Rapid Response

Sept. 22 (Bloomberg) -- The financial crisis of the past year has provided a number of surprising twists and turns, and from Bear Stearns Cos. To American International Group Inc., ambiguity has been a big part of the story.

Why did Bear Stearns fail, and how does that relate to AIG? It all seems so complex.

But really, it isn't. Enough cards on this table have been turned over that the story is now clear. The economic history books will describe this episode in simple and understandable terms: Fannie Mae and Freddie Mac exploded, and many bystanders were injured in the blast, some fatally.

Fannie and Freddie did this by becoming a key enabler of the mortgage crisis. They fueled Wall Street's efforts to securitize subprime loans by becoming the primary customer of all AAA-rated subprime-mortgage pools. In addition, they held an enormous portfolio of mortgages themselves.

In the times that Fannie and Freddie couldn't make the market, they became the market. Over the years, it added up to an enormous obligation. As of last June, Fannie alone owned or guaranteed more than $388 billion in high-risk mortgage investments. Their large presence created an environment within which even mortgage-backed securities assembled by others could find a ready home.

The problem was that the trillions of dollars in play were only low-risk investments if real estate prices continued to rise. Once they began to fall, the entire house of cards came down with them.

Take away Fannie and Freddie, or regulate them more wisely, and it's hard to imagine how these highly liquid markets would ever have emerged. This whole mess would never have happened.

It is easy to identify the historical turning point that marked the beginning of the end.

Back in 2005, Fannie and Freddie were, after years of dominating Washington, on the ropes. They were enmeshed in accounting scandals that led to turnover at the top. At one telling moment in late 2004, captured in an article by my American Enterprise Institute colleague Peter Wallison, the Securities and Exchange Comiission's chief accountant told disgraced Fannie Mae chief Franklin Raines that Fannie's position on the relevant accounting issue was not even ``on the page'' of allowable interpretations.

Then legislative momentum emerged for an attempt to create a ``world-class regulator'' that would oversee the pair more like banks, imposing strict requirements on their ability to take excessive risks. Politicians who previously had associated themselves proudly with the two accounting miscreants were less eager to be associated with them. The time was ripe.

The clear gravity of the situation pushed the legislation forward. Some might say the current mess couldn't be foreseen, yet in 2005 Alan Greenspan told Congress how urgent it was for it to act in the clearest possible terms: If Fannie and Freddie ``continue to grow, continue to have the low capital that they have, continue to engage in the dynamic hedging of their portfolios, which they need to do for interest rate risk aversion, they potentially create ever-growing potential systemic risk down the road,'' he said. ``We are placing the total financial system of the future at a substantial risk.''

What happened next was extraordinary. For the first time in history, a serious Fannie and Freddie reform bill was passed by the Senate Banking Committee. The bill gave a regulator power to crack down, and would have required the companies to eliminate their investments in risky assets.

If that bill had become law, then the world today would be different. In 2005, 2006 and 2007, a blizzard of terrible mortgage paper fluttered out of the Fannie and Freddie clouds, burying many of our oldest and most venerable institutions. Without their checkbooks keeping the market liquid and buying up excess supply, the market would likely have not existed.

But the bill didn't become law, for a simple reason: Democrats opposed it on a party-line vote in the committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democratic opposition, couldn't even get the Senate to vote on the matter.

That such a reckless political stand could have been taken by the Democrats was obscene even then. Wallison wrote at the time: ``It is a classic case of socializing the risk while privatizing the profit. The Democrats and the few Republicans who oppose portfolio limitations could not possibly do so if their constituents understood what they were doing.''

Now that the collapse has occurred, the roadblock built by Senate Democrats in 2005 is unforgivable. Many who opposed the bill doubtlessly did so for honorable reasons. Fannie and Freddie provided mounds of materials defending their practices. Perhaps some found their propaganda convincing.

But we now know that many of the senators who protected Fannie and Freddie, including Barack Obama, Hillary Clinton and Christopher Dodd, have received mind-boggling levels of financial support from them over the years.

Throughout his political career, Obama has gotten more than $125,000 in campaign contributions from employees and political action committees of Fannie Mae and Freddie Mac, second only to Dodd, the Senate Banking Committee chairman, who received more than $165,000.

Clinton, the 12th-ranked recipient of Fannie and Freddie PAC and employee contributions, has received more than $75,000 from the two enterprises and their employees. The private profit found its way back to the senators who killed the fix.

There has been a lot of talk about who is to blame for this crisis. A look back at the story of 2005 makes the answer pretty clear.

Oh, and there is one little footnote to the story that's worth keeping in mind while Democrats point fingers between now and Nov. 4: Senator John McCain was one of the three cosponsors of S.190, the bill that would have averted this mess.

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ZENIT, The world seen from Rome
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Supreme Knight's Letter to Biden
Today, Children of All Races Are Denied Recognition as 'Persons'

WASHINGTON, D.C., SEPT. 19, 2008 (Zenit.org).- Here is an open letter addressed
to Senator Joe Biden, the Democratic candidate for vice president, from the
Supreme Knight of the Knights of Columbus, Carl Anderson.It was published today
as a full-page ad in various U.S. newspapers.

* * *

Dear Senator Biden:I write to you today as a fellow Catholic layman, on a
subject that has become a major topic of concern in this year's presidential
campaign.

The bishops who have taken public issue with your remarks on the Church's
historical position on abortion are far from alone. Senator Obama stressed your
Catholic identity repeatedly when he introduced you as his running mate, and so
your statements carry considerable weight, whether they are correct or not. You
now have a unique responsibility when you make public statements about Catholic
teaching.

On NBC's Meet the Press, you appealed to the 13th Century writings of St.
Thomas Aquinas to cast doubt on the consistent teaching of the Catholic Church
on abortion.

There are several problems with this.

First, Aquinas obviously had only a medieval understanding of biology, and thus
could only speculate about how an unborn child develops in the womb. I doubt
that there is any other area of public policy where you would appeal to a 13th
Century knowledge of biology as the basis for modern law.

Second, Aquinas' theological view is in any case entirely consistent with
the long history of Catholic Church teaching in this area, holding that abortion
is a grave sin to be avoided at any time during pregnancy.

This teaching dates all the way back to the Didache, written in the second
century. It is found in the writings of Tertullian, Jerome, Augustine and
Aquinas, and was reaffirmed by the Second Vatican Council, which described
abortion as "an unspeakable crime" and held that the right to life
must be protected from the "moment of conception." This consistent
teaching was restated most recently last month in the response of the U.S.
Conference of Catholic Bishops to remarks by House Speaker Nancy Pelosi.

Statements that suggest that our Church has anything less than a consistent
teaching on abortion are not merely incorrect; they may lead Catholic women
facing crisis pregnancies to misunderstand the moral gravity of an abortion
decision.

Neither should a discussion about a medieval understanding of the first few
days or weeks of life be allowed to draw attention away from the remaining
portion of an unborn child's life. In those months, even ancient and
medieval doctors agreed that a child is developing in the womb.

And as you are well aware, Roe v. Wade allows for abortion at any point during
a pregnancy. While you voted for the ban on partial birth abortions, your
unconditional support for Roe is a de facto endorsement of permitting all other
late term abortions, and thus calls into question your appeal to Aquinas.

I recognize that you struggle with your conscience on the issue, and have said
that you accept the Church's teaching that life begins at conception - as a
matter of faith. But modern medical science leaves no doubt about the fact that
each person's life begins at conception. It is not a matter of personal
religious belief, but of science.

Finally, your unwillingness to bring your Catholic moral views into the public
policy arena on this issue alone is troubling.

There were several remarkable ironies in your first appearance as Senator
Obama's running mate on the steps of the old state capitol in Springfield,
Illinois.

His selection as the first black American to be the nominee of a major party
for president of the United States owes an incalculable debt to two movements
that were led by people whose religious convictions motivated them to confront
the moral evils of their day - the abolitionist movement of the 19th Century,
and the civil rights movement of the 20th Century.

Your rally in Springfield took place just a mile or so from the tomb of Abraham
Lincoln, who in April 1859 wrote these words in a letter to Henry Pierce:

"This is a world of compensations; and he who would be no slave, must
consent to have no slave. Those who deny freedom to others, deserve it not for
themselves; and, under a just God, cannot long retain it."

Lincoln fought slavery in the name of "a just God" without
embarrassment or apology. He confronted an America in which black Americans were
not considered "persons" under the law, and were thus not entitled to
fundamental Constitutional rights. Today, children of all races who are fully
viable and only minutes from being born are also denied recognition as
"persons" because of the Roe v. Wade regime that you so strongly
support. Lincoln's reasoning regarding slavery applies with equal force to
children who are minutes, hours or days away from birth.

The American founders began our great national quest for liberty by declaring
that we are all "created equal." It took nearly a century to transform
that bold statement into the letter of the law, and another century still to
make it a reality. The founders believed that we are "endowed by [our]
Creator with certain unalienable rights," and that first among these is
"life."

You have a choice: you can listen to your conscience and work to secure the
rights of the unborn to share in the fruits of our hard-won liberty, or you can
choose to turn your back on them.

On behalf of the 1.28 million members of the Knights of Columbus and their
families in the United States, I appeal to you, as a Catholic who acknowledges
that life begins at conception, to resolve to protect this unalienable right. I
would welcome the opportunity to discuss these issues personally with you in
greater detail during the weeks between now and November 4.

Respectfully,

Carl A. Anderson
Supreme Knight

Columbo interview with Obama

Ah . . . Sorry to bother you Mr. Obama, Sir

Excuse me Mr. Obama, I mean Senator Obama, sir. Um . . . I know you are busy and important and stuff. I mean running for president is very important and . . . ah . . . I hate to bother you.   I will only take a minute, ok, sir?

See, I have these missing pieces that are holding me up, and I was wondering sir, if you could take time out of your busy schedule and help me out. You know, no big deal, just some loose ends and things.

Hey, you have a nice place here! The wife sees houses like this on TV all the time and says boy she wishes she had digs like this you know? Is that painting real? Really? Wow. I saw something like that in a museum once!

Oh, sorry sir. I didn't mean to get off the track. So if you could just help me out a minute and give me some details, I will get right out of your way. I want to close this case and maybe take the wife to Coney Island or something. Ever been to Coney Island ? No, I didn't think so...

Well, listen, anyways, I can't seem to get some information I need to wrap this up. These things seem to either be "locked" or "not available'. I'm sure it's just some oversight or glitch or something, so if you could you tell me where these things are . . I . . . I . . . have them written down here somewhere . . . Oh wait.   Sorry about the smears. It was raining out. I'll just read it to you.

Could you help me please find these things, sir?

•                    Your Occidental College records
•                    Your Columbia College records
•                    Your Columbia Thesis paper
•                    Your Harvard College records
•                    Your Selective Service Registration
•                    Your medical records
•                    Your Illinois State Senate records
•                    Your Illinois State Senate schedule
•                    Your Law practice client list
•                    A Certified Copy of your original Birth certificate
•                    Your embossed, signed paper Certification of Live Birth
•                    Your Harvard Law Review articles that were published
•                    Your University of Chicago scholarly articles
•                    Your Record of baptism

Oh hey . . Listen! I know you are busy! Is this too much for you now? I mean tell you what. I will come back tomorrow. Give you some time to get these things together, you know? I mean, I know you are busy, so I will just let myself out. I will be back tomorrow. And the day after. .

For more information check out this link! What efforts he has gone to in order to have a "clean slate" and not leave a paper trail.

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ZENIT, The world seen from Rome
News Agency
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History of Church Teaching on Abortion

US Bishops Issue Fact Sheet

WASHINGTON, D.C., SEPT. 4, 2008 (Zenit.org).- Here is a fact sheet issued by
the U.S. episcopal conference's Committee on Pro-Life Activities, which
clarifies the Church's constant teaching on abortion.

The fact sheet responds to a misrepresentation of Church teaching made in
remarks by Speaker of the House Nancy Pelosi during an Aug. 24 interview on
national TV.

* * *

The Catechism of the Catholic Church states: "Since the first century the
Church has affirmed the moral evil of every procured abortion. This teaching has
not changed and remains unchangeable. Direct abortion, that is to say, abortion
willed either as an end or a means, is gravely contrary to the moral law"
(No. 2271).

In response to those who say this teaching has changed or is of recent origin,
here are the facts:

-- From earliest times, Christians sharply distinguished themselves from
surrounding pagan cultures by rejecting abortion and infanticide. The earliest
widely used documents of Christian teaching and practice after the New Testament
in the 1st and 2nd centuries, the Didache (Teaching of the Twelve Apostles) and
Letter of Barnabas, condemned both practices, as did early regional and
particular Church councils.

-- To be sure, knowledge of human embryology was very limited until recent
times. Many Christian thinkers accepted the biological theories of their time,
based on the writings of Aristotle (4th century BC) and other philosophers.
Aristotle assumed a process was needed over time to turn the matter from a
woman's womb into a being that could receive a specifically human form or
soul. The active formative power for this process was thought to come entirely
from the man -- the existence of the human ovum (egg), like so much of basic
biology, was unknown.

-- However, such mistaken biological theories never changed the Church's
common conviction that abortion is gravely wrong at every stage. At the very
least, early abortion was seen as attacking a being with a human destiny, being
prepared by God to receive an immortal soul (cf. Jeremiah 1:5: "Before I
formed you in the womb, I knew you").

-- In the 5th century AD this rejection of abortion at every stage was affirmed
by the great bishop-theologian St. Augustine. He knew of theories about the
human soul not being present until some weeks into pregnancy. Because he used
the Greek Septuagint translation of the Old Testament, he also thought the
ancient Israelites had imposed a more severe penalty for accidentally causing a
miscarriage if the fetus was "fully formed" (Exodus 21: 22-23),
language not found in any known Hebrew version of this passage. But he also held
that human knowledge of biology was very limited, and he wisely warned against
misusing such theories to risk committing homicide. He added that God has the
power to make up all human deficiencies or lack of development in the
Resurrection, so we cannot assume that the earliest aborted children will be
excluded from enjoying eternal life with God.

-- In the 13th century, St. Thomas Aquinas made extensive use of
Aristotle's thought, including his theory that the rational human soul is
not present in the first few weeks of pregnancy. But he also rejected abortion
as gravely wrong at every stage, observing that it is a sin "against
nature" to reject God's gift of a new life.

-- During these centuries, theories derived from Aristotle and others
influenced the grading of penalties for abortion in Church law. Some canonical
penalties were more severe for a direct abortion after the stage when the human
soul was thought to be present. However, abortion at all stages continued to be
seen as a grave moral evil.

-- From the 13th to 19th centuries, some theologians speculated about rare and
difficult cases where they thought an abortion before "formation" or
"ensoulment" might be morally justified. But these theories were
discussed and then always rejected, as the Church refined and reaffirmed its
understanding of abortion as an intrinsically evil act that can never be morally
right.

-- In 1827, with the discovery of the human ovum, the mistaken biology of
Aristotle was discredited. Scientists increasingly understood that the union of
sperm and egg at conception produces a new living being that is distinct from
both mother and father. Modern genetics demonstrated that this individual is, at
the outset, distinctively human, with the inherent and active potential to
mature into a human fetus, infant, child and adult. From 1869 onward the
obsolete distinction between the "ensouled" and "unensouled"
fetus was permanently removed from canon law on abortion.

-- Secular laws against abortion were being reformed at the same time and in
the same way, based on secular medical experts' realization that "no
other doctrine appears to be consonant with reason or physiology but that which
admits the embryo to possess vitality from the very moment of conception"
(American Medical Association, Report on Criminal Abortion, 1871).

-- Thus modern science has not changed the Church's constant teaching
against abortion, but has underscored how important and reasonable it is, by
confirming that the life of each individual of the human species begins with the
earliest embryo.

-- Given the scientific fact that a human life begins at conception, the only
moral norm needed to understand the Church's opposition to abortion is the
principle that each and every human life has inherent dignity, and thus must be
treated with the respect due to a human person. This is the foundation for the
Church's social doctrine, including its teachings on war, the use of capital
punishment, euthanasia, health care, poverty and immigration. Conversely, to
claim that some live human beings do not deserve respect or should not be
treated as "persons" (based on changeable factors such as age,
condition, location, or lack of mental or physical abilities) is to deny the
very idea of inherent human rights. Such a claim undermines respect for the
lives of many vulnerable people before and after birth.