Of the sons of Issachar, men who understood the times, with knowledge of what Israel should do, their chiefs were two hundred; and all their kinsmen were at their command — 1 Chronicles 12:32
How far is it from “we’re smart enough to elect our own leaders but we’re not smart enough to pick our own light bulbs” to “We’re not smart enough to elect our own leaders”?
Seriously, if we’re not smart enough to pick our own light bulbs, or our own energy sources or cars, or our own amount of sodium, etc. etc., how far are the people who have decided all of that from deciding that we’re not really smart enough to pick our own leaders and that “the wise” should choose them for us?
In Ameritopia, Mark Levin makes the point that Utopias have ALWAYS been based on the notion that some elite intelligentsia should be entrusted to run everything for us in order to achieve the societal perfection that human civilization has never quite reached. And if we simply surrender more of our freedoms and more of our ability to choose, the “experts” can make better choices for us.
And the obvious question (at least to a guy as brilliant as Mark Levin) is, “Just what is the suicidal instinct that makes us believe that a community rabble rouser (his word choice talking about the book on Sean Hannity) is going to be able to push all the buttons and run our lives better than we can run our own lives?
I haven’t read the book, but it just moved to the top of my “to do” list.
Btw, I noticed upon linking to Amazon.com that Ameritopia is either loved or hated. Out of 399 so-called “customer reviews” – you do NOT need to buy the book in order to review it on Amazon – there are a total of seven two, three, or four star reviews. All the rest are either five-star (238) or one-star (154). That tells me that about 240 or so of the people who reviewed the book actually bought a copy; the rest are liberals who are characterized by vileness and bitterness and dishonesty, which, along with hypocrisy, are the sine qua nons without which a liberal could not be a liberal.
Liberals are as likely to buy a copy of Mark Levin as I am likely to buy a copy of Michael Moore. Which is to say there’s about a zero percent chance because any fool knows where both of these guys are coming from ideologically. But when you look at reviews of Michael Moore on Amazon, what you see is that the conservatives who aren’t stupid enough to buy a copy are honest enough not to review it either. Unlike the incredibly vile, bitter, dishonest and hypocritical left.
Only someone who would burn books they hate would falsely review books they haven’t read. And what a coincidence: the political left has been responsible for 99% of all the book burnings in the world.
Call that the “Occupy” movement of stupidity and fascism.
Two things come out of this radio interview of Gloria Allred by Mark Levin:
1) The peculiar form of mental retardation that is endemic in even the most brilliant liberals. Listen to Gloria Allred repeatedly use every form of rhetorical jujitsu in order to make herself some kind of offended victim instead of just answering the damn question. It is simply amazing, and frankly demented, how a liberal can go on a program and talk and talk and talk all the while complaining that she isn’t being allowed to talk.
Add to that the fact that Gloria Allred bizarrely becomes self-righteously indignant and refuses to use the term “illegal alien” even though Mark Levin spoke as a lawyer himself and was using “illegal alien” as a recognized legal term, which any lawyer worth cat feces would recognize.
2) The fact that Gloria Allred deliberately put this woman, who is, yes, AN ILLEGAL ALIEN, in direct legal jeopardy just so that Gloria Allred can pursue an ideological vendetta against a candidate for governor.
Now, two things should happen.
1) Gloria Allred’s client should be criminally prosecuted because of her fraudulent criminal falsification of documents in order to illegally obtain a job. Then, after serving time in jail, she should be deported as a criminal illegal alien. And why should these things happen? Because Gloria Allred revealed the criminal activities of her client just to political attack a Republican candidate for governor. Had Gloria Allred NOT revealed the criminal activities of her client, her client would have been able to get another $23-an-hour housekeeping position.
2) Gloria Allred should be disbarred for exploiting a client rather than representing that client’s best legal interest. As attorney Mark Levin points out:
“When you represent a client, you have to make sure you are not exposing that client in other ways. So I’m asking you: are you aware that your client forged or falsified a Social Security document? Yes or no.” Levin goes on to say, “I am accusing you of putting your client in legal jeopardy. How do you respond?”
Gloria Allred “responds” by saying, “You know, even though my client is a housekeeper, and some people don’t respect a housekeeper, I happen to respect housekeepers.”
At this point, Levin impatiently says: “Aren’t you swell. Now answer my question.”
Gloria Allred stupidly says, “I’m answering your question” [which she clearly isn’t].
Levin now explodes:
“You put your client in legal jeopardy! I don’t need a lecture from a liberal about housekeepers! I asked you about your client, and the legal jeopardy that your client is in now.”
And Allred proceeds to go on yet another morally insane lecture in which she self-righteously presents herself as standing up for the truth, and how Mark Levin – who is practically screaming for Gloria Allred to stop grandstanding and provide the facts – is afraid of the facts. She mentions that her client – who was paid an incredible $23 an hour to do a menial job – was not reimbursed for all of her travel expenses.
Levin asks, “So you are aware that she falsified and forged a Social Security document.”
Allred pathetically says, “You want to attack a housekeeper. You don’t want to deal with…”
Levin interrupts the – excuse my language – lower-lip-high bullshit. And says:
“No, no. I want to deal with YOU. I want to deal with you as a fellow member of the Bar. My question: 42 United States Code 408A18. It’s a federal felony to forge or falsify a Social Security document. And you’re telling me that your client came forward and said, “Okay. Expose me to possible deportation. Expose me to up to five years in prison, I want my travel money?”
And Allred again self-righteously and pompously states that she would never tell anyone the conversation she had with her client. Because it’s attorney-client privilege. Which Gloria Allred apparently interprets as being allowed to destroy her client’s life at will and use her client’s destruction to advance liberal political partisan politics.
Levin says:
“It is absurd for you to say that you filed a complaint because she didn’t get reimbursed for her travel or what have you. Yesterday, as a matter of fact, you filed it. And you and the immigration attorney have exposed your client in my humble opinion to very, very serious matters which could cost her her liberty. And your answer is that I don’t like housekeepers! It’s you who apparently don’t like housekeepers.”
Gloria Allred repeatedly states that Mark Levin is afraid of the facts, and doesn’t want to deal with the facts – even though Levin is determined to get to them, and even though Allred is equally determined to whine about anything and everything BUT the facts.
And what are the facts? Other than the fact that Gloria Allred would be willing to watch her client get tortured and then burned alive if her screams and her ashes would help keep a Republican from being elected governor?
In other words, it wasn’t that Whitman didn’t bother to check her housekeeper’s legal status: it was that she CLEARLYDIDCHECK HER HOUSEKEEPER’S LEGAL STATUS, and an examination of the official state documentation provided by Santillan showed that Santillan was in fact legal.
So who is the criminal here? It most certainly was not Meg Whitman; it was CRIMINAL ILLEGAL ALIEN Nicandra Diaz Santillan. It was Santillan who committed felonies by using fraud to criminally obtain official government documents.
In exposing these facts about her client, Gloria Allred is all but guaranteeing that said client will be criminally prosecuted for multiple felonies, and then deported as a CRIMINAL ILLEGAL ALIEN.
And why does Gloria Allred destroy her client’s future? Because she thought she had a “gotcha” document in the form of a letter sent by the Social Security Administration. The letter was allegedly signed by gubernatorial candidate Meg Whitman’s husband (Dr. Griffith Harsh), who had written on the letter, “Nicky (i.e., ILLEGAL ALIEN Nicandra Diaz Santillan who had criminally falsified her documents to get the job in the Whitman household), please look into this.” And given the letter to the ILLEGAL ALIEN housekeeper. And, of course, “Nicky” (did I mention she’s a criminal illegal alien) sat on the letter. Until giving it to Gloria Allred.
Now, why does Meg Whitman’s husband write, “Nicky, please look into this”? Because he was duped by a criminal. He had no idea that this housekeeper had criminally falsified documents including a bogus Social Security Number in order to get the job which she had held for three years prior to the letter.
Which is to say husband Dr. Griffith Harsh assumed it was a minor paperwork issue BECAUSE HE TRUSTED A CRIMINAL ILLEGAL ALIEN WHO HAD SWINDLED THE COUPLE.
“While I honestly do not recall receiving this letter as it was sent to me seven years ago, I can say it is possible that I would’ve scratched a follow up note on a letter like this, which is a request for information to make certain Nicky received her Social Security benefits and W-2 tax refund for withheld wages,” he said. “Since we believed her to be legal, I would have had no reason to suspect that she would not have filled it in and done what was needed to secure her benefits.’‘
Harsh also wrote: “The essential fact remains the same, neither Meg nor I believed there was a problem with Nicky’s legal status and I certainly don’t recall ever discussing it with my wife, nor did I ever show her any letter about it. The facts of this matter are very clear: Ms. Diaz broke the law and lied to us and to the employment agency. When she confessed her deception to us last year, we ended her employment immediately.”
So much for the “smoking gun.” It actually proves that the Dr. Harsh and Meg Whitman did NOT know that their housekeeper was in fact an ILLEGAL ALIEN.
Apparently, the heart of Gloria Allred’s case is that Meg Whitman should have known that all Hispanics are liars and criminals. And even if a Hispanic has come from a legitimate employment agency, and even if that Hispanic has documents, that Meg Whitman should have realized that simply to be Hispanic is to be both a liar and a criminal.
So everyone should immediately fire any Hispanic under employment. Because having documents means nothing. You know that “those kind” will criminally produce fraudulent documents and then lie about it.
Liberals don’t give a leaping damn about Hispanics. They would destroy them in a heartbeat if they voted Republican. Just as Gloria Allred will destroy Nicandra Diaz Santillan in order to illegitimately demonize Meg Whitman.
And, as I’ve said over and over again, the quintessential element of a liberal is massive hypocrisy. The same liberals who have done everything they can to cynically aggrandize themselves to criminal illegal aliens – including making it impossible to verify their illegal status – are now trying to crucify a Republican political candidate for not being able to do what liberals have spent years trying to keep them from doing. All the while condemning as racist anyone even trying to do it to begin with.
I will always wonder how liberals’ heads don’t simply explode from trying to contain all the massive contradictions.
As a final note, if the media were even remotely fair in its coverage of this Glorai Allred political stunt, they would be asking the other gubernatorial candidate a question: given that Jerry Brown is the California Attorney General, why hasn’t he arrested Nicandra Diaz Santillan?
Radio talk host and author Mark Levin explained the Republican health care plan in a nutshell to a caller who demanded, “Where’s the Republican plan?”
In the course of two minutes, Levin proceeds to lay out the essence of the Republican health plan (which Democrats have deceitfully and maliciously claimed did not exist in all their ‘party of no’ rhetoric), and revealed the stupidity of the Glenn Beck “There’s no difference between the parties” foolishness:
Transcript:
Caller: I guess my question, sir, is where is the Republican plan?
Levin: Yes, there is a plan, sir, and it’s been repeated, and it’s been put out there, it’s on the internet. They don’t control the media in this country. They don’t get a fair break from the media in this country. Which is why I explain the plan over and over again. You ready? You got a pencil? Let’s write it down, shall we?
1) Tax credits so individuals can purchase their own health policies rather than paying that money to the federal government.
2) Expanding health savings accounts – like the 401Ks – so you can put more money aside, tax free, for catastrophes and other needs.
3) Right now you can’t purchase insurance across state borders because the various interest groups have larded up their laws so that if you purchase a policy in Ohio it doesn’t comply with a policy in Pennsylvania. You can eliminate that. And you should.
4) Tort reform. Which will save a fortune. You cap – talk about cap and trade – you cap awards to actual medical costs, and related expenses. So it’s not ‘hitting the lottery’ each and every day.
And I can go on with three or four more points. But these basic free market efforts – to unravel so much of what the government, and the regulatory bureaucracies have done – would open up the system. We’re talking about 12 million people – 12 million Americans – who don’t have health insurance.
Caller: The point that I’m trying to make is that it’s not for you or the other folks that are on the radio… You actually hear nothing from the Republicans…
Levin: Sir, this is a Republican proposal. It’s a conservative proposal that the Republicans have embraced. They have asked to meet with Obama to discuss it.
Look folks. I know the Republicans have screwed up. I know there are people out there saying the two parties are exactly the same. They’re not exactly the same. We’ve got a Marxist in the White House, a Marxist in the House, an idiot in the Senate. Don’t tell me they’re exactly the same! They can do better, but they’re not the same.
Now, these are truly great free market ideas that will provide lower-priced high quality health care AND preserve our liberties. And the Democrat pseudo outrage that “Republicans weren’t offering an alternative” was just that.
(CNSNews.com) – President Barack Obama and Democrats in Congress — while pushing their own health care overhauls — have criticized Republicans as offering only opposition and no ideas for reform, but the GOP, despite the lack of media attention, has introduced three health care bills.
The three Republican bills total almost 400 pages and have been on the table since May and June.
In May, Republicans in the House and the Senate formed a bicameral coalition to produce the130-page “Patients Choice Act of 2009.”
In June, Sen. Jim DeMint (R-S.C.) introduced the “Health Care Freedom Plan,” a 41-page proposal.
And in July, the Republican Study Committee, under the leadership of Rep. Tom Price (R-Ga.), unveiled the “Empowering Patients First Act,” a 130-page plan.
Some of the provisions included in one or more of the bills include: investing in preventive medicine, an overhaul of Medicaid, reduction of abuse and fraud in the Medicare program, supplemental health insurance for low-income families, tax credits for health insurance, and a ban on federal funds being used for abortions.
However, supporters of the Democratic plans have accused Republicans of trying to derail attempts at reforming health care without having a plan of their own.
“There is no Republican health care plan out there,” Rep. Chris Van Hollen (D-Md.) told Talk Radio News Service on July 31 about what he called the Republican-backed “misinformation campaign” that is slowing health care reform.
He said Republicans are satisfied with the status quo and “don’t want to show the American people where they stand on these issues.”
At a White House briefing on Aug. 18, Press Secretary Robert Gibbs criticized Republicans for not wanting to make the health care system better.
“Only a handful seem interested in the type of comprehensive reform that so many people believe is necessary to ensure the principles and the goals that the president has laid out,” Gibbs said.
In May, Sen. Tom Coburn (R-Okla.) said his bill, co-sponsored by Sen. Richard Burr (R-N.C.), and Reps. Paul Ryan (R-Wis.) and Devin Nunes (R-Calif.), puts a priority on patients and their ability to oversee their own health care choices.
“As a practicing physician, I have seen first-hand how giving government more control over health care has failed to make health care more affordable or accessible,” Coburn said. “The ‘Patients Choice Act’ will provide every American with access to affordable health care without a tax increase, more debt or waiting lines.”
“The American health care system needs a complete transformation,” Burr said. “The ‘Patients’ Choice Act’ will finally enable Americans to own their health care instead of being trapped in the current system, which leaves people either uninsured, dependent on their employer, or forced into a government program.”
The “Patients Choice Act” has been referred to the Senate Finance Committee, which is set to release a Democratic-crafted bill from that committee when Congress returns after Labor Day.
In June, DeMint, chairman of the Senate Steering Committee, introduced the “Health Care Freedom Plan,” which was analyzed by the Heritage Foundation. The conservative policy think tank said DeMint’s bill could reduce the number of uninsured by 22.4 million people in five years.
It also provides grants to help people with pre-existing conditions gain access to affordable insurance, and allows Americans to purchase health savings accounts to pay for insurance.
“The time has come for Americans to regain control of their health care choices, and the ‘Health Care Freedom Act’ empowers every American with the freedom to choose and own a plan that is best for them,” DeMint said.
DeMint’s bill also has been referred to the Senate Finance Committee.
“Today, we present a solution for health care reform that offers more patient-centered choices and care of the highest quality,” Price said. “The ‘Empowering Patients First Act’ is a budget neutral proposal based on the fundamental principle that personal medical decisions should be made by patients in consultation with the doctors rather than unaccountable bureaucrats in Washington.”
Price’s bill also emphasizes preventive health care, tax credits, reduction of fraud and abuse in existing federal health care programs, and health care programs tailored to meet the needs of Native Americans and U.S. military veterans.
The bill has been referred to the House Committee on Energy and Commerce, as well as to the committees on Ways and Means, Education and Labor, Oversight and Government Reform, and the Judiciary, Rules, Budget, and Appropriations committees.
There are differences between the legislation offered so far by Republicans. The “Empowering Patients First Act,” for example, is the only one of the three proposed bills that specifically prohibits federal funds being used for abortion.
The fate of the Republican proposals is also uncertain, with the Democrats controlling both chambers of Congress and Obama in charge of signing whatever final health care reform legislation lands on his desk.
If the Democrats are so patently dishonest that they are deceitfully working to prevent the American people from knowing that these bills even exist, then what else are they lying about? If you start examining their rhetoric and their proposals, you’ll find plenty of lies.
In any event, since the mainstream media is as dishonest as the Democrats whose agenda they propagandize, please tell your neighbors, friends, and co-workers that- contrary to the liberal lie – the Republicans really DO have a viable health care plan.
I’ve watched Glenn Beck and listened to his radio program. Aside from his frequent snide attacks on Republicans, I’ve usually enjoyed the program and thought he brought out interesting facts and ideas.
But when he appeared on CBS with Katie Couric, he jumped off the cliff into crazy town located far, far below:
Fox News host Glenn Beck, whose ratings and profile have soared this year as he has pummeled the Obama administration and become a rabble-rousing protest organizer, once again demonstrated his flair for creating viral new media moments, if the widely reproduced advance video excerpt from the show is any indication.
“John McCain would have been worse for the country than Barack Obama,” Beck told Couric. He also said that he might have cast his vote for Hillary Rodham Clinton rather than McCain if he had been faced with a choice between the two.
“I can’t believe I’m saying this, I think I would have much preferred her as president and may have voted for her against John McCain,” Beck said, explaining that in his world view “McCain is this weird progressive like Theodore Roosevelt was.”
Well, Katie Couric is happy. The left is happy with this latest fracturing within the conservative ranks. “Conservative” independents are happy with the demonization of Republicans as a means to help their various “third party” causes. And Republicans are trying to pull the knife out of the middle of their backs.
This morning on his radio program, a caller protested Beck’s damnation of Republicans as progressives and fakes. Beck interrupted him repeatedly and ultimately implied that he was crazy for supporting Republicans (“What’s the definition of insanity?” he asked, with the obvious answer, “Doing the same thing over and over again and expecting different results”).
Beck’s ridiculous answer was that the Republicans were only voting against it because they were out of power. As though a sane and serious person believes that the GOP would have been proposing and passing these things if they WERE in power. Does anyone seriously think that? Socialist health care? Cap-and-trade energy policy? Seriously, Glenn? Because that is just really asinine.
As for Beck’s bringing up the definition of insanity, let me just say this for that heckled caller today: rightbackatchya, Glenn.
You tell me when hoping for a third party victory amounted to anything other than a Looney Tunes fantasy.
Glenn Beck calls himself a Libertarian. Do you know how many Libertarians there are in national office? Zero. That’s how many. And there are only two independents in national U.S. politics, Joe Lieberman and Bernie Sanders. Sanders, by the way, refers to himself as a “democratic socialist.”
Now ask me how many Libertarians have stood up against the massive liberal onslaught that can be exemplified by the following articles:
Under President Obama, the 2009 budget deficit is set to reach a staggering $1.8 trillion. It took President George W. Bush seven years to run up $1.8 trillion in debt. And these deficits aren’t merely a temporary result of the recession; the president’s budget would run deficits averaging nearly $1 trillion a year for the next decade.The national debt would double. In other words, Obama would run up as much government debt as every president in US history from George Washington to George W. Bush — combined. Put simply, he’d dump $84,352 per household of new debt into the laps of our children and grandchildren over the next decade.
Mr. Obama’s $3.6 trillion budget blueprint, by his own admission, redefines the role of government in our economy and society. The budget more than doubles the national debt held by the public, adding more to the debt than all previous presidents — from George Washington to George W. Bush — combined. It reduces defense spending to a level not sustained since the dangerous days before World War II, while increasing nondefense spending (relative to GDP) to the highest level in U.S. history. And it would raise taxes to historically high levels (again, relative to GDP). And all of this before addressing the impending explosion in Social Security and Medicare costs.
The Office of Management and Budget has released its annual mid-session review that updates the budget projections from this past May.[1] They show that this year, Washington will spend $30,958 per household, tax $17,576 per household, and borrow $13,392 per household. The federal government will increase spending 22 percent this year to a peacetime-record 26 percent of the gross domestic product (GDP). This spending is not just temporary: President Obama would permanently keep annual spending between $5,000 and $8,000 per household higher than it had been under President George W. Bush.[2]Driven by this spending, America will run its first ever trillion-dollar budget deficit this year. Even worse, the President’s budget would borrow an additional $9 trillion over the next decade, more than doubling the national debt. By 2019, America will be spending nearly $800 billion on net interest to service this large debt.[3]
That’s right. Zero. Not one.
In fact, out of the 537 elected national politicians (President, VP, US Senators, US Representatives), the only two who are “independents” vote with the Democrats.
The conservative “Pipe Dream Party” that Glenn Beck thinks will one day sweep into power aint going to happen. Except in the minds of the brain damaged.
And he’s mocking this caller as insane?
One of the things I concluded long ago was that, if we ever by some miracle got a third party off the ground with enough power to change things, it would become every bit as corrupt as the other two. Or does Glenn Beck think his politicians would be sinless, morally perfect saints?
If you think a third party would do everything right, you seriously need to wake up and quit being so foolishly naive.
Another thing: Glenn Beck admires Sarah Palin, as I do. But Sarah Palin RAN with John McCain. She’s continued to praise him. If McCain is that terrible, than Palin is terrible too. She’s tainted by McCain. We can do one of Glenn Beck’s chalkboard exercises and draw double arrows connecting Palin to McCain.
If McCain is worse than Obama, then Sarah Palin deserves to be thrown into the junk pile of history.
I’m perfectly consistent in continuing to support Sarah Palin; Glenn Beck is not.
“I think there’s enormous confusion and positioning and pandering. It may be entertaining, but from my perspective, it’s not. It’s pathetic.”
Beck is great at criticizing Republicans’ motivations. Let’s see him justify his own damned motivations. He is pandering to divisiveness and anger. He is appealing to the type of people who would rather take their ball and go home than grow up and try to build the Republican Party into what real conservatives should want it to become.
(CNSNews.com) – Self-identified conservatives outnumber self-identified liberals in all 50 states of the union, according to the Gallup Poll.
At the same time, more Americans nationwide are saying this year that they are conservative than have made that claim in any of the last four years.
In 2009, 40% percent of respondents in Gallup surveys that have interviewed more than 160,000 Americans have said that they are either “conservative” (31%) or “very conservative” (9%). That is the highest percentage in any year since 2004.
Only 21% have told Gallup they are liberal, including 16% who say they are “liberal” and 5% who say they are “very liberal.”
Conservatives overwhelmingly outnumbered liberals while Nancy Pelosi and Harry Reid took over the House and Senate, and conservatives overwhelmingly outnumbered liberals while Barack Obama became president and liberals increased their stranglehold over our government.
And the simple fact of the matter is that they’re going to keep doing that unless “conservatives” decide they don’t want to keep eating liberal crap and start making their votes count.
As a practical matter, what Glenn Beck said on Katie Couric’s show was that he supports the hard-core liberal agenda more than he supports the conservative agenda.
Being able to work off the anger at the worst president in American history sure has done his pocketbook an awful lot of good. Methinks Beck doesn’t want his gravy train to end with a conservative takeover.
This isn’t the first time talk of conservatives forming a new party has happened. It happened in 1977, too. Ronald Reagan responded:
I have to say I cannot agree with some of my friends—perhaps including some of you here tonight—who have answered that question by saying this nation needs a new political party.
I respect that view and I know that those who have reached it have done so after long hours of study. But I believe that political success of the principles we believe in can best be achieved in the Republican Party. I believe the Republican Party can hold and should provide the political mechanism through which the goals of the majority of Americans can be achieved. For one thing, the biggest single grouping of conservatives is to be found in that party. It makes more sense to build on that grouping than to break it up and start over.
What Reagan said is every bit as true today as it was in 1977.
It was Ronald Reagan’s philosophy – NOT Glenn Beck’s – which led conservatives out of the wasteland and into the promised land.
From Mark Levin’s Liberty and Tyranny, pages 67-71:
From where does the Statist acquire his clairvoyance in determining what is good for the public? From his ideology. The Statist is constantly manipulating public sentiment in a steady effort to disestablish the free market, as he pushes the nation down tyranny’s road. He has built an enormous maze of government agencies and programs, which grow inexorably from year to year, and which intervene in and interfere with the free market. And when the Statist’s central planners create economic perversions that are seriously detrimental to the public, he blames the free market and insists on seizing additional authority to correct the failures created at his own direction.
Consider the four basic events that led to the housing bust of 2008, which spread to the financial markets and beyond:
EVENT 1: In 1977, Congress passed the Community Reinvestment Act (CRA) to address alleged discrimination by banks in making loans to poor people and minorities in the inner cities (redlining). The act provided that banks have “an affirmative obligation” to meet the credit needs of the communities in which they are chartered.1In 1989, Congress amended the Home Mortgage Disclosure Act requiring banks to collect racial data on mortgage applications.2 University of Texas economics professor Stan Liebowitz has written that “minority mortgage applications were rejected more frequently than other applications, but the overwhelming reason wasn’t racial discrimination, but simply that minorities tend to have weaker finances.”3 Liebowitz also condemns a 1992 study conducted by the Boston Federal Reserve Bank that alleged systemic discrimination. “That study was tremendously flawed. A colleague and I … showed that the data it had used contained thousands of egregious typos, such as loans with negative interest rates. Our study found no evidence of discrimination.”4 However, the study became the standard on which government policy was based.
In 1995, the Clinton administration’s Treasury Department issued regulations tracking loans by neighborhoods, income groups, and races to rate the performance of banks. The ratings were used by regulators to determine whether the government would approve bank mergers, acquisitions, and new branches.5 The regulations also encouraged Statist-aligned groups, such as the Association of Community Organizations for Reform Now (ACORN) and the Neighborhood Assistance Corporation of America, to file petitions with regulators, or threaten to, to slow or even prevent banks from conducting their business by challenging the extent to which banks were issuing these loans. With such powerful leverage over banks, some groups were able, in effect, to legally extort banks to make huge pools of money available to the groups, money they in turn used to make loans. The banks and community groups issued loans to low-income individuals who often had bad credit or insufficient income. And these loans, which became known as “subprime” loans, made available 100 percent financing, did not always require the use of credit scores, and were even made without documenting income.6 Therefore, the government insisted that banks, particularly those that wanted to expand, abandon traditional underwriting standards. One estimate puts the figure of CRA-eligible loans at $4.5 trillion.7
EVENT 2: In 1992, the Department of Housing and Urban Development pressured two government-chartered corporations – known as Freddie Mac and Fannie Mae – to purchase (or “securitize”) large bundles of these loans for the conflicting purposes of diversifying the risks and making even more money available to banks to make further risky loans. Congress also passed the Federal Housing Enterprises Financial Safety and Soundness Act, eventually mandating that these companies buy 45% of all loans from people of low and moderate incomes.8 Consequently, a SECONDARY MARKET was created for these loans. And in 1995, the Treasury Department established the Community Development Financial Institutions Fund, which provided banks with tax dollars to encourage even more risky loans.
For the Statist, however, this was still not enough. Top congressional Democrats, including Representative Barney Frank (Massachusetts), Senator Christopher Dodd (Connecticut), and Senator Charles Schumer (New York), among others, repeatedly ignored warnings of pending disaster, insisting that they were overstated, and opposed efforts to force Freddie Mac and Fannie Mae to comply with usual business and oversight practices.9 And the top executives of these corporations, most of whom had worked in or with Democratic administrations, resisted reform while they were actively cooking the books in order to award themselves tens of millions of dollars in bonuses.10
EVENT 3: A by-product of this government intervention and social engineering was a financial instrument called the “derivative,” which turned the subprime mortgage market into a ticking time bomb that could magnify the housing bust by orders of magnitude. A derivative is a contract where one party sells the risk associated with the mortgage to another party in exchange for payments to that company based on the value of the mortgage. In some cases, investors who did not even make the loans would bet on whether the loans would be subject to default. Although imprecise, perhaps derivatives in this context can best be understood as a form of insurance. Derivatives allowed commercial and investment banks, individual companies, and private investors to further spread – and ultimately multiply – the risk associated with their mortgages. Certain financial and insurance institutions invested heavily in derivatives, such as American International Group (AIG).11
EVENT 4: The Federal Reserve Board’s role in the housing boom-and-bust cannot be overstated. The Pacific Research Institute’s Robert P. Murphy explains that “[the Federal Reserve] slashed rates repeatedly starting in January 2001, from 6.5 percent until they reached a low in June 2003 of 1.0 percent. (In nominal terms, this was the lowest the target rate had been in the entire data series maintained by the St. Louis Federal Reserve, going back to 1982)…. When the easy-money policy became too inflationary for comfort, the Fed (under [Alan] Greenspan and the then new Chairman Ben Bernanke at the end) began a steady process of raising interest rates back up, from 1.0 percent in June 2004 to 5.25 percent in June 2006….”12 Therefore, when the Federal Reserve abandoned its role as steward of the monetary system and used interest rates to artificially and inappropriately manipulate the housing market, it interfered with normal market conditions and contributed to destabilizing the economy.
9 Editorial, “Fannie Mae’s Patron Saint,” Wall Street Journal, Sept. 10, 2008; Joseph Goldstein, “Pro-Deregulation Schumer Scores Bush For Lack of Regulation,” New York Sun, Sept. 22, 2008; Robert Novack, “Crony Image Dogs Paulson’s Rescue Effort,” Chicago-Sun Times, July 17, 2008.