We the Cared For

Stay the Course on Denying the Bailout

Hats off to our Congress today for not letting our fears overcome our sensibilities. I want to refer back to the blog article from June 25, 2008 “Fear and Freedom” because if we’re not careful, we’ll let it happen again:

What will fear make you do?

If I can induce fear in you, I can get you to react;
If I can get you to react more, you will think less;
If I can get you to think less, then I can gain control of you;
If I can get more control of you, you become weaker;
If you become weaker, you look to me for protection;
If you look to me for protection, you will do what I tell you;
If you do what I tell you out of fear, you have lost your courage;
If you have lost your courage, you will lose your freedom.

Some in Congress and on Wall Street are continuing to try and scare the American people into a continuation of the largest government bailout in history. A full year of the “sky is falling” has already resulted in the government’s direct participation in propping up, buying and lending billions of dollars to private companies. Fannie Mae and Freddie Mac have been fully nationalized; FHA is lending billions in subprime mortgages as I write this.

The folks on TV are joining in the frenzy and the market makers on Wall Street are putting in their two cents with all of the major indexes.

A moment on these folks.

The people involved in Wall Street including the big TV names that make their living in the markets, or are friends of Wall Street, are no different than the investment bank traders who had to keep the mortgage frenzy going to keep dollars flowing in their pockets. They are no different than you and I, a slow-down, a down turn and their goes the groceries, and in their case, the big bonuses.  Why wouldn’t they do everything they can to keep the money flowing even if takes trillions of dollars of taxpayer money to do it. To be honest many of the folks talking on TV just don’t have the knowledge or experience to know what they’re talking about and some of them are doing more harm than good with their less than expert opinions.

Don’t let them scare you.

The market hasn’t failed yet.

Better yet, let me give you the honest truth. We are in for a significant amount of pain whether we bloat the government and hand this money over for mismanagement, or not.

People are concerned that everyone will point to the economy three months from now if this doesn’t pass and say “I told you so, you should have listened”. Well guess what… it’s going to happen whether they do this or not, so fasten your seat belts.

This problem was 10 years in the making and it will not go away tomorrow no matter how many trillions of dollars we throw at it. The system has to undergo a complete deleveraging and recapitalization. Whether the taxpayer buys the bad assets, or the capital markets take the hit, it’s coming out.

This bailout is not the solution. As you can probably tell, the trillion or so of our money already spent wasn’t the solution either.

We need to get this right, and right means private markets take care of the private market problem. It’s time to slow down. This problem needs to be worked and worked hard with the right people for however long it takes.

We should demand an “economic crisis team” that consists of the best minds from industry and the universities and task them with a mission to develop a private market solution. If it takes 90 days so be it. Let the failures that would have been pushed into an uncertain future happen along the way. If the team decides a bridge loan is required the Fed can continue to pump out the support and bridge loans until we get there.  China and everyone else can wait and if they don’t think we’re a good credit risk in the future, we’ll have to adjust.

I just read the draft bill which can be found here and it creates no fewer than five new governmental departments/positions/committees. It hands unprecedented and unwarranted powers to the Treasury and should not be allowed.

Credit is tighter and it’s going to get even more restrictive moving forward regardless of which way we turn.

We have experienced an extended period of excess credit availability. It has made it easier for people and companies alike to borrow money. As a result it has inflated everything. Too many houses, too many cars, too many businesses, too many jobs.

It has inflated the values of all assets.

If it’s easy to borrow money for cars; we produce a lot of them, their prices rise, jobs are created, and companies make more money.

The current, and soon even more restrictive credit (whether we hand the rest of the keys over to the government or not) is going to have the inverse effect; Fewer qualified borrowers, fewer cars sold, prices decline to meet demand, jobs are reduced and companies will make less money or go out of business.

We will recover and if we get it right, we will grow at a realistic pace that has a strong foundation.

It is a stark reality that we have to live with and either party will be able to say “I told you so”.

Government's Social Engineering; a Key to the Credit Crisis

I have a family friend who penned an excellent email, the gist of which was his anger over the Mark Levin Radio Show and others trying to blame the Bush administration for this financial disaster. He is absolutely spot-on.

Since he didn’t have access to much of the history, I will lay out the important events I think led us to this point. This is explained in much greater detail in my upcoming book "From Your Wallet to Their Pockets: Privatizing Profits and Socializing Losses".

It is government intervention in private markets that got us here. Now, some say, "it's the government's responsibility to get us out". That’s just a much larger perpetuation of the problem, an adrenaline like boost for the cancer that’s sapping the life out of the victim. The “fix” should fall squarely upon the private markets.

The History of Government Intervention

1977 - The Community Reinvestment Act of 1977 (CRA), President Jimmy Carter – Up until this time, banks would only lend to qualified borrowers. Many “unqualified borrowers” were obviously in lower income neighborhoods, and in lower paying jobs, with poor or no credit history.

Since this was not serving the social engineering goals of government and congress at the time, this act was passed to force banks to lend to these previously unqualified borrowers. It created a bank CRA rating and the bank risked losing its cherished bank charter if it did not achieve the government’s goals and qualify for a good CRA rating. The more loans and investments to unqualified borrowers, the better the rating. 

Since Usury Laws, laws that capped the interest rates lenders could charge for their loans, were in place at the time, these loans were made to risky borrowers for the same price they were made to highly qualified borrowers. Government forcing private markets into bad loans, bad decisions and unprofitable loans.

1980 - The Depository Institutions Deregulatory and Monetary Control Act of 1980, President Jimmy Carter - This act eliminated the caps on interest rates lenders could charge for loans. Eliminating these caps allowed lenders to charge rates that allowed them to meet their profit requirements. This change had the positive effect of making credit accessible by people who could not qualify for loans previously. It was also the engine that begins to drive subprime lending.

The combination of CRA and this act begin to force, then open the spigot for subprime lending in an attempt to meet the governments goals of creating a private market to replace public housing.

1982 - Garn - St. Germain Depository Institutions Act of 1982, President Reagan – Deregulates the Savings and Loan Industry. Title VIII of the act allows for Adjustable Rate Mortgages. At the time bankers, appropriately, owned the credit and interest rate risk on the loans they made. This act allowed the banks to transfer interest rate risks (the rise, fall and management of interest rate moves) to the borrower. These are a significant portion of the delinquent mortgages today.

 

1986 - The Tax Reform Act of 1986, President Reagan - Eliminates the interest deduction on all loans (credit cards, automobile loans) other than mortgage loans. This change, in turn, made mortgages more attractive to borrowers. Instead of taking out mortgages to purchase the home they occupied, borrowers rushed to take out first or second mortgage loans for major purchases such as automobiles, vacations, home improvement, and investments.

 

In my personal opinion, this piece of legislation was a major contributor to the popularity of home equity extraction (commonly referred to using one’s home as an automated teller machine). It practically dared borrowers to move past their previous discomfort about high loan-to-values (which the reader should interpret as lower equity positions) in their homes.

 

1999 - Gramm-Leach-Bliley Financial Services Modernization Act of 1999, President Clinton – Allows commercial banks (B of A, Citi, Wells Fargo etc.) and investment banks (Smith Barney, Shearson etc.) to consolidate.  Accelerates higher leveraged lending activities and increases risk taking in the banking system.

Adding to the Pile

These pieces of legislation, combined with government’s creation of Ginnie Mae, Fannie Mae, Freddie Mac and FHA, are the root of this problem. The Federal Reserve Bank has whipsawed the markets. This government’s social engineering ala China under the blanket of “free market capitalism” is a primary driver of our problems today. Securitizations and greed are the other, enabled by these pieces of legislation.

So where is President Bush to blame in all of this? He’s not. He certainly will be if this bailout goes through; it is a travesty and should not be allowed.

On a final note, our congress sits high in their chairs berating Paulson and Bernanke asking why they didn’t see it coming, and it's still happening under their watch.

FHA

Well folks it’s still happening today in a little talked about area of government owned mortgage lending which is FHA. With the demise of other subprime lenders in the market, this entity is currently (right this minute) approving and insuring massive amounts of subprime loans that are secured through another government owned entity, Ginnie Mae.

Right under every ones righteous noses in congress, the government (we the people), continue to accelerate our ownership of the subprime business.

The Politics in the Economics

I am posting a response I made to a newsletter reader who had some great questions...

Morning   

Unfortunately I start with a major predisposition here regardless of some of the Kudlowish “greatest story never told” commentary out there. The government has no business or authority to make loans, purchase assets or engage in private business… period. It is not constitutionally authorized and it certainly  is not within the Feds charter and for good reason. The very cynical concerns of some over the role and dangers of a “central bank” are put to rest here. Since we have leapfrogged legal authority with “New Deal” voraciousness it’s already done but that is the context.

 

Adding to the context is the accounting rules. Agreed that mark-to-market is a big part of the problem here. But there is a very real reason there is no “market” so we’re looking at changing the rules to meet the need. The market isn’t crazy, there are a majority of good assets out there and there is a significant pool of bad assets out there. The question is how good is the good and how bad is the bad? The market says it doesn’t know. In fact if you take the ladder up in write-downs for the past 18 months by those that were supposed to know when the marks were known, the underestimation of the problem can’t be ignored. To artificially write these assets up to held to maturity values assumes that someone has the risk based capital set aside to apply to them and system wide we don’t. Yes the market has thrown the baby out with the bath water but we need the baby back, not the dirty water.

 

This is the fundamental problem.  Some $19 trillion in mortgage loans were made between 2001-2007. Most of it moved off balance sheet. Regardless of the tail you pin on the “how much is bad” donkey, the risk reserves that should have been on the systems balance sheet don’t exist. A very significant portion of what should have been set aside was paid in transaction fees to the parties along the way. The over collateralizations and insurance wraps have proven entirely inadequate in the face of too many bad loans. Yes I know it perpetuates itself, ratings downgrades, increased borrowing, lowered equity values leading to this death spiral.

 

The AIG “loan” was done for a reason. The company was about to fail. It got into its problems as did the others. It has good assets and bad assets. The private markets said too risky. For the government to act as if we’re going to make a profit is the same double speak engaged in when the fed waved it’s magic wand and opened up the auction facilities and began accepting poor quality assets as collateral.

 

I don’t prescribe to the household net worth numbers as an indicator of broad based economic conditions. The devils in the details; inflation, stagnant income, value of stock portfolios, inflated housing values (ala the current situation) vs. debt, the percentage of the population enjoying the increase etc.  It just decreased some $533 billion.

 

The only reason we’re not close, yet, on the bank failures is because of massive, unprecedented, government intervention in the system. These interventions are not only going to cost the American taxpayer a fortune now and in the future, but we’re perpetuating the problem today. FHA has become the “insurer” of last resort and the crap they’re putting on the books and securitizing through Ginnie Mae as we speak, will be just another wave. By the way the early 2008 mortgage vintages are apparently showing worse than the 2006, 2007.

 

I’m not a doom and gloom person, these are just facts as I see them. This massive restructuring of the balance sheet is going to be a significant drain on the economy. If we do it successfully and appropriate risk reserves are required moving forward, that in itself is going to slow credit availability from these boom levels and everything, wages, growth, home values etc. will be going with it. Already too long and probably terribly boring so don’t want to get into the print money, inflation, Treasury interest rate conversation.

Who’s Stimulating Who?

A Second Economic Stimulus Package?

It seems that Obama and now Pelosi are beginning to talk about and drum up support for a second economic stimulus package.  The first $152 billion fell flat, so let’s try another $50 billion or so.

From the data on the results of the first economic stimulus package, it appears that what we accomplished was sending more of our money to our enemies during the period in the form of higher gas prices. A failed energy and tax policy working hand in hand under the obfuscating cover of helping out the American people.

Does anyone else find this fascinating?

These “stimulus” packages are nothing more than sending the money earned by hard working Americans back to them. 

The difference is of course that since they confiscated the money from you first, they get to determine who gets their money back in an extremely corrupt, mixed, modern day version of the Vampire Lestat and Robin Hood.

As an example, they also send a big portion of “stimulus” back to our bastions of frugal money management also known as our state government’s coffers. Money laundering takes on an entirely new meaning when it is done under the auspices of Congressional “law”.

If putting this money back in taxpayer hands is necessary for the good of our economy, as now admitted by our representatives, why don’t we just hold them to the admission and reduce taxes permanently across the board and let us “stimulate” ourselves?

Alas, I fear not. Obama and Biden are telling us they will force Americans to do their “patriotic duty” by taking from one set of taxpayers and handing it out to another set of taxpayers.

Oops. It’s ok to “take from the rich” through tax policy because they’ve convinced the American people over all of these years that the constitution doesn’t matter. But letting the cat out of the bag that you think “patriotism” is stealing one persons money to give to someone else takes the mask off the socialistic face.

This thin mask has been carefully constructed since the “New Deal” and our socialist congressional and judicial “leaders” guard and wear it carefully.

It’s easy to do when the American people let it happen because they aren’t as successful monetarily and think that somehow the rich deserve to be penalized for their success. That they are somehow deserving of the result of someone else’s work. If we can keep the definition of wealthy defined as 5% of the population somehow the other 95% think its ok to hold them up by legal gun point.

 How cool is that? The votes outweigh the personal rights. The 5% could vote against it but who cares? If even half of the 95% vote to reach their hands in the 5% pocket, the crime has been blessed.

I’m sure some of you may recall that this was what the Bill of Rights and the Constitution were created to control; the tyranny of the majority over rights of a few and the individual.

We should just open these people’s houses and let's all go in for a weekend and take the food, cars and other property we want. At least it would be an open, honest expression of the thievery.

 “Representatives” like Biden and Obama clearly understand their power to create segments of the population and treat them differently. To play them against one another, to take trillions of dollars from working people, then decide who gets it.

Americans had better wake up and smell the coffee. Oh and if you don’t have enough or like the way your coffee taste, head on over to someone’s house who makes more than you do and take theirs.

You deserve it.  

 

 

We the Bankrupt

The Congressional Budget Office (CBO) has just released a report showing that the federal budget deficit will grow by an additional $246 billion this year to $407 BILLION.

To put that in perspective this means that in addition to the $2.5 TRILLION in Federal tax revenues in 2007, we have loans we must pay back to the tune of $407 BILLION.

This does not include any additions to spending for the new Feddie Mae and Feddie Mac take over. Nor do I think it adequately considers the additional expense to our borrowing costs that will result from the deterioration in our countries credit rating (real as “rated” or just as real as “perceived” by the market) as we publicly pay for the sins of private industry.

We continue to ask and let the Federal government expand to take care of us and we have spent our way into a real conundrum here.

Take a look at this chart produced by the Heritage Foundation showing inflation adjusted federal taxation and spending…

 

I would encourage you to take a look at the full series here http://www.heritage.org/research/features/budgetchartbook/index.html

Here are a few highlights all of which are inflation adjusted comparisons (apples to apples):

• Federal spending per household has more than doubled since 1960.

• Federal spending grew nine times faster than median incomes since 1965.

• Federal spending is growing faster than federal revenue.

• Federal (federal only) taxes per household have increased from $10,800 in 1965 to $22,100 in 2007.

• Despite the cost of the war, Defense spending is below its historical average as a percent of GDP.

We’re like the spoiled children of very rich parents. As long as they keep paying for my car, my college education, helping me buy and keep my house, let me move in when I can’t get a job or give me money in the mean time, cover my car insurance and gas and so on... I have very little incentive to work and sustain myself.

And so "We the Cared For" spend money we don’t have.

We’re picking every ones pockets to keep up a life style we can’t afford.

Even worse, we dump social “policy” issues into federal mandates that are so far outside constitutional authority, your tax dollars are being used to promote laws, regulations and programs you don’t even agree with.

Well … "We" are the collective "Parents".

We may have been rich, but now we’re heading for the poor farm. We’re mortgaging and borrowing so much money to keep the kids happy that when they take over the estate they will have nothing but bills to pay.

In your personal life when there is no money coming in, and you’ve borrowed all you can personally, lenders won’t give you any more money.

The only difference in this personal and government comparison is that unlike the family who has reached its borrowing limit, the government can just keep on getting more loans.

Have you ever noticed when people get serious about controlling their expenditures? I mean really serious? Is it when the money keeps coming in? Of course not; it’s when the money stops and they have no choice.

We have to remove the choice from government just as the constitution is designed to do. That is the only solution to this problem. We have to cut spending to what is constitutionally authorized, cut tax revenues to meet the new  (lower) spending, and severely limit (stop) borrowing.

It can be done.

One only has to look back as far as welfare reform which was pilloried by the opposition (Mommy Government folks). It was a massive expenditure and since the parents were covering the bills, it also took out the children’s incentive for work.

It has also been a rousing success by almost any measure and even Obama admitted that while he was opposed to it then, he is now convinced by the outcome.

Our government is bloated with these same departments, programs and spending that do NOT belong there.

Rather than pushing out some little sound bite, let’s keep it simple and ask congress to actually go to work for us.

The definition of work here is not just showing up to scrounge up more money, borrow more money and then redistributing that money.

This work, real work, would consist of the following:

1. Create a “Constitutional Assessment Tool” (CAT) under which all aspects of government can be assessed. Note that I did not say against the case law, or the legislative and judicial authorities that have led to this bloated mess… but the actual Constitution.

2. Examine every single department and program and test it against CAT and identify every single department and program that is not authorized.

3. Formulate a plan to eliminate those that are not authorized.

4. Recast the federal budget and determine the required revenues (which will of course be significantly reduced).

5. Implement a fair tax plan to generate those revenues.

6. Require a balanced budget and eliminate current and future deficits.

7. Decouple the national banking system from private enterprise.

8. Implement this analysis for everything from this point forward.

With all of the entrenched interest, this would be very difficult and challenging work.

It is also the hard work and the approach we should expect from our representatives.

Instead of this distorted system where the goal is to get as much as they can for their individual constituencies, how about a goal of working for the “American” constituency so that we as a people may remain free.

After this is done, they can go back to grabbing at the collective wallet for their individual constituent interest…  within the legally defined limits of the constitution.

Feddie Mae and Feddie Mac

At the risk of adding one more voice to the fray, it is impossible not to comment on the nationalization of Fannie Mae and Freddie Mac which, by default is the socialization of the home mortgage business.

We have now stepped firmly into a socialized housing policy… taxpayers are directly responsible for the engine that drives the housing industry.

This was not unexpected. For a history and detailed explanation and the forecasting of this very result, see my blog articles from back in July; The Credit Crisis and the Rush to Government Bailout and Fannie Mae and Freddie Mac; the Federalization of the Mortgage Business

The second of these two entities, Freddie Mac, was created to address the issue of “competition” when Fannie Mae was spun from the government’s balance sheet to make the Federal budget look better at the time. Fannie Mae would have become the dominant power in the mortgage market overnight; so Freddie Mac was created to compete with them.  

It’s now time to combine the two under our new nationalized mortgage industry.

Answering Two Questions

There is a great deal of analysis circling around two primary questions about the impacts of this government take-over:

• What affect will it have on mortgage interest rates?

• Does it signal the “bottom” for falling house prices?

The Effect on Mortgage Interest Rates

If mortgage rates go down as a result of this action it will be temporary, and a short-lived bounce of exuberance. (If you can imagine being exuberant that the tax payers have just taken on Trillons in new liabilities).

The reason interest rates won’t decline significantly, is that these two entities have been borrowing and funding their business as if they were already backed by the government. That has been the investors view since they were formed. There is no change from that respect.

The only change today is that the “implicit” guarantee is now made “explicit”.

The only reason mortgage interest rates or the guarantee fees from these entities would be reduced is if taxpayers not only capitalize these entities for the immediate need, but SUBSIDIZE these entities further to absorb more risk than they currently have. This is most certainly a possibility, however if Government sticks to its purported plan, the idea is to be sure they survive by assuming the current risk, not creating and subsidizing new and greater risk. Yeah right.

Since these entities now come under the direct control of our politicians and the administration you can bet this tool will be manipulated to produce desired political outcomes at even greater costs to the taxpayer.

All things being equal, this particular action should be a zero sum game for interest rates.

Will this change mean we’ve hit the Bottom for Housing Prices?

In short… no way.  

Housing is going to continue to be pummeled through 2009. At the risk of sounding bleak (just the facts as I see them) housing is going to continue to languish and even continue its downward spiral due to the following:

• Mortgage and mortgage servicing companies continue to see rising delinquencies. Rising delinquencies create more foreclosures; more foreclosures create more REO (Real Estate Owned “by the Bank”). These companies are not in the business of making money on properties, want them sold as soon as possible and will keep selling them at below market (read downward pricing) prices.

• Fewer and fewer borrowers can qualify for a mortgage loan. The fewer qualified buyers there are, the lower home prices have to go to help them meet the new definition of a “qualified buyer”.

• Servicer’s efforts to stem delinquency and foreclosure through loan modifications and short selling have only extended the problems into an unknown future.

• The credit and housing crisis is crushing the broader economy. We are in a recession, credit standards have tightened considerably, job losses will continue to increase, and other asset classes (auto, credit card) will, and have, begun a rapid credit deterioration, adding to the pain.

The only way that the nationalization of these two entities would have an impact on housing prices would be if they loosen credit standards so more people could qualify for a mortgage loan. The only way they could loosen standards would be through additional taxpayer subsidies to accept higher credit risk… a very distinct possibility.

The bottom line is that unless we’re taxed even more to pay for looser credit standards and lower house prices, the only meaning this has is that our private system for mortgage financing has failed and we own it.

It is going to cost an absolute fortune to fix these entities problems and the unintended consequences of these actions are still completely hidden from view.

Instead of congress working to untangle this ball of yarn of connections between the private capital markets and the national banking system, we have just done the complete opposite.

We have just mortgaged our children and our grandchildren’s future.

This is not an “academic conversation” about moving away from free market capitalism and the constitutional differentiation between the purpose of limited government and what is supposed to be left to private interest.

This is another long and dangerous leap towards socialism. This is not some radical view, it is a fact.

Wayne LaPierre, the CEO of the NRA couldn’t have said it better recently in an interview with Newsmax…

“What motivates me is the concern that the America that is being designed right now won’t resemble the America we’ve been defending”.    

A “do nothing Congress” at this point would be a blessing because every time they “do something” our principles, our Constitution and everything we purport to hold dear as a nation, is surrendered.

Bill O’Reilly… Pinhead or Patriot

It is a bit unusual for me to address a personality in this blog however I feel compelled at this point since it does get to the medias involvement in the political process.

Let me start by saying I’ve always enjoyed this guy. He has a great sense of humor, comes across very warm, he's smart, certainly speaks his mind and keeps it as “fair and balanced” as any person I’ve seen with as much power as he has. He has worked hard to build it.

The problem prompting this piece is that after months of effort trying to get Obama to an interview, he is allowing himself to become a political pawn. Last night he acknowledged this very fact then tossed it off to the people that just don’t understand and he may not get another shot if he doesn’t take this one.

Obamas campaign was upstaged after the “I have a change” speech by McCains wonderful announcement of Sarah Palin as his running mate.

That was something the candidate did.

This blatant attempt to do the same thing after Palins magnificent, much better speech last night and on the night that McCain is speaking is certainly smart of the Obama campaign.

But I must confess to being shocked that O’Reilly would agree to be a Democratic campaign enabler.

This is where I think ego overrides credibility. If tough, fair and balanced is the mantra this should have been put off until at least next week. If the Obama campaign then refused, Bill could again take up his banner, with honor and a straight face, and point out Obamas agreement as campaign maneuvering rather than an honest desire to set the record straight with Bill.

I’m certain Bill won’t read this so there is no fear of my opinion mattering since he has also taken the position that bloggers are just a bunch of irresponsible people, without credentials to write about anything. Apparently he was born with his journalistic bona fides and didn't have to break in some how.

It’s a big brush he’s painting with, and while I agree with him about the slanted corrupt news outlets, the inference I take away is he’s the only fount for reasoned information.

I do hold out the hope that if O’Reilly is going to allow himself to be a tool for the campaign, that he doesn’t give the same pass he blatantly gave Jesse Jackson in the last go around.

For the most part O’Reilly is a Patriot, on this one he is a Pinhead.

By the way… how about that Palin! WOW!!!!!

Sarah Palin… a Big Breath of Fresh Air!

This election cycle is the finest example yet of the paradoxical maturation of our country. On one side of our personality, we have grown past so many previously entrenched prejudices that we now have a black man running for President and a woman running for Vice President. What a wonderful, visible expression of our ability to grow past hateful biases.

On the other side, we have a system that does its best to destroy the personal character of anyone running for office. Opportunities to lift great leaders from our population are crushed by the personal muck rakers, our holier than thou attitudes about personal “flaws”, insufficient pedigrees and exhorbitant funding only the most wealthy can afford. In our aging process, we have allowed the “news” media to transform itself into the personal marketing arms for whatever candidate aligns most closely to the owner/editorial beliefs.

In thinking about what characteristics are important to me in assessing the people we put into public service, I arrived at a Top 7 in the following order of importance:

1. Honesty

2. Integrity

3. Displays Good Judgment

4. Representative

5. Hard/Smart Working

6. Strong Intellectual Capacity

7. Experience

These are the traits I think are important in choosing our political leaders… not the characteristics I care about in their friends and relatives. In other words I don’t care about the traits of their friends and relatives.

I want someone that is human. A person that has the bumps and bruises of a life lived as an ordinary American citizen. A person with flaws, a different kind of education, a feel for the life and issues that face the majority of Americans; frankly, a person that has not been breathing the ether of power in Washington , but instead is put-off by the smell.

Sarah Palin’s record, her persona, and the people that know her absolutely reinforce the fact that she hits it big on every one of the traits on my  Top 7.

While I’ll admit I  don’t know much about this woman, what I know I like and I like it more as each day passes.

Each day brings some harangue from the dirt divers and it has yet to do anything but reinforce this feeling I get that she would not only be a great neighbor, but someone you could look to for leadership if she was in charge; poised, capable, willing to take on the tough fight with entrenched interest, as well as caring and compassionate.

The latest new about her teenage daughter’s pregnancy and the ensuing storm is extremely disappointing. It’s not seemly from any angle on the national stage. The attackers with their ridiculous twists on the origin of her Down syndrome child prompting the early disclosure and her well meaning supporters praising their families values for her daughters decision to keep the baby and get married.

Both sides are engaging in disconnected conversation and "we the people" should express our distaste for it.

This is soap opera, Jerry Springer material, and does not belong in the realm of legitimate political discourse. Even supporting pundits say “well what can you expect? It’s a political campaign and she’s now on the national stage.”

What I expect is that our pundits can raise their expectations and ours to some higher level of decency. It doesn’t seem too much to ask to express disgust and refuse to engage in it… Pinhead or Patriot.

There is certainly a clear distinction between a candidates long term association with a hate mongerer like Reverend Wright and a teenage daughters pregnancy. One tells you about the candidate, the other speaks about a teenage daughter. The candidate will be making choices for our country; the teenage daughter will be making the difficult choices and decisions teenagers have to make for themselves.

While John Edwards made a tragic moral slip, even a forgivable moral slip (depending on your mores), the fact that he could blatantly lie about it is the break point in the assessment.

Telling the truth allows the peoples judgment of the candidate to come into play. The blatant lie leaves people with a single judgment alone and there is no wiggle room. If a candidate can lie so convincingly as he did, I am left at a loss to then know whether the truth is told in any other matter. I am now required to fact check every assertion and claim that you make… and you are not worth the effort.

This notion that we can even infer the strength of this candidates’ values through decisions her 17 year old daughter makes is ludicrous. If the young lady decided to have an abortion or not be married what does that really say about her mother? It says absolutely nothing about her mother’s decision making ability or judgment whatsoever.

Her mother, Sarah, is in direct control of her own actions only. As the parent of four previous teenagers I can assure you this obviously admirable mother and family have done a nice job of teaching and reinforcing their values with their children, but can’t decide for them every minute of the day. Parents only exercise influence over the decisions their elder teenage children make. That sounds pretty darn normal!

It is fascinating to watch this play out with the various, and now transparent, factions of women in this country. Every man that I know and have spoken with is as excited about this woman being raised to the second most powerful position in this country as I am. There are even a few not so veiled admissions that she would be a more exciting Presidential candidate than the boys who are running now.

Where oh where are the chauvinists that are trying to keep women in their “proper place”? Apparently they are in the female population as the example below shows…

“As a full-time working mother of four, a Republican and a feminist, I am incensed at the failure of female Republicans to admit that Palin is a poor choice at this juncture in her life," says Hillary Weiss, a Philadelphia accountant. "It might be politically incorrect on my part, but I question her ability to take on the VP role while managing a large family with young children. Or is it that she is willing to sacrifice her family's well-being for the good of the country and personal ambition?"

Just like the issue of race, we have a general population that is long past the divisions, biases and rancor, yet their own factions continue to promote the divisiveness themselves due to their misguided beliefs or even worse, for their own purposes.

So we take the news of this young lady and twist it into meaning about the politician herself. If many of my children’s individual actions throughout the years were used in the assessment of who I am or what I believe in, I frankly wouldn’t even recognize myself. Fortunately their actions over time display many of the core beliefs that I hold dear; however, they are their own people. In fact, I raised them to be their own people. Their lives are not there to be lived for me.

It is difficult enough in all of the adroitly crafted, lavishly expensive spin to make determinations about the 7 key considerations of the candidates themselves. To extend this investigation and determination into their families is a red herring and self generated smoke by the spinners who create their own vapid fires.

We have reached a problematic point in our country, where our elected officials in Washington are a distant cousin to the people they are supposed to represent. We should squash this conversation and get to the issues. We should make it clear that even the purportedly “flawed” among us, people without the “right” education and pedigree, people with flaws and problems can make it through this scrutiny to represent us.

After all, this fine American woman Sarah Palin is a very excellent example of “us”.