First post, and firing of the bazooka

Several folks have asked me about starting a blog after posting a couple pie recipes, and since I don't think I'll have enough original pie recipes to make this worth reading, I'll flesh it out with commentary on current events.

This is my take on the Freddie/Fannie take over and where this credit crisis is going:

Banking policy since the 1980s has made it far too easy to loan money,
and voters rewarded pols who encouraged this. I don't think any major
changes at the federal, state or local level followed the Savings and
Loan meltdown.

Thus, knowing that the federal goverment would reward those who made its
people feel rich (i.e. "live the American dream"), Freddie and Fannie
bought up pretty much all of the good mortgage debt and packaged it,
leaving only riskier stuff for private banks. The big Wall Street
firms got in on the act by packaging and reselling the crap, knowing
from history that the US taxpayers elect leaders who provide a backstop to the reckless providers of cheap capital (and therefore jobs). Underpinning this has been a worldwide desire to join the party, most notably in China, where cheap American credit has fueled double-digit export increases over the last twenty years.

The current crisis, however, may be game-changing:
http://www.iht.com/articles/2008/09/05/business/05yuan.php

I asked someone who does corporate finance for a living if this was
significant. The reply: "let's not go there." The current
generation of Chinese leaders knows that they rely on two pillars for
legitimacy: (1) nationalism and (2) prosperity. For now, and possibly
for a while yet, they don't have the military punch for serious
foreign adventures, which limits their ability to appeal to
nationalism, since that almost always requires a foreign enemy and occasional combat. The second requires a very robust export market, involving a weak yuan and percolating markets in the US. However, the lower level functionaries
and their managers, who make the place work on a day to day basis, are
apparently getting sick of roughly -10% return on investments they're
forced to make. Back in 2006 I think I wrote something to the effect
of a "death pact" that Sec. Paulson had signed with Chinese finance
ministry, one in which they would continue to loan us money we paid
them for stuff they made. Everyone survives as long as the mighty US
consumer is able to spend >100% of income. The wheels are now
officially off and we're entering uncharted territory.

Right now, both candidates are trying to sell plans to put the wheels
back on rather than buy a new car. I'll definitely give Obama a
slight edge in this debate, as one of the real problems is too much
money trying to find somewhere to get a return, and so pulling more
into the Treasury from top earners is fair. Beyond that, we need an expanded
export market ASAP, and anti-trade Dems ain't gonna get that done. Small businesses are bad for unions, and a lot of what I'm hearing about shoring up the housing market sounds distressingly similar to a planned economy.

We need to start producing things ourselves and stop asking for gov't help propping up our lifestyles. F. A. Hayek wrote a book about the other option.