Tuesday, September 23, 2008; Page A21

The political left always aims to expand the permeation of economic life by politics. Today, the efficient means to that end is government control of capital. So, is not McCain's party now conducting the most leftist administration in American history? The New Deal never acted so precipitously on such a scale. Treasury Secretary Paulson, asked about conservative complaints that his rescue program amounts to socialism, said, essentially: This is not socialism, this is necessary. That non sequitur might be politically necessary, but remember that government control of capital is government control of capitalism. Does McCain have qualms about this, or only quarrels?

On "60 Minutes" Sunday evening, McCain, saying "this may sound a little unusual," said that he would like to replace Cox with Andrew Cuomo, the Democratic attorney general of New York who is the son of former governor Mario Cuomo. McCain explained that Cuomo has "respect" and "prestige" and could "lend some bipartisanship." Conservatives have been warned.

Conservatives who insist that electing McCain is crucial usually start, and increasingly end, by saying he would make excellent judicial selections. But the more one sees of his impulsive, intensely personal reactions to people and events, the less confidence one has that he would select judges by calm reflection and clear principles, having neither patience nor aptitude for either.

It is arguable that, because of his inexperience, Obama is not ready for the presidency. It is arguable that McCain, because of his boiling moralism and bottomless reservoir of certitudes, is not suited to the presidency. Unreadiness can be corrected, although perhaps at great cost, by experience. Can a dismaying temperament be fixed?

georgewill@washpost.com

Teachers aren't the only ones who think they are underpaid.

'The school district has gotten cheap labor for a long time in this position,' said Orange School Superintendent Ron Blocker, who thinks he is being shortchanged, too.

Blocker pulls down $298,756 a year, when his salary and extras including an annuity and expense account are tallied. That's more than six times what the average teacher makes.

Gov. Charlie Crist earns only $132,932 a year under a state pay scale that provides considerably stingier benefits than local school boards heap on superintendents.

School superintendents across the region get a good dollar, compared with earnings for the average Joe -- or even the average Joe college graduate with an advanced degree similar to one a superintendent might have.

U.S. Census Bureau statistics for 2007 indicate that just under 8 percent of Florida workers earned more than $100,000 a year.

The average wage earner with an advanced degree made $56,542. The average salary for a teacher in Central Florida is between $42,000 and $49,000.

But the school superintendents, who make four or five times as much, say they are worth every penny.

'I am responsible for the education of more than 64,000 students, and I take it very seriously,' said Bill Vogel, superintendent of Seminole County schools, who tops Blocker's take by snagging $310,981 from taxpayers annually.

Vogel got a pay increase this summer, even though School Board Chairman Diane Bauer said the district 'didn't have a penny' to give raises to teachers and other employees.

The School Board is chopping nearly $30 million from school district programs this year because of cutbacks in state funding and rising costs for necessities such as electric and diesel fuel.

But Vogel's contract required a nearly 4 percent cost-of-living increase. The superintendent says he will donate net earnings from the extra $7,058 to the school system's charitable foundation this year, although it will figure in his base pay in subsequent years.

Vogel, Blocker and the other superintendents have a number of cash benefits in addition to their salaries that boost their incomes. The perks are written into their contracts.

Blocker got a $19,256 bonus from the School Board this past school year after the School Board said he was doing a good job.

Vogel 'retired' from the school system two years ago and draws a $5,940 monthly state retirement check in addition to his pay and other cash benefits. He returned to work a month after retiring, as allowed by state law.

Peg Smith, superintendent of Volusia schools, gets $652 a month to lease a big Buick. She also gets cash tucked away in an annuity -- $26,275 this past year.

'Reasonable compensation'

'It has to be reasonable compensation for all of the years of experience and training,' said Smith, who is in line to earn as much as $240,908 this year.

Smith points out that she plans to take a 2 percent cut in base pay this year -- about $3,500 -- because the district is in desperate financial straits. She says she also might give up a $14,431bonus she earned based on student FCAT scores, dropout rates and graduation rates.

Still, Smith and most of the other superintendents are paid considerably more than the state's suggested salaries for school-district heads.

Authored by Chuck Norris


Posted: September 22, 2008
1:00 am Eastern

© 2008

by Joseph Farah

Posted: September 08, 2008
1:00 am Eastern

© 2008

US Government takes over mortgage giants By MARTIN CRUTSINGER and ALAN ZIBEL AP Business Writers WASHINGTON (AP) -- The Bush administration's seizure of troubled mortgage giants Fannie Mae and Freddie Mac is potentially a $200 billion bet that it will help reverse a prolonged housing and credit crisis. The historic move announced Sunday won support from both presidential campaigns, but private analysts worried that it may not be enough to stabilize the slumping housing market given the glut of vacant homes for sale, rising foreclosures, rising unemployment and weak consumer confidence. Officials announced that both giant institutions were being placed in a government conservatorship, a move that could end up costing taxpayers billions of dollars. Treasury Secretary Henry Paulson said allowing the companies to fail would have extracted a far higher price on consumers by driving up the cost of home loans and all other types of borrowing because the failures would "create great turmoil in our financial markets here at home and around the globe." Mark Zandi, chief economist at Moody's Economy.com predicted that 30-year mortgage rates, currently averaging 6.35 percent nationwide, could dip to close to 5.5 percent. That's because investors will be more willing to buy the debt issued by Fannie and Freddie _ and at lower rates _ since the federal government is now explicitly standing behind that debt. "Effectively, the federal government has now become the nation's mortgage lender," he said. "This takes a major financial threat off the table." Futures on all major stock indexes rose about 2 percent in electronic trading Sunday night, another sign of investor relief about the takeover plan The companies, which together own or guarantee about $5 trillion in home loans, about half the nation's total, have lost $14 billion in the last year and are likely to pile up billions more in losses until the housing market begins to recover. The Treasury Department said it was prepared to put up as much as $100 billion over time in each of the companies if needed to keep them from going broke, in exchange for senior preferred stock. Treasury will immediately be issued $1 billion of such stock from each company, which will pay 10 percent interest. Further purchases of preferred stock will be triggered if quarterly audits find that the companies' capital cushion is below prudent standards. The government, which will receive warrants representing ownership stakes of 79.9 percent in each company, is hoping that its moves will reassure nervous investors that they can continue to buy the debt of the two companies. In a statement, President Bush said, "Americans should be confident that the actions taken today will strengthen our ability to weather the housing correction and are critical to returning the economy to stronger sustained growth." Democratic presidential nominee Barack Obama issued a statement agreeing that some form of intervention was necessary, and promised, "I will be reviewing the details of the Treasury plan and monitoring its impact to determine whether it achieves the key benchmarks I believe are necessary to address this crisis." Republican presidential nominee John McCain also voiced support while his running mate, Alaska Gov. Sarah Palin, said that Fannie and Freddie "have gotten too big and too expensive to the taxpayers. The McCain-Palin administration will make them smaller and smarter and more effective for homeowners who need help." The conservatorship will be run by the Federal Housing Finance Agency, the new agency created by Congress this summer to regulate Fannie and Freddie, a move taken at the same time that Congress greatly expanded the power of the Treasury Department to make loans to the two companies and purchase their stock. The executives and board of directors of both institutions are being replaced. Herb Allison, the former head of the TIAA-CREF retirement investment fund, was selected to head Fannie Mae, and David Moffett, a former vice chairman of US Bancorp, was picked to head Freddie Mac. Paulson was careful not to blame Daniel Mudd, the outgoing CEO of Fannie Mae, or Freddie Mac's departing CEO Richard Syron for the companies' current problems. While both men are being removed as the top executives, they have been asked to remain for an unspecified period to help with the transition. Fannie and Freddie both purchase home loans from banks and then repackage those loans as mortgage-backed securities which they either hold on their own books or sell to investors around the globe. This process provides banks with more money to make more home loans, greatly expanding home ownership. The impact of the government takeover on existing common and preferred shares, which have slumped in value in the last year, will depend on how investors react to Paulson's assertion that they must absorb the cost of further losses first. Under the plan, dividends on both common and preferred stock would be eliminated, saving about $2 billion a year. After the Treasury Department's announcement, credit rating agency Standard & Poor's downgraded Fannie and Freddie's preferred stock to junk-bond status, but reaffirmed the U.S. government's triple-A rating. The Federal Reserve and other federal banking regulators said in a joint statement Sunday that "a limited number of smaller institutions" have significant holdings of common or preferred stock shares in Fannie and Freddie, and that regulators were "prepared to work with these institutions to develop capital-restoration plans." The Fed released a letter from Fed Chairman Ben Bernanke to James Lockhart, the director of the Federal Housing Finance Agency, in which the Fed chief said he concurred in Lockhart's decision to take control of Fannie and Freddie saying the action "will help ensure the safe and sound operation of the enterprises." Analysts were split on how much the takeover could eventually cost taxpayers although they all agreed the up-front costs will be substantial, possibly hitting $100 billion as the Treasury is called upon to bolster the capital cushions at both institutions. However, if the plan does the trick of stabilizing the housing market and home prices stop falling and rebound, then the assets of both Fannie and Freddie should rise in value and the government should be able to sell off the companies and recoup its investments. But it could take a long time to work through that process given all the headwinds facing housing at the moment from the plunge in home prices to soaring defaults on mortgages which are dumping more homes on an already glutted market. The weak economy has pushed unemployment to a five-year high of 6.1 percent, further reducing demand for homes. "I think the government will end up having to put in far more money then they are planning right now (given all the problems facing housing) but the important thing is the agencies have been taken over by the government," said Sung Won Sohn, an economics professor at California State University Channel Islands. "That means there will be less panic in financial markets." Under government control, the companies will be allowed to expand their support for the mortgage market over the next year by boosting their holdings of mortgage securities they hold on their books from a combined $1.5 trillion to $1.7 trillion. Starting in 2010, though, they are required to drop their holdings by 10 percent annually until they reach a combined $500 billion. In addition, officials said the Treasury Department plans to purchase $5 billion in mortgage-backed securities issued by the two companies later this month, the first of a series of purchases planned by the government in an effort to bolster for these securities, which was badly shaken a year ago when the credit crisis first erupted with soaring defaults on subprime mortgages. Paulson said that it would be up to Congress and the next president to figure out the two companies' ultimate structure and the conflicting goals they operated under _ maximizing returns for shareholders while also being required to facilitate home buying for low- and moderate-income Americans. "There is a consensus today ... that they cannot continue in their current form," he said. Members of Congress will be watching in the coming months to see how the takeover works, but more housing legislation appears unlikely until next year given the few weeks remaining both Congress quits to hit the campaign trail. Sen. Charles Schumer, D-N.Y. said the intervention was sparked by worries within the Bush administration that foreign governments would stop holding Fannie and Freddie's debt. "This was the prudent course to take," he said. Senate Banking Committee Chairman Chris Dodd, D-Conn., announced his committee would hold hearings on the takeover to address a number of unanswered questions so that the American people will know "if this unprecedented proposal will help keep mortgages affordable, stabilize the markets and protect taxpayer interests." Lockhart said that all lobbying activities of both companies would stop immediately. Both companies over the years made extensive efforts to lobby members of Congress in an effort to keep the benefits they enjoyed as government-sponsored enterprises. Sunday's actions followed a series of meetings Paulson had with Bush and other top administration economic officials with Bush relying heavily on the judgment of Paulson, who was the head of investment giant Goldman Sachs before he joined the Cabinet in 2006. "It is really an assent to Hank's direction, guidance and judgment," said a senior administration official, who spoke on condition of anonymity to discuss behind-the-scenes deliberations. ___ Associated Press Writer Ben Feller in Washington contributed to this report. Associated Press text, photo, graphic, audio and/or video material shall not be published, broadcast, rewritten for broadcast or publication or redistributed directly or indirectly in any medium. Neither these AP material nor any portion thereof may be stored in a computer except for personal and non-commercial use. AP will not be held liable for any delays, inaccuracies, errors or omissions therefrom or in the transmission or delivery of all or any part thereof or for any damages arising from any of the foregoing. Copyright 2008 Associated Press. All rights reserved.

Michelle Obama was spectacular Monday night. Poised, charming, beautiful, and most of all, authentic.

Ted Kennedy was heroic. Rising out of a wheelchair to stride out on stage, he showed us all the meaning of courage.

But unless you're married to the nominee or fighting off brain cancer, each speaker has one job at the Democratic convention: make the case for change. That case begins with a resounding, ringing indictment of the failed Bush-McCain policies.

In other words: attack.

82 percent of Americans think our country is moving in the wrong direction. The Bush-McCain Republicans messed up the country in their first term, and they messed up the world in their second. If they get a third term, even the solar system won't be safe.

Nancy Pelosi was great. The House Speaker was radiant and optimistic, even as she tore into the Bush-McCain Republicans. And yet there are troubling signs that the rest of the Democrats still don't get it. There is a report that former Virginia governor Mark Warner, the Democrats' keynote speaker, will not attack the Republicans.

To be fair, Warner is running for the Senate in a state that has not voted for a Democratic presidential candidate since Lyndon Johnson. Tearing into war hero McCain while running in a state full of military families could prove problematic for a guy whose reputation as governor was made on bipartisanship.

Democrats should not have put Warner in this bind. They should have chosen as their keynoter someone who, like Pelosi, can give voice to the anger and anxiety of hundreds of millions of Americans. Someone who will show McCain to be the Bush clone that he is.

This is a no-brainer. The political press is abuzz with overblown stories of a Clinton-Obama rift. There are some hard feelings, but less than you'd think, given the closeness of the primaries. But I have a seven-point plan for uniting the Obama and Clinton wings of the party:

Attack, attack, attack, attack, attack, attack.

Attack.

The way to unite and internally divided organization is to identify an external threat. The Obama delegates will be buying beers for the Clinton delegates once they're focused on how disastrous a third term for Bush-McCain would be. But no one is telling them.

If the Democrats do not spend the remaining days of their convention -- hell, the remaining days of the campaign -- in an all-out assault on the ruinous Bush-McCain policies, they will lose.

I was for Hillary in the primaries, but when she endorsed Sen. Obama, I proudly sent him a check for the legal maximum. On the memo line of the check I wrote, "FOR NEGATIVE CAMPAIGNING ONLY." No matter what minor difference Hillary and Barack had, they pale in comparison to the corruption, incompetence, dishonesty and criminality of the Bush-McCain Republicans.

Democrats need to attack as if the future, the country and the planet depend on it. Because they do.

Let's see: housing meltdown, credit crunch, oil shock not seen since the 1970s. The economy is slowing, unemployment growing and inflation increasing. It's the sixth year of a highly unpopular war and the president's approval rating is at 30 percent.

The Italian Communist Party could win this election. The American Democratic Party is trying its best to lose it.

Democrats have the advantage on just about every domestic issue, from health care to education. However, Americans' greatest concern is the economy, and their greatest economic concern is energy (by a significant margin: 37 percent to 21 percent for inflation). Yet Democrats have forfeited the issue of increased drilling for domestic oil and gas. By a margin of 2-1, Americans want to lift the moratorium preventing drilling on the Outer Continental Shelf, thus unlocking vast energy resources shut down for the last 27 years.

Democrats have been adamantly opposed. They say that we cannot drill our way out of the oil crisis. Of course not. But it is equally obvious that we cannot solar or wind or biomass our way out. Does this mean because any one measure cannot solve a problem, it needs to be rejected?

Barack Obama remains opposed to new offshore drilling (although he now says he would accept a highly restricted version as part of a comprehensive package). Just last week, he claimed that if only Americans would inflate their tires properly and get regular tuneups, 'we could save all the oil that they're talking about getting off drilling.' This is bizarre. By any reasonable calculation of annual tire-inflation and tuneup savings, the Outer Continental Shelf holds nearly a hundred times as much oil. As for oil shale, also under federal moratorium, after a thousand years of driving with Obama-inflated tires and Obama-tuned engines, we would still have saved only one-fifth the oil shale available in the United States.

But forget the math. Why is this issue either/or? Who's against properly inflated tires? Let's start a national campaign, Cuban-style, with giant venceremos posters lining the highways. ('Inflate your tires. Victory or death!') Why must there be a choice between encouraging conservation and increasing supply? The logical answer is obvious: Do both.

Do everything. Wind and solar. A tire gauge in every mailbox. Hell, a team of oxen for every family (to pull their gasoline-drained SUVs). The consensus in the country, logically unassailable and politically unbeatable, is to do everything possible to both increase supply and reduce demand, because we have a problem that's been killing our economy and threatening our national security. And no one measure is sufficient.

The green fuels the Democrats insist we should be investing in are as yet uneconomical, speculative technologies, still far more expensive than extracted oil and natural gas. We could be decades away. And our economy is teetering. Why would you not drill to provide a steady supply of proven fuels for the next few decades as we make the huge technological and economic transition to renewable energy?

Congressional Democrats demand instead a clampdown on 'speculators.' The Democrats proposed this a month ago. In the meantime, 'speculators' have driven the price down by $25 a barrel. Still want to stop them? In what universe do traders only bet on the price going up?

On Monday, Obama outlined a major plan with mandates and immense government investment in such things as electric cars and renewables. Fine, let's throw a few tens of billions at this and see what sticks. But success will not just require huge amounts of money. It will require equally huge amounts of time and luck.

On the other hand, drilling requires no government program, no newly created bureaucracy, no pie-in-the-sky technologies that no one has yet invented. It requires only one thing, only one act. Lift the moratorium. Private industry will do the rest. And far from draining the treasury, it will replenish it with direct taxes, and with the indirect taxes from the thousands of non-subsidized new jobs created.

The problem for the Democrats is that the argument for 'do everything' is not rocket science. It is common sense. Which is why House Speaker Nancy Pelosi, surveying the political rubble resulting from her insistence on not even permitting drilling to come to a floor vote, has quietly told her members that they can save their skins and vote for drilling when the pre-election Congress convenes next month.

Pelosi says she wants to save the planet. Apparently saving her speakership comes first.

Charles Krauthammer's column appears Sunday on editorial pages of The Seatle Times.