Friday, October 31, 2008

IDS overview of the 9th District race

Everything is good in this article by the IDS' Peter Stevenson except his reference to Hill leaning left on Iraq. If his position is "leaning left", then we'll be in Iraq for a very long time.

Hill has done nothing substantive to get us out of Iraq. Period.

second hour of the debate on Indiana-9 this weekend

Saturday at 8pm


Sunday: the 1st hour will be re-run at 8pm-- with the 2nd hour at 9 pm

wow...the campaign is really catching fire!

Click here to see the news account...

Schansberg announces Election Day plans

October 31, 2008


Schansberg announces Election Day plans

On Friday, Dr. Eric Schansberg, the Libertarian candidate for U.S. Congress in Indiana's 9th District, announced his campaign stops and plans for November 4th.

Freetown Community Center 6:00 – 6:15 AM

Brownstown Courthouse 6:30 – 7:00 AM

Seymour High School 7:15 – 7:45 AM

North Vernon The Lord's Chapel 8:00 – 8:30 AM

Scottsburg Middle School 9:00 – 9:30 AM

Jeffersonville vote at Wilson Elementary 10:00 AM

Work/Teach IUS 10:30 – 3:00 PM

Campaign throughout So. Indiana 3:00 – 6:00 PM

Starting at 6:00, Eric and his wife will host a party in their home for supporters. Members of the media are welcome to attend as well.

October 31, 2008


Schansberg announces Election Day plans

On Friday, Dr. Eric Schansberg, the Libertarian candidate for U.S. Congress in Indiana's 9th District, announced his campaign stops and plans for November 4th.

Freetown Community Center 6:00 – 6:15 AM

Brownstown Courthouse 6:30 – 7:00 AM

Seymour High School 7:15 – 7:45 AM

North Vernon The Lord's Chapel 8:00 – 8:30 AM

Scottsburg Middle School 9:00 – 9:30 AM

Jeffersonville vote at Wilson Elementary 10:00 AM

Work/Teach IUS 10:30 – 3:00 PM

Campaign throughout So. Indiana 3:00 – 6:00 PM

Starting at 6:00, Eric and his wife will host a party in their home for supporters. Members of the media are welcome to attend as well.

For more information on the campaign, see:

To schedule an interview—whether on Election Night or prior to that—contact Eric at (812) 218-0443, or Melanie Hughes at (502) 432-1930, or send an email to



Thursday, October 30, 2008

NPR covers our race

I haven't heard this yet, so hopefully they say nice things about me! ;-)

Update: nothing about me. Surprising, since she liked me. But it would have been difficult to fit it into the ping-pong theme. Oh well...

Schansberg to celebrate 5th anniversary of VET’s demise

Schansberg to celebrate 5th anniversary of VET’s demise

On Saturday, Dr. Eric Schansberg will celebrate the fifth anniversary of the end of “vehicle emission testing” (VET) in Jefferson County, Kentucky in 2003. (Soon afterwards, Clark and Floyd counties in Indiana ended their VET as well.)

The event is a party from 2:00-6:00—with a 3:00 press conference featuring multiple speakers at the home of Donna and Dick Mancini (719 Talon Place, Owl Creek sub-division in Louisville).

Dr. Schansberg did research on the benefits and costs of VET in Jefferson County, published articles on the subject, and testified before the relevant sub-committee of the Kentucky State Senate.

In his research, Dr. Schansberg found that the money, time, and pollution costs of VET were tremendous when the regulation was imposed uniformly on all vehicles. Newer vehicles rarely failed the test—and so, the dollar and time costs of the program were far greater than the modest improvement to the environment.

Dr. Schansberg did not categorically oppose all forms of VET. But he found that the uniform implementation led to inequities and vast inefficiencies. And he noted that the “waiver” provision limited the program’s ability to improve the environment. (Auto owners with failed cars could simply a certain amount of money without improving their car’s performance.)

Dr. Schansberg also argued that annual, stationary testing is prone to abuse (people can rig their cars to get through the test) and necessarily misses out on problem cars (those who didn’t live in the Louisville metro area and were not tested). Instead, he recommended “mobile (emission) testing” which is far cheaper per vehicle and far more effective in catching high-pollution cars.

Press Release: Schansberg offers “voter guide” for 9th District race

Schansberg offers “voter guide” for 9th District race

On Thursday, Dr. Eric Schansberg offered voters an overview of the key issues in the 9th District’s congressional campaign: “Here are the five key issues where there are significant differences between the candidates.”

On Iraq, Schansberg said, “If you want someone who will continue the status quo in Iraq, you can choose from Hill or Sodrel. If you want someone who will work hard to bring the troops home in the next year, then you can choose Schansberg.”

On “fiscal conservatism”: “If you want someone who is ok for a Democrat, you can choose Hill. If you want someone who is ok for a Republican, you can choose Sodrel. If you want a fiscal conservative, the watchdog groups indicate that I’m your only choice.”

On abortion: “If you’re ‘pro-choice’, you have Hill. If you’re ‘pro-life’, you have me or Sodrel.”

On issues of “economic justice”: “If you want someone who will bring knowledge and zeal to this, you can choose a Christian economist. If you want someone who will largely ignore these issues, you can choose Sodrel. If you want someone who will focus on minor issues and dubious approaches, you have Hill.”

On illegal immigration: “If you want someone who is strong on illegal immigration, you can choose me or Hill. If you want someone who will only focus on border security, you can choose Sodrel.”

Schansberg and Sodrel reply to C-J non-endorsement

Click here to see both.

Here's mine:

The C-J editorialists didn’t interview me. You can understand why. Talking to an economics professor must sound like nails on a chalkboard to them. (They didn’t even return our campaign’s emails. Classy!)

They didn’t mention me in their endorsement of Baron Hill. The best explanation? Legitimate concern that some of my positions would take votes away from their preferred candidate.

Hill is “progressive”? Please… Hill has “courage” on Iraq?! He continually supports our on-going efforts there and devotes NO energy or advertising to ending it. Hill didn’t condemn the DCCC’s nasty ads against Sodrel. In 2006, challenger Hill repeatedly demanded debates; in 2008, incumbent Hill wanted no debates.

Most voters say they want “change”. In the 9th District, voters have a highly-credible 3rd-party candidate—the only fiscal conservative in the race. Will they embrace change or choose the status quo?

Don’t waste your vote this time; vote Schansberg for Congress.

Tuesday, October 28, 2008

3rd party efforts

A good article from David Weigel in Reason on Mike Munger in particular-- and more broadly, relatively successful Libertarian candidates this year.

I get a brief mention in the article and it's good to see an old buddy/colleague of mine running a strong race in NC!

Sunday, October 26, 2008

front page of the C-J this morning

From Lesley Stedman Weidenbener in the C-J...

For Hill, who has served in the seat for eight of the past 10 years, it's about pragmatism, about getting things done...Sodrel, though, is driven more by his conservative fiscal and social philosophy....

An interesting opening: Sodrel bragged about "getting things done for us", but Hill gets credit for "getting things done". Sodrel gets credit for relying on his "conservative fiscal philosophy", but his failure to adhere to that is one of the top reasons I entered the race in 2006.

This is Hill and Sodrel's fourth straight battle, with Hill winning twice and Sodrel once. Libertarian Eric Schansberg is joining the fray for the second time.

But even though the match-up has been considered one of the nation's most intense, this year's race hasn't had the feel of those in 2004 and 2006 when attack ads and commercials from outside interest groups dominated the conversation...."This is a much cleaner campaign than 2006 and I think that's frankly because Baron's got a large lead and a lot more money," Schansberg said.

Indeed, recent polls by Survey USA show that Hill has opened a double-digit lead on Sodrel, with Schansberg gaining a bit as well....

Schansberg is one of the state's most active Libertarians. He participates in candidate forums, advertises on television and tells voters that he is the real choice for change.

"We've voted ourselves into all kinds of problems with the two-party system the last 100 years, and I think it's time for a real change," he said.

Schansberg is also a conservative. He opposes abortion and all federal funding for Planned Parenthood. He wants to reduce the size of the federal government and constrain it to stricter constitutional bounds. And he supports eliminating the federal income and payroll taxes in favor a single sales tax.

But he also labeled himself the race's "strongest defender of the poor and those in the middle class."...

Sodrel is also a conservative....

This is a bit unfortunate since it gives the impression that I'm a more conservative version of Sodrel, feeding an erroneous stereotype. Our differences on Iraq (a sin of commission) and his failure to speak to issues impacting the working poor and middle class (sins of omission) separate the two of us.

I wish Iraq had made into her article since I outflank Hill on that issue as well. If people want a congressman who will work hard to bring home the troops, there's only one choice.

Saturday, October 25, 2008

idolatry is often a painful thing to see and experience

an email my wife received...
we would appreciate your prayers for us and for the emailer...

grace, eric

Tonia: I will say this to you privately because I don't want to say this sort of thing on the loop. Believe me, I know your husband's so called, self-stated qualifications - both economically and 'Christian'. Just because you say something, however, does not necessarily make it so. Teaching the theory of economics is a far different thing than actually starting a business, running a business, hiring and firing people, making that business successful, making a payroll, paying taxes, creating jobs for people so they can support their families and pay taxes, etc. All those things far better qualify someone to talk about and do something about the economy than someone who picks up a book and talks about the theory.

But, the bottom line is this: Eric, as far as I'm concerned is nothing better than any other tarnished politician - slinging mud, casting aspersions, telling lies and slandering and stretching the truth to suit his own gain - or perhaps the gain of someone else? For him to distort Mike Sodrel's unwavering, unabashed, unflinching commitment to the Sanctity of Life - all life - just for Eric's own political gain is at best unconscionable and at worst un Christ-like! And, believe me, I want to hear nothing about you adopting children as proof of your commitment to life. That has NOTHING to do with the abortion issue.

You know nothing about this man and his life long commitment to Southern Indiana - the thousands of families he has quietly, unassumingly helped to gain a fresh start in life, so they would not have to be dependent on the government - I could go on for hours - but I seriously doubt it would matter to Eric Or you in the least. Eric is just having too much 'fun' having 'civil discourse' to be concerned about the true state of our country. Polling data notwithstanding I stand by my comments - and I will answer to God for them - as will all of us.

Friday, October 24, 2008

Hill continues to lead Sodrel by double-digits

Hill has a huge, 15-point lead over Sodrel going into the last 10 days of the campaign.

The bad news: Our campaign is not gaining as much traction as I would like.

The good news: People should feel completely free to vote their conscience (not having to worry at all about "wasting their vote"); this will allow them to sleep better at night-- and perhaps this will help the economy to recover! ;-)

The other good news: People who are ignorant &/or idolatrous about politics are less likely to blame me for Sodrel's impending loss. It amazes me to hear some people complain about (or even attack me for) my presence in the race-- on the theory (unsupported by data) that I'm hurting their preferred candidate (or at least, the lesser of the proverbial "two evils"). If they were just as concerned about making sure they had great candidates, perhaps we'd be in a better position today.

Thursday, October 23, 2008

one more article on the debate

From Daniel Suddeath in the Jeff/NA News-Tribune...

A nice overview, especially of the second hour of the debate, including details on our positions-- and a discussion of our press release on not getting a closing statement and having only one debate.

The first and only debate featuring 9th District candidates went off with a few fireworks Tuesday.

Most of the forum — which was held at the Arts Center on the campus of Vincennes University’s Jasper location — consisted of the three candidates defending and explaining their platforms on issues such as abortion, economic bailouts and tax strategy.

Republican Mike Sodrel and Libertarian Eric Schansberg aggressively portrayed differences between their ideas and those of incumbent Democrat Baron Hill, who mainly was on the defensive.

Sodrel accused Hill of flip-flopping on his opinion of the economic situation in Indiana and America while Schansberg contrasted himself as the only candidate willing to break away from typical Washington politics, at one point likening the choice between mainstream party choices as “shuffling chairs on the Titanic.”...

Sodrel attacked television advertisements paid for by the Democratic Congressional Campaign Committee, including what is known as the “Millionaire Mike” ad, calling them unfounded and off base.

Schansberg said the ads sponsored by Hill were not dirty but also condemned the DCCC spots, saying the candidates should publicly denounce such tactics.

The Libertarian said this campaign is cleaner than the 2006 run, citing a big lead by Hill and less funds available to Sodrel....

Schansberg’s qualm over lack of closing statement

The program ended without the candidates making closing statements after questions from the crowd exasperated the time limit set for the debate.

Sodrel was the only candidate who was asked a question from the panel during the first hour about Iraq, a topic Schansberg planned to tackle during his final remarks.

“We didn’t get a two-minute closing statement — as per the agreement. I was hoping to use that to speak to our ongoing efforts in Iraq,” Schansberg said.

He claims to be the only candidate who is serious about bringing troops home from Iraq, saying Hill talks about it but continues to vote for the “status quo in Iraq.”

Sodrel said he was pleased with progress in the war-torn country and would support bringing troops home “as soon as practical.”

Hill was not asked about the war during the debate and left prior to a post-debate press conference.

Aside from the lack of a closing statement, Schansberg said he enjoyed the format and wished there were more debates.

Wednesday, October 22, 2008

pictures from last night's debate

debate coverage

Unfortunately, only the first hour is available at present-- and it's not yet on-line (although it was streamed live by VU).

But there was nice coverage of the debate in the C-J and the IDS...

Excerpts from Lesley Stedman Weidenbener's article in the C-J...

A debate about the so-called "fair tax" and the "flat tax" emerged as one of the largest differences among the three candidates running in a rematch in the 9th Congressional District....

The candidates also disagreed on congressional term limits, with Sodrel arguing they're a good idea and Hill saying they're unnecessary.

"We've got term limits now and they're called elections," Hill said.

Term limits shift power away from elected officials and to lobbyists and bureaucrats because lawmakers can't build up power and expertise, Hill said.

But despite the fact that he defeated Hill four years ago, Sodrel argued term limits are necessary, in part because incumbents are able to raise so much money they become nearly unbeatable.

He got a laugh from the crowd when he said there are three parties in Washington, D.C.: Republicans, Democrats and incumbents.

"America has a deep enough bench," Sodrel said. "We don't have to have the same people serving for two generations."

Schansberg said he could support term limits. But he said the debate about that issue misses the larger problem that Republicans and Democrats are too much alike and aren't taking the steps necessary to get spending in check and reduce the size of government.

"We need to go back to a place of fiscal sanity," Schansberg said. Term limits "don't really speak to that."

And from Lauren Clason in the IDS...

The audience at Tuesday night’s congressional debate was small, but the crowd was fierce.

Once the candidates for Indiana’s 9th Congressional District dealt with the pre-written questions from the participants on stage, they had to face inquiries from the local residents themselves.

Issues such as abortion, energy, the national language and the appropriate tax system had constituents’ patience stretched to the breaking point. One man lashed out at what he said is corruption among politicians and groups like the Association of Community Organizations for Reform Now (ACORN), and a Bloomington resident argued with Democratic incumbent Baron Hill on abortion.

But the main concern was the effects of the current tax system and its repercussions.

“I would support either a flat or a fair tax, either would be better than what we have now,” said Libertarian candidate Eric Schansberg, who is also an economics professor at IU-Southeast New Albany.

Republican candidate Mike Sodrel said he is also in favor of either tax, although he prefers a fair tax, which he said would help knock out foreign market competition....

Hill favored the current system, saying the fair tax and its goal for revenue neutrality would drive the deficit up.

When it came to the state of the economy and one audience member’s retirement fund, he believed things would soon get better.

“Some economists are saying we’re going into a depression, but I don’t think that we are,” Hill said. “If you can hang on, I think eventually it will all come back. These things are cyclical.”

Schansberg agreed things won’t get as bad as some might fear.

“Unless the government does a lot of the bone-headed things it did in the ’30s, we won’t go there again,” he said.

One thing all of the candidates agreed on was the bailout plan...Schansberg agreed, commending Hill for his vote against the plan.

“When the Republicans are leading the charge for that kind of spending, who’s left?” Schansberg said.

debate to be replayed on Indiana 9 this weekend

From Indiana 9's website...


Saturday, Oct 25th @ 8pm

Sunday, Oct 26th @ 4p & 8pm

Tuesday, October 21, 2008

Schansberg comments post-debate

Schansberg comments post-debate

On Tuesday evening, Dr. Eric Schansberg engaged in a two-hour debate with Rep. Baron Hill and former Rep. Mike Sodrel at the Vincennes University campus in Jasper. The first hour was broadcast on radio and television across the district. The second hour is available by contacting Paul Knies with Ch. 27—WJTS in Jasper (

Schansberg commented: “I thought it went well. I enjoyed the format, but wish we’d had more debates and the ability to have different formats. Unfortunately, Baron only allowed us one debate this time. Apparently, he’s far more interested in debating as a challenger than as an incumbent.”

Asked about what went well, Schansberg replied: “I thought I was able to communicate that I am the choice for ‘independent’ voters and the only vote for ‘true change’. People often say they’re independent and they want change. I guess we’ll see how much that’s true on November 4th.”

Asked about any disappointments, Schansberg replied: “We didn’t get a two-minute closing statement—as per the agreement. I was hoping to use that to speak to our on-going efforts in Iraq—which didn’t come up for me during either hour of the debate. I wanted to underline that I am the only candidate who is serious about bringing our troops home soon. Hill talks about it, but continues to vote for the status quo in Iraq. And he has devoted no advertising to the topic.”

Monday, October 20, 2008

debate coverage

Here's what we know so far:

The Jasper debate will be streamed video/audio on the website.

WNIN-TV9 in Evansville, WVUT-TV22 in Vincennes, Indiana-9 in Jeffersonville, and WJTS-TV27 in Jasper are carrying it live.

Among radio stations, WVUB (Jasper), WNIN (Evansville), and WNDA (Jeffersonville) will carry it live.

WTIU-TV in Bloomington is carrying it at 8pm (ET) delayed.
Indiana 9 will re-telecast at 10:00.

The following TV stations are carrying it on their "SD channel" live or in their newscasts: WAVE (Louisville) and WISH, WTHR, and WRTV (Indianapolis).

Indianapolis Star endorses Sodrel, praises Schansberg; Hill shows growth but “weakest of the three”

Indianapolis Star endorses Sodrel, praises Schansberg; Hill shows growth but “weakest of the three”

On Monday, The Star’s editorial board endorsed Republican Mike Sodrel in the 9th District race, citing “a business owner's experience and expertise”, “a depth of knowledge” from his previous stint in Congress, and “tempered partisan tendencies”.

The board commended Democratic incumbent Baron Hill for showing “encouraging growth in the past two years”, but thought that he “remains the weakest of the three candidates”.

The board also praised Libertarian Eric Schansberg as “well-qualified”, “a strong candidate”, “thoughtful”, “well versed”, and “a prime example of how far the Libertarian Party has advanced in Indiana”.

Schansberg said, “I’m thankful for the complimentary and encouraging words from the most important newspaper in Indiana. We’ve run a strong campaign and I’m glad that The Star sees me as a highly credible candidate.”

For more information on the campaign, see: To schedule an interview, contact Eric Schansberg at (812) 218-0443, Melanie Hughes at (502) 432-1930, or send an email to


Wednesday, October 15, 2008

Press Release: NRA endorses Hill but Schansberg receives higher rating

NRA endorses Hill but Schansberg receives higher rating

For this election, the National Rifle Association (NRA) endorsed Baron Hill in the 9th District congressional race.

Schansberg commented: “Their decision rule seems to be choosing incumbents who are decent on the 2nd Amendment—rather than those who are best in that area. That said, it still seems odd that they would endorse someone who publicly endorsed Barack Obama.”

In 2006, the NRA and Gun Owners of America (GOA) endorsed Mike Sodrel. In 2006, GOA gave Baron Hill a grade of D- (D minus), Mike Sodrel a grade of A- (A minus), and Eric Schansberg a grade of A. In 2008, GOA awarded Schansberg and Sodrel an A—while giving Hill a B.

When asked about the endorsement and ratings of the two 2nd Amendment groups, Schansberg said “We’re fortunate to have three good candidates on the 2nd Amendment, but you’re not going to beat a Libertarian on gun rights. Hill is solid—and very good for a Democrat. Sodrel is excellent. But we’re glad for the GOA’s recognition of our strength on the 2nd Amendment—equal to Sodrel this year and surpassing him two years ago.”

my appearance on Afternoon Edition yesterday

Sunday, October 12, 2008

Schansberg town hall in New Albany on Thursday

October 13, 2008


Schansberg town hall in New Albany on Thursday

Dr. Eric Schansberg, the Libertarian candidate for the U.S. Congress in Indiana's 9th District, will hold a town-hall meeting in New Albany on Thursday, October 16th at 2:30. (The meeting will be held in the Community Room of the Mark Elrod Tower at the end of Wolf Trace.)

At the town hall, Schansberg will deliver prepared remarks for 15-20 minutes—and then field questions from those in the audience.

In his prepared remarks, Dr. Schansberg will address:

· the attempted bail-outs of the economy over the past year

· gas prices and energy policy—policies that will work (domestic drilling and a stronger dollar) and policies that will not work (regulations on speculators, subsidies to energy companies, etc.)

· the dramatic but overlooked impact of fiscal conservatism

· our on-going efforts in Iraq

· the oppressive burden of payroll/FICA taxes on income and the need for Social Security reform

All interested parties are encouraged to attend. Audio and video recording are permitted.

Wednesday, October 08, 2008

Schansberg agrees to “lie detector” debate proposal

October 8, 2008


Schansberg agrees to “lie detector” debate proposal

On Wednesday, Dr. Eric Schansberg agreed to a debate proposal from 9th District Republican Party Chairman Larry Shickles. Shickles proposed that the three candidates would be allowed to ask each other a pre-determined number of questions—while connected to a polygraph lie detector.

In his letter, Shickles expressed a common sentiment—that the race for the 9th District seat during the last four campaigns has been unnecessarily negative and unproductive, because of negative campaigning by Rep. Baron Hill and former Rep. Mike Sodrel.

Schansberg commented: “I’d love to see more debates—whatever the format. But Baron is unlikely to cooperate. After repeatedly demanding debates (immediately after the primaries) in 2006, he is now quite reluctant to debate. It’s hypocritical, but understandable. He has a huge lead in the polls; he has a big money advantage; and his answers are often unimpressive. I can see why he’d want to severely limit his exposure to debates.”

For more information on the campaign, see: To schedule an interview, contact Eric Schansberg at (812) 218-0443, Melanie Hughes at (502) 432-1930, or send an email to


Key Points on a "Rescue" Plan From A Healthy Bank's Perspective

Key Points on a "Rescue" Plan From A Healthy Bank's Perspective

by John Allison (September 30, 2008; hat tip: Jefferson Review)

Here is a letter by John Allison, President & CEO of BB&T, that was sent to every member of Congress.

Dear Senator/Congressman/Representative:

BB&T is a $136 billion multi-state banking company. We have 1,500 branches throughout the mid-Atlantic and southeast states. While we have been impacted by the real estate markets, we continue to have healthy profitability and a strong capital position.

We think it is important that Congress hear from the well run financial institutions as most of the concerns have been focused on the problem companies. It is inappropriate that the debate is largely being shaped by the financial institutions who made very poor decisions.

Attached are the issues that we believe are relevant from the perspective of healthy banks. Your consideration of these issues is greatly appreciated.


Key Points on a "Rescue" Plan From A Healthy Bank’s Perspective

1. Freddie Mac and Fannie Mae are the primary cause of the mortgage crisis. These government supported enterprises distorted normal market risk mechanisms. While individual private financial institutions have made serious mistakes, the problems in the financial system have been caused by government policies including, affordable housing (now sub-prime), combined with the market disruptions caused by the Federal Reserve holding interest rates too low and then raising interest rates too high.

2. There is no panic on Main Street and in sound financial institutions. The problems are in high-risk financial institutions and on Wall Street.

3. While all financial intermediaries are being impacted by liquidity issues, this is primarily a bailout of poorly run financial institutions. It is extremely important that the bailout not damage well run companies.

4. Corrections are not all bad. The market correction process eliminates irrational competitors. There were a number of poorly managed institutions and poorly made financial decisions during the real estate boom. It is important that any rules post “rescue” punish the poorly run institutions and not punish the well run companies.

5. A significant and immediate tax credit for purchasing homes would be a far less expensive and more effective cure for the mortgage market and financial system than the proposed “rescue” plan.

6. This is a housing value crisis. It does not make economic sense to purchase credit card loans, automobile loans, etc. The government should directly purchase housing assets, not real estate bonds. This would include lots and houses under construction.

7. The guaranty of money funds by the U.S. Treasury creates enormous risk for the banking industry. Banks have been paying into the FDIC insurance fund since 1933. The fund has a limit of $100,000 per client. An arbitrary, “out of the blue” guarantee of money funds creates risk for the taxpayers and significantly distorts financial markets.

8. Protecting the banking system, which is fundamentally controlled by the Federal Reserve, is an established government function. It is completely unclear why the government needs to or should bailout insurance companies, investment banks, hedge funds and foreign companies.

9. It is extremely unclear how the government will price the problem real estate assets. Priced too low, the real estate markets will be worse off than if the bail out did not exist. Priced too high, the taxpayers will take huge losses. Without a market price, how can you rationally determine value?

10. The proposed bankruptcy “cram down” will severely negatively impact mortgage markets and will damage well run institutions. This will provide an incentive for homeowners who are able to pay their mortgages, but have a loss in their house, to take bankruptcy and force losses on banks. (Banks would not have received the gains had the houses appreciated.) This will substantially increase the risk in mortgage lending and make mortgage pricing much higher in the future.

11. Fair Value accounting should be changed immediately. It does not work when there are no market prices. If we had Fair Value accounting, as interpreted today, in the early 1990’s the United States financial system would have crashed. Accounting should not drive economic activity, it should reflect it.

12. The proposed new merger accounting rules should be deferred for at least five years. The new merger accounting rules are creating uncertainty for high quality companies who might potentially purchase weaker companies.

13. The primary beneficiaries of the proposed rescue are Goldman Sachs and Morgan Stanley. The Treasury has a number of smart individuals, including Hank Paulson. However, Treasury is totally dominated by Wall Street investment bankers. They do not have knowledge of the commercial banking industry. Therefore, they can not be relied on to objectively assess all the implications of government policy on all financial intermediaries. The decision to protect the money funds is a clear example of a material lack of insight into the risk to the total financial system.

14. Arbitrary limits on executive compensation will be self defeating. With these limits, only the failing financial institutions will participate in the “rescue,” effectively making this plan a massive subsidy for incompetence. Also, how will companies attract the leadership talent to manage their business effectively with irrational compensation limits?

And in a report by Bloomberg on "Allison's Alternative":

Allison is retiring in December after 19 years leading BB&T, the 14th-biggest U.S. commercial bank, with assets of $136.5 billion. BB&T avoided subprime lending, option adjustable-rate mortgages and complex debt securities that have slammed Wachovia Corp., Washington Mutual Inc. and other lenders. Still, BB&T more than tripled the money it set aside for loan losses in the second quarter, mainly because of loans to builders and developers in Georgia, Florida and the Washington, D.C., metropolitan area.

Rather than buying distressed assets, the U.S. government could offer a ``significant'' tax credit for home purchases, or even purchase vacant lots or houses under construction, Allison said. The market should be allowed to eliminate ``irrational competitors,'' he said. ``There were a number of poorly managed institutions and poorly made financial decisions during the real estate boom,'' Allison wrote. ``It is important that any rules post-`rescue' punish the poorly run institutions and not punish the well-run companies.''

He said the mortgage crisis was caused primarily by Freddie Mac and Fannie Mae. The government-chartered companies, which own or guarantee more than 40 percent of the $12 trillion of U.S. home loans, ``distorted normal market-risk mechanisms,'' and were abetted by a Federal Reserve that made the wrong decisions on interest rates, Allison wrote.

Undecideds breaking to Hill and Schansberg—as Hill extends his lead over Sodrel

October 7, 2008


Undecideds breaking to Hill and Schansberg—as Hill extends his lead over Sodrel

According to the SurveyUSA poll released today, Rep. Baron Hill has extended his lead over Mike Sodrel from 11 to 15%. Dr. Eric Schansberg's share of the vote increased from 5% to 7%. (Hill gained 3%, Sodrel fell 1%.)

Schansberg said: "We're glad to continue building support. In the past month, we've run a lot of radio and TV commercials. And we've had many opportunities to meet voters, talk on the radio about the bailout, and give speeches to groups throughout the District."

On progress by Hill and his own campaign, Schansberg remarked: "It makes sense. Baron and I have been running more active campaigns, especially with paid media. Our commercials seem to have been effective in drawing people to our efforts."

On the impact of Hill's huge lead on his campaign, Schansberg commented: "With a margin of victory that is perceived and expected to be that great, it should be easier for people to vote on their principles instead of worrying about 'wasting their votes'. So, that's good news for us. Of course, I think people are wasting their votes by voting for the same old candidates. If they really want change—like we always hear about—then they have the opportunity this time for a credible and fresh choice in the 9th District."

Wednesday, October 01, 2008

on WHAS tomorrow morning

I'll be on the Francene Show to talk with her about the bailout plans-- from 10:30-11:00.

Tune in and enjoy!

the only anti-war candidate

Occasionally, I run into supporters of Baron Hill. And some of them bristle at my claim to be the only "anti-war candidate" in the 9th District congressional race.

I understand their partisan desire to maintain that label for their candidate and the potential for confusion and subjectivity in such claims.

But let's look at the three options in the race:
-Sodrel wants the status quo advocated by Bush and McCain. I respect but disagree with that position.
-Hill votes for every non-binding resolution, but voted to start the war and votes to fund the war every time. He returned to Congress in January 2007 promising change-- and we haven't exactly seen that. And we haven't heard Hill make much noise about Iraq. In my mind, that position is hypocritical at worst, inconsistent at middling, and tepid at best.
-I want the troops to come home within the next 8-12 months.

After I make those generalizations, his defenders usually make some excuse for Hill-- why he can vote that way and still be "anti-war". I'm not impressed, so I tell them that if they're content with that, then "that's fine, but it's not good enough for me".

Here's another barometer: how much of Hill's advertising budget is devoted to ending our on-going efforts in Iraq? How many TV ads, radio ads, and printed literature? For me, it's about one-fourth. If he really cares about the issue, he'd devote energy and resources to the cause.

a really nice article by Dale Moss in the C-J

Excerpts from from Dale's article which came from his lengthy interview with me a few Fridays ago...

Schansberg is back on the ballot, as are his better-known, better-financed opponents -- both have run before in this race. Schansberg wages a fight that is both serious and symbolic. He runs commercials, offers a Web site, conducts forums, shakes hands at fairs and debates every opportunity he can.

Still, Schansberg cannot reasonably expect to win. But he does expect to appeal to more of the voters who say they are fed up with politics as usual. Forty percent of voters nationally call themselves independents. Schansberg takes them at their word.

"People know what they're getting," Schansberg said of his candidacy and those he is challenging. "Do they really want one of those two? Or do they want something different?"

Schansberg was born in Louisville and is 43 years old. He was raised primarily in Virginia near Washington, D.C., where he notes he got an up-close-and-personal introduction to politics. He now resides in Jeffersonville. A Ph.D., Schansberg is a full professor of economics at IU Southeast and has some administrative duties there.

He is the father of four children, two of whom he and his wife Tonia adopted. The couple home-schools the children in order to spend more time with them.

"You've got to respect a guy who walks and does the things he says are right," said John Harbeson, Schansberg's campaign treasurer.

Schansberg describes himself as an evangelical Christian. For his Southeast Christian Church, a Louisville-based mega-congregation, Schansberg co-wrote a 21-month discipleship curriculum now also used in about 20 other churches. "Aside from my family, this is the coolest thing I do -- even cooler than politics," he said.

Schansberg received 4.5 percent of the vote in the 2006 election, his first try for the 9th District seat. Using what he learned in that race and building on his base, he asked himself if he could reach double-digits. Is doing better good enough? How outrageous is the prospect of victory?...

To a teacher, a campaign at least provides an inviting platform. "He's trying to make some noise, see who will listen," said Melanie Hughes, who manages Schansberg's candidacy....

Schansberg planned this second race all along. He budgets about $30,000, a pittance compared to what his foes spend. Schansberg speaks out against American involvement in Iraq and for increased domestic oil drilling. He opposes the $700 billion plan to bail out the financial sector. He calls himself the only fiscal conservative in the race and the strongest defender of the poor and the middle class.

The race for Congress struggles to attract its fair share of attention, what with a president and a governor also to elect. Schansberg wishes his campaign would be followed more closely by the media. Yet, as with his reception at large, Schansberg forges ahead without discernible worry....