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Jan. 9, 2009

Rabbi Yonason Goldson: Why there's hope amidst the destruction

Martin Peretz: At War, Not at War

Charles Krauthammer: Will Olmert screw it up yet again?

Jan. 8, 2009

Stratfor Geopolitical Intelligence Report: Arab regimes secretly rooting for Israel?

Larry Elder: Israelis and Palestinians: Who's David, Who's Goliath?

Jeff Jacoby: Yes, it's anti-Semitism

Jan. 7, 2009

Jonah Goldberg: Who are the real Nazis?

Anne Applebaum: Pointless Peace Proposals

Jan. 6, 2009

Caroline B. Glick: Iran's Gazan diversion?

Dennis Prager: Dissecting Dershowitz

Jan. 5, 2009

Mark Steyn: Gaza has its version of rocket scientists

Mona Charen: The So-called International Community

Jan. 2, 2009

Rabbi Abraham J. Twerski: Having a holy tongue

Caroline B. Glick : Hamas' march to victory

Dec. 31, 2008

Dore Gold: Is Israel Using 'Disproportionate Force'?

Renee Enna:: Succulent 'stewp' is quick, easy fix

Dec. 30, 2008

Jonathan Mark: Israel's Response Is Disproportionate

Wesley Pruden: It's time once more to blame the Jews

Dec. 29, 2008

Rabbi Hillel Goldberg: Chanukah: 'Give me Judaism or give me death'

Michael B. Oren: A crisis and an opportunity

Dec. 26, 2008

Rabbi Yonason Goldson: When the past meets the future

Caroline B. Glick: Iran and Hamas do Christmas

Dec. 24, 2008

Rabbi Dovid Zauderer: Judaism's Santa problem

The Kosher Gourmet by Ethel G. Hofman CHANUKAH FORK-FINGER FOOD FEAST

Dec. 23, 2008

Caroline B. Glick: Repeating failure in Gaza

Dec. 22, 2008

Rabbi Boruch Leff: Too many Jews today are missing the intended purpose of one of Judaism's most beloved holidays

Barry Rubin: Liar, liar, pants on cease-fire

Dec. 19, 2008

Rabbi Yonason Goldson: The Final Battlefield

Caroline B. Glick: Betting on a dead horse

Dec. 18, 2008

The Kosher Gourmet by Steve Petusevsky: Juicy Chef's hella top, hella bottom, hallelujah in the middle

Craig Crossman : More gifts for geeks --- and those who love them

Dec. 17, 2008

Dion Nissenbaum: Israel kicks out outrageously biased UN official

Craig Crossman : Gifts for geeks --- and those who love them

Dec. 16, 2008

Jonathan Rosenblum: The Gift of Joy

Frank J. Gaffney, Jr.: Uncle Shariah

Dec. 15, 2008

The Jewish Ethicist by Rabbi Dr. Asher Meir : Expert witnesses who put themselves first

Barry Rubin: What they say isn't what you hear

Dec. 12, 2008

Rabbi Hillel Goldberg: Can the Bible be a secular language?

Caroline B. Glick: What a PM Netanyahu faces from Washington

Dec. 11, 2008

Rabbi Leiby Burnham: Our role in the Divine's global corporation, World Inc.

The Kosher Gourmet by Steve Petusevsky: A retro-tasting pareve pot pie made with a light hand

Dec. 10, 2008

Rabbi Paysach J. Krohn: Groom admits he was caught "red handed"

Kara McGuire: No money for gifts? No problem

Dec. 9, 2008

The Jewish Ethicist by Rabbi Dr. Asher Meir : Can I make my boss treat me fairly?

Stratfor Geopolitical Intelligence Report: Next Steps in the Indo-Pakistani Crisis

Dec. 8, 2008

Rabbi Avi Shafran: 'Chanukah Bush' flap and graciousness

Mark Steyn: Jews get killed, but Muslims feel vulnerable

Dec. 5, 2008

Rabbi A. Henach Leibowitz: Truth --- The Key to Gratitude

Jeff Jacoby: UN's obsession is grotesque and Orwellian

Oct. 29, 2003
Mortimer B. Zuckerman: Graffiti On History's Walls (MUST-READ!)

Jewish World Review Sept. 19, 2008 / 19 Elul 5768

The two presidential candidates took the opportunity of thefinancial melodrama to engage in senseless babbling

By Robert Robb

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http://www.JewishWorldReview.com | Well, that didn't last long.


Last weekend, the federal government finally mustered the fortitude to allow a big boy, Lehman Brothers, to go bankrupt.


By Tuesday, the Federal Reserve had basically bought an insurance company to which no one else was willing to lend money.


At this point, it's clear that Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke are flying by the seat of their pants, making sequential ad hoc decisions that are roiling markets rather than calming them.


There is simply no rationale or standard by which it is OK for Lehman to go through bankruptcy but taxpayers have to assume huge liabilities and risks to prevent Bear Sterns, Fannie Mae, Freddie Mac and AIG from doing so.


The systemic risk allegedly posed by AIG wasn't its main insurance business, which is subject to separate capitalization requirements that by all accounts are adequate. Instead, the alleged systemic risk was the role AIG played in guaranteeing the debt instruments of others, including mortgage-backed securities.


But if those guarantees were put into question by AIG going into bankruptcy, the mortgage-backed securities held by others wouldn't suddenly become worthless.


They would become worth less, since defaults might not be covered. But they would still be producing income. After all, over 90 percent of mortgages are still current. Even two-thirds of subprime mortgages are still current. Revaluating such debt instruments is something markets can do, if given the chance and time.


Meanwhile, the two presidential candidates took the opportunity of the financial melodrama to engage in senseless babbling.


According to Barack Obama, the difficulties in the financial sector were caused by Bush administration deregulation. This is a falsity of breathtaking and brazen scope.


There has been no material change in the regulation of the financial sector under Bush. The Bush administration, however, did propose increased regulation of Fannie Mae and Freddie Mac. It wanted to increase their capital requirements and limit the amount of mortgage-backed securities they could own for investment.


If the Bush regulations had been adopted when proposed, putting taxpayers on the hook for their mortgage-securities guarantees might have been avoided. But congressional Democrats, supported by too many Republicans, said no.


Preventing this meltdown from occurring through regulation would have required making it more difficult for people to buy homes. Don't recall any Democrats proposing that.


John McCain, for his part, is saying he should be elected because he is a tough guy who will go beat the crap out of all those Wall Street bastards who did this. He's even taken out an ad in which he boosts: "I've taken on tougher guys than this before."


Contrary to Obama and McCain, the turmoil in the finance sector wasn't caused by corruption, fraud or dishonesty. It was caused by an overinvestment in housing and excessive and imprudent use of debt.


The federal government is significantly complicit in this. A persistently loose monetary policy favored debt. And a favored relationship with Fannie and Freddie stifled the development of more responsible ways to create a secondary market for mortgages, in which originators stay on the hook for defaults.


Market corrections are necessary to wring out these excesses. Housing prices have to find a bottom. Credit has to shrink.


These corrections will be painful. But government efforts to smooth or ease them run a large risk of prolonging them and making them worse.


Ideally, government would let these market corrections run their course, perhaps increasing income supports for vulnerable populations, but letting big boys go broke.


If the federal government is simply incapable of doing that, as appears to be the case, a much better approach than Paulson and Bernanke's ad hoc decisions about who lives and dies, would be the proposal floated by former Fed Chairman Paul Volcker and others.


That is for the federal government to set up an entity that would purchase distressed debt instruments, particularly mortgaged-backed securities. The entity could hold the paper, collect the income from performing mortgages, and exercise forbearance on foreclosures.


This would require a substantial upfront capital contribution from taxpayers. But it's better than continuing to proceed ad hoc, with unknown costs and results. And it's better for the federal government to hold paper than owning mortgage and insurance companies and being in the business of providing mortgage refinancing and guarantees.


Meanwhile, there's a presidential election going on. And on this issue, the choice appears to be between Tweedledum and Tweedledee.

Every weekday JewishWorldReview.com publishes what many in in the media and Washington consider "must-reading". Sign up for the daily JWR update. It's free. Just click here.

JWR contributor Robert Robb is a columnist for The Arizona Republic. Comment by clicking here.

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