Here's A Mostly Cheerful Op-Ed:  Not counting financial companies — which are getting almost all the press — prospects look good for the American economy.

It turns out that John McCain, who was widely mocked for saying that "the fundamentals of our economy are strong," was actually right.  We're in a financial crisis, not an economic crisis.  We're not entering a second Great Depression.

How do we know?  Well, the economy outside the financial sector is healthier than it seems.

One important indicator is the profitability of non-financial capital, what economists call the marginal product of capital.  It's a measure of how much profit that each dollar of capital invested in the economy is producing during, say, a year.  Some investments earn more than others, of course, but the marginal product of capital is a composite of all of them — a macroeconomic version of the price-to-earnings ratio followed in the financial markets.

When the profit per dollar of capital invested in the economy is higher than average, future rates of economic growth also tend to be above average.  The same cannot be said about rates of return on the S.& P. 500, or any another measurement that commands attention on Wall Street.

Since World War II, the marginal product of capital, after taxes, has averaged 7 percent to 8 percent per year.  (In other words, each dollar of capital invested in the economy earns, on average, 7 cents to 8 cents annually.)  And what happened during 2007 and the first half of 2008, when the financial markets were already spooked by oil price spikes and housing price crashes?  The marginal product was more than 10 percent per year, far above the historical average.  The third-quarter earnings reports from some companies already suggest that America's non-financial companies are still making plenty of money.

The marginal product has accurately reflected hard economic times in the past.  From 1930 to 1933, for instance, the marginal product of capital averaged 0.5 percentage points per year less than the postwar average.  The profit per dollar of capital was also below average in the year before the 1982 recession and the year before the 2001 recession.  Sure, the financial industry has taken a hit, and so have cities like New York that depend on that industry.  But the financial system is more resilient today than it has been in the past, because it's a much easier industry for companies to enter than it was in the 1930s.

I have no idea if economist Casey Mulligan is right, no idea even how he measures the "marginal product of capital".  But I don't see anything implausible about his argument.  (Although I do think the collapse of the housing bubble is net, a good thing.)

(Here's his blog if, like me, you want to read more of his thoughts.)

The Wall Street Journal Thinks The Culprits In The Mortgage Mess Should Be On The Witness Stand:  Including the senior senator from Connecticut, Christopher Dodd.

Former Lehman Brothers CEO Dick Fuld was under oath Monday when he was grilled on Capitol Hill about his role in the current financial meltdown.  But if Members really want to understand the credit mania, they should also call Chris Dodd.

The Connecticut Senator has been out front denouncing the "companies that form the foundation of our financial markets," for "their insatiable appetite for risk."  He has also decried "reckless, careless and sometimes unscrupulous actors in the mortgage lending industry" and he has proclaimed that "American taxpayers deserve to know how we arrived at this moment."  To that end, we propose he take the stand -- under oath.

Good idea.  He could bring along copies of his Countrywide mortgages, which he promised to release months ago, but somehow hasn't gotten around to actually releasing.

(I must say that I have a sneaking admiration for Dodd's nerve, considering what we already know about his role in creating these problems — and the rewards he received from some dubious organizations.)

More Good News for our economy.

Oil prices lost altitude Friday as the cost of a barrel of liquid gold dropped below $80 US for the first time since September 2007.

Crude for November delivery slipped by as much as nine per cent in morning trading, hitting $78.61 US a barrel, a drop of $6.98 from the previous day's level.

And for the economies of most of our friends.  But not the economies of most of our enemies.

(If you want to follow oil prices in almost real time, you can do so here.)

Krauthammer On Obama:  The syndicated columnist comes to conclusions similar to my own.  Obama is both a cynical con man, and on the left, possibly the far left.

But that does not make these associations irrelevant.  They tell us two important things about Obama.

First, his cynicism and ruthlessness.  He found these men useful, and use them he did.  Would you attend a church whose pastor was spreading racial animosity from the pulpit?  Would you even shake hands with -- let alone serve on two boards with -- an unrepentant terrorist, whether he bombed U.S. military installations or abortion clinics?

Most Americans would not, on the grounds of sheer indecency.  Yet Obama did, if not out of conviction then out of expediency.  He was a young man on the make, an unknown outsider working his way into Chicago politics.  He played the game with everyone, without qualms and with obvious success.

Obama is not the first politician to rise through a corrupt political machine.  But he is one of the rare few to then have the audacity to present himself as a transcendent healer, hovering above and bringing redemption to the "old politics" -- of the kind he had enthusiastically embraced in Chicago in the service of his own ambition.

Second, and even more disturbing than the cynicism, is the window these associations give on Obama's core beliefs.  He doesn't share Rev. Wright's poisonous views of race nor Ayers' views, past and present, about the evil that is American society.  But Obama clearly did not consider these views beyond the pale.  For many years he swam easily and without protest in that fetid pond.

But Krauthammer — in my opinion — has farther to go, before he really understands Obama.  He ends his column with this:

Obama is a man of first-class intellect and first-class temperament.  But his character remains highly suspect.  There is a difference between temperament and character.  Equanimity is a virtue.  Tolerance of the obscene is not.

What I think Krauthammer will learn — in time — is that Obama's intellect is over-rated and that Obama is enough of a narcissist so that is a mistake to say that he has a "first-class temperament".

Learning From 1992, Part 1:  Here's what Bill Clinton promised in 1992:

Back when Mr. Clinton was campaigning for president in 1992, he made a pretty direct pitch:  Raise taxes on people making more than $200,000, and use those revenues to fund tax relief for the "forgotten middle class."

In an October presidential debate, then-Gov. Clinton laid out the marginal-rate increase he wanted and some of his plans for the revenue that would be brought in.  He followed with a pledge:

"Now, I'll tell you this," he said.  "I will not raise taxes on the middle class to pay for these programs.  If the money does not come in there to pay for these programs, we will cut other government spending, or we will slow down the phase-in of the programs."

Not everyone believed him, but some voters did, possibly enough to give him his winning margin.

Here's what he did in 1993:

Mr. Clinton, of course, won that election.  And as the inauguration approached, he began backtracking from his promise.  At a Jan. 14, 1993, press conference in New Hampshire, he claimed that it was the media that had played up a middle-class tax cut, not him.  A month later, he announced his actual plan before a joint session of Congress.

On page one of the New York Times, the paper described the fate of the middle-class tax cut this way:  "Families earning as little as $20,000 a year -- members of the 'forgotten middle class' whose taxes he promised during his campaign to cut -- will also be asked to send more dollars to Washington under the President's plan."

By the way, one of his tax increases, on gasoline, is regressive, hitting poor people harder than the well off.

The speed of Clinton's reversal makes it reasonable to conclude that he never intended to keep his promise of a middle-class tax cut.

Some politicians undoubtedly learned from Clinton's success.  Not only did he win in 1992, but he was able to win re-election in 1996.  (Though his supporters in Congress had a little trouble in 1994.)  Since politicians imitate other, successful politicians, we can expect that other candidates, especially other Democratic candidates, will emulate his simple strategy.

Cross posted at Sound Politics.

(One oddity:  If I recall correctly, one of the things that helped Clinton win re-election in 1996, in spite of his broken promise on middle-class tax cuts, is that many voters had decided, even in 1992 that Clinton did not always tell the truth.  So they gave his promises less weight than they might have given to promises from a more honest politician.)

Being An Asylum Seeker in Britain pays better than I would have guessed.

A council has sacked three officers after it was revealed an Afghan family was living in a £1.2million home paid for by the taxpayer.

Mother-of-seven Toorpakai Saiedi, 35, receives £170,000 a year in benefits, a staggering £150,000 of that is paid to a private landlord for the rent of a seven-bedroom house in West London.

The detached property in Acton has two large reception rooms, two kitchens, a dining room and a 100ft garden.

The three officers say they were just following standard procedures — and they may have been.

Let's see.  At current exchange rates, they are giving this family close to $300,000 a year.  On the other hand, prices are much higher in Britain, so, in terms of what it could buy, this stipend might be worth only $200,000 or so in the United States.

Wonder if I could claim political asylum in Britain, should Barack Obama win the presidency?

(Most Britons thinks this is nuts, too, as you can see in the comments after the article, or in this opinion piece.

Neither piece explains why this family is still in Britain.  I can understand why the family sought shelter in 2001 from the Taliban, but most of Afghanistan has been free of the Taliban for years.  Perhaps asylum in Britain is always open-ended, regardless of changed circumstances.)

This Is Probably Good News:  Here's the news:

Sellers of protection on mortgage finance companies Fannie Mae (FNM.N: Quote, Profile, Research, Stock Buzz) (FNM.P: Quote, Profile, Research, Stock Buzz) and Freddie Mac (FRE.N: Quote, Profile, Research, Stock Buzz) (FRE.P: Quote, Profile, Research, Stock Buzz) will be repaid between 91.5 percent and 99.9 percent of protection they sold, based on the results of an auction on Monday to determine the value of the contracts.

And here's Tom Maguire's tentative conclusion.

Now, this is good news if we can infer that FNMA and Freddie bonds were worth more than people might have expected, since it suggests that the underlying mortgages are maybe not as bad as we think.  But I need some time to digest this and I am relying on some cogent commenters to do the heavy lifting here.

Sounds right to me, but I will again warn you that I know little about this subject.

(You may want to read first fifty or so comments after Maguire's post for more, though the discussion drifts off topic fairly soon, as most internet discussions do.)

Barack Obama And The New Party:  The New Party has ideas that were old a century ago.  It's on the left, some would say the far left. Others aren't so sure, thinking it may only be on the left.  (And it may be that the differing opinions just reflect different definitions.  For instance, some reserve "far left" for organizations and individuals that reject democracy, as practiced in the United States.  Others use different dividing lines.)

The party endorsed Barack Obama on his first run for state senate.  They also claimed he was a member.

Still, it appears clear that as of 1996, the New Party and its parent organization the Democratic Socialists of America considered Barack Obama to be their guy--one of a handful of avowed socialists running for office at any level in the United States.  It strikes me that Obama has some explaining to do.

But as John Hinderaker implies in a follow-up post, our "mainstream" news organizations are not likely to press him for an explanation.

We have been discussing for months whether Obama was on the left, or whether he has just been conning leftists all these years.  I see people I respect on both sides of that question.  But, if Obama was a member of this organization when he first ran for office, then I think we have to conclude that he was then on the left, and possibly the far left, depending on where you draw the line.  And he may still be, considering that there is no evidence that he has changed his views much in recent years — except in obvious political moves.

(My own view, which I have come to over time, is that Obama is on the far left — and is conning people, including many on the left.  And I don't really know whether he rejects American democracy in principle — while seeing a way to use it in principle.  His record, such as it is, is that ambiguous.)

Different Political Consultants use Different Tactics:  In Georgia, one of them may have used voodoo rituals.

High voodoo priestess George Ann Mills prays the gods will cleanse a Georgia woman who she says asked her to perform a death ritual on a political opponent.

Cobb County, Ga., Commissioner Annette Kesting asked Mills to cause the death of longtime political rival Woody Thompson, Cobb County police said.

Note that I said "may".  Mills says that she refused to do a death ritual, but did try to help Kesting with other rituals.  But she did not report Kesting to the police until Kesting's checks bounced.  (Kesting denies the charges.  I assume the police have seen the bounced checks, but I could be wrong about that.)

Offhand, I can't think of another use of such tactics in the United States, though I suspect they are common in some other countries.  Political tacticians will be interested to learn that Kesting lost the Democratic primary to Thompson.

(Theologians may be interested in Mills' mix of beliefs:

Mills, a former rootworker Muslim who has dabbled with voodoo practices for more than three decades, was initiated into the religion five years ago by her godfather, who is from Nigeria, she said.

She advertises that she can heal cancer or any type of sickness as well as release loved ones from jail.  All work is done on a contract basis with a guaranteed warranty.

I am no expert in Islamic theology, but that combination does not sound orthodox to me.

Incidentally, Cobb County is not some little rural place; as of 2006, it had a population of nearly 700,000 and was growing rapidly.)

Pre-Debate Syndrome:  Yesterday, I was feeling a little bit down and realized that I was not looking forward to last night's "debate".  That may seem strange for a political junkie, but in fact I have despised these "debates" for years.

My objection to these debates is simple:  I think they are a really stupid way to evaluate presidential candidates.

Part of the problem is that the "moderators" usually don't ask good questions.  And they often omit entire areas that should be discussed.  For example, in the Palin-Biden debate, moderator Gwen Ifill asked just two questions about taxes, these two:

IFILL:  OK, our time is up here.  We've got to move to the next question.  Sen. Biden, we want to talk about taxes, let's talk about taxes.  You proposed raising taxes on people who earn over $250,000 a year.  The question for you is, why is that not class warfare and the same question for you, Gov. Palin, is you have proposed a tax employer health benefits which some studies say would actually throw five million more people onto the roles of the uninsured.  I want to know why that isn't taking things out on the poor, starting with you, Sen. Biden.

Not very impressive questions, are they?

And Ifill did not ask a single question about the budget.  Not one.

(What questions should she have asked on taxes and the budget?  At least the obvious questions.  She should have added up their promises on lower taxes and more spending, and asked them how they were going to pay for their tax cuts and program increases.  And she should have displayed the main budget categories, and asked Biden and Palin where they thought there should be increases — and where they thought there should be cuts.)

Both candidates did mention taxes — many times — and both did mention budgets.  But their discussion was not particularly coherent, since they were not responding to the same question about taxes.  (Biden mentioned Obama's "tax cuts" so many times, that he convinced me that almost all of us will be seeing tax increases, should Obama be elected.  In fact, I began to suspect that the Obama campaign already has two task forces working on the problem, one designing the tax increases, and one planning the PR campaign to justify the increases.)

But even with better questions and better moderators, these "debates" would not tell us much about what a candidate would do as president, or vice president.  For that, the best guide is still their records — to the extent that they have records.  And there are other ways we could evaluate candidates, as I suggested somewhat fancifully in this post.  It would be fascinating, for instance, to know which of the four candidates knows the most about basic statistics.  (Probably McCain.)

Most journalists — and most talk show hosts — like the debates because they make their living with words, and tend to value words too highly.  For instance, almost all journalists, and most talk show hosts, are terribly impressed by Churchill's speeches during World War II.  And so am I.  But we should recognize that those speeches would have been useless if Churchill had not gotten the basic strategic decisions right.  Mostly.  Here's John Gooch's summary from The Oxford Guide to World War II.

His success as a war leader rests on the fact that he was enormously gifted amateur strategist — and that, ultimately, he acknowledged as much. (p. 188)

Or, to choose a more homely metaphor, we should not make a man our football coach just because he makes great half-time speeches.  If we can, we should look for a man with a winning record.  And, if we really understand football, we would want to inquire into a coach's thinking on strategy.

Enjoy the "debates" if you can, but don't take them seriously.  And don't use them to decide which candidate to vote for.

Cross posted at Sound Politics.

(For the record:  Both presidential candidates are making combinations of promises on taxes and spending that are impossible to keep.  But then I came to the same conclusion in 2000, and still preferred Bush's combination because it was less irresponsible than Gore's.  And for the same reason this year I prefer McCain's combination to Obama's.

Also for the record;  I did listen to a little of the debate last night, and followed some of it on line.  And I will read the transcript.  Eventually.)

Knowing Your Enemy:  Has gotten much easier in the last few years — if your enemy happens to be a virus.   Thanks to Joseph DeRisi and his ViroChip.

Q. HOW DID THE IDEA FOR THE VIROCHIP FIRST COME TO YOU?

A. My colleague Dave Wang and I were sitting around the office one day in 2000 asking, "How were viruses discovered in the past?"

We knew that it had always been a laborious and time-consuming effort.  When an epidemic struck, what researchers generally did was go to electron microscopes and try to figure out what they were seeing.  Sometimes, it took 10, 20 years to find a virus they knew had to be in there.

Earlier, when I was a Stanford graduate student, I'd worked on developing DNA microarrays, which are often called DNA chips.  They allow a researcher to do many biological tests at once.  The chips are now widely used in gene discovery, cancer detection, drug discovery and toxicology.  So Dave and I reasoned that these DNA microarrays would be perfect for viral discovery.  I said, "We can build a similar device representing every virus ever discovered, and it could simultaneously look for them."

Q. AND YOU DID BUILD IT.  WHAT DOES YOUR VIROCHIP LOOK LIKE?

A. It's a glass slide onto which we've printed little DNA fragments of every virus ever discovered — about 22,000 different viral sequences.  I designed the robot that made the chip.  I then built that robot and wrote all the software to automate it.  I've always been a serious computer nerd, as well as a biologist.  Now is really the right moment for a scientist with that combination of interests. The way the chip works is this: If we are looking at a virus and trying to figure out what it is, we take some DNA and some RNA from a patient and we tag it with a fluorescent dye.  Then we put that material onto the virus chip.  Because matching genetic sequences stick to each other — the double helix — if there's a match between what's on the chip and our biological sample, a particular spot on the chip will glow.  That tells us which virus the sample is.  And, thanks to computers, we can do this with thousands of viruses at one time.

Not magic, but pretty darn close to it.

DeRisi believes that we will be able to identify the viruses in any epidemic "within a few days".  And knowing the virus, and who has the virus, will tell us how to fight the epidemic.   At the worst, we will be able to isolate those who are infected, and stop the spread of the epidemic that way.

The ViroChip can be used with unknown viruses to locate their relatives, to place them in a family tree.  And DeRisi has developed a similar product to identify active genes in our ancient enemy, malaria.

(Here's his lab's web site, if you are wondering what he has done for us lately.)

How Bad Are The ACORN Registrations In Nevada?  So bad that their offices were raided.

Nevada state authorities seized records and computers Tuesday from the Las Vegas office of an organization that tries to get low-income people registered to vote, after fielding complaints of voter fraud.

Bob Walsh, spokesman for the Nevada secretary of state's office, told FOXNews.com the raid was prompted by ongoing complaints about "erroneous" registration information being submitted by the Association of Community Organizations for Reform Now, also called ACORN.
. . .
Walsh said agents from both the secretary of state's office and Nevada attorney general's office conducted the raid at 9:30 a.m. local time, and "took a bunch of stuff."  Miller's office reported seizing eight computer hard drives and about 20 boxes of documents.

By the Nevada secretary of state, Bob Miller, a Democrat.  (As far as I know, he is no relation.)  Apparently, his office just got tired of the junk that ACORN was sending him.

Their canvassers did not all have clean records; according to this article, ACORN had hired "59 felons through a work release program".  As you would expect in a group like that, not all of them were great employees.

As I mentioned in this recent post, I have come to the conclusion that ACORN intentionally encourages illegal registrations.  ACORN officials have denied that, over and over, on the record, but a few might admit it — off the record.  In the first edition of Stealing Elections, John Fund passed this on from Larry Sabato and Glenn Simpson's Dirty Little Secrets:

Some liberal activists that Sabato and Simpson interviewed even partly justified fraudulent behavior on the grounds that because the poor and dispossessed have so little political clout, "extraordinary measures (for example, stretching the absentee ballot or registration rules) are required to compensate." (p. 7)

In short, some activists — let me repeat, some — think that it is OK for the poor to cheat a little in elections.

Jonah Goldberg explains Senator Joe Biden.

Biden has no excuse. He's been in the majors for nearly 40 years, and yet he sounds like a bizarro-world Chauncey Gardner.  The famous simpleton from Jerzy Kosinski's "Being There" (played by Peter Sellers in the film) offered terse aphorisms that were utterly devoid of specific content but nonetheless seemed to describe reality accurately.  Biden is the reverse: He offers a logorrheic farrago of "specifics" that have no connection to our corner of the space-time continuum.

In short, he just makes stuff up.  But he does it with passionate, self-important intensity.   He's like a politician in a movie with a perfect grasp of a world that doesn't exist.  He's not an expert, he just plays one on TV.

And plays one well enough to stay in the Senate since 1972.

Most of us have known people like Biden.  Often we call them, putting this as delicately as I can, BS artists.  These artists aren't bad people, usually, but you can't trust what they say.  They are too attached to the immediate effect of their words to be bothered by such abstract concepts as the truth.

CNN Commits Journalism:  Granted, they reveal nothing new, nothing that hasn't been seen on conservative web sites, notably the National Review, or even conservative blogs, including my own, but they do ask the right questions about Obama's ties to unrepentant terrorist Bill Ayers.

Ayers is now a university professor who lives on the South Side of Chicago, where Obama cut his political teeth.  The nature of their relationship has been the subject of discussion all year in the blogosphere, but was dismissed by Obama during a Democratic primary debate earlier this year.

Obama confirmed during that April debate that he knew Ayers "as a guy who lives in my neighborhood."
. . .
But the relationship between Obama and Ayers went deeper, ran longer and was more political than Obama -- and his surrogates -- have revealed, documents and interviews show.

A review of board minutes and records by CNN show Obama crossed paths repeatedly with Ayers at board meetings of the Annenberg Challenge Project.

And there is much more in the article.

Classy:  The junior senator from Missouri teaches a lesson in manners.  

[Senator Claire] McCaskill was stepping out of her chair at the end of an MSNBC interview, and Romney was up next.  She and a staffer unplugged her various wires, and she handed Romney the earpiece the guests use to hear the host.

"I spit on this before I put it in," she said to Romney, with a sweet smile.

What's almost as interesting is that the reporter, Politico's Ben Smith, appears to admire McCaskill for saying this.

(Oh, and though I haven't heard much of McCaskill, I wouldn't describe her as a deft surrogate for Barack Obama.)

Update:  McCaskill claims that she was joking, in response to a Romney joke.  That makes her look better, but does nothing for Ben Smith.

Worth Reading:  Even though nothing in it is original.  John Tierney explains, once again, why we should go nuclear.  Some highlights:

Today about 20 percent of electricity in America is generated by nuclear power, which is about 20 times the contribution from solar and wind power.  Nuclear power also costs less, according to Gilbert Metcalf, an economist at Tufts University.  After estimating the costs and factoring out the hefty tax breaks for different forms of low-carbon energy, he estimates that new nuclear plants could produce electricity more cheaply than windmills, solar power or "clean coal" plants.

The outlook could change, of course, if new nuclear plants turn out to be more expensive than expected, or if engineers make breakthroughs in other technologies.  (To debate these possibilities, go to www.nytimes.com/tierneylab.)  Given the uncertainties, Dr. Metcalf cautions, it would be risky to bet everything on nuclear power as the answer to global warming.

But it seems even riskier to bet on just the soft path, as so many greens are doing, either by flatly opposing nuclear power or by setting so many conditions that no plants could be built for decades, if ever.  (Mr. Obama says nuclear power is necessary but should not be expanded until security and safety issues are addressed.)

(Tierney gives Obama a little too much credit in that last line. As I noted in June, Obama favors nuclear energy in principle, but opposes it in practice.  He uses a common trick, calling nuclear waste an unsolved problem:

When a political candidate uses nuclear waste to object to nuclear power, they reveal one of two things about themselves: Either the candidate does not understand the science — which is not that difficult to grasp — or the candidate is a demagogue who does not care about the scientific facts.  But the position is enormously convenient for a candidate who wants to appear reasonable about nuclear power, while blocking it in practice. (But not, and this is important, closing any current nuclear power plants.)

I do not know whether Obama does not understand the science — though he has no significant training in the sciences — or whether he is just being a demagogue.  But his position is, on this issue, profoundly anti-scientific.

It's a common trick because it has been so successful.  The trick would not succeed as often as it does, if so many journalists were not scientifically illiterate.)

Part of the problem — in my opinion — is that many on the left have as their unspoken slogan:  "Power from the people."  They want ordinary people, though almost never themselves, to use less energy, whether or not that results in less global warming, or a cleaner environment.

(More on Tierney's article from Tom Maguire and the Instapundit.)

Canadian Election:  In just one week.  Haven't seen many stories on the Canadian election in American newspapers, have you?

To some extent, that's understandable.  We're having a much noisier campaign ourselves.   American news organizations seldom pay as much attention to Canada as they should.  And whoever wins will probably not make large changes in Canada, at least in the short run.

But I think there is one more reason that our "mainstream" news organizations are paying so little attention to the Canadian election:  Currently, Stephen Harper's party, the Conservatives, are leading in the polls, and are likely to win the most seats in Canada's parliament, though perhaps not an absolute majority.  Harper has been more friendly to the United States and President Bush than his predecessors in the Liberal party.  So, unless there is an upset, this election can not be interpreted as a repudiation of George W. Bush.

Therefore, it isn't a real story.

(I'm not saying that American "mainstream" journalists are doing this deliberately, just that when they choose stories to cover, they are influenced by their biases, often unconsciously.)

It is unfortunate that American journalists are not interested in this election, because it is fascinating story.  Almost exactly five years ago, the Canadian Conservative party was formed by combining the Reform Conservative Alliance and the Progressive Conservative party.  In its second election in 2006, the new party won the largest number of seats, helped by series of scandals in the ruling Liberal Party.  Next week, in its third election, it may increase its share of the seats in the Canadian parliament.

Much credit for this success should be given to their leader, Stephen Harper, an economist by training, and a canny political tactician.

As I said, it's an interesting story — but it doesn't have a moral that would attract many "mainstream" journalists, and so you may not have seen much about it.

(Here are the web sites for the four most important Canadian parties, the Conservatives, Liberals, the Bloc Québécois, and the socialist NDP.  (New Democratic Party)  The Green party may also influence the election, by taking votes away from the Liberals and the NDP.

I don't know how significant tactical voting is in Canada, though with four significant parties, you would expect some voters to vote for their second, or even third, choices in order to defeat the party they dislike the most.)

Bank Regulation, British Style:  In yesterday's post, I linked to an article describing how Britain's Financial Services Authority regulated, or, most would say, did not regulate, Northern Rock.  Here's a list of failures, just in case you didn't follow the link:

The raft of failures uncovered by the regulator's internal auditors were:

— For 12 months Northern Rock was monitored by supervisors with expertise in insurance, not banking;

— Over the 2 years, three department heads had responsibility for Northern Rock. The FSA's review found that only one other bank had experienced such a high turnover in the same period;

— Formal records of supervisors' meetings with the FSA's risk assessment panel to discuss Northern Rock were not kept, nor did supervisors give the panel any "developed financial analysis" on the bank;

— The panel agreed to allow the supervisors to lengthen the period between the bank's assessments from 24 months to 36 months;

— Northern Rock's supervisors did not understand what close and continuous (C&C) supervision entailed and kept only one partial record from eight C&C meetings with the bank;

— The supervisors failed to enter any details into the FSA's database on the risks presented by the bank, or how those risks were worsening;

— The supervisors and the panel did not issue the bank with a risk-mitigation programme (RMP) that would have forced it to address its risks.  Northern Rock was the only bank monitored by the FSA without an RMP.

You don't have to be a CPA to realize how badly the regulator failed.  It is simply amazing, by the way, to learn how many formal records are missing.  Bureaucracies, for all their faults, are usually good at keeping records.

(Incompetence is by far the most likely explanation, but this series of failures is so bad that British authorities should investigate the possibility of fraud, investigate the possibility that regulators were paid to protect the bank from regulation.)

How Do "Mainstream" News Organizations Help Democrats?  Jeffrey Lord explains, using the New York Times coverage of the 2004 presidential election.  Example:

Headline: SENATOR WHO CROSSED PARTY LINE IS A POLARIZING FIGURE AFTER SPEECH
Reporter: Carl Hulse
Message: A warning to Democrats who would spurn Kerry for Bush as did Georgia Senator Zell Miller.   (Did you see any stories like this in 2008 about former GOP Representative Jim Leach after he spoke at the Democrat's Convention for Obama?  Me neither.)

Discouraging, but instructive.

Northern Sand:  Some news accounts are describing the current financial crisis as something that started in the United States, and then spread to Europe.  There are a number of objections to that, including the fact that the first large bank to get bailed out was a British bank, Northern Rock.   And their failure was mostly caused by their British management.

The list of people to be indicted for the failure of Northern Rock, and the ineptitude of its rescue, is long.  Adam Applegarth, the former chief executive of the Newcastle lender, is the chief culprit.  He and his team of top managers ran Northern Rock into the ground.  They used methods that were foolish and risky.  Northern Rock managers borrowed too much from the financial markets, and lent too much to loan-hungry homebuyers.  Northern Rock was left disastrously exposed to the danger that materialised in August when the world's financial system hit the buffers.  Banks should manage risk.  Mr Applegarth and the other Northern Rock managers put far too many eggs in one, wholesale money-market, basket.

The failure was detected later than it should have been because the British regulator, their Financial Services Authority, failed to supervise Northern Rock properly.

When the failure was finally recognized, dithering by the Labour government delayed a solution.

When the crisis broke, the Government had three broad options.  It could have allowed Northern Rock to go under, to the cost of its lenders and its larger depositors (smaller savers being protected by existing legislation).  It could have moved to immediate nationalisation.  Or it could have allowed the Bank of England quietly to facilitate a takeover.
. . .
Why was none of these options pursued?  Because Labour had its eye on an October general election and was determined to defer the crisis.

(The third option, the Telegraph says, was excluded by European Union regulations.)

The aid given to this one bank, £55 billion, is about as large, relative to the British economy, as our $700 billion bailout.

At some point, the bank should have been renamed "Northern Sand", to give the public a hint.

(Here's a Northern Rock time line.  Note that the public first learned about the problem September 13th of last year.

There are accusations that Northern Rock received special treatment because of its links to the Labour party.   I don't know whether that is true, but it would not be surprising if it were.

Finally, one irony:  The British government guaranteed deposits in Northern Rock.  As a result, worried customers are now rushing to deposit money in the bank.  That damages banks that compete with Northern Rock.

Russians Are Sick:  And they aren't having enough babies.  Unless those change, then Russia will inevitably decline, says Murray Feshbach.

According to U.N. figures, the average life expectancy for a Russian man is 59 years -- putting the country at about 166th place in the world longevity sweepstakes, one notch above Gambia.  For women, the picture is somewhat rosier: They can expect to live, on average, 73 years, barely beating out the Moldovans.  But there are still some 126 countries where they could expect to live longer.  And the gap between expected longevity for men and for women -- 14 years -- is the largest in the developed world.

So what's killing the Russians?  All the usual suspects -- HIV/AIDS, tuberculosis, alcoholism, cancer, cardiovascular and circulatory diseases, suicides, smoking, traffic accidents -- but they occur in alarmingly large numbers, and Moscow has neither the resources nor the will to stem the tide.
. . .
On the other end of the lifeline, the news isn't much better.  Russia's birth rate has been declining for more than a decade, and even a recent increase in births will be limited by the fact that the number of women age 20 to 29 (those responsible for two-thirds of all babies) will drop markedly in the next four or five years to mirror the 50 percent drop in the birth rate in the late 1980s and the 1990s.  And, sadly, the health of Russia's newborns is quite poor, with about 70 percent of them experiencing complications at birth.

What you will notice about that list of suspects killing Russians is that they are all, at least in part, consequences of behavior.  Or, as an earlier generation would have said, a consequence of character.  Russsians, especially Russian men, are dying because they behave badly.

Feshbach criticizes, with reason, Russia's public health failures, their failure, for example, to provide decent TB hospitals.  But I am struck more by the collapse of Russian character, by the unwillingness of so many Russians, especially men, to take care of themselves.

It is unfortunate that, with these problems, Russia is ruled by Vladimir Putin, who cares more about dramatic confrontations than the hard work of reclaiming the Russian population.

(In the 19th century, under the Czars, Russia had the largest population gain of any large European nation between 1870 and 1910, 88 percent.  The population grew under Soviet rule, though not as rapidly.  It is hard not to think that most of their current troubles are a result of the horrible damage done decades of Soviet rule — and their recent exposure to some new temptations.

Putin has tried to increase the birth rate, and may have had a little success in his efforts.)

It's Time To Repeat this joke.

Can Obama laugh at himself?

Of course not.  That would be racist.

It's time because Douglass Daniel of the Associated Press made a complete fool of himself by raising charges of racism, where there is none.

And because Daniel is not the only one to make these absurd charges of racism.

I expected this kind of nonsense, ever since Barack Obama began running for president.  But I did not expect that it would be quite this bad.  Or that one of the worst examples would come from the Associated Press.

(Would Douglass Daniel get that joke?  I doubt it, and I am sure that he would not find it funny.)

Is Obama Clueless, Rather Than A Leftwing Extremist?  That's David Bernstein's tentative conclusion in this much-linked post.

But what is interesting to me is that not only did Obama not personally find anything especially obnoxious about Wright's radicalism, anti-Americanism, ties to Farrakahn, and so on, or Ayers' lack of regret for his terrorist past, he apparently didn't expect that much of anyone else would care, either.  How else do you explain why he didn't jettison these individuals from his life before they could damage his presidential ambitions?  How else do you explain how his campaign seemed to be caught flatfooted when Obama's ties to Wright and then Ayers became campaign issues?  And, perhaps most tellingly, how else do you explain that when Obama was asked in a debate with Clinton about his ties to Ayers, he analogized his friendship with Ayers to his friendship with Senator Tom Coburn, as if being friends with a very conservative senatorial colleague is somehow analogous with being friends with an unrepentant extreme leftist domestic terrorist?

In short, Obama's ties to Ayers and Wright suggest to me NOT that Obama agrees with their views, but that he is the product of a particular intellectual culture that finds the likes of Wright and Ayers to be no more objectionable, and likely less so, than the likes of Tom Coburn, or, perhaps, a Rush Limbaugh.  Not only that, but he has been in his particular intellectual bubble so long that he was unable to recognize just how offensive the views of a Wright are to mainstream America, or how his ties to Ayers would play with the public, especially post-9/11.

Like me, Bernstein is not certain what Obama actually believes.  And I would agree with Bernstein that Obama may not have realized how ordinary Americans would react to his pastor and his political allies, including Ayers.  In other words, Bernstein thinks that Obama is more clueless than a leftwing extremist.  But that's a false dichotomy since a person can be both clueless and on the far left.  I can say that with confidence because, over the years, I have met a number of people who are both.

And that, I think, is a fair way to describe Obama — with some qualifications.  He is BOTH clueless and on the far left.  (With some qualifications:   From what I have read, he seems to have been a decent constitutional law instructor.  And he is not a bad writer.  But there is nothing in his career, or even in the speeches that have been written for him, that suggests that he has a deep understanding of this nation and its current problems.)

My own tentative opinion is that, were Obama to be elected president, he would govern as a leftist, specifically "as close to his leftist ideas and values as he can get away with".  That is what Obama has done as an elected official, and I see no reason to expect him to change, as president.

(Obama's choice of Coburn is easy to explain; Coburn is very pro-life.  And for some on the left, that is unforgivable, far worse than having tried to blow up a few buildings and policemen during the Vietnam war.

"Farrakhan" not "Farrakahn", but we know who Bernstein means.)

Brazil Expels Undocumented Aliens:  Claiming, naturally, to be doing it for humane reasons.  But, just possibly, those penguins prefer the beaches of Bahia to the wastes of Patagonia.  (Even if they are a little over-dressed for Brazilian beaches.)