exercise of imprudent greed, but mandated that credit be made available for it: to bad credit risks. There are still millions of Americans who have not misused credit, in spite of literal daily blandishments to do so.
What will get us out is the normal human desire of people to better their circumstances and improve their futures — IF the government will stand back and let that happen. It is not “greed” to want these things. Seeking them through hard work and delayed gratification is not greed.
Unfortunately, Bush has never been a SMALL business owner, or operated in a business in which public business policy wasn’t a major driver of corporate decisions. He’s been in oil and professional sports. His background would predispose him to consider government bailouts appropriate, rather than annoying. That probably has a lot to do with why he doesn’t understand that the stock market was always going to react badly to the bailout.
The bailout introduces the opportunity for ham-handed arbitrariness in a gigantic slice of the financial market. No one trusts the government to make decisions based on on market principles. The feds will use the $700B in some unpredictable way based on political considerations. Investors aren’t stupid: they will move their assets into gold and cash, and wait to find out what’s to be done with the $700B before reentering the stock market. All things being equal, they WILL come back, once the feds’ play is clearer to everyone. The trick will be keeping all things equal. That’s definitely not a job for Obama. Unfortunately, McCain has done little to differentiate himself from Obama on that score.
This is a panic. And panics tend to become self-perpetuating and stray into irrational territory. There is an underlying problem but the sell-off has gone far beyond it at this point. So certainly you need to explain what the problem is and to show how it is being addressed. But fear is itself an element of the problem and it has to be noted.
JED,same question
What do you do today for businesses and individuals who need to borrow to keep their businesses/lives above water?
RCAR — direct them to the institutions that ARE lending. There are plenty of them still out there. They will be requiring the old-fashioned level of creditworthiness. But if you are creditworthy to that level, the lending rates, even with a risk premium (due to uncertainty about the government’s intentions, as opposed to the borrower’s credit), are still quite reasonable.
JED, please call the CFO of The Marriott Corp. and ask him why he can’t borrow the $40M he needs to do his short term spending becaude you know of plenty of institutions that will take care of him. Marriott has stopped construction on two major building projects because they don’t know about your sources/3000 construction workers laid off/Multiply that times the Fortune 1000/you’re going to be busy on the phone today.
#5: El que no pasa orina (meolib) only passes miasmas. The rest stays between his ears, since there’s nothing else there.
RCAR — come on, now. You’re using a specific example as though what you’ve recounted here is all there is to it, and as though this could only have happened because of the financial crisis.
How many times have major corporations stopped construction on projects when there was NOT a general financial crisis — for other reasons? You don’t know, do you?
I’m sure Marriott is being honest that that financial crisis is the proximate reason for its construction stoppage. But companies have had construction stoppages before, and they work through the issues that led to them. If Marriott literally can’t get financing from anywhere, that tells me the projects are assessed as too risky by potential lenders. Maybe they are only “too risky” in the economic climate of the last two weeks. Or maybe they are too risky, period. Or Marriott’s balance sheet looks weak to the lenders. If Marriott doesn’t want to take $40M out of its own cash reserves to continue the projects, that tells me Marriott thinks the projects are too risky too — that they won’t lead to profit quickly enough to justify doing that. Why should the lenders take on the risk, instead of Marriott?
One thing for sure: Marriott doesn’t want to just sit there, on top of real estate Marriott probably financed through lending, and is definitely paying taxes on, but can’t find a way to improve. Marriott will do something, whether it is deciding to use the company’s own cash to keep going, or selling the properties off.
Meanwhile, people have continued to get mortgages and car loans on every day of the last two weeks. Local grocers and small manufacturers in my area have reported that they are having no trouble getting short-term financing from their long-time lenders. I’m sure we have more problems like Marriott’s to look forward to in the coming weeks or months. But I would predict that Marriott, which has always been run pretty well, will recover from this setback. Lenders are there to make money from lending: they are vetting their borrowers, and their borrowers’ projects, more closely now than they did a month ago, but they will keep lending where they can.
JED The largest loan brokerage firm in NYC reported today that 45 of its major world class banking clients needed money to loan and none of those 45 or any other banks in their system were loaning. I’m glad things are A OK on your end.
Don’t Panic!
–Hitchhiker’s Guide to the Galaxy
RCAR — those 45 lenders were probably overleveraged in risky-debt instruments. It’s too early to tell, I think, but one thing we may be seeing is kind of a reverse of the situation of the early 1930s, when smaller, more local lenders were the ones that failed. A picture may be emerging of smaller local lenders, in 2008, being better capitalized and less leveraged in risky-debt instruments than the “world class banking clients” of that brokerage firm. Anecdotally, a lot of us can say that our credit unions are still looking to lend, whereas the daily solicitations, via email and snail-mail, from the “world class,” big name lenders have dried up.
Again, too early to tell for sure. Obviously the smaller lenders don’t have the heft to lend $40M to Marriott. But they are not insolvent: they can still lend to smaller borrowers. This has the potential to play out in the opposite way from the events of the Great Depression.
J.E. good to hear someone who still believes in the free markets and the American people. Because we both know that ultimately the free market preserves control of the economic system by the American people. All those who talk of the end of capitalism are precisely talking about taking this control away from entrepreneurs, small business owners, and those that finance those enterprises. With that said I will say I agree that government intervention caused the problem and that the solution is not to rewrite the rules (as is being considered according to the Italian prime minister). Governments use crisis to increase their power. Any time the global powers that be enter into meetings and arrangements to further inject themselves into the private marketplace, know that the slippery slope to complete global government control is not to far away. We need commonsense leadership and a leader who has true faith in the American
people and will allow the people get the country out of this crisis. This leader is not present in the race for president nor in the White House (though I will say Sarah Palin has these instincts).
I fear for this country now, because as unprecedented as this crisis is, this country has gone through far worst, without such a need to totally revamp the global market system. The international system may very well need revamping, but I will point out that it is not guaranteed that we as a country will emerge out of this crisis as the undisputed superpower we’ve been. After the depression, we had a World War and we emerged as the world’s greatest power and was able for the rest of the century have our way in the international arena. Today, its seems with so much of our resources being spent arbitrarily to sustain not only our economic system, but the world’s, it’s hard for me to see that we emerge without sustaining long-term damage to our future growth prospects. Especially if we allow a Democrat, unconstrained by Congress to become the next president. I am very concerned, very concerned.
JED/Agreed
Steven — agreed. I think Obama could do a tremendous amount of damage if elected. We recovered from a great deal of the damage done by FDR in the 1930s — most people today have no idea how far down the path of state socialism we went in that decade. But the terrible, unfunded entitlements regime we are burdened with now is the direct legacy of the FDR ’30s. Obama and a Democratic Congress could leave us with something even worse.
It is our fate to have only McCain to vote for, to prevent this outcome. McCain on economics is little different from Obama, frankly: he sees the same role for government as Obama, but proposes to wield it at a smaller percentage of markets and wealth. The real economic benefit with McCain, I think, would be that he and a Democratic Congress would have a harder time agreeing on what to foist on the people than Obama and a Democratic Congress. Oy.
RCAR —
First time for everything?
Amity Shlaes said it all: Wall Street can not abide uncertainty. and that’s what we’ve got with noone knowing what rules the government will enforce. I wish they’d never gotten involved.
It’s this uncertainty that Amity says caused the Depression to last so many years: FDR spent his breakfast hour deciding what to do with financial rates that day. We’ll never recover until Wall Street can rely on some known rules.