Posts Tagged ‘bailout’

Joe The Plumber Right On Socialism, Soaring Taxes On Small Businesses Under Obama

April 28, 2009

It’s not like Barrack Obama didn’t promise the American people that he would lead them into socialism.  You might remember the famous encounter with Joe “the plumber”:

Wurzelbacher said he planned to become the owner of a small plumbing business that will take in more than the $250,000 amount at which Obama plans to begin raising tax rates.

“Your new tax plan is going to tax me more, isn’t it?” the blue-collar worker asked.

After Obama responded that it would, Wurzelbacher continued: “I’ve worked hard . . . I work 10 to 12 hours a day and I’m buying this company and I’m going to continue working that way. I’m getting taxed more and more while fulfilling the American Dream.”

“It’s not that I want to punish your success,” Obama told him. “I want to make sure that everybody who is behind you, that they’ve got a chance for success, too.

Then, Obama explained his trickle-up theory of economics.

“My attitude is that if the economy’s good for folks from the bottom up, it’s gonna be good for everybody. I think when you spread the wealth around, it’s good for everybody.”

“Spread the wealth around,” Obama said.  From each according to his ability, to each according to his need.

Joe the Plumber famously answered, “That sounds like socialism.”

And how the liberals howled.  Pieces like Mc Clatchey Newspapers’ “Obama plan isn’t ‘socialism’; it’s traditional progressive taxation” by David Lightman and William Douglas abounded:

“It wouldn’t qualify as socialism.

“The answer is clearly no, Senator Obama is not a socialist,” said Paul Beck, a professor of political science at Ohio State University. “We’ve had a progressive tax system for some time, and both Republicans and Democrats have bought into it.”

Socialism involves state ownership of the means of economic production and state-directed sharing of the wealth. America’s democratic capitalist system is neither socialist nor pure free market; rather, it mixes the two, and it has at least since the progressive income tax was introduced 95 years ago. Under it, the wealthy pay higher income tax rates than those who are less fortunate do. It’s a form of sharing the wealth.”

Now, of course, I read that last paragraph and I’m just rolling on the floor laughing at how ignorant and dishonest these liberals were – and are.

Let me just say two words:  “Auto industry.”  Let me say two more: “banking industry.”  Let me add a few others: “Obama fires GM CEO.”  And, “Government forcing GM board out,” And, “Obama won’t allow banks to repay bailout loans.”  And, “Government, UAW Own 89% of GM In Restructuring.”  And, “Government Power and Control: The One Trillion Dollar Takeover Of Health Care.”  And, “Obama’s cap-and-trade plan a wolf in sheep’s clothing.”  And, most frightening and revealing of all: “Financial Rescue Nears GDP as Pledges Top $12.8 Trillion.”

“Let’s move it along, folks.  Move it along.  No socialists to see here.”

Sorry, mainstream media: Obama is as socialist as the sun is hot.  The fact that you were too blatantly dishonest and corrupt and incompetent to do your job during the campaign is just one more case in point that we are now under the thrall of totalitarian propaganda.

As the February 16, 2009 issue of Newseek gleefully trumpeted:

we-are-all-socialists-now

That pretty much makes it official: Obama and the Democratic Party lied to us: they were socialists all along, and too dishonest and too corrupt to honestly and legitimately represent themselves.

I also have to point out the fact that the VERY WORST ELEMENTS OF SOCIALISM – right out of the playbook of the “National Socialist German Workers’ Party” or the “Union of Soviet Socialist Republics” – were used to attack Joe Wurzelbacher simply for asking a candidate for president a couple of questions right outside his house.  The media and the Democrat machine went after him with everything they had, including snooping through his private records in a very KGB-like manner in hopes of dredging up dirt on him.

You know, kind of like what Obama and his Democrat lynch mob are doing to Bush administration officials even as we speak in 1) releasing memos selectively targeted to make Bush look like a torturer while refusing to release any memos that would show how Bush’s actions kept America safe; and 2) threatening to prosecute Bush officials for their part in 1) in what would amount to a show trial.  How quintessentially totalitarian of them.

All this said, our socialist – and frankly fascist – president is now about to come after small business owners EXACTLY as Joe Wurzelbacher feared he would to pay for his socialist Statist agenda:

Small Businesses Brace for Tax Battle
Under Obama Plan, Some Entrepreneurs’ Bills Would Soar
By Lori Montgomery and V. Dion Haynes
Washington Post Staff Writers
Monday, April 27, 2009

Gail Johnson doesn’t think of herself as wealthy. The former pediatric nurse has spent 20 years building a chain of preschools and after-school programs that accommodate sick children so working parents can keep their jobs.

But, like most small-business owners, Johnson reports her profit on her personal tax return. In a typical year, she and her husband make more than $500,000, according to her accountant, a figure that throws them squarely into the ranks of the richest Americans — and makes them a prime target for the Obama administration’s tax policy.

Since last year’s campaign, President Obama has vowed repeatedly not to increase taxes for families making less than $250,000 a year. That pledge, while politically popular, has left him with just two primary sources of funding for his ambitious social agenda: about 3 million high-earning families and the nation’s businesses.

Johnson, with her company, falls into both categories. If Obama’s tax plans are enacted, her accountant estimates that her federal tax bill — typically, around $120,000 a year — would rise by at least $23,000, a 19 percent increase.

“You hear ‘tax the rich,’ and you think, ‘I don’t make that much money,’ ” said Johnson, whose Rainbow Station programs are headquartered near Richmond. “But then you realize: ‘Oh, if I put my business income with my wages, then, suddenly, I’m there.’ ”

Across the nation, many business owners are watching anxiously as the president undertakes expensive initiatives to overhaul health care and expand educational opportunities, while also reining in runaway budget deficits. Already, Obama has proposed an extra $1.3 trillion in taxes for business and high earners over the next decade. They include new limits on the ability of corporations to automatically defer U.S. taxes on income earned overseas, repeal of a form of inventory accounting that tends to reduce business taxes, and a mandate that investment partnerships pay the regular income tax rate instead of the lower capital gains rate.

‘A Permanent Target’
Business groups say they’re bracing for even more battles with the administration.

“They’re desperate for revenue. And therein lies the concern of the broader business community,” said R. Bruce Josten, chief lobbyist for the U.S. Chamber of Commerce.

“We’re going to be a permanent target, and we understand that,” added Catherine Schultz, vice president for tax policy at the National Foreign Trade Council. “The way they see it, corporations don’t vote.”

[Read the rest of the article]

Many small business owners file individual income tax returns.  Their “incomes” do not merely go into their pockets; rather, they use their profits to pay their employees and reinvest in their businesses:

Johnson declined to say whether she voted for Obama. But she said she ignored his tax plans until her husband, who handles real estate and construction for the schools, mentioned it one day. “I’ve since talked to my accountant,” she said. “And, oh, my gosh!”

The accountant, Carroll Hurst, said Johnson is unlikely to owe any federal taxes this year due to accounting changes that confer a one-time tax benefit. But in a typical year, he said, Johnson and her husband earn about $515,000 from various entities related to the schools. They claim around $90,000 in deductions — much of it contributions to charity — reducing their taxable income to around $425,000. Johnson said the sum they take home in wages is “substantially less.”

In a typical year, Johnson’s federal tax bill would be about $120,000. But starting in 2011, the higher marginal rates would add about $13,000 a year, Hurst said. Capping the value of itemized deductions at 28 percent would add another $10,000, for a total increase of $23,000.

And Johnson’s tax bill stands to grow dramatically if Obama were to revive a plan to apply Social Security tax to income over $250,000 instead of capping it at the current $106,800. Because Johnson is an employee and an employer, she would have to pay both portions of the tax, Hurst said, tacking another $30,000 onto her bill.

Johnson said such an increase would force her to consider scaling back operations.

“You can try to pass it on to consumers. But if you raise tuition, you put pressure on family budgets,” she said. “For us, we’re caught between the devil and the deep blue sea.”

Other business owners are also nervous. Jim Murphy, president of EST Analytical in Fairfield, Ohio, which sells analytical instruments to environmental testing labs and pharmaceuticals, said his company is struggling in the sluggish economy. But if profit returns to pre-recession levels — about $455,000 — Murphy said his accountant estimates that Obama’s proposals could add $60,000 to his $120,000 tax bill.

“The misconception is that guys like me take [our profits] and put it into our pockets,” said Murphy, who employs 47 people. “But the money the company earns in a given year is used to buy additional inventory so we can grow and hire.” A 50 percent tax increase, he said, would be “really painful.”

So let’s review the basic facts: Barack Obama IS a socialist, just as Joe the Plumber intuitively understood even as liberal “intellectuals” loudly howled with all the outrage they could muster.  There’s no question of that fact any longer.  In fact, he is essentially a fascist, just as progressives such as Woodrow Wilson and even FDR were before him.  And Obama IS coming after small businesses and their owners, just as Joe the Plumber rightly feared.  And, furthermore, the Obama White House and the mainstream media alike will apply any tactic to attack and demonize their opponents for political purposes just like the worst socialist regimes in world history.

Why We Should Be Seriously Contemplating The Great Depression

December 3, 2008

Revelation 6:6 – “And I heard a voice in the midst of the four beasts say, A measure of wheat for a penny, and three measures of barley for a penny; and see thou hurt not the oil and the wine.”

There are plenty of financial experts out there assuring us that any comparison between our current economic situation and the Great Depression are utterly baseless.  The problem is that most of these experts are either demonstrated hypocrites who have themselves compared our economy to the Great Depression, or they are employing extremely flawed logic in their dismissals that may well even cross the line into outright deception.

Nathan Burchfiel takes CNBC‘s Jim Cramer to task for the sort of blatant hypocrisy that we’ve seen from all to many other media analysts:

CNBC “Mad Money” host Jim Cramer said on NBC’s “Today” show Dec. 2 that comparisons between the current economy and the Great Depression are “scare tactics.” Maybe he forgot about his own reliance on the juxtaposition….

But Cramer has been among the most vocal scaremongers when it comes to throwing around Great Depression warnings.


Criticizing economists who opposed the $700 billion taxpayer bailout of the financial industry on the “Today” show Oct. 1, Cramer warned the country was “on the precipice of Great Depression II.”

He made a similar claim about the financial bailout in September, arguing that if Treasury Secretary Henry Paulson didn’t find a way to get a rescue package passed, “we are going to have The Great Depression II on our hands.”


On Nov. 11, Cramer supported another proposed bailout – this time for the U.S. auto industry by saying it would prevent another depression. “It’s like look – we got to bail them out,” Cramer told CNBC “Street Signs” host Erin Burnett. “We have to. We have to keep the Great Depression off the table.”

In other words, the “Great Depression” basically becomes a shell game, where you see the shell when the shysters want you to look at it, and then you don’t see the shell when they want to keep it out of sight.  It’s a bogeyman that some journalist, or some academic, or some government official can trot out to frighten us into doing what s/he wants to advance an agenda, and then put it away until they want to frighten us again.

Now, there was a time when a story like this one would have completely discredited a media personality such as Jim Cramer.  But in these Bizarro World days, being discredited seems to be to a journalist’s career what having a tawdry sexual affair does to a movie star’s career.

Then we’ve got the philosophical dismissal of any comparison to the Great Depression, as exemplified by government academics such as Ben Bernanke:

WASHINGTON (AFP) — Federal Reserve chairman Ben Bernanke said Monday the current economic situation bears “no comparison” to the much deeper crisis of the 1930s Great Depression.

“Well, you hear a lot of loose talk, but let me just … say, as a scholar of the Great Depression — and I’ve written books about the Depression and been very interested in this since I was in graduate school, there’s no comparison,” Bernanke said in a question period after an address in Austin, Texas.

Bernanke cited “an order-of-magnitude difference” in the current situation compared to the 1930s.

“During the 1930s, there was a worldwide depression that lasted for about 12 years and was only ended by a world war,” he said.

“During that time, the unemployment rate went to 25 percent, at least, based on the data that we have. The real GDP (gross domestic product) fell by one-third. About a third of all of the banks failed. The stock market fell 90 percent.”

Bernanke said the situation at that time represented “very difficult circumstances,” because “we didn’t have the social safety net that we have today. So let’s put that out of our minds; there’s no — there’s comparison in terms of severity.”

Well, first of all the fact is that Bernanke – just like Cramer – has himself made the comparison between our economy and the Great Depression, as the bottom of the same article clearly demonstrates:

In a related matter, President George W. Bush said in an interview released Monday that Bernanke and Treasury Secretary Henry Paulson warned him weeks ago that bold action was needed to avert a new Great Depression.

“I can remember sitting in the Roosevelt Room with Hank Paulson and Ben Bernanke and others, and they said to me that if we don’t act boldly, Mr. President, we could be in a depression greater than the Great Depression,” Bush told ABC News.

Which clearly means that comparisons to the Great Depression clearly aren’t so silly after all – as evidenced by the very people who are most loudly telling us that such a comparison is silly.

Bernanke and others also imply that our social support structures and our financial expertise would prevent the worst effects of any so-called “Great Depression.”  But is that really so?

When the $852 billion Troubled Asset Relief Program (TARP) suddenly morphed into what one writer mocked as Capital Redistributed As Pork (CRAP), shouldn’t it bother you that an abandonment of such an enormous program’s expressed goal midstream amounts to a de facto declaration that our experts clearly don’t know for sure what they’re doing?

The notion that a Great Depression could never happen because we know so much more doesn’t hold much water for me in the light of our “Keystone Cops-approach” to all of our various bailouts and attempts at political legislation.  The fact is, after seeing our “experts” at work the last couple months, I have less confidence in them than I’ve ever had before.

But there’s another giant problem with Bernanke’s analysis, and it is difficult to imagine that he doesn’t himself recognize it.  The problem is that he’s comparing apples to oranges; he’s comparing an economy that may well be on the throes of a future Great Depression to a 1930s economy that was already well into the worst stages of a depression.  And he’s pointing out the obvious – but in fact completely irrelevant and actually completely absurd – fact that they don’t look alike.  Of course they don’t look alike – yet.

But what would have happened had Bernanke compared the economy as it was in 1929 with our economy today, rather than the worst period of the 1930s?  What would have happened had he looked at the economy just before the Black Tuesday crash of October 29, 1929, or even shortly after that crash?  The numbers would have hardly appeared anywhere near so dire, which means Bernanks’ comparison would have failed.

Let me quote Wikipedia to show you what I mean:

The Great Depression was not triggered by a sudden, total collapse in the stock market. The stock market turned upward in early 1930, returning to early 1929 levels by April, though still almost 30 percent below the peak of September 1929.[7] Together, government and business actually spent more in the first half of 1930 than in the corresponding period of the previous year. But consumers, many of whom had suffered severe losses in the stock market the previous year, cut back their expenditures by ten percent, and a severe drought ravaged the agricultural heartland of the USA beginning in the summer of 1930.

In early 1930, credit was ample and available at low rates, but people were reluctant to add new debt by borrowing. By May 1930, auto sales had declined to below the levels of 1928. Prices in general began to decline, but wages held steady in 1930, then began to drop in 1931. Conditions were worst in farming areas, where commodity prices plunged, and in mining and logging areas, where unemployment was high and there were few other jobs. The decline in the American economy was the factor that pulled down most other countries at first, then internal weaknesses or strengths in each country made conditions worse or better. Frantic attempts to shore up the economies of individual nations through protectionist policies, such as the 1930 U.S. Smoot-Hawley Tariff Act and retaliatory tariffs in other countries, exacerbated the collapse in global trade. By late in 1930, a steady decline set in which reached bottom by March 1933.

Keep in mind that OUR stock market began to tank only a little over two months ago.  And if the exact same thing were to happen now that it did to the United States in the 1930s, we actually would expect our market to pick up significantly in the coming months – and our economy to even appear to be rebounding – shortly before a downward slope into collapse that would occur one to three years later.  It wasn’t until March 1933 – 3 years and 4 months after the Black Tuesday stock market crash – that the bottom really fell out of our economy.

And while “Great Depression” comparisons may be silly in terms of the actual economic numbers RIGHT NOW (the number of banks going under, the jobless rate, etc.), we actually face potential economic nuclear bombs that would very likely have made 1930s American financial experts faint with dread.

We are looking at $700 TRILLION in derivatives.  Compare this stupefying fact to the associated fact that global GDP is only about a lousy $50 trillion! Assets have been leveraged as much as a hundred and even two-hundredfold.  The Institute for Economic Democracy have an article titled, “Hedging and Derivative Risks Become Infinite Risks.”  The result is MASSIVE exposure such as the world has never seen lurking like some incredibly deadly plague in the form of financial vehicles that few even begin to understand and only advanced computers can calculate.  As these highly leveraged financial obligations result in losses – as has already begun to happen – the result is cataclysmic failure in financial markets beyond the power of any government to prevent.  And anyone but a fool should be able to recognize by now that such disasters can send the entire global economy crashing down very quickly, seemingly from out of nowhere.

None of the bailouts have done ANYTHING to fix the systemic structural problems with our financial system (the worst probably being the massive flow of capital out of production and into speculative markets due to the shift from being a manufacturing-based economy to a service-based economy).  And the fact that the $852 billion bailout package went from being used to buy bad mortgages to a completely different solution should kind of serve to tell you that no one really knows WHAT to do.

So our financial experts are throwing out our money the way out-of-control craps players throw dice.

ABC News had this:

The government’s financial bailout will be the most expensive single expenditure in American history, potentially costing around $7.5 trillion — or half the value of all the goods and services produced in the United States last year.

In comparison, the total U.S. cost of World War II adjusted for inflation was $3.6 trillion. The bailout will cost more than the total combined costs in today’s dollars of the Marshall Plan, the Louisiana Purchase, the Korean War, the Vietnam War and the entire historical budget of NASA, including the moon landing, according to data compiled by Bianco Research.

It remains to be seen whether the government’s multipronged approach to bail out banks, stimulate spending and buy up mortgages will revive the economy, but as the tab continues to grow so does concern over where the government will find the money.

One critical thing to understand is that the aforementioned historic massive expenditures – which combined still only amount to half of the expenditure we are talking about today – took place over many decades, such that the various costs to the economy were absorbed over many years.  What happens when we spend trillions of dollars in only a few months?  Who knows?  No one has ever tried it before! And unlike the what had been the greatest – now the second greatest – expenditure in history, the costs associated with World War II were spent producing, building, and developing, whereas frankly most of the costs associated with our current bailouts essentially amount to paying off Wall Street’s gambling debts.

Meanwhile – as we contemplate forking over still more billions to bail out our automakers – we need to realize that we’re entering a potentially insane realm where there’s simply no end to the companies and now even the states who are “too big to fail” and need bailouts of their own.  And what of the moral hazard incurred by giving money to people, corporations, and states simply because they were the biggest fools and failures?  What impact will this have not only on the economy, but on the hearts and minds of honest people who played by the rules and ended up with nothing to show for it while the failures and the gamblers walk away with money in their pockets?  How many previously stable people will begin to angrily demand, “Where’s my bailout?”

What’s going to happen as our financial system attempts to absorb absolutely mind boggling government debts that dwarf anything ever before seen in human history?

A lot of financial experts aren’t so much anxious about what happens in the next few months.  We might well be able to throw so much money at the economy that we can stimulate it again; rather, they are worried about 3-5 years down the road as our dollar devalues dramatically due to interest payments that can only be repaid by printing more and more money.  You don’t just double an already insanely-out-of-control national debt without severe consequences.

And given the very real probability that massive spending is going to be the cause of our undoing, the social safety net that Bernanke refers to as being a preventative would actually merely be one more causative factor in a pending economic collapse.  We won’t be able to hand out food stamps and welfare checks if our government itself goes bankrupt.

So while it’s obviously not accurate to describe our present situation as a “Great Depression,” the simple reality is that we might well – and in the very near future – experience an economic meltdown that would likely make the Great Depression look tame in comparison.

Obama Democrats Pull Out All Stops To Bail Out Auto Industry Carcass For Union Leaches

November 11, 2008

You remember Bill Clinton’s view of Obama, that he has the “political instincts of a Chicago thug“?  Well, we got another chance to see why that’s so today.

President Bush attempted to be the gracious host at the White House, and got a fork thrust in his eye for his trouble.  Barack Obama – with a lot of media assistance that crossed the line into blatant propaganda (for one relevant example, Chicago Tribune writer John Kass described the media’s utter refusal to examine Obama’s Chicago political connections) – portrayed himself as floating above one of the most corrupt political environments in American history in some kind of butterfly-like manner.   But you just don’t play in a filthy playground without getting dirty.

So President Bush meets with Barack Obama in a private meeting between just the two of them – and next thing you know details are emerging that President Bush is quid pro quo demanding “I’ll scratch your back if you scratch mine” in exchange for his support for any bailout of the automakers.  We saw the use of the most potent political weapon in any American politician’s arsenal: the anonymous “leak.” And so, “Asked if the leak affected what appears to be a very smooth transition so far, the senior Bush aide said, ‘It won’t affect what we have to do … but it was disappointing. I think the Obama folks will be backing off this pretty soon.'”  And “Podesta did just that later in the day.”

Obama claims that he didn’t have anything to do with the leak intended to paint Bush into a corner on the auto bailout.  But someone on his staff sure did.  And let us not forget that Obama is pushing for that bailout that his little “leak” puts pressure on Bush to grant.  Automakers already received $25 billion in federal loans, and now they want another $25 billion.   And Obama wants to give them your great great great great grandkids’ money as a payoff to the union leaches who need the rotting carcass of the automakers to feed off of.

Democrats have spent most of the last two years demonizing corporations in order to portray themselves as caring about the little guy as opposed to Republican meanies who cared only about big corporations.  It played very well into their overall “class warfare” strategy.

They’ve gone after whole industries, and they’ve singled out major American corporations to such abuse and demagoguery that they pulled out of the United States altogether.  As a Human Events article described one such event:

How would you feel if as an owner of a business you were hauled into Congress so the world could see you portrayed as a villain? How would you feel if you were grilled on national television by Sen. Carl Levin (D.-Mich.) and Rep. Henry Waxman (D.-Calif.) waving subpoenas to the cameras? Wouldn’t your stomach churn hearing advocates of terrorists’ rights such as Democrat Senators Ted Kennedy (Mass.) and Pat Leahy (Vt.) accuse you, an American family man with a business, of high crimes against America? Perhaps that is how many American CEOs are beginning to feel.

What if your company’s name had, through liberal demonization, become synonymous with evil? The phrase “Halliburton” has been morphed here into a pejorative by liberals and the media. Certainly, that must be one of the reasons Halliburton has packed its bags, decided to relocate outside America and declare “I’m out of here.”

And they won’t be the only ones who decide to head for greener pastures that actually want their jobs and their tax contributions.

Democrats have done a pretty good job demonizing the US car industry, as well.  Their constant ravings about forcing American automakers to make even more concessions to unions, about hitting their bottom line more and more with demands for health care and compensation packages that cost them more than $1300 per car over their Japanese rivals, about forcing them to develop more fuel efficient cars and smaller, “greener” cars when the aforementioned inequalities make it impossible for such cars to be profitable for US automakers, has led to the desperate state that they are in now.  When you are saddled with massive structural labor costs, it is incredibly difficult to make a profit with smaller, less expensive cars.

The American auto industry quit being car makers a long time ago.  What they have long-since become are socialized pension providers for unions who managed to build a few cars on the side.

And now Democrats are about to impose “Card Check” to take secret ballots away from workers in an attempt to force even more unionization on corporate America.  It’s a terrible idea for business that is almost certain to become law given total Democratic control of the government.  You show me a unionized industry, and I will show you an industry in crisis.

Why do Democrats want to bail out the automakers?  Because they want to bail out the unions that overwhelmingly support them.  If the automakers go the way of the dodo bird, the unions will be going right along with them.

Democrats have loudly decried “corporate welfare” by even reducing their income tax burden; so let us now demand that they hang on their own petard when it comes to giving a TAXPAYER HANDOUT to the tune of billions of dollars to a union shop.  Let the automakers fail; everyone who supports Democrats knows that economies are built from the bottom-up anyway, right? Let’s put the theory to the test and let the big boys go under and see if the “bottom” can still move “up” without the people who create jobs for them.

How ‘Failed Policies’ Of Democrats Were Responsible For Financial Crisis

October 1, 2008

Why should anyone blame Democrats for the housing finance crisis?  Because they laid virtually all the landmines that would eventually explode in the first place, and then they wouldn’t allow Republicans to reform or even regulate the impending disaster before it occurred, that’s why.

From the New York Times in September 30, 1999:

“Fannie Mae, the nation’s biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits. . . .

Fannie Mae has expanded home ownership for millions of families in the 1990’s by reducing down payment requirements,” said Franklin D. Raines, Fannie Mae’s chairman and chief executive officer. ”Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.” . . .

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980’s.

”From the perspective of many people, including me, this is another thrift industry growing up around us,” said Peter Wallison a resident fellow at the American Enterprise Institute. ”If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.” . . .

The LA Times writes on May 31, 1999 that:

It’s one of the hidden success stories of the Clinton era. In the great housing boom of the 1990s, black and Latino homeownership has surged to the highest level ever recorded. The number of African Americans owning their own home is now increasing nearly three times as fast as the number of whites; the number of Latino homeowners is growing nearly five times as fast as that of whites….

Under Clinton, bank regulators have breathed the first real life into enforcement of the Community Reinvestment Act, a 20-year-old statute meant to combat “redlining” by requiring banks to serve their low-income communities. The administration also has sent a clear message by stiffening enforcement of the fair housing and fair lending laws. The bottom line: Between 1993 and 1997, home loans grew by 72% to blacks and by 45% to Latinos, far faster than the total growth rate.

Lenders also have opened the door wider to minorities because of new initiatives at Fannie Mae and Freddie Mac–the giant federally chartered corporations that play critical, if obscure, roles in the home finance system. Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them into securities; that provides lenders the funds to lend more. . . . .

Another article in the New York TImes from September 11, 2003:

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago. . . .

This reform – and another in 2005/06 – were blocked by Democrats who threatened to filibuster the bill in the Senate.

In that 2003 New York Times article, we find the extent of Republicans’ concerns, and of Democrats’ intransigence:

Fannie Mae, which was previously known as the Federal National Mortgage Association, and Freddie Mac, which was the Federal Home Loan Mortgage Corporation, have been criticized by rivals for exerting too much influence over their regulators.

The regulator has not only been outmanned, it has been outlobbied,” said Representative Richard H. Baker, the Louisiana Republican who has proposed legislation similar to the administration proposal and who leads a subcommittee that oversees the companies. ”Being underfunded does not explain how a glowing report of Freddie’s operations was released only hours before the managerial upheaval that followed. This is not world-class regulatory work.”

Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Representative Melvin L. Watt, Democrat of North Carolina, agreed.

”I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.

Democrats such as Watt and Maxine Waters played the race card to label any effort to prevent poor and black families from buying homes they couldn’t afford as racist.

But when the fecal matter hit the rotary oscillator as a direct result of Democrats’ policies, Nancy Pelosi trots and says:

“The — what we have now is a manmade disaster, a disaster that sprang — comes from the Bush failed policies, the failure of the Bush administrations to steward our economy in a responsible way.”

I am telling you, if you vote for Democrats in November, you will be putting the very people who caused this disaster in power, and you will be entrusting the people who created a crisis in charge of averting the very crisis they caused.  By putting these irresponsible demagogues in charge of our economy during one of the most vulnerable periods in our nations’ history, you will in effect be saying, “I want the Great Depression.  I want my children to suffer.”

Why Barney Frank Can Stick His ‘Republicans With Hurt Feelings’ Remark

September 30, 2008

Yesterday, just before the House vote on the $700 billion bailout, House Speaker Nancy Pelosi delivered a speech in which she essentially called Republicans corrupt and stupid, laid the entire blame for the financial disaster at Bush’s and Republicans’ feet, and told Republicans that they would get all the blame and Democrats would take all the credit.  And then she asked Republicans to join her in a bipartisan vote.

In an outcome that was apparently astonishing only to Democrats, Pelosi’s ridiculously partisan approach backfired.

If Nancy Pelosi were a homeless bag lady (one can only dream), her marketing approach would be to slap you in the face, call you a stupid pig, and then ask you for money.

Democrats, partisan ideologues to the core as they are, simply could not admit that “Madam Speaker” said anything that was in any way inappropriate.  Barney Frank said:

“We don’t believe they had the votes and I think they are covering up the embarrassment of not having the votes. But think about this: somebody hurt my feelings so I will punish the country. I mean that’s hardly plausible. And there were twelve Republicans who were ready to stand up for the economic interest of America but not if anybody insulted them. I’ll make an offer: Give me those twelve people’s names and I will go talk uncharacteristically nicely to them and tell them what wonderful people they are, and maybe they’ll now think about the country.”

Well, let me just say this:they were 12 votes away from passing this thing, and if there actually were 12 Republicans who WOULD have voted for it if Nancy Pelosi hadn’t opened her big damn mouth – and passing the bill really was a really such a vital thing for the country – then maybe, just maybe, Nancy Pelosi shouldn’t have opened her big damn mouth.  Maybe a good leader doesn’t attack the people she needs to come through for her right before a huge vote.  I’m just sayin’.

But there’s something else.  It turns out that 12 Democrats on Barney Frank’s own Housing Financial Services Committee – of which he is chairman – voted against the bill he chided Republicans for voting against.  So I have an idea: maybe, just maybe, if Barney Frank had spent less time being a fat, arrogant, condescending, smarmy-mouthed little pervert ridiculing 12 Republicans after the vote; and more time getting his own damn Democrats on his own damn committee in order before the vote, he would have got his bill passed.

So if someone brings up the “Republicans with hurt feelings” retort, all you need to do – after pointing out the fact that Nancy Pelosi is the worst Speaker in history for smack talking Republicans immediately before a vote she wanted when she knew she needed heavy Republican support – you just bring it back home to Barney Frank and the fact that he really needs to shut his fat mouth about any lack of 12 votes.

Democrats’ Idea Of Bipartisanship Is HARD CORE Partisanship

September 27, 2008

We are in the worse financial crisis since the Great Depression, and Democratic leadership is playing the same hard core ideological political games that got us into this mess to begin with.  You’ve heard the phrase, “fighting like rats on a sinking ship”?  Well, the Democrats are the rats in this story (which really isn’t much of a metaphor).

First you have the fact that House Republicans were largely excluded from the negotiating process.  And then, surprise: they weren’t happy about it.

Then we have Senate Majority Leader Harry Reid calling upon John McCain to become directly involved in the negotiation process – only to viciously attack him when he actually tried to become directly involved.  A whole bunch of Democrats then dove onto the pile, falsely claiming that a bipartisan deal had been struck when none actually had, and that McCain had thrown a monkey wrench into it – even though he had said very little at the explosive and divisive meeting which Democrats had Obama chair.  Democrats – in an obvious act of presidential politics – were out claiming that John McCain was playing “presidential politics.”

Then we get to look at the actual bill that the Democrats have been working on – and expect Republicans to agree to – only to find that it is a clear pork-laden giveaway to traditional Democratic allies such as ACORN, Big Labor, and the trial lawyer lobby.  ACORN has been involved in more cases of documented voter fraud than any organization in history; yet STILL receives federal money thanks to Democrats’ efforts.

And, of course, when Democrats came back this morning for more “bipartisan” negotiations, the two Republicans were shocked to find not two Democrats joining them, but NINE:

Pelosi made her remarks as the negotiators streamed into her office, and that group is much bigger than expected; instead of just the four principals, a number of other prominent Democrats, including Ways and Means Chairman Charles B. Rangel (N.Y.), Senate Finance Chairman Max Baucus (Mont.), Senate Budget Chairman Kent Conrad (N.D.) and New York Sen. Chuck Schumer also entered the meeting.

This leaves House Minority Whip Roy Blunt of Missouri and New Hampshire Sen. Judd Gregg severely outnumbered as the only Republicans in the room. Oh yeah, and Treasury Secretary Henry Paulson. But he’s been at loggerheads with the House GOP for the last week, so he they might not be singing from the same songbook on this one.

The ship is sinking, and Democrats are determined to cynically use every ideological play in their playbook, apparently counting upon a biased media and an ignorant population to set up their next play.

And what is their next play?  When the Republicans refuse to accept the crap the Democrats are trying to feed them, Democrats will flood the airwaves to proclaim that Republicans are refusing to play ball and stave off a meltdown.

McCain Suspends Campaign To Lead In Economic Crisis; Democrats Pandering

September 24, 2008

John McCain announced that he would suspend his campaign – including all advertising and the upcoming debate – in order to focus on providing leadership in addressing the financial crisis.  Senate Majority Leader Harry Reid issued the following statement:

This is a critical time for our country. While I appreciate that both candidates have signaled their willingness to help, Congress and the Administration have a process in place to reach a solution to this unprecedented financial crisis.

I understand that the candidates are putting together a joint statement at Senator Obama’s suggestion. But it would not be helpful at this time to have them come back during these negotiations and risk injecting presidential politics into this process or distract important talks about the future of our nation’s economy. If that changes, we will call upon them. We need leadership; not a campaign photo op.

If there were ever a time for both candidates to hold a debate before the American people about this serious challenge, it is now.

The only problem with this is that it completely flies in the face of what he said only yesterday:

Senate Majority Leader Harry Reid is watching Republicans in both chambers, one after another, criticize the Wall Street bailout, but he says he’s not going to let them off the hook by passing the bill and letting the GOP cast soft “no” votes against the plan.

“This is a Republican proposal, and we need some Republican votes,” to help it pass. “At this stage we [Democrats] are working with ourselves.”

Reid went on to say in the same statement:

“We now need Republicans to stand up,” Reid said. “We need the Republican nominee for president to say what he’s for.”

So, anyone who thinks that Democrats aren’t completely full of crap, and determined to use whatever side of any issue to posture and pander and demagogue – no matter how dangerous it is to the nation’s well being – explain Harry Reid’s complete hypocritical turnabout to me.

Yesterday, Senate Majority Leader Harry Reid claims that he isn’t seeing enough Republican action on the Paulson financial bailout plan.  Yesterday Reid claims that we need the Republican nominee – and that’s John McCain by the way – to step up and say what he’s for.  Reid demands that of McCain even though Barack Obama hasn’t bothered to say what he’s for.

So John McCain suspends his campaign to return to Washington and put his leadership in the Republican Party – and his very political future – on the line to become personally involved in the economic situation in order to break the impasse and reach a compromise deal that is best for the American people.

And immediately following his announcement to do so, Reid suddenly says McCain’s involvement is unnecessary.

If any thinking person had any doubt that the Democratic leadership – and that includes Barack Obama, who is planning to keep launching divisive attacks when we need to come together fast, keep fundraising in the midst of economic crisis, keep playing the same old politics – is not above cynically manipulating a crisis, it ought to be clear now.

Democrats are trying to present John McCain’s suspending his campaign in order to return to Washington to lead the Republican effort to produce a bipartisan plan as nothing more than a desperate political act.  But please don’t forget that this isn’t the first time John McCain was willing to suspend his political campaign in the face of a national crisis: he did so during the Republican Convention as Hurrican Gustav was bearing down on the Gulf Coast.