The faster Public Education crumbles, the better

Regardless of your position in life, please consider removing your child from America’s awful public education system. I know, that sounds radical, but I’m right. It will be better for your children. It will be better for America if your children are removed from such a negative force in our society.

One thing for you to consider is to home school your child. Remove yourself from the rat race of Suburbanization. Remove yourself from renting your “owned” home from the greedy local school district. Power down your “earnings,” move to a low tax area, and power up your child’s learing. It is a good choice.

Home Schooling Goes Mainstream

“I never really told anybody about my music at school, only my really close friends,” Cheyenne Kimball told People Magazine in 2006. “Then [school officials] actually aired the show around the whole entire school, and that caused a lot of problems. I was a straight-A student and all of a sudden I didn’t want to go to school anymore because of the things people were saying. That’s why I’m homeschooled now.” Cheyenne, winner of NBC’s America’s Most Talented Kid at age 12, recording artist, and star of her own MTV show, is just one of many high-profile Americans whose educational choice is home schooling. Movie stars Will Smith and Jada Pinkett Smith, married in 1997, home school their two children along with Will’s nephew. Why? “For flexibility,” Pinkett Smith told an Essence reporter, “so they can stay with us when we travel, and also because the school system in this country—public and private—is designed for the industrial age.

Cyber Charters are an option as well.

After three decades of explosive growth, the rate of increase in home schooling has begun to slow somewhat, and home-schooling rates are even declining a bit in some states. In Pennsylvania, there were 24,415 reported home schoolers in 2002, the largest figure the state had ever seen. But in 2003 the number of registered home schoolers dropped to 24,076. In 2004 it declined again to 23,287, a decrease of 3.3 percent from the previous year.

Among the possible explanations for declines in home schooling is the increased use of home-based public charter schools, often called “cybercharters” because of their extensive use of online curricula, by families that had previously been home schooling independently. Home schooling is blending with other education movements to lead the way toward a 21st-century education matrix that is far more dynamic and adaptive than the schooling patterns of the past.

“Dynamic” and “adaptive!!” Those two words are death to corrupt teacher’s unions. Please by dynamic. Please be adaptive. Please kill the teacher’s unions.

“The New Home Schoolers” explode the myth of “diversity in public education. Public schools are the anathema (look it up) of diversity, as they stifle an entire nation with a patently awful form of monothought conformity.

Survey research has revealed a heterogeneous population of home schoolers and higher rates of minority home schooling than expected. Economist Guillermo Montes’s analysis of data from the massive 2001 National Household Education Survey found that 70 percent of respondents cited a nonreligious reason as the top motivator in their decision to home school. Home schoolers whose motivations are primarily religious have certainly not gone away, but they are now joined by those whose reasons range from concerns about special education to bad experiences with teachers or school bullies to time-consuming outside activities to worries over peanut allergies (see Figure 1).

Increasing participation in home schooling among African Americans has drawn media attention in recent years. The U.S. Department of Education estimated that by 2003 there were 103,000 black home schoolers (see Figure 2). Nonprofits, including the Children’s Scholarship Fund, founded in 1998, have provided vouchers to help low-income families afford private schools, and some are using the money to home school. Several nationwide support groups have been formed by African Americans to build momentum; the newest and largest is the National African-American Homeschoolers Alliance, cofounded in 2003 by Jennifer James. By 2006 the organization had 3,000 members. James learned of home schooling by watching the success of home schoolers at the Scripps National Spelling Bee and embraced it for her family. “Families are running out of options,” James told the St. Petersburg Times in 2005. “There’s this persistent achievement gap, and a lot of black children are doing so poorly in traditional schools that parents are looking for alternatives.” Home schooling is becoming the method of choice for many, and as such “the Black homeschool movement is growing at a faster rate than the general homeschool population,” according to J. Michael Smith, president and cofounder of the Home School Legal Defense Association (HSLDA), the nation’s most powerful home-school advocacy organization.

My homeschooling group includes Moslem, Jewish, Quaker, Baptist, Messianic Jews, Pagan, Baha’i, atheist, agnostic, Catholic, unity, evangelicals, other Protestant denominations, and probably more. We have African Americans, Latinos, Asians, Middle Easterners, and other minorities. We have stay-at-home dads and single mothers. We are FAR more diverse than the neighborhood school I pulled my oldest child out of 10 years ago.

Please home school. Please help destroy the awful, greedy, corrupt, and inneffective American public school bureaucracy.

The Mumbai Attacks and Concealed Carry II

I haven’t read Powerline in a while. I think I might start looking at it again on a regular basis. They have a great post about how the police in Mumbai, though armed, did nothing to defend citizens in train station.

The report comes from a brave photo-journalist.

Somebody get me a Gun!

D’Souza describes his experience at the railway terminal where many innocent Indians were murdered:

“I first saw the gunmen outside the station,” Mr D’Souza said. “With their rucksacks and Western clothes they looked like backpackers, not terrorists, but they were very heavily armed and clearly knew how to use their rifles.

“Towards the station entrance, there are a number of bookshops and one of the bookstore owners was trying to close his shop,” he recalled. “The gunmen opened fire and the shopkeeper fell down.”

But what angered Mr D’Souza almost as much were the masses of armed police hiding in the area who simply refused to shoot back. “There were armed policemen hiding all around the station but none of them did anything,” he said. “At one point, I ran up to them and told them to use their weapons. I said, ‘Shoot them, they’re sitting ducks!’ but they just didn’t shoot back.” …

I wondered earlier today how a mere ten terrorists could bring a city of 19 million to a standstill. Here in the U.S., I don’t think it would happen. I think we have armed security guards who know how to use their weapons, supplemented by an unknown number of private citizens who are armed and capable of returning fire. The Indian experience shows it is vitally important that this continue to be the case. This is a matter of culture as much as, or more than, a matter of laws.

Another storyline that is just plain ticking me off is how “brilliant” the attack was…

The audacious attack which took a year to plan

Ten terrorists dedicated to fighting for an independent Kashmir were selected for an operation from which they were likely never to return.

The tactics were relatively simple: to strike at multiple targets while simultaneously slaughtering as many civilians as possible before going “static” in three of the locations within the city.

But such a plan would require a year of planning, reconnaissance, the covert acquisition of ships and speed boats as well as the forward basing of weapons and ammunition secretly hidden inside at least one hotel.

Am I the only person that doesn’t think this was difficult? Why does the media act as if these Bozos are brilliant because they can stash weapons and synchronize watches? How hard is it to get in shape, learn to operate a few explosives and guns, and kill innocent people?

We don’t have all of the facts yet, but if the goal was to take hostages, these folks failed right off the bat. If their goal was to kill civilians, then all you need to do to minimize the next attack, and eventually prevent others, is to arm the citizenry.

Legalize concealed carry in India, and these a-holes don’t last 5 minutes, no matter how well trained they are. This isn’t rocket science.

St. Augustine’s advice to the GOP

This nugget of extreme wisdom comes from a Politico article written by Mark Sanford, governor of South Carolina.


“Unity in the essentials, diversity in the nonessentials, and charity in all things”

Of course, we could all quibble about what is, and what isn’t “essential.” Some angry white males probably think it is “essential” that the GOP work to kick every Hispanic out of the USA. Others think it is essential that we become an open, assimilationist party (as opposed to the Democrats “Balkanizationalist” model).

That said, Sanford’s, and Augustine’s advice is pretty good. I just don’t know if the party has the ability to heed it.

What’s next for the GOP?

We would be wise to start with the biblical notion of first taking the log out of your own eye before worrying about the splinter in someone else’s. In other words, Republicans would do well to first focus on how we were beaten in November not by Democrats, but in many cases by those in our own party.

Our party took nothing short of a shellacking nationally. Some on the left will say our electoral losses are a repudiation of our principles of lower taxes, smaller government and individual liberty. But Election Day was not a rejection of those principles — in fact, cutting taxes and spending were important tenets of Barack Obama’s campaign.

Instead, voters rejected the fact that while Republicans have campaigned on the conservative themes of lower taxes, less government and more freedom, they have consistently failed to govern that way. Americans didn’t turn away from conservatism, they instead turned away from many who faked it.

Behold the “Pension” – Destroyer of Civilization

GM should be broken up and sold to any buyer who wants it. All assets should be turned over the the Pension Benefit Guaranty Corp. to cover the costs of taking over GM’s responsibilities.

Pension Agency Sounds Alarm on Big Three

“We take our obligations very seriously, managing our plans with integrity and prudence even during difficult times,” a Ford spokesman said. Chrysler declined to comment and GM couldn’t be reached. Each company has said a bankruptcy filing would be prohibitively expensive and could threaten car sales. However, GM and Chrysler have said they could run short of cash in coming months, barring federal aid.

The Pension Benefit Guaranty Corp. steps in to take over failed pension plans. After studying updated pension information for the auto makers in recent weeks, the agency has grown increasingly concerned that it might have to cover billions of dollars in pensions if one or more of the car companies should file for bankruptcy-court protection.

The agency’s letters were sent as the auto makers scramble to assemble blueprints for congressional leaders demanding viable business plans in exchange for a $25 billion bailout.

______

When writng books about the “fall” of Western Civilization (worry not, it will rise again eventually), future analysts and historians will be able to point to the “Pension” as one of the root causes of decline. As our society was able to throw off so much ‘value’ (in terms of lifestyle choices, baubles, and geegaws as well as food and shelter), the society became enamored with the absurd notion that its most productive citizen could quit at age 55 and live of the next generation(s). (which they then, in their laziness and narcissism, decided not to even produce)

This worked for a while, but as millions of public employee unions decided to go along for the ride, and increasingly disconnected soccer moms rubber stamped every increase in a bloated public bureaucracy that was failing miserably (education, fire, police, municipal, – and coming soon! – daycare!) , the system eventually failed.

With the rich lacking all political will to challenge the “tax eaters”, and the corporate chieftans shilling for “free healthcare” instead of challenging the unproductive “zeitgeist” of the times, each layer of burden laid upon the productive induced them to become less productive. EVERYONE wanted their “bailout.”

It was a nice idea, but the system can’t / couldn’t withstand the effects of human nature, which even Barack Obama will not be able to change.

Pensions and retirement that rely on anything other than your own efforts ought to be outlawed.

Asking the WRONG Question!

“Saving” our schools is NOT the function of one person, and it never will be. America is seems to be caught in the grip of the absurd notion that a “Czar” or an “Education President” can “fix” our schools.

Can She Save Our Schools?

The U.S. spends more per pupil on elementary and high school education than most developed nations. Yet it is behind most of them in the math and science abilities of its children. Young Americans today are less likely than their parents were to finish high school. This is an issue that is warping the nation’s economy and security, and the causes are not as mysterious as they seem. The biggest problem with U.S. public schools is ineffective teaching, according to decades of research. And Washington, which spends more money per pupil than the vast majority of large districts, is the problem writ extreme, a laboratory that failure made. (See pictures of a diverse group of American teens.)

Rhee took over Anacostia High and the district’s 143 other schools in June 2007, when Mayor Adrian Fenty named her chancellor. Her appointment stunned the city. Rhee, then 37, had no experience running a school, let alone a district with 46,000 students that ranks last in math among 11 urban school systems. When Fenty called her, she was running a nonprofit called the New Teacher Project, which helps schools recruit good teachers. Most problematic of all, Rhee is not from Washington. She is from Ohio, and she is Korean American in a majority-African-American city. “I was,” she says now, “the worst pick on the face of the earth.”

But Rhee came highly recommended by another prominent school reformer: Joel Klein, chancellor of New York City’s schools. And Rhee was once a teacher–in a Baltimore elementary school with Teach for America–and the experience convinced her that good teachers could alter the lives of kids like Rhodes.

Each week, Rhee gets e-mails from superintendents in other cities. They understand that if she succeeds, Rhee could do something no one has done before: she could prove that low-income urban kids can catch up with kids in the suburbs. The radicalism of this idea cannot be overstated. Now, without proof that cities can revolutionize their worst schools, there is always a fine excuse. Superintendents, parents and teachers in urban school districts lament systemic problems they cannot control: poverty, hunger, violence and negligent parents. They bicker over small improvements such as class size and curriculum, like diplomats touring a refugee camp and talking about the need for nicer curtains. To the extent they intervene at all, politicians respond by either throwing more money at the problem (if they’re on the left) or making it easier for some parents to send their kids to private schools (if they’re on the right).

If there is one sign of hope regarding education, it is that the drones in the media are starting to understand just how useless and corrupt the education bureaucracy has become. If they are starting to write sentences like the one bolded above, they may start to realize that the entire bloated ediface of education bureaucracy is worthless – EVEN in the SUBURBS.

Those of you reading this post need to know that no one person can “fix” education. YOU can fix education by telling all your friends the following four words.

Fund Children, NOT Bureaucracy.

More Declinism

It’s hard not to buy into the “America in decline” mantra with our financial system imploding around us. But rumors of our demise are STILL greatly exaggerated. Here is one of the latest articles cataloging our fall from power.

Is America’s new declinism for real?

But last week the Scowcroft Institute of International Affairs at Texas A&M hosted a conference designed to discuss the latest, markedly gloomy world view issued by America’s intelligence establishment. Every four years the National Intelligence Council – which oversees America’s baroque collection of intelligence agencies – releases a global trends report, which is given to the new president.

The latest report, published on November 20, has made headlines around the world. The front page of Britain’s Guardian newspaper shouted “2025: the end of US dominance”. For once, the headline is broadly accurate. As the NIC frankly notes, “the most dramatic difference” between the new report and the one issued four years ago is that it now foresees “a world in which the US plays a prominent role in global events, but the US is seen as one among many global actors”. The report issued four years ago had projected “continuing US dominance”.

The NIC report has made people sit up because it comes from the heart of the US security establishment. But it is part of a broader intellectual trend in America: a “new declinism”. This mood marks a complete break with the aggressive confidence of the Bush years and the “unipolar moment”. Its starting assumption is that America, while still the most powerful country in the world, is in relative decline.

In the middle of all of this financial meltdown, it is hard not to agree. OTOH, if America isn’t the world leader, then who is? China?

China fears job riots

China is most concerned about the growing labor unrest, the human resources minister, Yin Weimin, said at a news conference. The increase in unrest has paralleled the increase of business and factory closings and job losses.

Yin noted that in the past two months, some businesses, mainly smaller ones, have been forced to close or suspend production.

Several hundred taxi drivers went on strike Wednesday in Chongqing, in southwestern China, after the government said it planned to put more cabs on the district’s roads, thereby increasing competition, the Gansu Daily newspaper said.

The beginnings of a disintegrating China – Part I

With all of this positive news, who should be worried? My answer: anyone that understands the ripple effect, that’s who! The leaders say one thing to pacify the people while on the streets another world exists. I want to delve into the beginnings of a disintegrating China.

I sat in disbelief reading a recent Shenzhen local paper stating that “Some 9,000 of the 45,000 factories in the cities of Guangzhou, Dongguan and Shenzhen are expected to close down in the next three months according to the Dongguan City Association of Enterprises with Foreign Investment estimates. Those closures would see up to 2.7 million jobs cut as overseas demand for consumer goods and clothes fades.” That’s more than 50,000 a day if you believe official figures, which I do not, and I believe the number is actually higher.

The association says that, by end of January, demand will shrink by 30 per cent, and these are just mainland factories. The Federation of Hong Kong Industries said that about 25 per cent of the 70,000 Hong Kong-owned companies in southern China “could go to the wall by the end of January”. Yet on the very next page I read an article quoting the Ministry of Commerce as stating, “Although it is likely to cause a decline in China’s external demand, our stock market and financial system will not be fundamentally affected”.

I can understand the flip-flopping stories as a means to keep a population from panicking; after all the Shanghai A-shares have declined more than 60 per cent from their bubbly peak at the beginning of the year. The Hang Sang in Hong Kong and the Shenzhen indices are not doing much better. Real estate prices have slipped 20 per cent in the last six months, all of the recent factory closings with many more to come and this is just the beginning of a prolonged feedback loop.

The central government’s plan to reverse a foreign trade decline is to increase domestic consumption, restructure industry and boost innovation to change its economic development mode; that’s fine but first you need to have an expanding domestic economy to do that.

I worry about the moral degradation of our people as much as the next person. The public sector screws the worker out of their future with their obscene pensions and payroll bloat while the rich MBA skanks screw us out of our futures with their opaque debt instruments.

It isn’t pretty.

But at the end of the day, do you really want to bet against America?

The Mumbai Attacks and Concealed Carry

As I was surfing the web this morning, looking for as much information on the Mumbai terrorist attacks as I could find, it occured to me that these types of attacks – coordinated attempts at hostage-taking of civilians – would be nearly impossible in a society where law-abiding citizens were allowed to carry guns.

While the limp American media elite view this type of thinking as extreme, the fact is that is obvious to anyone applying a modicum of common sense. Regardless, in my search for information, I Googled the words “India’s Gun Laws.”

What a stunning series of links!! The best is right at the top of the page.
Gun Ownership in India

Colonial Roots of Gun-Control

I live in India and I am a proud firearm owner – but I am the exception not the norm, an odd situation in a country with a proud martial heritage and a long history of firearm innovation. This is not because the people of India are averse to gun ownership, but instead due to Draconian anti-gun legislation going back to colonial times.

The quotes alone are worth the time spent on the page.

An example of British thinking in colonial times:

“No kingdom can be secured otherwise than by arming the people. The possession of arms is the distinction between a freeman and a slave. He, who has nothing, and who himself belongs to another, must be defended by him, whose property he is, and needs no arms. But he, who thinks he is his own master, and has what he can call his own, ought to have arms to defend himself, and what he possesses; else he lives precariously, and at discretion.” –James Burgh (Political Disquisitions: Or, an Enquiry into Public Errors, Defects, and Abuses) [London, 1774-1775]

And thoughts (on this subject) of the man who wanted to rule the world:

“The most foolish mistake we could possibly make would be to allow the subject races to possess arms. History shows that all conquerors who have allowed the subject races to carry arms have prepared their own downfall by so doing. Indeed, I would go so far as to say that the supply of arms to the underdogs is a sine qua non for the overthrow of any sovereignty.” — Adolf Hitler (H.R. Trevor-Roper, Hitler’s Table Talks 1941-1944)

Patrick Henry

“I ask, sir, what is the militia? It is the whole people. To disarm the people is the best and most effectual way to enslave them.”

Here is the sad truth, folks. The many shootings/events by nuts and/or terrorists show that the absence of the ability to defend ourselves creates an “attractive nusiance” for such predators.

Terrorism alone is another reason to arm the citizenry.

India deserves high marks in crisis

First, they made an utterly rare, but intellectually sound, decision. They did not negotiate with the terrorists. This alone puts them ahead of all the people, companies, or nations that are giving in to the Somali-style pirates over in the gulf a Aden.

In a first, India refuses to negotiate with terrorists

NEW DELHI: Probably marking a first in its reaction to hostage situations, India has refused to negotiate with terrorists, even though almost 40
foreigners were held captive by jihadis in Mumbai.

India seems to have joined countries like US, Israel, Russia and some from Europe in refusing to negotiate with terrorists on hostages.

Sources said there was no question of negotiating with the Mumbai terrorists — but it was important to “talk” to them. There are two aims in this — buy time for an eventual armed encounter, and get the hostages released in small batches, starting with women and children. India has a bad record in hostage situations — starting with the 1989 abduction of Rubaiyya Sayeed when her father Mufti Mohammed Sayeed was home minister.

During the 1999 IC-814 hijack, India gave in to demands of Pakistani terrorists supported by Taliban. In return, India released three highly dangerous terrorists — Masood Azhar, who went on to create Jaish-e-Mohammed, Mushtaq Zargar and Omar Sheikh who is convicted of killing US journalist Daniel Pearl.

This is why you never “negotiate.” Though probably unlikely in a western nation these days, the best policy regarding terrorist demands for release, would be to pass a law that automatically commuted to a death sentence any punishment of any personin jail.

This way, the moment there are demands for release of any terrorist, that particular terrorist is simply and immediately executed. Oh well, such are ideas are good talk radio fodder. No matter how good they are, no one is going to pass them into law. Not here, anyway.

Interestingly, one wonders whether the recent uptick in terrorism in India is a function of it’s increasingly close ties with the West, and the US in particular.

Indian Commandos Free More Than 200 After Attacks

Political Backlash

Singh’s government would face a political backlash for security failings if it said the assaults were carried out by a domestic group, said Stratfor, which has clients in the financial community. Blaming Pakistan, however, could strain ties between the nuclear-armed neighbors as they try to advance their more than five-year-old peace process.

In recent weeks and months, India has been the target of stepped up terror attacks. On Oct. 30, more than 60 people were killed and about 300 injured in 12 bombings across the eastern Indian state of Assam, the scene of clashes between ethnic groups.

On Sept. 13, New Delhi was rocked by five blasts in 45 minutes in three crowded market areas during the evening rush hour, killing as many as 26 people and injuring about 133. Police defused two bombs in the Connaught Place area and one near India Gate. Indian Mujahideen, which claimed responsibility for similar attacks in Ahmedabad and Jaipur, said it was behind the blasts.

Now everyone wants on board for a Gas Tax!

Here are all my posts regarding swapping gas taxes for the worker’s portion of Social Security taxes. Once again, Extreme Wisdom is ahead of the curve.

Holman Jenkins is one of my favorite Wall Street Journal columnists. He writes from a “libertarian” perspective that I don’t always agree with, but he cuts away at the absurd “sound bite” nature of “conventional wisdom” surrounding most issues.

Here, he nails it regarding Detroit.

A Car Wreck Made in Washington

The wrong folks were in the witness chairs in last week’s congressional hearings on auto doom. A fantastic moment was Massachusetts Rep. Stephen Lynch assailing Rick Wagoner about whether GM was asking China for a bailout too. The implication seemed to be that GM can’t afford its inflated UAW pay packages because it’s squandering money to build cars in China.

Mr. Wagoner mildly answered that GM’s China operations are profitable. They actually help to underwrite the massive losses in the U.S.

Mr. Lynch showed no sign he was actually listening, having illustrated his disapproval of foreigners. He didn’t ask the obvious question: If GM can make cars profitably in China, why doesn’t GM import them to the U.S.?

Why indeed? Because the UAW won’t let them, that’s why. This isn’t to forgive the management of the big 3 for incompetence. Like all toady business weenies these days, they would rather cave to Unions than to fight them. They deserve to go under based upon their cowardice alone.

What you wouldn’t know is that the single biggest factor in preserving the UAW’s monopolistic power has not been labor law but Congress’s fuel-economy rules. These effectively have required the Big Three to lose tens of billions making small cars at a loss in UAW factories. Not only were the companies obliged to forgo profits they might have earned importing such cars, but CAFE deprived them of crucial leverage to control labor costs by threatening to move jobs to a factory in Spain or Taiwan or Poland. (Let’s face it, that’s what other successful U.S. manufacturers do.)

All this was deliberately designed to give the UAW the means to defend uncompetitive wages in the face of a globalizing auto business. It had nothing to do with making sure Americans have high-mileage cars. Yet not a single legislator last week breathed a hint of recognition that something might be behind Detroit’s woes other than an improbable series of “stupid decisions” (as another Massachusetts congressman put it) by 18 CEOs over 30 years.

Caving to DC and Washington WAS and IS a stupid decision. But next comes the REAL fun part. First, people are starting to realize the DC based bureaucracy is throwing everything out of whack. Next, everyone is starting to talk about a GAS TAX.

[Obama] asked on Monday for Detroit to deliver a “plan” somehow to reconcile, at long last, the fantasy life of Washington, with nobody losing a job, with super energy-efficient cars, and yet somehow all this being done at a profit to Detroit.

Here’s a plan, but it requires Mr. Obama to play a role too, finally relinquishing such chronic free-lunchism where autos are concerned. He should simply get rid of the CAFE rules and impose a gasoline tax to move the country to a “new energy economy,” if he really believes in panicky climate predictions and/or that “energy independence” would be a net improver of American welfare. And be prepared for Detroit to shift jobs offshore if the UAW won’t concede competitive labor agreements.

Not acceptable? Here’s an alternative plan: Buy out the UAW with taxpayer dollars and free the Big Three to staff their factories with nonunion workers the way Toyota and Honda and BMW do. Last week’s Hill circus notwithstanding, the negotiation that really needs to take place now is between Democrats and their union allies. The Big Three executives are just in the way.

As I said, Jenkins has a great way of cutting through the nonsense.

The End of Wall Street?

When an article is merely named “The End,” you have to wonder just how bad things really are. If you’ve read “Liar’s Poker,” you may remember Michael Lewis. He wrote a book about Wall Street back in 1989, thinking that the game had to be over soon.

He thinks the game is over now.

This article is VERY LONG, so you may want to set aside some time to read it or print it out for reading at your liesure. I posted very short excerpts merely to whet your appetite.

The article will give you an idea of just how corrupt and morally bankrupt Wall Street has become. Just remember that millions of Americans from every walk of American life went along for the ride.

I maintain my view that the recent meltdown, and all of the major and minor milestones that got us there, are NOT an indicator of a breakdown in capitalism. It is an indicator of the breakdown in the character of the American people.

The End

To this day, the willingness of a Wall Street investment bank to pay me hundreds of thousands of dollars to dispense investment advice to grownups remains a mystery to me. I was 24 years old, with no experience of, or particular interest in, guessing which stocks and bonds would rise and which would fall. The essential function of Wall Street is to allocate capital—to decide who should get it and who should not. Believe me when I tell you that I hadn’t the first clue.

I hoped that some bright kid at, say, Ohio State University who really wanted to be an oceanographer would read my book, spurn the offer from Morgan Stanley, and set out to sea.

Somehow that message failed to come across. Six months after Liar’s Poker was published, I was knee-deep in letters from students at Ohio State who wanted to know if I had any other secrets to share about Wall Street. They’d read my book as a how-to manual.

Eisman wasn’t, in short, an analyst with a sunny disposition who expected the best of his fellow financial man and the companies he created. “You have to understand,” Eisman says in his defense, “I did subprime first. I lived with the worst first. These guys lied to infinity. What I learned from that experience was that Wall Street didn’t give a s–t what it sold.”

At the end of 2004, Eisman, Moses, and Daniel shared a sense that unhealthy things were going on in the U.S. housing market: Lots of firms were lending money to people who shouldn’t have been borrowing it. They thought Alan Greenspan’s decision after the internet bust to lower interest rates to 1 percent was a travesty that would lead to some terrible day of reckoning. Neither of these insights was entirely original. Ivy Zelman, at the time the housing-market analyst at Credit Suisse, had seen the bubble forming very early on. There’s a simple measure of sanity in housing prices: the ratio of median home price to income. Historically, it runs around 3 to 1; by late 2004, it had risen nationally to 4 to 1. “All these people were saying it was nearly as high in some other countries,” Zelman says. “But the problem wasn’t just that it was 4 to 1. In Los Angeles, it was 10 to 1, and in Miami, 8.5 to 1. And then you coupled that with the buyers. They weren’t real buyers. They were speculators.” Zelman alienated clients with her pessimism, but she couldn’t pretend everything was good. …. “You needed the occasional assurance that you weren’t nuts,” she says. She wasn’t nuts. The world was.

And short Eisman did—then he tried to get his mind around what he’d just done so he could do it better. He’d call over to a big firm and ask for a list of mortgage bonds from all over the country. The juiciest shorts—the bonds ultimately backed by the mortgages most likely to default—had several characteristics. They’d be in what Wall Street people were now calling the sand states: Arizona, California, Florida, Nevada. The loans would have been made by one of the more dubious mortgage lenders; Long Beach Financial, wholly owned by Washington Mutual, was a great example. Long Beach Financial was moving money out the door as fast as it could, few questions asked, in loans built to self-destruct. It specialized in asking home­owners with bad credit and no proof of income to put no money down and defer interest payments for as long as possible. In Bakersfield, California, a Mexican strawberry picker with an income of $14,000 and no English was lent every penny he needed to buy a house for $720,000.

As an investor, Eisman was allowed on the quarterly conference calls held by Moody’s but not allowed to ask questions. The people at Moody’s were polite about their brush-off, however. The C.E.O. even invited Eisman and his team to his office for a visit in June 2007. By then, Eisman was so certain that the world had been turned upside down that he just assumed this guy must know it too. “But we’re sitting there,” Daniel recalls, “and he says to us, like he actually means it, ‘I truly believe that our rating will prove accurate.’ And Steve shoots up in his chair and asks, ‘What did you just say?’ as if the guy had just uttered the most preposterous statement in the history of finance. He repeated it. And Eisman just laughed at him.”

“With all due respect, sir,” Daniel told the C.E.O. deferentially as they left the meeting, “you’re delusional.”
This wasn’t Fitch or even S&P. This was Moody’s, the aristocrats of the rating business, 20 percent owned by Warren Buffett. And the company’s C.E.O. was being told he was either a fool or a crook by one Vincent Daniel, from Queens.

This was what they had been waiting for: total collapse. “The investment-banking industry is f—-d,” Eisman had told me a few weeks earlier. “These guys are only beginning to understand how f—-d they are. It’s like being a Scholastic, prior to Newton. Newton comes along, and one morning you wake up: ‘Holy s–t, I’m wrong!’ ” Now Lehman Brothers had vanished, Merrill had surrendered, and Goldman Sachs and Morgan Stanley were just a week away from ceasing to be investment banks. The investment banks were not just f—-d; they were extinct.

My excerpts don’t do the article justice. Read the whole article. You really need to get your head around how badly all of these smart people are really quite stupid.