Senator Richard Durbin

Would you like to see the prototype of what is wrong in politics today? Look no further than Senator Dick Durbin's recent speech on the floor of the Senate.

First, Senator Durbin states, "If I read this to you and did not tell you that it was an FBI agent describing what Americans had done to prisoners in their control, you would most certainly believe this must have been done by Nazis, Soviets in their gulags, or some mad regime — Pol Pot or others — that had no concern for human beings."

For days, Sen. Durbin (D-IL) refused to retract or apologize for his outrageous statement. However, after facing much pressure, Sen. Durbin followed up his treasonous remark with, "I have learned from my statement that historical parallels can be misused and misunderstood," Durbin explained. "I sincerely regret if what I said caused anyone to misunderstand my true feelings: Our soldiers around the world and their families at home deserve our respect, admiration and total support."

Of course, shortly thereafter, Senator Durbin responded to talk of his apology with the following, ""It's not that my remarks were wrong or that there's any need for apology," Durbin told the St. Louis Post-Dispatch on Friday. "It's the fact that [my critics] have successfully twisted them out of context." Durbin blamed conservatives for his troubles, saying that he refused to be "intimidated by the right-wing message machine."

And finally, after there was talk of censure, Senator Durbin was really sorry, even seeming to be choked up by his own lack of couth, "Some may believe that my remarks crossed the line," said the Illinois Democrat, at times holding back tears. "To them I extend my heartfelt apologies."

Recently, I watched a program w/ Senator George Mitchell (D-ME). What ever happened to respectable politicians like him.

Housing Bubble? (Pt 2)

I a previous post I opined on the state of the real estate market. I believe it is very important to remember the words of one of history's greatest economists who said, "The markets can remain irrational far longer than we can remain solvent" (or something to that effect. What John Maynard Keynes was suggesting is that asset prices will not necessarily reflect what they should be priced.

In any market (stocks, bonds, houses, and tuna fish), prices are a function of supply and demand. Sometimes, either factor can be artificially enhanced. One example is an "urban growth boundary." I have heard this used as a reason why Portland real estate cannot significantly decline in price. All I have to say about that is to look at Manhattan, which has a very significant urban growth boundary, namely the Hudson and East Rivers. It would be difficult to extend that boundary by law.

Another artificial enhancement is the tax break extended to home owners on mortgage interest. Of course, this enhances demand. Another is derivative mortgage products, allowing people to finance their homes interest only, or fluctuating monthly based upon some measure of interest rates. All of these factors serve to enhance the demand of housing. For prices to change, supply or demand (or both) must fluctuate.

Bottom line: can housing prices decline? Absolutely. Will any measured decline pose a very real problem for some borrowers? Absolutely. If you are in year 1 of a 30 year fixed mortgage and you do not have to move, are you in danger? Probably not. Will housing prices recover from a protracted decline? Sure. Just look to history for precedents. It may take a decade or more (depending upon the severity), but it should happen.

In a related sidenote, based upon an anonymous e-mail I received from a reader, I leaned that this post came up # 2 in popularity when I searched "housing bubble"+"oregon." Pretty cool, even if it did only bring in like 10 readers.

Hope the rest of your weekend goes well.

War

In one of the books I recently read (Caucasus: Mountain Men, Holy Warriors), I found a passage from Leo Tolstoy (author of Anna Karenina & War and Peace), who wrote about a 19th century warrior from the Caucasus named Hadji Murad (published in 1904). Murad had been fighting against the Russian empire who had been attempting to extend their empire into the Caucasus. This observation was:

"What always happens when a state, having large-scale military strength, enters into relations with a primitive, small peoples, living their own independent life. Under the pretext of self-defence (even though attacks are provoked by the powerful neighbour), or the pretext of civilizing the ways of a savage people (even though the savage people are living a life incomparably better and more peacable than the civilizers) or else under some other pretext, the servants of large military states commit all sorts of villainy against small peoples, while maintaining that one cannot deal with them otherwise."

And while this does not necessarily apply to our missions into Iraq, it is important for us to know why we are fighting. Is it for the defense of our nation, or that of ambition?

Recent Reading

Just finished two very good book. First was "The Big Picture" by Edward Jay Epstein about the entertainment industry. Second was "Caucusus: Mountain Men and Holy Warriors" about the Caucus region south of Russia and north of Iran.

Both were fascinating reads for their own reasons. "The Big Picture" is great for anyone who is puzzled by why Hollywood does the wierd things it does, like "why the hell is Tom Cruise dating Katie Holmes even a relevant news story?" Read the book and you'll understand.

"Caucusus" was very interesting because this is a very volatile region of the world that we don't know near enough about. The main areas in the region are Georgia, Chechnya, Albania, Azerbijian, and Dagestan. I picked up this book because I had heard alot about Chechnya as it applies to terrorism and wanted to learn more.

Both are very good.

Enjoy