Bernanke Is Fighting the Last War: 'Everything works much better when wrong decisions are punished and good decisions make you rich.'

Randy Jones

Palin draws big ratings

Gov. Sarah Palin on Saturday Night Live

How Obama Would Stifle Drug Innovation. If you want cutting-edge health care, don't make it a cost-controlled commodity.

How Washington Can Help Alaska Drill. Three years in, Shell is still waiting to recover a single barrel of oil.

Another 'Deregulation' Myth

Most Pundits Are Wrong About the Bubble. The repeal of Glass-Steagall has helped us weather the storm.

Will the Real John McCain Please Stand Up? The Maverick roasts the Messiah.

John McCain often comes across as stodgy and stiff. Well, Thursday night, at the nonpartisan Alfred E. Smith Memorial Dinner in New York, the senator brought down the house with his hilarious remarks on the election so far. With pitch-perfect delivery and impeccable timing, who knew that a white-tie affair would actually loosen him up?

John McCain

On his penchant to overhaul his campaign staff, Mr. McCain self-mockingly announced that, once again, he's replaced his entire team of senior advisors, this time by one man: Joe the Plumber. Joe's concerned about getting hit by an Obama tax increase, Mr. McCain continued, because he recently signed "a very lucrative contract with a wealthy couple to handle the work on all seven of their houses " -- a shot at the McCains and their controversial housing assets.

On his relationship with Barack Obama, who was seated nearby, Mr. McCain revealed that while he likes to call his "friend and colleague . . . 'That One,'" Mr. Obama "even has a pet name for me: George Bush."

And in recognizing his underdog status, he lamented that "my friend " Chris Matthews of MSNBC was not a McCain supporter. "We've talked about it, and I've told him: 'Maverick I can do, but Messiah is above my paygrade.'"

Still, Mr. McCain said there was much cause for hope: "Even in this room full of proud Manhattan Democrats, I can't shake that feeling that some people here are pulling for me. I'm delighted to see you here tonight, Hillary!"

Like many other McCain speeches, this one was given from behind a podium and read from notes. Yet the crowd clearly loved him, as you could tell by the extended applause. If only every stop along the campaign trail was an Al Smith memorial dinner.

Invasion of the Wallet Snatchers: Confirming your suspicions about Obamanomics.

Night of the Living Constitution: Explaining the judicial consequences of an Obama presidency

The Cabinet of Dr. Obama: Dissecting the health care proposals of Obama and McCain.

The Fog: Translating Obama's vague foreign policy pronouncements.

A Liberal Supermajority: Get ready for 'change' we haven't seen since 1965, or 1933.

Obama Makes It Up

The Axelrod Method: The 'change' president could be in for a rough ride on Capitol Hill.

A couple Januaries ago, the first African-American governor of Massachusetts took the oath of office on the State House steps. "Change is not always comfortable or convenient or welcome," he declared. "But it is what we hoped for, what we have worked for, what you voted for, and what you shall have."

The swearing-in ended an improbable journey for Deval Patrick -- and started a painful lesson in political realities for a rookie executive.

It’s the Economy, Stupid: And the policies of George W. Bush hardly deserve all the blame.

If 70 percent of the American people scrimp to buy a home, we can’t endanger their financial solvency by waiving the rules for others, who can’t or won’t pay the mortgage debts they freely incurred. It’s time to tell the public that you must budget to buy a house, see it as a place to raise a family and pay the mortgage you took on. And if that’s not possible, then keep renting.

The problems on Wall Street, our energy woes, the election-year fight over taxes versus more programs, and the housing crash have one common denominator: massive debt. They are simply the collective reflections of our own spendthrift habits of buying things with borrowed money that we now either can’t or don’t want to pay back.

Their Own Worst Enemy

Obama Voted 'Present' on Mortgage Reform

In each of the first two presidential debates, Barack Obama claimed that "Republican deregulation" is responsible for the financial crisis. Most viewers probably accepted this idea, especially because Republicans generally do favor deregulation.

But one essential fact was missing from the senator's narrative: While there has been significant deregulation in the U.S. economy during the last 30 years, none of it has occurred in the financial sector. Indeed, the only significant legislation with any effect on financial risk-taking was the Federal Deposit Insurance Corporation Improvement Act of 1991, adopted during the first Bush administration in the wake of the collapse of the savings and loans (S&Ls). FDICIA, however, substantially tightened commercial bank and S&L regulations, including prompt corrective action when a bank's capital declines below adequate levels and severe personal fines if management violates laws or regulations.

If Sen. Obama had been asked for an example of "Republican deregulation," he would probably have cited the Gramm-Leach-Bliley Act of 1999 (GLBA), which has become a popular target for Democrats searching for something to pin on the GOP. This is puzzling. The bill's key sponsors were indeed Republicans, but the bill was supported by the Clinton administration and signed by President Clinton. The GLBA's "repeal" of a portion of the Glass-Steagall Act of 1933 is said to have somehow contributed to the current financial meltdown. Nonsense...

If Sen. Obama were truly looking for a kind of deregulation that might be responsible for the current financial crisis, he need only look back to 1998, when the Clinton administration ruled that Fannie Mae and Freddie Mac could satisfy their affordable housing obligations by purchasing subprime mortgages. This ultimately made it possible for Fannie and Freddie to add a trillion dollars in junk loans to their balance sheets. This led to their own collapse, and to the development of a market in these mortgages that is the source of the financial crisis we are wrestling with today.

Finally, on the matter of deregulation and the financial crisis, Sen. Obama should consider his own complicity in the failure of Congress to adopt legislation that might have prevented the subprime meltdown.

In the summer of 2005, a bill emerged from the Senate Banking Committee that considerably tightened regulations on Fannie and Freddie, including controls over their capital and their ability to hold portfolios of mortgages or mortgage-backed securities. All the Republicans voted for the bill in committee; all the Democrats voted against it. To get the bill to a vote in the Senate, a few Democratic votes were necessary to limit debate. This was a time for the leadership Sen. Obama says he can offer, but neither he nor any other Democrat stepped forward.

Instead, by his own account, Mr. Obama wrote a letter to the Treasury Secretary, allegedly putting himself on record that subprime loans were dangerous and had to be dealt with. This is revealing; if true, it indicates Sen. Obama knew there was a problem with subprime lending -- but was unwilling to confront his own party by pressing for legislation to control it. As a demonstration of character and leadership capacity, it bears a strong resemblance to something else in Sen. Obama's past: voting present.

OBAMA FIRES A 'ROBIN HOOD' WARNING SHOT

WASHINGTON - You won't find it in his campaign ads, but Barack Obama let slip his plans to become a modern-day Robin Hood in the White House, confiscating money from the rich to give to the poor.

Conservatives yesterday ripped Obama after he was caught on video telling an Ohio plumber that he intends to take the profits of small-business owners and "spread the wealth around" to those with lesser incomes.

The fracas over Obama's tax plan broke out Sunday outside Toledo when Joe Wurzelbacher approached the candidate.

Wurzelbacher said he planned to become the owner of a small plumbing business that will take in more than the $250,000 amount at which Obama plans to begin raising tax rates.

"Your new tax plan is going to tax me more, isn't it?" the blue-collar worker asked.

After Obama responded that it would, Wurzelbacher continued: "I've worked hard . . . I work 10 to 12 hours a day and I'm buying this company and I'm going to continue working that way. I'm getting taxed more and more while fulfilling the American Dream."

"It's not that I want to punish your success," Obama told him. "I want to make sure that everybody who is behind you, that they've got a chance for success, too.

Then, Obama explained his trickle-up theory of economics.

"My attitude is that if the economy's good for folks from the bottom up, it's gonna be good for everybody. I think when you spread the wealth around, it's good for everybody."

Critics said Obama let the cat out of the bag.

"It's clear that his main goal is redistribution of wealth, not growth," said Andy Roth with the anti-tax group Club for Growth. "He's perfectly happy to destroy wealth as long as he can redistribute it."

Obama has been meticulous, Roth said, to conceal the "socialistic" nature of his tax plans. "But every once in a while, he lets it slip," he said.

Republican candidate John McCain yesterday charged that Obama's comment was telling.

"This explains how Senator Obama can promise an income-tax cut for millions who aren't even paying income taxes right now," he said in Pennsylvania.

"My plan isn't intended to force small businesses to cut jobs to pay higher taxes so we can 'spread the wealth around.' My plan is intended to create jobs and increase the wealth of all Americans."

Meanwhile, a New York Times/CBS poll last night showed Obama moving into a commanding 53-39 percent lead.

Biden's Fantasy World

In the popular media wisdom, Sarah Palin is the neophyte who knows nothing about foreign policy while Joe Biden is the savvy diplomatic pro. Then what are we to make of Mr. Biden's fantastic debate voyage last week when he made factual claims that would have got Mrs. Palin mocked from New York to Los Angeles?

AP

Start with Lebanon, where Mr. Biden asserted that "When we kicked -- along with France, we kicked Hezbollah out of Lebanon, I said and Barack said, 'Move NATO forces in there. Fill the vacuum, because if you don't know -- if you don't, Hezbollah will control it.' Now what's happened? Hezbollah is a legitimate part of the government in the country immediately to the north of Israel."

The U.S. never kicked Hezbollah out of Lebanon, and no one else has either. Perhaps Mr. Biden meant to say Syria, except that the U.S. also didn't do that. The Lebanese ousted Syria's military in 2005. As for NATO, Messrs. Biden and Obama may have proposed sending alliance troops in, but if they did that was also a fantasy. The U.S. has had all it can handle trying to convince NATO countries to deploy to Afghanistan.

Speaking of which, Mr. Biden also averred that "Our commanding general in Afghanistan said the surge principle in Iraq will not work in Afghanistan." In trying to correct him, Mrs. Palin mispronounced the general's name -- saying "General McClellan" instead of General David McKiernan. But Mr. Biden's claim was the bigger error, because General McKiernan said that while "Afghanistan is not Iraq," he also said a "sustained commitment" to counterinsurgency would be required. That is consistent with Mr. McCain's point that the "surge principles" of Iraq could work in Afghanistan.

Then there's the Senator's astonishing claim that Mr. Obama "did not say he'd sit down with Ahmadinejad" without preconditions. Yet Mr. Biden himself criticized Mr. Obama on this point in 2007 at the National Press Club: "Would I make a blanket commitment to meet unconditionally with the leaders of each of those countries within the first year I was elected President? Absolutely, positively no."

Or how about his rewriting of Bosnia history to assert that John McCain didn't support President Clinton in the 1990s. "My recommendations on Bosnia, I admit I was the first one to recommend it. They saved tens of thousands of lives. And initially John McCain opposed it along with a lot of other people. But the end result was it worked." Mr. Biden's immodesty aside, Mr. McCain supported Mr. Clinton on Bosnia, as did Bob Dole even as he was running against him for President in 1996 -- in contrast to the way Mr. Biden and Democratic leaders have tried to undermine President Bush on Iraq.

Closer to home, the Delaware blarney stone also invited Americans to join him at "Katie's restaurant" in Wilmington to witness middle-class struggles. Just one problem: Katie's closed in the 1980s. The mistake is more than a memory lapse because it exposes how phony is Mr. Biden's attempt to pose for this campaign as Lunchbucket Joe.

We think the word "lie" is overused in politics today, having become a favorite of the blogosphere and at the New York Times. So we won't say Mr. Biden was deliberately making events up when he made these and other false statements. Perhaps he merely misspoke. In any case, Mrs. Palin may not know as much about the world as Mr. Biden does, but at least most of what she knows is true.