»  Radio Derb — Transcript

        Friday, April 23, 2010

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[Music clip: From Haydn's Derbyshire Marches]

01 — Intro.     Ey-jaff-jalla … Ey-jaf-ja-ja … No: Ey-ja-fallujah … The heck with it. Damn foreigners. Why can't they all speak English? As the legendary hillbilly said: If it was good enough for Our Lord, it's good enough for me. This is of course that Icelandic volcano that's shut down air travel all over Europe. Actually, in situations like this, I really don't need to bother. I have a handy little escape hatch. See, I have a Chinese-language resource on the premises chez Derb, out there in the bosky suburbs of Long Island. Now, Chinese is all built up from monosyllables, so when Chinese people come up against a foreign name like that, they just break it down into appropriate-sounding monosyllables, stick a written character on each one, and Bob's your uncle. So let's see what they've done with this durn volcano. Trouble is here, for one-off events like this, each news agency does it differently, there are no standards. Xinhua, the official ChiCom agency, writes 埃亞菲亞德拉. OK, got that. But then, Reuters China does it as 埃亞菲德拉, while China News chops it down to 艾雅法拉. I think I'll go with that one, it's shortest. Ai-ya-fa-la, Ai-ya-fa-la. Got it. Hey, pay attention in the back row there, and spit out that gum. Twenty years from now, you'll all be speaking Chinese. Yes, folks, this is your implacably genial host John Derbyshire bringing you another edition of Radio Derb. I just thought I'd give you a little insight there into how much hard work goes into being a major news source. Now, let's go spanning the world.

02 — Eyjafjallajökull.     If you want to look on the bright side here — I can't imagine why you would, but just suppose — the eruption of Ai-ya-fa-la at least has the potential to make the global warming scare look picayune by comparison. One of the science reports here — I'm looking at Helium.com — points out that Ai-ya-fa-la has now had two eruptions a few days apart, and the rate of lava flow from the second eruption is ten times that from the first. This is very bad news, as it suggests the pressure under the volcano is still increasing. If that's so, the pressure might next fire off a much bigger volcano just twelve miles away. This bigger volcano — it's about ten times bigger — is called Katla. The last three times Ai-ya-fa-la erupted, Katla followed suit. Cheery quote from Helium.com: "The past few weeks of closed airports may just be the beginning. Floods, lost farms, months of altered weather — a lot of trouble could be afoot, and not just for Iceland. Its most powerful volcanoes have been known to spew toxic gases and ash that affect Europe, North Africa, and America as well." End quote. And you still don't think we're doomed? Ha!

03 — VAT …     While Ai-ya-fa-la's threatening our travel plans and our weather, Ai-ya-ba-ma and his pals are threatening our pocketbooks. The most recent sign of this was an eruption of talk about VAT. That's "value added tax," basically a national sales tax. What used to cost a hundred bucks will now cost a hundred and twenty, the difference going to Uncle Sam — that's the long and short of it. White House economic adviser Paul Volcker started things off. Addressing the New York Historical Society earlier this month, Volcker said that that a VAT was, quote, "not as toxic an idea" as it has been. He added that both a VAT and extra taxes on energy need to be considered. Quote: "If at the end of the day we need to raise taxes, we should raise taxes," end quote. As that cloud of ash ascended into the atmosphere and drifted south, darkening the skies over Washington, panic began to spread among the populace. The White House tried to calm the situation, wheeling out Press Secretary Robert Gibbs and Communications Director Jen Psaki to issue flat denials that the president is giving, ever has given, or ever would give so much as a nanosecond's thought to imposing a VAT. Then, just as the skies began to clear and international air flights were ready to resume, Obama himself went on CNBC and told an interviewer, quote: [Obama clip: "You know, I know that there's been a lot of talk around town lately about the value-added tax — that is something that has worked for some countries. It's something that would be novel for the United States."] The question, the interviewer, and my attention then disappeared under a lava flow of Obamaspeak ambiguity. Before succumbing to the cloud of toxic gases Obama was emitting, I caught something about "reducing wasteful spending" [Laugh] and "getting a better picture of what our options are." Oh, I think we have a pretty good picture, Mr. President. Everything we buy will cost twenty percent more, isn't that the picture? Or will it be 25 percent, as it is on some goods in Europe? You can't tax the rich any more, or you might start losing campaign contributions. Gotta hit the middle class now, and VAT is the way to do it.

04 — … vs. IRS.     Not that VAT is a terrifically bad idea. For lovers of liberty, it's a much better idea than the income tax. At this point in the calendar, in fact, almost any idea you can come up with is a better idea than the income tax: Subprime mortages, open borders, war in Afghanistan, the Space Shuttle, affirmative action, liberation theology, public employee unions, another Harold and Kumar movie … Try as I might, no matter how stupid, misguided, and irrational an idea I come up with, none seems as bad as the income tax just at this moment. I didn't quite manage to get mine in under the wire this year, so I'm running an extension, with more paperwork to come. Even so, the stuff I've already filed amounts to 59 pages. For goodness' sake. I'm married with two kids. I write stuff and sell it to magazines. I have some mutual funds; my wife has an IRA. We have a home equity loan and two cars. For this I need 59 pages of returns? The IRS needs to know what make and model car I bought last year? They need to know how much my phone bill was? Why? The income tax is a monstrous invasion of privacy. With a VAT, the government doesn't have to know anything about me. Furthermore, VAT is progressive, since you pay on what you buy, and rich folk buy more than poor folk. You can even rig it to be really progressive, exempting necessities like food and kids' clothes, piling it on to yachts and Learjets. What's not to like? If it were a choice between VAT and IRS, I'd go for VAT without hesitation. Of course that's not what'll happen. We'll get VAT and income tax. The beast must be fed, and it's up to us to feed it. You wouldn't want all those Administrative Assistants at the federal Department of Administrative Assistance to have to go out and find real jobs, would you? Of course not.

05 — SEC vs. Goldman Sachs.     The SEC, the Securities and Exchange Commission — you know, those fearless, ever-vigilant guardians of the public interest, the ones who kept such close tabs on Bernie Madoff — the SEC is suing Goldman Sachs for dirty dealing. What's this all about? Well, there are three players here: Goldman Sachs, which is an investment bank, ACA Capital, which is a bond insurer, and John Paulson, who runs a hedge fund, which is to say, a mutual fund for the carriage trade. As I'm sure you know, ordinary old residential mortages can be bundled up into bonds and sold to investors, the homeowner's mortage payments ending up as coupon payments to the bond holder. These bonds in turn can be sorted into higher risk and lower risk, and bundled up into another type of bond called a CDO, with the higher risk mortgages feeding through to higher coupon payments, and lower-risk ones contrariwise. If you believed that a lot of high-risk mortages were about to default, you could short the corresponding CDOs — that is, you could sell them without having bought them yet. When the moment came that you had to buy them, they'd be worth next to nothing, the mortgages having defaulted, and you just made a killing. See? Well, that's what John Paulson thought back in early 2007. He thought there were going to be a lot of defaults among high-risk mortgages. This was very smart of him, as not many people agreed. He asked Goldman to bundle up some high-risk mortgage securities into CDOs so he could short them. Goldman handed the selection of the mortgages off to ACA Capital. ACA Capital and Paulson worked together at figuring out which mortage securities to use. When the CDOs were made up, Goldman marketed them. Paulson shorted, the mortgages defaulted, and Paulson made a billion dollars. Who'd he make it from? Well, mostly ACA, which lost 900 million. Goldman lost 90 million, and a German bank something like 150 million. These guys bet one way, Paulson bet the other way, and Paulson won the bet. Since ACA were involved with Paulson in picking the underlying securities, and since Paulson was a famous bear — which is to say, famous for betting that things would lose their value, it's hard to feel much sympathy for ACA. It is possible to feel sympathy for the German bank and other purchasers of the CDOs, depending on how much you think they knew about the background I just sketched out here. Did they know, for example, that famous-bear Paulson was instrumental in setting up the CDOs? That's what the SEC case hinges on: that Goldman weren't open enough with investors about the background to the CDOs. A big fat German bank with tens of billions in assets isn't exactly a babe in the Schwartzwald, though. They have rooms full of well-paid analysts to look into the quality of securities and decide where the point of balance is between risk and reward. This is a big boys' game. I wouldn't rule out that Goldman behaved unethically, I suppose possibly even illegally, in not disclosing as much as they should have in the prospectus, but ultimately I see it as a case of caveat emptor — let the buyer beware, a warning that applies just as much to bankers as to anyone else.

06 — Legal immigration numbers released.     I do a fair amount of grumbling about illegal immigration, which I see as just a dereliction of duty by the federal government — politicians deliberately refusing to enforce the people's laws, for fear of offending powerful lobbies and donors. This week for a change I'm going to grumble about legal immigration. The Department of Homeland Security has just published its Yearbook of Immigration numbers for Fiscal Year 2009. That's a bit deceptive: Fiscal Year 2009 actually went from October 2008 to September 2009, so you have the last 3½ months of the Bush administation in there. It doesn't actually matter very much, as immigration-wise, the Bush and Obama administrations can be considered to be a single biological entity, pursuing identical policies. That period, though, October '08 to September '09, was the trough of the Great Recession, so you'd expect the numbers of settlement visas issued to be way down, to give American citizens first shot at the dwindling number of jobs. Well, you'd expect wrong. We issued 1.13 million green cards in that fiscal year, actually a two percent increase over the year before, which in turn was a five percent increase over the year before that. Two thirds of those settlement visas went to family unification — that is, they went not to people who were believed, on some visa officer's judgment, to have something useful to add to the U.S. population, but just to people who happened to have a relative living here. Which foreign country was granted the most settlement visas — way, way out ahead of the pack? See if you can guess. Give you a clue: ["Way south of the border …"] That one country got nearly 15 percent of green cards. By contrast, the entire continent of Europe got 9.3 percent. Boy, this is some strange recession we have going here. For one thing, it's strictly a private sector recession: public sector workers were actually out marching in the streets of Chicago yesterday, demanding pay hikes — a sort of Million Bureaucrat March. For another thing, it's a citizen recession, Americans getting laid off while ever-larger numbers of foreigners are waved in for settlement. I guess this makes sense to somebody, but it's lost on me.

07 — Nicholas Clegg.     There's an election coming up across the pond, and the Brits have adopted the American custom of boring the electorate to death before polling day. Er, sorry, I'll read that again. The Brits have adopted the American custom of party leaders standing up at lecterns in a row to field predictable questions from establishment media lefties. Well, to everyone's surprise, the winner of the first debate was Nicholas Clegg, leader of the Liberal Democrat Party. Far as I can tell, he won the debate on account of being the only one of the three who didn't sound like Mr. Spock on Xanax. Now, I know that the names of political parties in foreign countries can be a bit confusing. The Liberal Democratic Pary in Japan, for example, is the center-right party, sort of like Republicans in the U.S.A. So how about this Liberal Democrat Party in Britain? What's the U.S. equivalent? Listener, the U.S. equivalent is "liberal Democrat." The Lib Dems are multiculturalist and green. They want higher taxes to pay for more welfare state. They want closer union with Europe and more distance from those beastly warmongering Americans. Nick Clegg is a sort of trim, sober Teddy Kennedy. The Liberal Democrat Party was formed twenty-something years ago from a breakaway faction of the Labour Party and the old Liberal Party of Gladstone and Lloyd George. The Labour breakaways, who called themselves Social Democrats, boasted of being responsible socialists, the rest of the Labour Party having drifted so far left in the 1980s, it had fallen off the edge of the known world. The Liberals had been out of power for 60 years and were sunk deep in irrelevant irresponsibility. This union of socialism and irresponsibility was originally called the Social Democrat and Liberal Party, which everyone abbreviated to SODPAL, a name which, to my deep regret, didn't stick. So here we are in 2010 with three major parties in Britain: Tories, Labour, and Lib Dem. The three party leaders are all boring political wonks, who have never had any lives outside politics, and never done any kind of productive work. There are differences between their parties, but you need a microscope to see them. Unfortunately I gave my microscope to a colleague at National Review who was trying to find the GOP base of support for Michael Steele.

08 — Miscellany.     And now … [Choral intro] … Here comes Miss El-lan-y, with our closing selection of brief items.

Item:  Larry King's in a spot of bother. He's divorcing his umpteenth wife after he cheated with somebody and she cheated with somebody; and feminists are screeching at him for agreeing with an interviewee that Sarah Palin should pose for Playboy. I must admit, I never got Larry King. He's homely and ill-prepared, and never asks anybody anything interesting. Yet he's got stupendously rich from his TV show, which seems to have been on for ever. What's it all about? Can I have a TV show please? I'm homely too, but at least I know the Dalai Lama isn't a Muslim. Though to cut Larry a little slack, he's right about Sarah posing for Playboy. It's a terrific idea. For equal time, Nancy Pelosi could go full monty in the Congressional Quarterly. Let's get a little spice in our politics. I suppose now I've said that, the National Association of Screeching Man-Haters will be after me, too. Bring it on!

Item:  Here's a man after my own heart: Marc Faber, financial consultant, editor of the Gloom, Boom, and Doom Report. Quote from him, appearing on CNBC, quote: "I'm ultra-bearish about the world. I think we're all doomed, because the governments are taking over and they will all bankrupt us and expropriate us, but it may not happen tomorrow. They'll give us something to play with, until the whole system breaks down … They'll just print money and print more money." Nothing much to argue with there, except … how about putting me on commission, Marc?

Item:  Some news from Iran, actually some pearls of wisdom from Hojjat ol-eslam Kazem Sediqi, leading Friday prayers in Tehran last week, quote: "Many women who do not dress modestly lead young men astray and spread adultery in society which increases earthquakes," end quote. So there were we ignorant infidels thinking it had something to do with plate tectonics. Nope, it's short skirts and halter tops. What's the line on volcanoes, I wonder? Caused by lascivious loose talk, perhaps? Tune in to this Friday's Tehran prayers to find out.

Item:  Since I've mentioned Iran, what's Li'l Squinty been up to lately? Well, the Mighty Midget's been down in Southern Rhodesia — oh sorry, I mean Zimbabwe — partying with Robert Mugabe. Li'l Squinty explained to Cap'n Bob how to survive the apocalypse that will follow the appearance any day now of the Hidden Imam, and Cap'n Bob showed Squinty how to reduce a prosperous, orderly, grain-exporting country into a disease-ridden wasteland populated by starving beggars and machete-wielding thugs. Just another fun encounter between two of the most esteemed and revered leaders of the Third World, no slight intended there to Colonel Muammar Gaddafi.

Item:  The TV show South Park ran an episode that mocked the founder of a major religion known for its devotion to peace, tolerance, assimilation, and human values. Some adherents of that religion promptly threatened the show's writers with death. In a disgraceful display of cowardice, Comedy Central withdrew the show from its archives, and bleeped out all references to the religion's founder in a following show. Shameful! Doesn't Comedy Central have the guts to stand up against this kind of intimidation? Never fear: Radio Derb will never cower and tremble before these bullies! Whoever they are. I really have no idea. Zoroastrians, perhaps? It was probably some kind of misunderstanding, actually …

Item:  Quote: "We hear so many loud and angry voices in America today whose sole goal seems to be to try to keep some people as paranoid as possible and the rest of us all torn up and upset with each other. They spread hate. They leave the impression, by their very words, that violence is acceptable." End quote. Who said that, and when? The "who" is not very surprising: it was Bill Clinton, of all our presidents surely the one with the lowest character. The "when" is worth noting: It was April 23, 1995, just fifteen years ago, following the terrorist bombing of the Murrah Building in Oklahoma City. Clinton shamelessly — if you'll excuse the pleonasm — he shamelessly used the Oklahoma City bombing to outwit Newt Gingrich and the House Republicans. Today Clinton's trying to draw the Tea Party movement as being in line of descent from the perpetrators of that bombing, for similar low political purposes. This man is loathsome. But you know that: why am I even talking about this crook? What a shame on this great country that we elected him to such high office — twice.

Item:  Former Governor of Illinois Rod Blagojevich, preparing to go to trial on corruption charges, has asked the court to subpoena Barack Obama. The president, Blagojevich says, can testify that nothing went on beyond ordinary Chicago political horse-trading. There was nothing actually criminal, like the blatant corruption that put Tony Rezko in jail. Remember Tony Rezko? That's the guy who was never, absolutely never, any kind of friend, neighbor, or fund-raiser for Barack Obama, and was most certainly never involved in any sweetheart real estate deals with him. Absolutely not! No way!

09 — Signoff.     There you have it, ladies and gents … Oh, here's Mandy, one of my diligent research assistants, clutching her brouillon with both hands. Whaddya say, Mandy? [Mandy: "I guess it's time to go."] Yes, I guess it is …

[Music clip: From Haydn's Derbyshire Marches]