Posts Tagged ‘moral hazard’

Are You Paying Your Bills Like A Sucker In A World Of Obamanomics?

October 21, 2010

Are you a sucker?

If you’ve actually been working hard to pay your own bills, you sure are.

Imagine two houses, the same square footage, built by the same developer, right next door to one another.   You bought your house two years ago the same month as your neighbor, with both homes closing at about the same price.

You’re working two jobs to pay your bills, and you literally envy the rats in the rat maze, who not only eventually get to the end of the maze, but actually get a tasty treat, too.  When all you do is work.  And then work some more.

You wonder how your neighbor – who doesn’t seem to be working anywhere near as hard as you – manages to make ends meet.

And then you find out that you’re paying nearly three times more for your mortgage at nearly three times the interest rate.  Why?  Because you work hard, pay your debts and play by the rules – like a sucker.

“People are able to come here, and in the same day, restructure their mortgages saving $500, sometimes over $1,000 a month,” says NACA’s charismatic leader, Bruce Marks.

We saw another homeowner, Althena Peet, actually embrace her lending counselor, tears streaming down her face. “My monthly payments were $1,888 per month, and its down now to $687.64. That’s with 2 percent interest. I just can’t believe it,” Peet exclaimed.

While Althena gets a great deal, another homeowner with the exact same mortgage who paid his bills would be shelling out that $1,888 a month, leaving some to question whether such foreclosure rescues are fair, or wise.

Among those with concerns is professor Paul Habibi with UCLA’s Anderson School of Management. “It’s not fair,” he says. “It penalizes those who play by the rules, and those who are in dire need and may have not played by the rules and got into mortgages they can’t afford, are now able to get some help. It’s kind of the old adage of taxing success and subsidizing losses. We are seeing that prevail in the housing market.”

Habibi argues that, while well-intentioned, such foreclosure rescue programs could have unintended consequences. “It creates a moral hazard, and that is basically the premise that people would behave differently if they knew that they had a parachute saving them than if they didn’t.

“And in this case, those who do play by the rules, and are paying their mortgages continuously are suffering in a sense, relative to those of their peers that are being helped out.”

You’re working two jobs to make ends meet and pay your bills.  That used to be the right thing to do.

But not in Obamanomics.  Now, working hard and paying your contracted debts is the stupidest thing you can possibly do.

The moral of the story in Obama’s America is DON’T PAY YOUR BILLS.  Because only suckers pay their bills these days.

The right thing to do under Obamanomics is to quit one of those two jobs, and then qualify for a sweetheart deal; one in which you don’t have to pay what you promised on a contract you would pay.  Just don’t watch Fox News while you’re sitting on your ass in front of the boob tube, is all Democrats ask.

It’s a great way to go, until America collapses under socialism.

But then again, only suckers care about stuff like that.

Hypocrite Obama At It Again: Attacks GOP Leader For Wall St. Meetings Even As His Chief Of Staff Does Same Thing

April 21, 2010

Let’s see, the definition of “hypocrite“: a person who professes beliefs and opinions that he or she does not hold in order to conceal his or her real feelings or motives.

Yep.  That’s pretty much Barry Hussein – our hypocrite in chief – in a nutshell.

Obama Calls Wall Street Meetings ‘Shocking’ as Rahm Emanuel Meets with Wall Street Investors
by  Connie Hair
04/20/2010

White House Chief of Staff Rahm Emanuel met with Wall Street investors Sunday, the night before his boss, President Obama, criticized such meetings with Wall Street investors.

In Los Angeles trying to help Sen. Barbara Boxer (D-Calif.) boost her sagging senatorial campaign that is in serious trouble, Obama Monday called such Wall Street meetings “shocking.”

“The Senate Republican leader, he paid a visit to Wall Street a week or two ago,” Obama said.  “He took along the chairman of their campaign committee. He met with some of the movers and shakers up there. I don’t know exactly what was discussed. All I can tell you is when he came back, he promptly announced he would oppose the financial regulatory reform.  He would oppose it.  Shocking.”

Just one day before, White House Chief of Staff Rahm Emanuel was meeting with Wall Street “movers and shakers” working out the finer details of the Democrats’ Wall Street reform that sets up a permanent taxpayer-funded bailout structure for “too big to fail” companies.

How is that NOT hypocrisy?  “How DARE you do the same thing my guy just did!  How DARE YOU!!!”

So what is really “shocking” is just what a loathsome, lying, hypocrite demagogue our president is.

Senate Republican Leader Mitch McConnell had absolutely every right and reason to meet with the Wall Street figures, given the fact that he had been blasting the $50 billion in “too big to fail” bailout money that the Democrat legislation had stuffed in it.  That was so heinous that even Obama was trying to strip out the uber-obvious unpopular bailout cash for Wall Street big boys.  Obama said he would onlyonly sign a bill if it passed the test of putting an end to bailouts; this bill contains a gigantic bailout slush fund – and promises many more bailouts to come.  And there is other bad news in that power-grab Obama calls a bill.

Hey, Barry Hussein, how about if we ask one of your Democrats how he feels about that fifty billion bucks that McConnell had been outraged about.  Ask your fellow Democrat how HE feels about your turd of a bill:

(As Rep. Brad Sherman (D-Calif.), a Democrat member of the House Financial Services Committee, told the Politico yesterday that even if the $50 billion bailout slush fund currently in the bill were stripped out, “The Dodd bill has unlimited executive bailout authority. … The bill contains permanent, unlimited bailout authority.”)

The Washington Post reports:

“As President Obama prepares to deliver a speech in New York later this week that will attempt to align his administration squarely on the side of American taxpayers furious with Wall Street, his chief of staff, Rahm Emanuel, met privately on Sunday night with some of the city’s top investors,” The Washington Post’s Jason Horowitz and Michael Shear report. “At a private cocktail reception at the Park Avenue home of investors Jane Hartley and Ralph Schlosstein, Emanuel joked about how each of the 60 guests should take a work of art home before speaking seriously about the administration’s commitment to regulation reform.”

Perhaps Obama didn’t get the Rahmbo memo?

Senate Republican Leader Mitch McConnell (R-Ky.) blasted Democrats for their support of the $50 billion Wall Street bailout fund from the Senate floor today:

“It is important for the country and taxpayer that we get this right, that we put them before politics.  That’s why I was disappointed to read that Senate Democrats are refusing to drop the $50 billion bailout fund — a fund that the Treasury Secretary himself opposes – unless Republicans pay a price for taking it out. This is exactly what Americans don’t like about Washington: when one side tries to ‘get’ something for doing what they should have done in the first place.  If everyone agrees it should be dropped, then it should be dropped.  And if Senate Democrats think it should stay, then they should explain why they think the Treasury Secretary was wrong when he said that this bailout fund ‘would create expectations that the government would step in to protect shareholders and creditors from losses.’

“Both sides have expressed a willingness to make the changes needed to ensure without any doubt that this bill won’t put taxpayers on the hook for future bailouts of Wall Street banks. Let’s just do that.”

Apparently Mitch McConnell is suffering from something slightly worse than Stockholm Syndrome, given the fact that he seems to think the depraved demagogues across the aisle actually have a “willingness” to make “changes needed.”  That just isn’t the way Democrats roll, Mitch: rather, they try to shove through one hard-core partisan bill after another, and then demonize and demagogue anybody who points out what’s wrong with the crap they’re pushing.

You should really KNOW that, Mitch.  After all, Barry Hussein just literally got through doing that very thing to you.

The often-way-too-infuriatingly moderate Susan Collins explained what was wrong with the Democrats’ thrust-into-our-face financial overhaul bill this way:

SEN. SUSAN COLLINS, R-ME.: I don’t think you do it by creating a moral hazard, by putting a big fat fund out there in the first place that tells financial institutions don’t worry, you can engage in risky practices, high-risk products, there is going to be a fund, there it is, $50 billion all ready to bail you out.

But Democrats LOVE moral hazard.  They LOVE rewarding the people who created the mess we’re in to begin with.  And those morally hazardous special interests KNOW it: that’s why Goldman Sachs was the SECOND BIGGEST FINANCIAL CONTRIBUTOR TO OBAMA DURING THE CAMPAIGN.  It’s also why John Paulson, the slimeball investor who made billions screwing America by getting investors to buy investments he was betting would fail, was a major Democrat donor and major supporter of Democrat Chuck Schumer.

Charles Krauthammer points out the fundamental power-grab that this bill truly is:

CHARLES KRAUTHAMMER, SYNDICATED COLUMNIST: I think what is so interesting about the bill that is now proposed is that it is Congress once again voluntarily emasculating itself.

The bailout as proposed in the bill would allow the executive branch on its own, without appropriation from Congress, any approval from Congress, to seize, essentially seize a firm it designates again unilaterally as systematically risky, take it over, have the treasury back all of the bad loans, and then have the Fed print the money to pay them off.

Now, when we did the Chrysler bailout, or the bailout of TARP, which we had in 2008, we had to get the Congress along. This is an interesting and I think a disturbing trend where so much arbitrary power is not only in Washington, but not only in the executive, there is no checks, no balance.

That means you get a few powerful people in Washington, secretary of the treasury, head of the FDIC. You walk into a large institution and say we might designate you systematically risky. We want you to do “x,” “y” and “z.” I can assure you they will do “x,” “y” and “z.”

And that’s what happens in Putin’s Russia when he takes over oil. That’s not the way it should be. Congress ought to stay engaged, and that it’s willingly giving up its prerogative is remarkable.

As usual, Democrats are counting upon outright lies and demagoguery to sell a truly terrible bill.  They present the facade that they are against Wall Street – even though Wall Street has been lining Democrats’ pockets with millions and millions in contributions, and even though Obama’s chief of staff Rahm Emanuel came out of Goldman Sachs – and that Republicans are somehow opposing everything that is good and right by standing against Obama’s next Washington power-grab.

The fact of the matter is that the biggest and most scandal-ridden Wall Street firms such as Goldman Sachs would BENEFIT from Obama’s “regulatory reform.” That’s because the president would have so much power to dole out bailouts and benefits to the most politically-connected Wall Street power-players.  Big Wall Street firms would be able to benefit from low interest government loans and undercut smaller and less politically-connected firms.

To quote the president of Americans for Tax Reform:

The new bank bill would institutionalize more bailouts. No longer would congressmen vote on bailouts, they would be run by bureaucrats and flow automatically from the pockets of taxpayers to the pockets of banks that contribute enough to the Chicago political machine to make the list.

Do you actually want that?  You are literally enabling Obama and Democrats to receive millions and millions of dollars in campaign contributions to help them win reelection even as they give huge Wall Street firms billions and billions in future rewards courtesy of taxpayers.

Please don’t believe the constant stream of lies that spew out of the mouth of your hypocrite-in-chief.

My Big Fat Greek Bailout – And What It Means For America

February 10, 2010

So Greece is going to get its big fat bailout.

The “Too big to fail” mindset wins yet again.  First it was big union-dominated automakers and high-risk lending institutions.  And now it’s entire countries, starting with Greece.  And after Greece comes Spain and Portugal, and then will come California and a bunch of other mostly decades-long liberal-progressive states like New York and New Jersey.  High taxation and out-of-control spending equal fiscal disaster as states and countries rack up enormous debts that they can never hope to repay.

Here are a couple of headlines for you:

California will go bankrupt

Is California Too Big To Fail?

And you know damn well it is.  California all by itself is the sixth largest economy on the planet.  And the inescapable logic of redistributionism means that the other 49 states are going to have to redistribute their wealth to bail out the People’s Republic of Pelosistan.

Beware Greeks bearing IOUs.  Hell, beware ANYBODY bearing IOUs.

In contrast to everything liberals believe, the higher the tax rates, the lower the revenues that are being collected as businesses relocate to states that DON’T hate them.  This has been proven throughout American economic history, and it is certainly being proven now: the states with the highest taxes are facing the largest revenue shortfalls.

Their understanding of free market capitalist economics comes primarily through the straw man created by Karl Marx, and so they fundamentally misunderstand and distrust the economic system that made America the greatest nation on earth.  They want redistributionism, and someone has to pay for my right to be a nonproductive bon-bon-eating couch potato.  That “someone” ends up being the only people with the resources to invest and create jobs.  But the rich aren’t stupid, and so they shelter their money to avoid the higher taxes.

I mean, even Oprah Winfrey does everything she can to avoid high taxes.  Even MICHAEL MOORE does everything he can to avoid paying more taxes.

And what do we do when the disaster these people created finally comes home to roost?  We bail them out, so they can do it all over again.  It’s called “moral hazard.”  Somebody in power should look it up and then quit doing it.

We keep making this giant ball of stink bigger and bigger and bigger, and we’re all wading through it now, and everything is going to sh*t all around us because our leaders don’t have the courage to simply let losers lose.  We’ve become bailout nation, where the people who had discipline and did things right prop up the reckless so they can continue being reckless until the system crashes.  Or to put it more precisely, until the system crashes bigger and badder the next time around.

Times are going to get harder.  China is announcing that they are dumping US securities in what appears to be an economic war declared against us.  That’s going to make it a lot more expensive for us to keep borrowing.  But the only way we can continue these insane liberal-progressive policies is to keep borrowing and borrowing.

There’s no question that we need to collect more taxes.  But raising rates isn’t the way to collect more taxes.  The Bush tax cuts stimulated an unprecedented 52-consecutive months of economic growth even as it generated MORE tax revenue.  Obama’s going back to “the failed policies of the past” from the Jimmy Carter era are going to create a lot of damage as Democrats refuse to learn the lesson of the luxury tax again and again and again.

There’s also no question we need to dramatically decrease our spending.  And along with that, we need to phase down the boondoggles we’ve created via Social Security (which is now in the red, paying out more than it collects) and Medicare/Medicaid (how does a ONE HUNDRED TRILLION DOLLAR unfunded liability strike you?).

The problem is that the federal government has expanded so far beyond its constitutional limitations that its not even funny – with the lion’s share coming from progressive-Democrat social programs.  The government which was supposed to be limited to defending the country and creating infrastructure is now involved in absolutely everything under the sun.

And Democrats will fight to the death for every single one of these programs.

There’s also the now-typical Democrat demand from the government:

Pay my mortgage.  Fill my gas tank. Buy my car.  Give me free health care.  Feed me.  Change my diapers.

Which means we can’t control our black hole-spending.  Which means we can’t reduce our never-before-seen-in-human-history debts.  Which means that we’re on the same road that Greece is on.  Only no one will be there to bail us out when we collapse.

The only question is how long it takes for us to get there.

Bizarro Obama’s Credit Bill Subsidizes Stupidity By Penalizing Prudence

May 23, 2009

Elaine and Jerry have the following dialogue in a famous Seinfeld episode titled, “Bizarro Jerry”:

“He’s reliable. He’s considerate. He’s like your exact opposite.”
“So he’s Bizarro Jerry.”
“Bizarro Jerry?”
“Yeah, like Bizarro Superman, Superman’s exact opposite, who lives in the backwards Bizarro world. Up is down, down is up, he says hello when he leaves, goodbye when he arrives.”
“Shouldn’t he say badbye? Isn’t that the opposite of goodbye?”
“No, it’s still goodbye.”
“Does he live underwater?”
“No.”
“Is he black?”
“Look, just forget the whole thing.”
- Elaine and Jerry, in “The Bizarro Jerry”

Well, let’s not forget the whole thing, Jerry.  Because Bizarro Superman is now among us.  Art, imitation, and boob-tube television have come to life: Barack Obama is our Bizarro Superman.

Bizarro Superman is the sort of Superman who saves the guilty by beating the snot out of the innocent.

Did you buy a house you could afford?  Bizzaro Superman flew in and established a system whereby you subsidized those who foolishly overextended themselves.  After bailing out these fools who received assistance primarily by belonging to traditional liberal voting blocs, three out of five of them are already defaulting again (necessitating yet another bailout from you).

Do you have an account with a bank that took (in many cases was forced to take) TARP money?  Bizarro Superman wants to impose his political agenda on banks, so he won’t allow them to repay their loans.

Did you hope to be able to improve your lot in life with the gigantic stimulus package?  Sorry, Bizarro Superman’s stimulus turned out to be the porkulus that conservatives said it would be, with far more money going to 40 years’ worth of liberal pet projects than to job creation.  We’ve also recently learned that due to massive structural flaws the stimulus is bypassing all of the counties that most desperately needed help.  It might have helped if someone had actually been allowed to read the bill first, but Bizarro Superman didn’t want to take any chances that someone would see what a socialist power grab it truly was.

Did you invest in secured debt from Chrysler and GM?  Sorry, buddy: Superman has flown in and given your safe and secured investment dollars to his UAW cronies.  When the secured investors – who by law were entitled to be at the head of the line in any bankruptcy – balked at being paid pennies on the dollar while the UAW was given the farm – Bizarro Superman demonized them as “greedy hedge funds” and threatened them with public propaganda attacks.

Bizarro Superman has flown in and promised that 95% of Americans will get a tax cut under his plan (which actually just means more welfare for the 43.4 percent who already don’t pay any federal income tax at all even as our small business owners who employ most American workers are increasingly taxed into oblivion).  Will people pay less in taxes under Bizarro Superman?  Just for your information, the average 30 year old will pay $136,932.75 just for the interest of just Obama’s 2010 budget over the course of his or her working lifetime. Americans will be paying FAR more of their money to the government – and they will have Bizarro Superman to thank for it.

Only in Bizarro world does an administration say it’s “the patriotic duty” for some to pay a an even more massive tax burden imposed on them even as it promises that the other 95% should be LESS patriotic by paying less in taxes.

Are you one of the 100% of Americans who use energy?  Get ready for the price of it to skyrocket (“necessarily skyrocket,” to quote Bizarro Superman).  Even the Obama administration admits that Bizarro Superman’s energy plan will increase the average American’s electric bill by $1,800 a year.  Which means it will very likely be a hell of a lot worse than that.

Only in Bizarro world does Congress actually hire a speed reader to read really fast a terrible energy bill that Representatives and Senators won’t bother to read at normal speed.

Now Bizarro Superman has flown in and saved risky credit-card borrowers by establishing a system that will penalize those who have always paid their bills on time and in full.  From the New York Times:

Credit cards have long been a very good deal for people who pay their bills on time and in full. Even as card companies imposed punitive fees and penalties on those late with their payments, the best customers racked up cash-back rewards, frequent-flier miles and other perks in recent years.

Now Congress is moving to limit the penalties on riskier borrowers, who have become a prime source of billions of dollars in fee revenue for the industry. And to make up for lost income, the card companies are going after those people with sterling credit.

Banks are expected to look at reviving annual fees, curtailing cash-back and other rewards programs and charging interest immediately on a purchase instead of allowing a grace period of weeks, according to bank officials and trade groups.

“It will be a different business,” said Edward L. Yingling, the chief executive of the American Bankers Association, which has been lobbying Congress for more lenient legislation on behalf of the nation’s biggest banks. “Those that manage their credit well will in some degree subsidize those that have credit problems.”

Again and again, on issue after issue, our Bizarro Superman, Barack Hussein Obama, has come to the rescue of the irresponsible by punishing the responsible.

Our economy became the greatest in the history of the world by policies that rewarded sound and prudent investment while punishing foolish behaviors.  Those days are long gone.  We’re in Bizarro world now.

I pulled out of the stock market following the Democratic National Convention when I had that first moment of genuine fear that Obama would probably win, and put my nest egg into gold and silver.  Betting that Obama would be a disaster for the economy has been the best financial move I’ve ever made: I’ve made a 15% return on precious metals even as investors in the stock market lost about 30%.

I still remember the day I came across the following poll results from the September/October issue of CEO Magazine:

According to the poll, which is featured on the cover of Chief Executive’s most recent issue, by a four-to-one margin, CEOs support Senator John McCain over Senator Barack Obama. Moreover, 74 percent of the executives say they fear that an Obama presidency would be disastrous for the country.[...]

In expressing their rejection of Senator Obama, some CEOs who responded to the survey went as far as to say that “some of his programs would bankrupt the country within three years, if implemented.” In fact, the poll highlights that Obama’s tax policies, which scored the lowest grade in the poll, are particularly unpopular among CEOs.

I’ve pulled out of the US economy due to Bizzaro Superman and his Bizarro economic policies.  No investments in stocks, no purchases of US bonds.  Not with Obama’s mind-boggling deficit spending acting like a 10 ton anvil hovering over the economy due to debt as a percentage of GDP rising like a rocket ship.  I’m making as few purchases as possible.  And I’m not coming back to investment in America as long as Bizarro Superman is our president.

And I’m going to pull out of credit cards now, too.  If I see one fee, or if I see my interest rate go up so much as 1 point due to my cards’ charging interest from the moment of purchase, I’m cutting them up and going back to the tried and true checkbook.

The only question I have is this: at some point Obama’s and the Democrat’s policies of subsidizing stupidity by penalizing prudence are going to implode the economy.  In the aftermath of that disaster, will there even BE a U.S. economy worthy of investing in?

I’m not betting on it.


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