Takethe5th Picks and Pans

Frank Partnoy at the Daily Beast has written an encomium( meaning lavish  praise of a person or thing) to the Five Hedge Funders that each a)had to appear before Congress this past week and b)had to bear the burden of earning at least $1billion this past year  for which they paid capital gains taxes at most while the plebes (you and I) got stuck for the the higher income tax rates.

But let Frank’s full-some praise take full form:

“No one has been more successful in recent years than fifty-two-year-old John Paulson, president of Paulson & Company. He testified that his funds have made money in fourteen of the previous fifteen years, including this year - when many markets have been sliced in half. His Credit Opportunities Fund was up nearly six hundred percent in 2007. Paulson now manages $36 billion, more than the massive Fidelity Equity-Income Fund. And he does all of this with just seventy employees. Last year, Paulson personally made a reported $3.7 billion. It is almost impossible to imagine that much money. Ten million dollars a day? Ten times more than the annual income of Tom Hanks and Oprah Winfrey - combined?

The other four men didn’t do much worse. In just one week, Philip Falcone of Harbinger Capital Partners, Kenneth C. Griffin of Citadel, James Simons of Renaissance Technologies, and George Soros of Soros Fund Management made as much as the total salaries of all 538 members of the House of Representatives. For the entire year.”

Frank goes on to describe what amounts to his SuperHeroes of Finance. By the way,at a minimum of  $1billion per year these  Hedge Funders commanded at least 25,000 time the US Average wage of just over $40,000 per year in 2007. If we assume 2-times factor for each standard deviation in improved decision-making, this means that  these hedge funders should be 12500 times better in making decisions than the average US wage earner, Mr Plebe. So indeed these guys are SuperHeroes because they are paid as if they are infallible in their financial decision-making(these heroes are 12500 times less likely to make a wrong financial decision then Mr. Plebe and his ilk).

Unfortunately, in this regard, Frank has a slight problem. John Paulson and has made money in only 14 of the last 15 years. Mr. Paulson must have delegated the investment decisions for his funds that one year to some Mr. Plebe. Otherwise he has an infallible financial record.  And Frank goes onto describe some of the infallible things these Financial Superheroes have done for the US economy:
“The hearings sought to praise these men, not to bury them, for the valuable role their funds have played in the markets. They have reduced risks and stabilized prices by buying low and selling high. They have been an early warning signal by uncovering bad news. They have generated value for investors by pressuring entrenched managers to focus more on shareholders. In a recent Journal of Finance study I co-authored with professors from Columbia and Duke business schools and Vanderbilt law school, we found that hedge fund activists generated large positive returns to investors for precisely these reasons.”

In effect, these Financial Superheroes are gamers. They know and take advantage of the growing regulatory weaknesses in the increasingly secretive International Financial Markets and Systems for huge gains. Don’t be stupid - they don’t warn the appropriate authorities that the Financial Markets are going to derail; but rather create schemes to make sure money from the ensuing slaughter.  ….  And then, after the fact, they may deign to pass along “a warning”.

Lets be absolutely clear - these Financial StuporHeroes are nothing more than freeloaders and raiders of the Commons.  And of course their $billion dollar pay packets can be pointed to by the Boards of Directors at say Country Wide Financial as the reason that they had to pay departing and tainted CEO Anthony Mozilo $110million in severance pay. And of course there is a pecking order of executive compensation at only $10’s if not $100’s of millions that is completely justified in the light of our Financial StuporHeroes annual pay packets - collaborative and team decisions be damned.

So all praise for our Financial Hedge Fund StuporHeroes, they made  $billions while billions of others have to suffer  their gaming of the Financial System which remains locked and uncontrollable  at the brink  of a horrific economic and social precipice. But remember these Financial StuporHeroes did not use monstrous leverage and suspect derivatives to achieve these laudable ends - or so we are told.

The question that gets asked everyday and of every Tom, Dick, and Henry Blodget Financial commentator is “when will the bottom be reached “in the current rollercoastering  yet consistently swooning stock markets. And without fail, the Financial commentators fill the airwaves with incredible financial mumbo jumbo that even a voodo witch doctor would not lay claim to. Thus  I suspect the following words taken from a Financial Post article courtesy of  Hedge Funder Barton Biggs are closer to the mark:
“Biggs, a New York-based hedge fund manager, doesn’t expect, as some fear, ‘a tsunami of redemptions from disillusioned investors.’ His view is in part because ‘the panic has abated’…. Biggs, former chief global strategist for Morgan Stanley, conceded, ‘Nobody, and I mean nobody, really knows what hedge-fund liquidity is or what redemptions are or will be.’”

And like those still-unevaluated $54 trillion of Credit Default Swaps, Hedge Fund Redemptions still overhang a Greedy-Gutted market.  So maybe the current OECD predictions of a  downturn of 0.3% world wide for 2009 and 2.8% for the US are still optimistic as momentum is draining fast from the economic engine while basic Financial market valuations remain murky and/or frozen. And this should not be a surprise as a)nobody admits to knowing how to evaluate all those overhanging CDS and b) consumers 0% savings rate, decline of 20-30% in in their house values , 20-50% declines in their 401K and other equity holdings plus rapidly increasing unemployment may have sidelined those very same  US consumers longer than presumed.

What I find worth a 5th of contemplation is that the Hedge Fund managers that appeared before the US House committee this past week  collectively pocket at least $1billion each for the past two years.  Yet despite this plunder, they could shed no light on the market’s future fate. Second, that kind of pay presumes that they are worth 5000 times as much as the average Wall Street commentator (average of $200,000/year in wages). Or from a statistical point of view these anointed Hedge Fund managers  are compensated  2500 standard deviations better than their Financial commentator counterparts in making  decisions and calling the shots on the markets. In effect, these anointed Hedge Fund managers are more infallible than the Pope. Or conversely, the current breed of Financial commentators are dumber than the dumbest Monkey or his Uncle.

Barack Obama is given tops marks for his ability to write and deliver a stirring speech. It is no small part of his political prowess. He has been compared to another Illinois native son - Abraham Lincoln for being a superb communicator. But Barack Obama may be taking this ability to listen, define and communicate to a new level. That is the argument of diverse observers from the Technology Review, NYTimes, and eWeek.

And above is the evidence that these observers may be right on the mark. First, note how fast a complete website was developed (for all Web wonks,  it is primarily AJAX with  jQuery and some embedded blog(s) yet to be fired up). True, much of the material is taken from Obama.com. But the what is remarkable is that Change.gov allows readers:
a)to see a copiously delineated plan of action: the Blueprint for Change is a 60 page PDF;
b)see what has made the transition from candidate (obama.com) to President-elect (change.gov).
This is unprecedented insight into the priorities and agenda for the new President. But as well there is a blog and newroom not yet activated, which presumably will allow site visitors to presumably dialog with the Administration in some fashion. It will be interesting to see how effectively this is managed because the sheer law of numbers may make the site untenable (can you imagine 600,000 comments to a posting ?). But the site is at the moment soliciting direct comment submissions from visitors. This will put Web 2.0 software to the test.

But clearly one can see President Obama using the Web as a supplement if not as an alternate to the FDR’s Radio Fireside chat. It will also be interesting to see if this Web 2.0 approach will be applied to the various Cabinet departments and Head Officers. In any case, stay tuned because already one can get more in depth insights as to what the Obama+Biden administration intends to do  in greater detail than I have ever encountered before. And policies that appear on change.gov have to be assumed to be on the top of the LIFO stack as these problems get addressed in the White House and in Congress. Also stay tuned for more commentary as the features and functions of Obama Web 2.0 unfold.

The NYTimes has a story today that Barack Obama has finally been declared the winner in North Carolina. It hardly seems to matter since Obama already has well over the needed 270 electoral votes as well as an 8 million popular vote plurality. But there is something satisfying about Obama winning in North Carolina - long thought to be safe country for Republicans and John McCain.

There is a rising crescendo of stories emanating from Republican insiders lamenting now the “sorry state of the McCain campaign” or the “Palin Hillbillies doing in the the GOP election strategy”. To be a Republican is to have to experience the Housing -Mortage bubble again. The Republican Bubble and Brand with its Politics of Fear, Partisan Discipline, Trashing Liberals and KneeJerk Populist Constituents has been exploded by the Obama victory.  And the North Carolina victory marks that so well.

As a thinking person, I have had to cringe when President Bush or Vice President Cheney unleashed yet another attack on Socialist Liberals or Environmental Dandies. They delivered to their key constituents by stalling regulations, helping global warming deniers  and let the markets hold unfettered sway. By agreeing with their self serving constituents that markets were efficient and did not need controls and regulations, they allowed more than one  bubble to blow up in the faces of the USA Commons. Yet they themselves are not effected; their handlers and backers will see to that. Just watch how much is invested in the Bush Presidential Library and what posh corporate Board positions they manage to pull down. Its almost a repeat of their VietNam draft dodging ways.  Meanwhile the USA and the world suffers a debilitating recession and the financial system continues to sputter for years to come and all those innovation and financial services jobs are endangered because American Financial institutions are at the Heart of the Over-leveraged and Derivative-based Darkness that is enveloping the World’s Financial markets.

So I would like to think that at least Bush and Cheney in ruining the Republican Brand as evidenced in 8 years of ever worse  Executive administration and their electoral demise as shown in the the North Carolina win,  put the GOP’s  Politics of Fear and Republican-lead Smear Mongering permanently out of political fashion.

But the 30 years of Republican-articulated and Republican-perfected fear politics sharpened to corrosive effects by the likes of  Lee Atwater and  Karl Rove are not gone by any means. It as if the lessons of end-means corruption by President Richard Nixon were lost. Just right shift political shenanigans and corrupt end-means  methods to the electoral process where the electorate are so frazzled, disconnected and/or dumb, you can pull anything over on them. But now there may be an  effective antidote. Barack Obama’s true first contribution to US politics is how to run a campaign that can neutralize many of the Fear+Smear tactics employed by Republican political “strategists”.

Now what the Republican elites will have to decide is whether to move to more inclusive and less abusive politics.  This will mean less corrosive partisanship and a broader “base” which  allows them to bring in Latinos, Youth, and broader female support. Or will the Republicans simply re-arm with even greater and more powerful Politics of Lies, Fear and Smear as heard in the last days of the Presidential campaign (Obama-Biden are socialists, fear a liberal-dominated Democratic majority in Congress and the White House,  and the onslaught of 527-sponsored Reverend Wright “videos ads” is just a sampler). The Republican Party must decide to be either continually “cleverly divisive” or take another path. Given the lack of action by such GOP intellectuals W.F. Buckley, D. Brooks,  W. Kristol, C. Powell, and A. Sullivan among others to reign in the Bush/Cheney excesses, I am not sanguine.But Obama at 364 electoral votes says more of the same old, same old GOP is not viable.

Look at the record. The Financial Debacle started in the US and now  enveloping  the World is the classic result of Financiers gaming themselves - playing a Ponzi scheme on their  own colleagues to their own and the Commons detriment. In a like fashion, Republicans have been Gaming the Electorate. The GOP is  playing Chicken with the Truth, relying on a lazy electorate to snap to Republican favor and attention on a small subset of kneejerk issues. What remains to be seen is how these parties: the Rabid Evangelicals;  the Financial Elites; the Guns-at-any-Pricers; the Dwindling Intolerants of Latinos,  Gays and “Foreign Immigrants”; and their Republican Bagmen  adapt to the future given their own great missteps. It is not certain they will be rational . Rather I suspect each group will be striving again for new model, a new way to “game the system”. But if they do so, then the USA as a World Power will be gone before the Arctic Ice disappears - currently estimated to be 2050. And some estimate it will only take a fifth of that time.

The reason that stock prices continue to gyrate so much as they head down and the credit markets still are frozen - even after unprecedented action by the Fed and worldwide central banks - all is captured in a single phrase - the derivative mess.

The Size of the Problem
That is why I am repeating the picture above because it tells the story. Now many of these swaps cancel each other out - but there is  an overhang estimated at between $4 to $12 Trillion depending on which international financial agency does the counting.  There is $50 trillion++ of CDS-Collateralized Debt Swaps of which a significant fraction are toxic. But no financial institution can unravel how many and how badly their CDS “assets” have turned. This is the thrust of the problem that adding liquidity will just not solve right away. Financial institutions are unable to valuate their “assets”. Particularly their drivatives or swaps. Thus Ben Bernanke is not kidding when he says the recovery processes is not months but more likely quarters if not years in length.
What makes the situation so galling is that the Financial Markets have already had a run in with this financial bubble before. In 1998, losses due to the same causes - highly leveraged, derivative “buys” increasingly in vehicles that are complex and hard to price, and highly illiquid especially when one player dominates the market. Long-Term Capital in 1998 shook the very foundations of Wall Street with its bankruptcy in the face of taking a series of unanticipated and cascading risks with their derivative instruments.

And so Wall Street had a hard failure and precusor experience that should have taught the institutions a lesson. Over and over we are told by financiers that they are Darwinian and efficient - they learn and fast from from their mistakes. Thus, let me repeat that Wall Street Bankers and Hedge Fund excutives should have known better to get themselves involved in the Housing/Mortgage bubble.

And Wall Street executives even had a book that spelled out all the problems in detail - Richard Lowenstein’s When Genius Failed. These were University professors and Nobel Prize geniuses who succumbed to making highly leveraged derivative bets that eventually went beyond their hundreds of millions capital means. Move forward 10 years and Wall Street repeats the same mistakes. Darwinian efficiency be damned - Wall Street players were greedy blind to their vulnerability when they should have known batter. After all the CDS were the same type of complex derivatives whose complex intertwinings negated the very risk dispersal CDS were designed to deliver. And of course the huge leverage of 20-1 up to 40-1 had already failed catastrophically. The Rise and Fall of Long-Term Capital had already told us what Wall Street has visited on not just the US but the whole world =>A wrenching financial debacle of the same ingredients (thanks again you over-compensated Greedy Guts): the derivative-based, highly leveraged hedge fund that failed spectacularly in 1998 has all the “earmarks” of ten years later and the 2008 Mortgage Meltdown.
Just reading through the book many of the same players and same causes are on stage. Exceedingly high leverage plus complex hard-to-value derivatives are there for all to see. But perhaps the most telling problem is the overwhelming secrecy in which trillions of dollars of swaps are done without control or scrutiny by either the Financial Communty or their Regulators. In effect, the Dark Matter Financial Markets which the Economist warned about a year and half ago have come back to bite not just Wall Street but the whole world that adopted many of the swaps, derivatives and other financial instruments of darkness. Fiduciary Trust be gone as much of this is own account work by the banks, funds and institutions. And its also Shark Chum Greed for outlandish compensation that has helped to energize the notion that one can perpetuate outsized returns. Heaven forbid he who has to solve this Wicked Problem because the Financial Sharks are still armed with ill-gotten millions if not billions.

The World Finance industry and especially the Wall Street Branch has  been able to fend off most monitoring and regulation under the guise that a)financial institutions and markets are Darwinian effective -  as long as they remain unfettered by regulations, financial markets will be transparent and efficient at reaching very risk balanced valuations of any business, commodity, stock or other financial bet; and b)because they are so efficient markets tend to regulate themselves because they eliminate the poor or bad players in their midst.

Meanwhile Wall Street is spawning new commodity, derivative, and swaps markets at an ever spiraling rate. And the people watching the stock and financial markets in the SEC, Treasury Secretary, and Fed Chairman posts have tended to be sympathetic to this “no need to regulate” point of view. Our previous post looked at such advocacy by former Fed Chairman Alan Greenspan.

What this post will raise is the idea that a)self regulation by financial players has been virtually non-existent or woefully short of the mark. To support the latter point, consider the August 1 2008 issue, page C12, of the Wall Street Journal. Here is the promise by Credit Default Swap traders -  “they will put in place a central clearing house for ’some’ credit-derivative trading in place by the year end”.

Now CDS-Credit Default Swaps have grown in 5 years by a factor of 25 times in size to a $50Trillion++ dollar market. A very lucrative market. But also  a very secretive market as well. In fact that is one of the causes of the current market meltdown. Nobody can determine who has what toxic CDS and how toxic they are. So banks and financial institutions are loath to do business with each other because they are afraid their next door neighbor may be too highly leveraged and exposed to substantial capital losses with their CDS  and other bad mortgage/debt exposures. So turn off the spigots. This point of view is further exacerbated by the fact that so much bad debt got spread though the financial system by badly valued (Moodys, S+P, Fitch,  and other valuation firms take a bow here) swaps, CDS and other securitized debt.

Given that CDS are ground zero for the current financial meltdown, one would think that the CDS and swap dealers would want to put up a comprehensive and foolproof system. But as the WSJ points out they don’t. It would a)be subject to many exceptions and non-compliant freeloaders, and b) it would open the market up to the very competitive thrusts and Darwinian efficiencies the finacial markets say they deliver with such efficiency. Oops- maybe financial markets are efficient in the own very sweet time.

NYTimes is leading the charge in re-examining the nature and worth of the  influence Alan Greenspan had on broad US Economic and Financial policy. As long serving chairman of the Federal Reserve Board, Mr. Greenspan set monetary policy as FedCharman from 1987 to 2006 under Republican and Democratic Presidents. As seen in the article Mr. Greenspan garnered top ratings from business and government during his tenure.  But the current Worldwide financial storm has lead to a serious reassessment. Here is why:

The reason that credit markets have seized up is that a toxic portion of the $54.6 trillion worth of credit default swaps have turned sour. And how sour nobody knows - precisely because the financial markets are not working and simply are not able to value those derivtives.  And the FED is waving a $0.7 trillion sword trying to get the markets working again. The even bigger question is what other derivatives are creaking in this $464 trillion bubble?

But note carefully what is being said. For a sizable chunk of swaps, the markets are not working - and worse, the whole derivative/swaps market has a)a high degree of opaqueness because derivatives are hard to describe let alone understand even for financial advisors, many of whom cannot predict the behavior/value of the derivatives; and b) inherent systemic risk associated with them because they are so new and have not been tested in a broad range of market conditions . In short derivatives are more volatile than their issuers and buyers would care to admit to. This latter fact has been a specific causal factor in the “meltdown” of the markets. In fact credit markets are “freezing up” precisely because various derivative instruments are creating litigatious “heat” and fears of offloading of “frozen” assets and liabilities.

And as Fed Chairman, Alan Greenspan Gave the Green Light to Almost Unlimited Use of Derivatives with Little or No Regulation.
So this is the first strike against the record of Alan Greenspan, Fed Chairman - the allowing of financial markets to spawn huge $-value derivative based markets with no regulation whatsoever. Not only was there no regulation of the new derivative markets but existing bank and investment firms were dereulated. In fact, regulations of financial institutions were loosened such that Investment Banks and other funds were able to access moneys at low costs but also very high debt to equity ratios. So Alan Greenspan put in place two factors that helped feed the current Financial Meltdown - new and complex derivative markets were allowed to explode in size and import without regulation. And deregulation of existing banking and other financial institutions allowed for risks such as huge leveraged lending and dubious “risk transfers” to be made.

The third problem is that under Alan Greenspan the Fed has been acting as the Moral Hazard Insurance Company of record for financial markets. How so? In the Long Term Capital bailout of 1998 the Fed got the Wall Street Banks to pony up and bailout LTC with no Fed money at risk. True, but in 1989, the biggest bailout before the Wall Street 2008, was the Savings and Loan recovery through US Government organized and taxpayer funded Resolution Trust. Alan Greenspan was a board member of Resolution Trust. Resolution Trust cost US Taxpayer $90B. Resolution Trust set the precedence for the Fedral Government being the massive lender of last resort, Moral Hazard Insurance. This Moral Hazard role was adopted in the 2000-2002 Dot.com Bust when interest rates were lowered to induce spending and quicker recovery from the stock market downturn. In fact, Fed interest rate cuts have been used sevral times in the past 10-15 years like Trickle Down inducers to get stock markets corrected and/or the Economy going again. High debt holdings and low savings Finally, In his recent writings Greenspan has been recommending the same RTC type institution be started to bailout defaulting mortgage holders.In fact, as an early protege of Ayn Rand, Alan Greenspan showed a consistent bias toward financial markets being ultra cometitive and therefore self-regulating
In sum, the Worldwide Financial Capital Freeze and Meltdown 2008 is itself the result of a confluence of ill-behaviors and co-conspirators:
Consumers living too close to margin on debt versus income; Financial institutions believing that a)they are indeed ultra-competitive and therefore self-regulating and b)ultra high leverage and ultra low interest rates were the way to indecent returns indefinitely into the future; and Government and its regulators deceiving themselves that capital markets, when freed from regulation and government control would be perfectly efficient and self regulating enough to bring great and long lasting prosperity at least to their own community if not to the broader economy.

There is a news item at the NYTimes  that confirms in no uncertain terms what has become abundantly obvious -  Wall Street will not regulate itself. Not only that but Wall Street cannot rescue itself when it gets into trouble. The whole reason the banking system is failing now is that a)no financial institution trusts any other;  b)no financial institution has been able to make known in an unambiguous and irrefutable way it is clear of any “toxic” liabilities; and c)no financial institution has been able to determine with certainty the exact status and worth of the many derivative instruments making up huge portions of its asset base. And by huge I mean there worth is a significant fraction of the financial institution’s  capital base

So we have the current sub-Prime Fiasco as a repeat performance of the Saving and Loans Debacle stretching from the late 1980’s to the mid 1990’s. These incompetencies are  important because of two reasons. First, Wall Street says it deserves the huge returns it makes because it delivers on fiduciary trust to clients. But fiduciary trust implies a good deal of self-regulation and an ability to recover of itself which the Street has proven time and again that it is  incapable of doing. Second, Wall Street says it deserves the huge annual pay packets amounting  to hundreds of millions of dollars if not billions accorded to a few private equity managers because it manages risks better than anybody. But we have a mess that Wall Streeters, who are paying themselves as if they are near nigh infallible in their financial and risk managing astuteness, have blundered full greedy guts into and now leave taxpayers to clean the upchuck. “Oh and when you get it cleaned up don’t think of regulating or prosecuting us…. regulation is bad, prosecution is impossible.”
So of even greater import is the matter of how well Wall Street has managed risk.Wall Street from Investment Bankers  through Private Equity to Hedge Funds has proven not just inept but totally incompetent at managing risk. Wall Street Financial Institutions are running at leverage ratios of debt to capital of not ten times but for the past 6-10 years of 30-50++ times. These are very risk prone levels. Wall Street has been relying on CDS, CDOs,   and a host of other derivative instruments that a)are hard and complex to understand and value(just ask the rating agencies), b) are subject to “boundary value problems” that make their behaviour in extreme conditions hard to predict and c)simply have not been tested for all possible market conditions and exigencies; c)Wall Street has been using computerized automated trading that has increased the variability in the market place and creating dangerous fluctuations and trading seize-ups; and d)Wall Street has bent the rules in its favor. Due its riches and huge lobbying power, Wall Street has managed to deflect, water down and utterly dismiss regulatory safeguards and oversight. Even worse with private equity and huge unregulated derivative instrument markets, Wall  Street has managed to create literally secret financial enclaves for which the rles of the road are set by contractual agreements among the players themselves. The Economist has warned of the problems with theDark Markets.

Yet for delivering not less but increased risks and ever greater financial bubbles, Wall Street demands outsize returns on investment and  pay for their top officers that are not just  30-40 times but stretch to  300-400 times the average pay in their organization . <u>Six Sigma says that when you achieve 99.9999% operating effectiveness, you are making virtually no mistakes whatsoever</u>. That is to say that you are operating at 6 standard deviations better than the average. Such an operation deserves 6  times the return or equivalently 6 times the average pay - so how  in the world does Wall Street and its executives deserve the returns and compensation they are currently granting to themselves?</u>

In the current crisis, Wall Street has degenerated into rapacious, dog-eat-dog Darwinian-survival-of-the-fittest world=>  Bear Sterns goes for $2/share. WaMu for not much more. Merrill shotgunned into merger. Lehman left to capital wither and fail. And fortunes made short selling bailouts of Fannie Mae and Freddie Mac. Do these gals and guys deserve outsize returns, pay-packets, no regulations and a bailout ??? Please a fifth of sense should be applied here.

In a daring but also partisan fear-laden column, Frank Rich advances the notion that Sarah Palin is doing a Dick Cheney to the McCain-Palin campaign. She and her handlers are providing the more energetic thrusts and are now, de facto,  steering the McCain campaign. And the Republican elites, who are on notice from the Maverick McCain that he is going to change Washington (Republican dominated Washington) - would like nothing better than to have a malleable VP Maverick become President - sort of like how Dick Cheney handled  for George Bush the tough behind the scenes policy making  and decisions on the Iraq War, energy, Justice department changes and other key conservative decisions.

In effect, if the Republican political elites  can’t control the Presidency immediately, they would have their election-winning Palin  voice carrying the key messages on how things should go. And then God forbid - but all it takes is medical incapacity for a transfer of power to Palin the President.

As I noted at the outset this smacks of TV’s  24 Hours and one of its berserker plots. But one has to admit  that Art does imitate life  as Wesley Snipes’ Passenger 57 movie from 1992 had its real life  denouement in September 2001.

The Media appear to be working overtime to earn the hated “liberal” or “recklessly biased” epithets. In the latter case, Fox News Hannity and Colmes program is lately acting as a RNC-Republican National Committee cable channel conduit for strictly RNC viewpoints despite trumpeting that “the fair and balanced debate is only on ‘Hannity and Colmes’ “. Rigggghhhhtttttttttt.

But even media outlets that one would expect to be non-partisan and unbaised are letting out partisan attack dogs in their Opinions sections. The Wall Street Journal has just done a disservice to its own paper’s credibility by allowing a hopelessly short sighted view on what went wrong with recent Iraq War to be publsihed as an Opinion piece. And yesterday, the New York Times let Op-Ed columnist Bill Kristol publish a Palin piece that clearly was  a Republican cover  and “apologia” for the McCain-Palin campaign’s turn towards PitBull personal attacks on Barack Obama.

Kristol’s column’s only redeeming quality was as an example of political manipulation spelled out in written formulas:
1) Breathless account of how I get to talk to Sarah Palin.
2) She even confides in me, William Kristol, about how her son dispatched to Iraq has neglected to call her … and then when the call finally comes …
3) Here are the setup lines for a new Palin mission assignment:
‘As for the campaign, Palin made clear — without being willing to flat out say so — that she regretted allowing herself to be overly handled and constrained after the Republican convention. She described the debate on Thursday night as “liberating,” and she emphasized how much she now looked forward to being out there, “getting to speak directly to the folks.”’
4) Well your new assignment, if you choose to accept it:
‘Palin also made clear that she was eager for the McCain-Palin campaign to be more aggressive in helping the American people understand “who the real Barack Obama is.” Part of who Obama is, she said, has to do with his past associations, such as with the former bomber Bill Ayers. Palin had raised the topic of Ayers Saturday on the campaign trail, and she maintained to me that Obama, who’s minimized his relationship with Ayers, “hasn’t been wholly truthful” about this.

I pointed out that Obama surely had a closer connection to the Rev. Jeremiah Wright than to Ayers — and so, I asked, if Ayers is a legitimate issue, what about Reverend Wright?

She didn’t hesitate: “To tell you the truth, Bill, I don’t know why that association isn’t discussed more, because those were appalling things that that pastor had said about our great country, and to have sat in the pews for 20 years and listened to that — with, I don’t know, a sense of condoning it, I guess, because he didn’t get up and leave — to me, that does say something about character. But, you know, I guess that would be a John McCain call on whether he wants to bring that up.” ‘
5) The mission asignment then concludes with Palin saying, all of her own accord as made Kristol-clear to readers, that John McCain should decide to take the gloves off and let her be Super-smear Mom too.
6)And presumably now the Republican operatives “There was a pause, and I thought I heard some staff murmuring in the background (we were on speaker phones).” could be sure that orders … ushh suggestions were getting properly executed by the Vice President.
Wow - we got to see Repulican presidential campaign policy making “Live”. Again that is the only redeeming virtue of an op-ed column that is Deep Six Republican. Please NYTimes, give us an OpEd voice closer to David Brooks who at least endeavours to be unbiased, looking for the insights that are independent and not repackaged political party lines.
In sum, our press has become key agents of the change to shrill and biased political “debates”. So the ability to even do good analysis let alone arrive at good policy decisions is being progressively cutoff and squandered in the current hyper-toxic partisan politics. The Press held out as the institution that helps to preserve the public’s political consciousnes, will and trust is now undermining by allowing such biased players a loud, squaking and no-partisan-holds barred national outlet.