Maggie's Farm

Over hyped or not it is a reality. Race is thicker than political affiliation as we have recently seen. Irrational , yes, but with their eyes on the prize the African Americans are going to abandon all but race as a measure of judgement.

The Hispanics will stop them in the general election, as will the whites. The African American reaction should be very interesting.

Funny thing is, is that all the political fodder being made out of who did the most for civil rights, MLK or LBJ is still so far off the mark it ain't funny.

The guy who did the most for civil rights was Sheriff Bull Conner. If he hadn't been so brutal, well the civil rights thing would have taken a good deal longer.

January 15, 2008
Barack Obama's Race Problem: White Liberals
By Charles J. Sykes

Barack Obama has a racial problem, but it's not what the media thinks -- it's not rednecks, older voters, or even women offended by attacks on Hillary Clinton. Obama's racial problem is white liberals.


"I'm OK, You're Not."


A central tenet of modern liberalism, after all, is the unshakeable conviction that white American is deeply and irredeemably racist. For three decades, America's white liberals have invested in the belief that American is so incapable of racial fairness that society needs a panoply of laws, preferences, quotas, set-asides, and remedial programs to ensure that black people are treated fairly.


All of those policies are fundamentally based on the belief that America is deeply racist, that their fellow Americans are personally biased and institutionally prejudiced -- consciously and unconsciously, intentionally and structurally; racist in history and practice.


It follows that many race-holding liberals will be among the last to believe that America will ever elect an African-American as president.


White liberals face this cognitive dissonance: if they decide that America is ready for a black president and back Obama they would also be forced to surrender or at least modify decades of convictions about American bias.


The euphemism for this is "electability," and it is one of the reasons why the race and gender cards are being played so aggressively among post-New Hampshire Democrats.


The spectacular failure of polling in New Hampshire may well be the first hint of how deeply the divide will affect the coming primaries. Notably, the polls for the Republican race were on target; but the Democratic polls drastically overstated Obama's support. Despite the initial wagon-circling denials of the media, the phenomenon is not new. In the past, other African American candidates -- Doug Wilder in Virginia; David Dinkins in New York, and Tom Bradley in Los Angeles - have done better in polls than at the ballot box, raising the possibility that white voters who wanted to look racially virtuous told pollsters they were backing Obama, but then actually voted for the white woman on the ballot.


One reason the magnitude of the error in New Hampshire was so much greater than in other biracial contests may be that nearly all of the Democrat respondents were white liberals, wrestling with the dual allegiances of gender and race politics.


"I'm offended. No I'm offended."


In the wake of Clinton's New Hampshire victory much of the punditocracy seems to be surprised by the sudden resurgence of race as a central factor in the presidential race. They shouldn't be.


Democrats, after all, are a party shaped and obsessed with identity and grievance politics, so the clash between sensitivities of race and gender will inevitably be magnified. Who is more offended? Women or Blacks? In New Hampshire it was women, who protectively rallied around an emotional Hillary Clinton who has been unfairly beaten up by the boys.


Now the focus is turning to the sensitivities of African Americans, who are offended by the subtle racial digs of the Clinton campaign. The political backlash of "denigrating women," is being replaced by a backlash against "denigrating African American." Thus the furor over whispers about Obama's teenage drug use and Bill Clinton's comment that Obama's campaign was a "fairytale."


Hillary is accused of dissing Martin Luther King, Jr. by giving too much credit to Lyndon Johnson for civil rights legislation, a hair-splitting distinction that is described in apocalyptic terms by commentators who now focus on potential backlash from black voters.


But this backlash could further complicate Obama's path to the nomination. Until now, to use Shelby Steele's memorable phrase, Obama has been perceived a racial bargainer.


"Bargainers make a deal with white Americans that gives whites the benefit of the doubt: I will not rub America's history of racism in your face, if you will not hold my race against me. Especially in our era of political correctness, whites are inevitably grateful for this bargain that spares them the shame of America's racist past. They respond to bargainers with gratitude, warmth, and even affection. This ‘gratitude factor' can bring the black bargainer great popularity. Oprah Winfrey is the most visible bargainer in America today.
Because Obama is a "natural-born bargainer," writes Steele, Obama is a far more plausible candidate than "challengers" like Al Sharpton or Jesse Jackson who "never give whites the benefit of the doubt." But the return of the "race card" to the campaign may in turn magnify public perceptions of Obama's "blackness" which will further polarize opinion.


And it will leave white liberals facing the dilemma of dueling victimisms.


The white liberals who will decide the Democratic race are genuinely excited about the prospect of an African-American elected president. They are equally, if not more, desperate not to be considered racist. But never underestimate the ability of a liberal to rationalize.


On the one hand they yearn to prove themselves racially virtuous; on the other hand is their conviction that other less enlightened Americans can't be trusted to give a black candidate a fair shake. On the one hand they claim to be champions of minorities; on the other they have developed a reflexive instinct to protect rather than promote minorities.


But won't guilty white liberals turn to Obama as a sacrament of racial absolution? Not necessarily.


Deep down, guilty white liberals feel guilty about other people's attitudes and behavior, not their own. To the contrary they are smugly certain of their own racial virtue; in fact, (they will tell themselves) they care so deeply about black people that they feel an obligation to protect them from an unenlightened electorate. Don't be surprised if many white liberals end up voting against Obama, while telling themselves they are doing it because they are so supportive of minority aspirations.


That's Obama's racial problem.


"Before I voted white I told a pollster I'd vote black, so my conscience is clear"

or

"I voted for the white half"

The Countrywide Bailout and the Macroeconomic Picture

As I mentioned a few days ago, Bank of America (BofA) is buying out troubled Countrywide Financial (a home mortgage lender) for more than $4 Billion, and taxpayers are going to help them finance the buyout. This is good news for Countrywide (whose CEO is being given a ludicrous $110 million going away present), but bad news for the economy as a whole, and for taxpayers.

I should mention that it has been rumored that BofA felt obliged to acquire Countrywide, because the two firms had some large derivatives contracts, and if Countrywide had folded, BofA would have to write-off some very large dollar figures--perhaps enough to wipe out BofA. But by buying out Countrywide, BofA now holds both sides of the derivative transaction (they are in effect both party and counter party) so they can just zero out those derivative contracts. I expect that regardless of whether or not they are able to offset their derivatives exposure, buying out Countrywide may still be disastrous for BofA. One of the longest standing legal precepts in mergers and acquisitions is: "When you buy a company, you also buy its liabilities." The full downside risk at Countrywide is enormous. If the default rate spikes in the nascent recession, Countrywide's mountain of bad paper could very well take BofA down with it. I think that A.P. Giannini (the founder of the Bank of Italy, which later became the Bank of America), is probably rolling in his grave right now.

What does the Countrywide experience portend for the larger economy? I believe that the credit collapse will eventually spawn numerous taxpayer-funded bailouts of financial institutions, some of them measuring in the hundreds of billions of dollars. In essence, the credit collapse is just getting started. The bad news that is presently being trumpeted about subprime mortgages, will soon apply to the entire mortgage credit market. There are so many institutions--banks, hedge funds, mutual funds with financial stock holdings, and more--that have direct or indirect subprime exposure, that once the dominos start to tumble there will be many billions if not trillions wiped out. So much debt has been re-packaged in so many different ways that nobody can tell who owns what debts, and exactly what property is backing those debts. (There are now a dizzying array of Collateralized Debt Obligations (CDOs), Convertible Contingent Debt Securities (CODEs), Enhanced Equity-Linked Debt Securities (ELKs), Mandatorily Exchangeable Debt Securities (MEDs), Stock Return Income Debt Securities (STRIDEs), Structured Investment Vehicle (SIVs), and even "Super SIVs"--SIVs that aggregate other SIVs.)

It is the bankers' inability to assign risk that inspired the summer of Aught Seven credit collapse. Liquidity has dried up worldwide because bankers are terrified of issuing loans if they cannot evaluate risk. With all of the repackaging within repackaging, it is nigh on impossible to identify risk. The term "marked to market" has become meaningless. With so much debt marked to mystery (my term), we are in uncharted waters. In my estimation, anyone that isn't apprehensive about the economy is a Pollyanna.

While much of the credit market is going through a meltdown, the credit rating agencies like Fitch, Moody's, and Standard & Poor's are of no help because it has now been revealed some of them were in on the sub-prime scam--artificially boosting credit ratings in exchange for bribes. (You can look for this scandal to be one of the biggest financial news stories of 2008, potentially much bigger than the Enron scandal ever was.). Any further turmoil in the financial markets--and I expect that there will be plenty--will surely depress stock prices and the value of the US dollar. The dollar is already in deep, deep Schumer. There is a significant chance of a full scale collapse of the US Dollar in 2008.

Knowing the way that things work in Washington, DC, I conclude that bailing out the bankers will eventually mean both higher marginal tax rates, and a higher capital gains rate. As previously mentioned, this is just one more reason to shelter most of your assets in tangibles. For the most part, tangibles are not taxed until after you sell them and realize a profit. And, as I also recently mentioned, here in the US, land and houses are not taxed by the Federal government(at least not yet.) I don't expect the mortgage tax deduction to go away anytime soon, but I would not be surprised if once they feel the squeeze, the Federal government ups the size and number of unfunded mandates on cities, counties, and states, forcing them to increase property taxes.

WOW

above credit to Survival Blog