Tag Archives: U.S. economy

It’s Not About How Much Money We Earn

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If we were to ask fellow American citizens, “do you believe that wages, in our country, essentially, have been stagnate, for many years”? I am pretty confident that most Americans would say, “yes,” and agree that wages, today, do not rise at the same percentage that they once did. I would, also, agree with that sentiment, and would add that, once upon a time, companies, perhaps, were much more generous with things such as Christmas bonuses, profit-sharing etc. Unfortunately, however, the commonly accepted belief tends to be that companies, CEOs etc., today, are just plain greedy, and that the average worker is, simply, being screwed. While, there may be some truth to these sentiments, I believe, it completely misses the point, and fails to pinpoint the root cause.

Allow me to quote from this previous post, in which I was attempting to make the case as to why raising the minimum wage is a bad idea, and to point out the unintended consequences that come along with doing so:

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Saturday Night Cigar Lounge Sept. 7th

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When:Saturday, August 31st, 10pm Eastern/7pm Pacific

Where: Saturday Night Cigar Lounge with Taylor on Blog Talk Radiosncl_logocdn

What: Saturday nights were meant for cigars and politics.

Hear Taylor and his co-host Liz Harrison talk about everything from the past week – from politics, to news, to books, and entertainment. Whatever comes to mind, and of course, sobriety is not likely.

Tonight: Jason Pye from United Liberty, and Jackie Bodnar from FreedomWorks join Taylor to talk Syria, liberty, and more.

Listen to internet radio with CDNews Radio on BlogTalkRadio

Saturday Night Cigar Lounge July 27th

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When:Saturday, July 27th, 10pm Eastern/7pm Pacific

Where: Saturday Night Cigar Lounge with Taylor on Blog Talk Radiosncl_logocdn

What: Saturday nights were meant for cigars and politics.

Hear Taylor and his co-host Liz Harrison talk about everything from the past week – from politics, to news, to books, and entertainment. Whatever comes to mind, and of course, sobriety is not likely.

Tonight: Taylor talks to  Liz (yes the co-host) about her recent Politichicks article found here: http://politichicks.tv/column/sex-lies-politics-priorities-self-respect-walking-in-huma-abedins-shoes/ It’s awesome you should read it.

Also expect Texas politics talk, tattoo talk (again) with a heavy dose of freedom and liberty.

Listen to internet radio with CDNews Radio on BlogTalkRadio

 

What Obama’s “Bulworth” Comment Shows About Us

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Almost forgotten within the whirlwind of last week’s columns and news stories covering the Obama Administration’s scandals was a piece from The New York Times discussing the “onset of woes” he’s had to deal with. Various aides told The Times on, and off, the record how the President is doing all he can to make sure his second term agenda gets accomplished. They also mentioned how Obama is frustrated and “exasperated “with Washington, something which isn’t new to anyone who’s watched one of his news conferences.

The most telling comment in the piece is how Obama has talked about “going Bulworth” and just saying what he actually thinks. This is a reference to the Warren Beatty/Halle Berry film about a California senator who decides to tell everyone what he believes, no matter the consequences. The New York Post has taken it to mean Obama wants to come out and admit he’s a socialist, which the Bulworth character is. This could be true, but it also reveals a problem with our political system.

Politicians have a problem with being 100-percent honest. Big surprise, but a David Axelrod quote following the Bulworth revelation is even more telling. Axelrod told The Times, “But the reality is that while you want to be truthful, you want to be straightforward, you also want to be practical about whatever you’re saying.”

 

It’s not that politicians can’t tell the truth, it’s that they don’t think the public wants to know the truth.

 

The sad part is…they’re probably right.

 

More people would rather be told that things are “going to be okay,” instead of hearing the horrific reality of the situation.

 

The 2012 election is a perfect example of this. Mitt Romney and Paul Ryan were vilified for discussing the nation’s $16-trillion in debt. Columnists like Paul Krugman claimed the nation’s debt isn’t an issue, while Obama told David Letterman “we don’t have to worry about it short term.” Letterman asked only one follow up but that shouldn’t be surprising. He’s not Jake Tapper.

 

When Romney spoke his mind in the “infamous” 47-percent quote, he was said to “not represent all Americans” and to have “written off half the nation.” Obama, again, told Letterman about how he wanted to represent the “entire country,” but didn’t talk the substance of Romney’s quote, why he may have said it or the context.

Guaranteed: more people saw Obama make those comments than any of Romney’s speeches on the debt.

 

However, it’s not just Romney who was vilified. Ron Paul was called a “dangerous man” for some of his positions. A look at the jokes the late night talk show hosts said about Paul, shows they saw him more as a “crazy uncle” and not a real candidate. Now, Paul is a horrible messenger from time to time (see his Chris Kyle tweet and his September 11th comment) but he’s at least willing to speak his mind and tell the truth. Something refreshing in politics.

 

As much as people claim to want the truth, the reality is much different. The truth hurts and people prefer “flowers and sunshine” to reality. There’s a difference between pointing out problems and solutions, and just telling people it will be okay. This is why politicians use double-speak and seem distance. A majority of people don’t want reality.

 

There is a way for conservatives and libertarians to break through this. Outreach. Real outreach, not the failed attempt of Project ORCA by Romney’s team during 2012. Get out in the community and be with people. See what they experience. Explain to them how freedom and liberty is important and show them how it can make their lives better. Support what Deneen Borelli and Wayne Dupree are doing in the Black community and what “True the Vote” is trying to do with the Hispanic community. Talk to friends. Engage them.

 

 

And keep politicians accountable. It’s not always pragmatic to change one’s mind. Sometimes it’s simply political. Get them to explain why they do what they do. Get them to tell the truth.

 

 

It’s the only way to prove Axelrod and his ilk wrong.

 

And to make sure Bulworth isn’t “just” a movie but reality.


 

How Joe Biden Spent $585,000 for One Night in Paris

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Have you really thought about that? Here’s how he did it.

There are more stories about this than I have toothpicks and we owned a restaurant. (Trust me, you end up with a lot of toothpicks after closing a restaurant.) I have a much different take on things but first “the facts:”

"No worries America"

“No worries America”

When you think about it – I mean really think about it – can you even imagine having the desires (plural), let alone the time and energy of what’s left in a 24-hour day, to think of all the places you could go or of all of the friends you could take or could you find enough hours in what’s left of that day to spend $585,000 for a one night stay – even in Paris with an entire security entourage? And just who’s running our country without this brain child of gluttony at the helm?

Rush Limbaugh hit this nail on the head: People like this self-serving hooligan could not and would not (because they could not) do such things with their own money. They couldn’t afford to, even on their Congressional pay and perks. OUR money is paying for this amoral gluttony and whether you are a Liberal or Conservative, if you aren’t mad as hell about this waste and excess then there’s something seriously wrong with you – get out of here. Now.

 

“The Facts”

Joe Biden’s $585,000 hotel bill makes no sense, MSN Money

Biden did spend an evening in Paris in early February, but there are no details in the document about whether this contract is accurate or what the final hotel bill came to. A standard room in the hotel costs about $475 a night, and the royal two-bedroom suite runs about $3,900 a night.The Weekly Standard also points to another government contract for Biden’s London hotel stay in early February. The contract, to the Hyatt Regency London, totaled $459,339. An associated document with that contract said it was for 136 rooms for 893 room nights.

Few expenses are spared when Vice President Biden hits the road, racking up five-star hotel bills of $500G, Daily News

It can cost in the neighborhood of $500,000 a night — and that’s just for the hotel.Biden’s one-day visit to Paris on Feb. 4 required more than 100 rooms at the five-star Hotel InterContinental Paris Le Grand.

The lodging cost taxpayers $585,000.50, according to federal contracting records that emerged Friday.

Joe Biden runs up bill of $585,000 for just ONE NIGHT in five-star Paris hotel (and taxpayers will pick up the tab), Mail Online

When Mr Biden and his hefty entourage stayed in Paris for an evening in early February and it cost $585,000.50 for that single night. The Vice President likely rented out more than 100 rooms in the Hotel Intercontinental Paris Le Grand, though they must not have gotten a group discount rate.

Biden One-Night Hotel Tab: $585,000, The Weekly Standard

The documentation for this contract is not as detailed as the London one, so the cost per room is not available.  However, just like his London hotel, the Hotel Intercontinental Paris Le Grand is a five star hotel. Again, security concerns prevent these type of contracts from being open to bidding, but if the government was able to do some comparison shopping, the Hotel Intercontinental has a special offer, “Find a lower price elsewhere and your first night is free.” The Vice President stayed in Paris for one night.

Biden One-Night Hotel Tab: $585,000, The Washington Free Beacon

Biden and his wife, Jill Biden, spent three days traveling Germany, London and Paris in February.They stayed at the five-star Hotel Intercontinental Paris Le Grand then spent $459,388.65 at the Hyatt Regency London the next day, also according to the Weekly Standard:

Joe Biden Spends 1 Night In Paris, Racks Up $585K Bill [PHOTOS], Hip Hop Wired

(See photo essay.)

If you want to know how Biden did this against all reasonable human odds, you’re in the right place … Go here.

This is no joke. That’s the only reason I don’t parody this lamebrain administration’s unconscionable thuggary-theft of taxpayer money more. You need to read this linked article and make time for its video. Until then this will only get worse. GOP Old Guard Republicans are no better. They’re lovin’ it just as much. All on the backs of our labors (or entitlement program cut, whatever your case may be – it DOES effect you). Stop it or stop whining.

Contact your legislator today. Tell them to stop this gross spending as they deprive taxpayers who’re paying their overly extravagant bills. If not you, who? We could function better without a government than with this one. Pick your poison. I’ll take my chances with YOU any day.

President has Personal Discretion in Government Shutdown

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This was originally posted April 09, 2011 during that threat of government shutdown. It’s regrettable the American people are rounding this corner again. The sharp contrast of lost standards from a mere two-years ago reflects how Obama has effectively “nudged” a serious deterioration of American expectations. This is a most shameful course of action for any American President.

The president has enormous personal discretion in deciding ‘who’ and ‘what’ gets paid during a government shutdown. He can use that discretion to turn a government shutdown into a favorable or unfavorable event for The People; or, as has been the case with this president, to use it against The People to propagandize his own political gain. Legal authorities have suggested this behavior is impeachable. Bring it on.

Those certain to be paid without interruption are the politicians: The White House, Congress and their staffs. Most of us don’t know that “furloughed” federal employees are typically paid retroactively anyway. Of late we’ve been told federal employees were furloughed only to find they didn’t work but they did continue to receive pay. This sheds a glaring light on Obama’s self-serving propensity for imposing harships on people of an entire country, purely for sake of his personal pleasure and propagandizing political gain.

The big question in 2011’s government shutdown was, how does an American President possibly justify denying pay to troops who are defending our country; and to our most vulnerable elderly who’ve built it? Who among us could possibly condone such acts?

Prior administrations have generally accepted that the following services remain uninterrupted:

Services funded by permanent appropriations that don’t expire; and some services funded by annual appropriations, “if there’s a reasonable and articulable connection between the function to be performed and the safety of human life or the protection of property.”

Services that legally require new appropriations, having expired during a shutdown, can be extended, such as “national security, law enforcement and medical care for those already in hospitals, as well as some that many might find both surprising and infuriating, like ‘the conduct of foreign relations’.” Services requiring new appropriations are the government services most typically subject to shutdown. This president has proven his decisions as anything but “typical.”

Stan Collender of Capital Gains and Games of Roll Call, a political and economic news source, wrote President has the Upper Hand in a Shutdown.” The article discusses a president’s wide range of personal discretion (excerpted below). It is appalling how much Obama has so radically altered this rationale from a mere two-years ago when first reported:

The Obama administration will have enormous discretion in other ways. Whole departments, agencies and programs are not automatically exempt just because they fall into one of the categories, it will be up to the White House to decide which activities will be conducted if a shutdown actually occurs.

The administration is also free to reject precedents for reasons that include economic and technological changes, new programs and functions, political hardball, and more.

The bottom line about a federal government shutdown is simple: The president has far more room to maneuver and is in a much better position to take control of the situation than Congress. As Clinton showed in 1995 and 1996, when he reclassified some programs several weeks into the fight so that they could operate despite originally being on the shutdown list, the White House even has the ability to change its determinations.

The same information was consistently available from a variety of news sources, the below excerpted from “Administration Paints Picture of Possible Government Shutdown” by Kimberly Schwandt of Fox News:

The Obama administration clarified the scope of the potential government shutdown saying that it would impact about 800,000 employees and stop services like IRS paper filling and returns, and close institutions like the Smithsonian.

A senior administration official also said that military personnel would continue to earn money, however they wouldn’t actually receive it until the government is funded again. They’ll be receiving full pay checks until April 8.

There are two areas that guide who will stay working. Government activities will stay open that:

1) Have alternative funding – like user fees or appropriations that aren’t renewed every year.

2) Are necessary for safety of life and protection of property.

Here’s a snapshot of what else stays open and what closes during this potential shutdown:

800,000 federal employees (the same as 1995) the official says is the “vicinity” of workers who would be affected.

Military members will continue get paid through April 8th, but after that are only earning and will get money when the government is funded again.

What services will be suspended? IRS filings with paper claims won’t be processed and audits will also be stopped. Electronic claims will continue. Small business loans and Federal House Administration mortgages will also be halted. (The official noted that FHA had 12 percent of housing market in 1995, and now it’s up to 30 percent)

Another excellent source is by Ed O’keefe at Federal Eye entitled “Government Shutdown: Facts and Figures.” These linked articles provide important, additional information about what is and is not typical in government shutdowns.

In 2011 I wanted to know why Obama, at his personal discretion, routinely opted not to keep paychecks going to our Troops overseas and during his “Kinetic Military Action?” Did he forget he’s supposed to be their “Commander In Chief” and the responsibilities that job truly entails? Did he ever know? Or is it as simple as it seems: Obama only knows how to use those around him in appeasing himself?

Given the countless lies this administration told in trying to ramp up fake consequences of the Sequester, we no longer have to ask these questions. If by now you are not indignantly insulted by the fools this president plays us, nothing can help. These are Obama’s personal choices. It cannot be any more clear than it is why he’s making personal choices that are directly aimed at denegrating us as a people. It is what it is. He is what he is.

Soros’ Anti-Frack Attack in MN

George_SorosLeftwing progressive organization, Land Stewardship Project bussed in activists from rural Minnesota to lobby for a “temporary moratorium” (read: 30 year moratorium that will never go away) on silica sand mining in the state, a direct attack on the natural gas industry. The silica sand has been used for decades in hydraulic fracturing – also known as “fracking” – to safely and cleanly remove natural gas from shales deep beneath the ground.

The Land Stewardship Project is funded by the Joyce Foundation and billionaire George Soros and claims to promote “sustainable agriculture.” The group’s spokesperson wouldn’t disclose the cost of the busses or the number of passengers.

As reported by KMSP Fox 9 News, “a temporary statewide moratorium on frac sand mining in Minnesota passed the Senate Energy and Environment committee by an 8-4 vote Tuesday.”

Should the proposed legislation pass the democratically-controlled state house and senate, the very liberal governor, Mark Dayton (who benefited from a Soros-hosted fundraiser for his campaign), will promptly sign it into law, sending thousands of jobs and millions of dollars into Wisconsin and surrounding states.

“It will lock Minnesota out of the energy revolution that’s going on in the country,” says Scott Sustacek of Jordan Sands.

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To learn more about fracking, what it really does, who’s making money from it, and what the real environmental & economic impacts are, watch FrackNation.

Read the FIVE REASON YOU MUST WATCH FRACKNATION here.

Follow me on Twitter! www.twitter.com/erinhaust

A Citizen Challenge

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Chances are you haven’t heard (and won’t hear) about this Federal report from the Liberal media.

Two days ago the non-partisan Government Accountability Office (GAO) released its Annual Audit of the United States Government for fiscal years 2011 – 2012. The government’s own conclusion is this:

“… Absent policy changes – the Federal Government continues to face an unsustainable fiscal path.” (Minute 00:35)

That means – if the Federal Government does not stop the wild spending – the U.S. dollar will collapse.

tsunamiThis is like telling people on a beach, “Hey, a tsunami is coming and if you don’t move you will be killed.”

But the beach folks say, “I like it here, I’m not moving,” and eventually the wave comes in and kills them.

That’s exactly what’s happening now.

We The People are allowing this.

Only We can change this.

The best Talking Points I’ve heard in a long time:

Video Courtesy of MrFeshamon & YouTube

“He Said She Said” with Demetrius & Stacy

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  cdnlogoWhen: Wed, Jan 9, 10PM EST/7PM Pacific

Where: Listen here: He Said She Said with Demetrius & Stacy

What: Have you ever wondered what Black Conservatives think about the political issues of today? Well wonder no more, “He Said, She Said” with Demetrius and Stacy. brings you an inner peek into the mind of the conservative: bold, full strength, and unfiltered.

Tonight: Special guest: Rep. Dr. Paul Broun, (@DrPaulBrounMD), Congressman in 10th district of Georgia, and Dean Clancy (@DeanClancy),  Vice President for FreedomWorks.

drpaulbroun deanclancy

“He Said She Said” with Demetrius & Stacy

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 When: Wed, Nov 28, 10PM EST/7PM Pacific

Where: He Said She Said 

What: Have you ever wondered what Black Conservatives think about the political issues of today? Well wonder no more, “He Said, She Said” with Demetrius and Stacy. brings you an inner peek into the mind of the conservative, bold, full strength, and unfiltered.

Tonight: Special guests: Rep. Tom Price (@RepTomPrice), chairman of House GOP Policy Committee and Bethany Bowra (@BethanyBowra), Founder of NextGenerationVoters, and blogger at Smart Girl Politics and RedState.com


Government Stands In The Way of Energy Independence

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In a striking blow for the environmental left, the International Energy Agency released a report last Monday detailing how the United States is on track to outpace Saudi Arabia in oil production.  This surely puts the Obama administration in a bind concerning their green energy monomania that has dominated their energy policy for the past four years.  Heritage compiled a nice butcher’s bill of the president’s green energy investments.  However, the most important part about this development is that it proves that the United States can be energy independent, and we have the resources to achieve that feat.  However, the boot of government is trying to centralize and control those resources to expand their dependency agenda.  It’s hard to oppose someone when they have their finger on the power switch.

Elisabeth Rosenthal wrote in the New York Times on Nov. 12 that “the United States will overtake Saudi Arabia as the world’s leading oil producer by about 2017 and will become a net oil exporter by 2030…that increased oil production, combined with new American policies to improve energy efficiency, means that the United States will become “all but self-sufficient” in meeting its energy needs in about two decades — a “dramatic reversal of the trend” in most developed countries, a new report released by the agency says.” However, it’s hard to meet that goal when the government decided to cordon off 1.6 million acres, worth about 1 trillion barrels worth of oil, for conservation

 Thomas J. Pyle, president of the Institute for Energy Research (IER), reiterated that exploration and development of federal lands is a necessity to meet our goal of energy independence. When I asked him about how this report will effect the narrative disseminated by government officials and left-wing enviroementalists, Pyle said, “unfortunately, it seems part of the divide.  Those who want restrictions have their best success in manipulating policies on public lands – the very places where they don’t live and work. High prices also get people’s attention, but then it becomes a blame game – politicians always point the finger at everybody but themselves and oil companies are probably the only group besides lawyers who are less popular than politicians.  But we are making headway!”

Dan Kish, Senior Vice President for Policy at IER, claimed that the political left will respond by trying “to federalize hydraulic fracturing regulation, which is being done by states in a very professional and knowledgeable way.  Take fracking away, the oil and gas production drops. They also always seek to drive up the costs of activities so as to make them uneconomic, and there is no shortage of levers they use for that.   Since the myth of energy scarcity is their justification for federal programs the like, this doesn’t fit the agenda.  They will fight it by trying to scare people.”

They’ve already begun with Jacob Weissmann’s asinine Nov. 13 piece in The Atlantic. Basically, he says that we can’t drill our way to independence, Saudi Arabia is just too good at this oil production stuff, and we need to conserve to “insulate ourselves from rising gas prices.”   Sadly, Weissmann never factored in oil + increased coal production, since we are the Saudi Arabia of coal.  Also, natural gas via The Marcellus Shale is another major area of energy development.

Weissman isn’t looking at it through a larger scope.  In 1.6 million acres alone, we have 1 trillion barrels worth of petroleum.  In 1944, we were estimated to have about 20 billion in proven oil reserves, but we’ve produced 176 billion barrels between 1945-2010.  Concerning coal, we have enough to power our country for 485 years.  We have the resources to become energy independent, but government feels otherwise. As Pyle and Kish told me before, the War on Energy isn’t about conservation. It’s about control.

Financial Crisis…a “Top Down, Bottom Up, Inside Out” Designed Collapse from Home Loans to Student Loans

As the fiscal cliff looms, it is prudent to discuss how we got here. As our crisis moves from housing to student loan and then into health care, it should be noted what, how and who got us into this situation.

“…because this financial crisis just wasn’t the result of decisions made in the executive suites on Wall Street, it was also the result decisions made across kitchen tables across America by folks who took on mortgages and credit cards and auto loans,”

Barrack Obama, Wall Street, April 22, 2010

     During a 2010 speech at Wall Street, President Obama blamed Wall Street and Main Street for irresponsible financial practices but he neglected the true culprit of the housing crisis…the federal government. When third parties such as Washington politicians, bureaucrats and community organizations get involved, it perpetuated the housing disaster in what we have today.

So, how do you collapse the housing market? You start with the philosophy of “Overloading the system” with an approach known as “Top Down, Bottom Up and Inside Out. Van Jones explains this concept below. Politicians and bureaucrats wrote legislation that entice community organizations, citizens and lawyers to force banks in giving loans they should not have given. This concept begins with the passage of the Community Reinvestment Act, then relaxing HUD policies with unrealistic goals. The Clinton Administration and Congress put pressure on banks, this represents the “Top Down” portion. This placed the legal ability for banks to make risky “subprime” loans. The “Bottom Up” is community organizations, like ACORN and lawyers who push the written law through the court system. These community organizations put pressure or extorted banks through threats of lawsuits. With Fannie and Freddie’s loan goals increased, pressure from federal agencies and community groups demanding risky loans to be made, this is the “Top Down, Bottom Up” scenario. The “Inside Out” scenario is where people within the system begin to work with the community organizations or replaced with people who are friendly to organizations that caused the problems.

So, what caused the subprime lending crisis? Let’s start with the Community Reinvestment Act.

In 1977, the Community Reinvestment Act (CRA) established the foundation for the housing crisis and “encouraged” financial institutions to provide loans to low- and moderate-income communities. It eliminated “redlining”, a practice where banks identify and eliminate lending to certain high-risk communities. But one of the most damaging aspects of the act was the creation of a rating system that evaluated banks on several factors, one being their subprime loan record. The CRA addressed concerns of the deteriorating conditions of cities like urban flight and declining neighborhoods, this was due to limited credit availability. After the CRA was enacted, the federal government continued to tweak previsions for the next 30 years to provide loans to risky borrowers, loosen restrictions so banks were able to give these loans and provided legal grounds for community organizations and lawyers to force these loans.

After the passage of the CRA, trends of outstanding consumer credit skyrocketed. (See chart below)

     The Glass-Steagall Act of 1933 kept banks in check. It limited the affiliation between commercial banks and security firms, this also eliminated financial transactions being granted within the same credit, lending and investing institutions, also known as “too big to fail.” What this would do is tie loans to the banks physical assets. Back in 1933, this act gave additional oversight authority to the Federal Reserve. In addition, the FDIC would be able to guarantee loans up to a certain amount.

     Ben Bernanke explained that the CRA encouraged many banks to make high-risk loans to low and middle-income communities at low interest rates. The Financial Institution Reform, Recovery and Enforcement Act of 1989 (FIRREA) publicized these CRA reports public. This allowed community organizations and lawyers to “perform more-sophisticated, quantitative analyses of banks’ records.” If a bank’s ratings were not adequate, community organizations such as Association of Community Organizations for Reform Now (ACORN) sued banks for the lack of loans in low income communities.

     In 1980, Jimmy Carter signed the HR 4986, “Depository Institutions Deregulation and Monetary Control Act” forcing banks to adhere to Federal Reserve rules. It allowed the merger of banks and raised deposit insurance from $40,000 to $100,000.

     In 1992, the Housing and Community Development Act of 1992 “establish(ed) specified housing goals for each enterprise, including goals for purchase of mortgages on housing for low- and moderate-income families”. These two Government-Sponsored Enterprises (GSE), Fannie Mae and Freddie Mac, encouraged “subprime” lending by authorizing a “flexible” criteria whereas high-risk borrowers could be qualified for home loans. These GSEs were intermediaries who loan to banks and not directly to homeowners. Banks were directed to accept welfare payments and unemployment benefits as “valid income sources” in qualifying for mortgages. If banks didn’t accept these documents, they could face lawsuits.

     In 1994, Housing and Urban Development (HUD) instituted a “top down” policy where ten federal agencies adopted a policy, entitled “Policy Statement on Discrimination in Lending”. According to the news release “The following Federal Agencies—HUD, OFHEO, DOJ, OCC, OTS, the Board, FDIC, FHFB, FTC and the NCUA—sharing a concern that some prospective homebuyers and other borrowers may be experiencing discriminatory treatment in their efforts to obtain loans, formed an Interagency Task Force on Fair Lending to establish uniform policy against discriminatory lending.”

     Community organizations increasingly used the public comment process to pretest bank applications on CRA grounds. When applications were highly contested, federal agencies held public hearings to allow public comment on the bank’s lending record. In addition, this policy “seek(s) to promote fair lending” and “seeks to prevent lending discrimination and redlining by requiring public disclosure of certain information about mortgage loan applications.” In essence, the federal government established a grading program to evaluate how these programs lent to the poor. Due to these changes in lending practices and activism, homeownership would soar as shown below.

     According to the Chicago Daily Observer, Barrack Obama represented 186 African-Americans in a 1995 discrimination lawsuit against Citibank. These individuals were not approved loans but Citibank settled in 1997. Since then, roughly half of those represented have gone into bankruptcy or received foreclosure notices. Today, only 19 of the 186 still own their homes with a clean credit record. This demonstrates how community organizations can pressure banks into giving subprime loans.

     In 1999, President Clinton and a Republican majority Congress repealed the Glass-Steagill Act. This allowed banks, lenders and investments firms to practice across different environments, reintroducing “Too Big Too Fail.”  The bill passed the house (362-57) and Senate (90-8). At the same time, the Clinton Administration put pressure on Fannie Mae to expand mortgage loans among low and moderate income people. HUD increased Fannie/Freddie’s subprime lending goals to over 40 percent for low- and moderate-income families.

    Bill Clinton in an interview describes how much CRA loans were given out during his time as President.

In 1999, Franklin D. Raines, Fannie Mae’s Chairman and CEO stated ”Fannie Mae has expanded home ownership for millions of families in the 1990’s by reducing down payment requirements.” “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.”

According to Milkeninstitute, “The rate of foreclosures on subprime loans originated increased each year from 1999 to 2007 and accounted for approximately half of all foreclosures over the same period.” When the collapse occurred in the third quarter of 2007, subprime ARMs made up only 6.8 percent of US mortgages outstanding but accounted for 43 percent of the foreclosures that began in that quarter.

In November 2000, Fannie Mae announced HUD would increase the dedicated amounts to 50%. According to CSR Press Release, to expand the secondary market, Fannie Mae committed to purchase $2 billion through a suite of flexible mortgage options purchasing one-to-four unit homes. Fannie Mae injected a process where previous loans would be negotiated on an individual basis. Dan Mudd, from Fannie Mae stated “By teaming with lenders, Fannie Mae can not only help increase lending to minorities and other underserved market segments, but we also can assist depository institutions in meeting their own community investment goals and objectives. We look forward to working with our customers to create increased liquidity for Community Reinvestment Act (CRA) -eligible loans.”

In 2001, the US Department of Treasury warned, “Subprime borrowers typically have weakened credit histories that include payment delinquencies and possibly more severe problems such as charge-offs, judgments and bankruptcies. They may also display a reduced repayment capacity as measured by credit scores, debt-to-income ratios, or other criteria that may encompass borrowers with incomplete credit histories.”

Although most home loans were not subprime mortgages, their numbers rapidly grew in the early part of the 21st Century. Subprime loans accounted for 9 percent in 1996 and 20 percent in 2007, one-fifth of US home loan market. Throughout the 2000s, there were calls to reform Fannie and Freddie because they were “systemic risks”. In 2003, Barney Frank stated that Fannie and Freddie are “not in a crisis” and Republicans were crying wolf in calling Fannie and Freddie not financially sound. Democrats blocked Republican-sponsored legislation. From a servicing standpoint, these loans have a statistically higher rate of default and are more likely to experience repossessions and charge offs. Lenders use the higher interest rate and fees to offset these anticipated higher costs.

In April 2005, there was rumble of fixing the housing debacle but some lawmakers said that it undercut the ability of the CRA to “meet the needs of low and moderate-income persons and communities.” Senator Shelby introduced legislation to deal with Fannie Mae and Freddie Mac that was causing a “systemic risk for our financial system.” The carrot was subprime loans that would be purchased and backed by federal GSEs Fannie Mae and Freddie Mac. Community Organizations felt this legislation would only weaken CRA. Even Federal Reserve Chairman Alan Greenspan warned of Fannie and Freddie’s debt. “We are placing the total financial system of the future at a substantial risk,” he said. Senator Charles Schumer (D) says, “I think Fannie and Freddie over the years have done an incredibly good job and are an intrinsic part of making America the best-housed people in the world.” No legislation would be passed to address the looming bubble.

On August 15, 2007, concerns about subprime mortgages caused a sharp drop in stocks across Nasdaq and Dow Jones. Record lows were observed in stock market prices across the the world. The US market recovered all those losses within 2 days. Concern in late 2007 increased as the August market recovery was lost, in spite of the Fed cutting interest rates by half a point (0.5%) on September 18 and by a quarter point (0.25%) on October 31. Stocks are testing their lows of August now.

On December 6, 2007, President Bush announced a plan to voluntarily and temporarily freeze the mortgages of a limited number of mortgage debtors holding ARMs by the Hope Now Alliance. He also asked Congress to: 1. Pass legislation to modernize the FHA. 2. Temporarily reform the tax code to help homeowners refinance during this time of housing market stress. 3. Pass funding to support mortgage counseling. 4. Pass legislation to reform GSEs like Freddie Mac and Fannie Mae.

In 2008, Troubled Asset Relief Program was enacted in response to the subprime mortgage crisis. Citizens do not have access to Fannie and Freddie’s records because they are considered a GSE, so the Freedom of Information Act does not apply. Currently, Fannie Mae and Freddie Mac still have an open checkbook in buying loans.

So, what changed to cause the subprime mortgage crisis? Was it a conspiracy contrived by the Fannie, Freddie, bankers, lawyers or community organizations? NO! Legislation and courts were used to position third parties such as federal agencies, community organizations, GSEs and lawyers who determined the validity of banks’ lending practices based off a banks’ CRA rating rather than the practice for each individual. These players used the law to force banks to lend money to people who could not afford it. The housing collapse was caused by third party intervention intervening into the free market…not capitalism!

According to Maxine Waters (5:08), “Under the outstanding leadership of Frank Raines, everything in the 1992 Act has worked just fine. In fact, the GSEs has exceeded their housing goals. What we need to do today is focus on the regulator and this must be done in a manner so as not to impede their affordable housing mission. A mission that has seen innovation flourishes from desktop underwriting to 100 percent loans.”

According to a 2010 House Oversight Committee Report, top banks such as Countrywide, Bank of America, Chase, Washington Mutual and Wells Fargo established relationships with community organizations such as ACORN. The report also stated “ACORN used provisions in the Community Reinvestment Act (CRA) of 1977 to challenge bank mergers and acquisitions. These challenges successfully forced banks to make lending agreements with ACORN Housing.” ACORN became a HUD approved housing counselor. According to the report, ACORN has “waged savage public campaigns and delivered subtle private threats to large banking institutions for its own financial gain, defeated former political allies…and formed powerful alliances with the SEIU, Rod Blagojevich and Barack Obama.”

With federal legislation pushed banks to make high risk loans and provided upward pressure from community organizations that ensure the subprime. The problem cannot be entirely blamed on the CRA but it laid the foundation. CRA reports enabled community organizations and lawyers to force banks into making subprime loans, and this extortion probably extended elsewhere…and to some degree partnerships. Fannie & Freddie was able to guarantee and provide cheap subprime money.

Ron Paul provided some insight that the very people who was instrumental in creating the legislation are there to fix it.

The next financial  bubble will be “Student Loans” while the housing bubble’s intrinsic issues were not addressed.

OF COURSE WE SEE OUR PATH!

Papa John’s Appreciation Day More Than a Buy-cott

What began as a simple discussion among conservative activists on social media has snowballed into an all out national Papa John’s Day.

The popular pizza chain has come under attack by liberal media and activist groups for holding true to its promise made before the recent election to reduce employee hours in preparation for the Affordable Care Act regulations set to take affect in January 2013.

I had the pleasure of discussing the event and the purposes behind it with HuffPost Live host Ahmed Shihab-Eldin.

Friday, November 16th has been dubbed Papa John’s Appreciation Day complete with its own Facebook Event Page and Twitter Hashtag (#NationalPapaJohnsDay). The group credited with the idea is Rebooting America, a start-up activist organization still in its planning stages.

A point missed in much of the media attention circling Papa John’s Appreciation Day is that it began with the intent to encourage pizza enthusiasts and lovers of capitalism to show with their actions that the free market is charitable. Organizers of the event are asking that when you buy a pie on Friday, consider buying an additional pie for a local charity, church group, afterschool program, or even a neighbor that may be out of work.

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Caterpillar Flees Minnesota

Once a backdrop for President Obama’s campaign to pass the Stimilus Bill in 2009, Caterpillar Inc. is making a mad dash for the border and they are leaving 100 employees behind.

Caterpillar’s Owatonna, MN production plant will cease production in March 2013, according to executives who met with the 100 laid-off workers just 2 days after the November 6th election.

“We value our employees’ contributions, and these actions are not a reflection of them, but rather the result of a need to make our business more efficient and competitive,” Caterpillar said in a statement.

Given the timing of the announcement and the outcomes in Minnesota state legislative races, one has to assume the move is at least in part politically motivated.

In 2010, on the wave of Tea Party and liberty-minded activists throughout the country, Minnesota’s state legislature saw a Republican led House and Senate for the first time in decades. The state had a $6.2 billion deficit at the time, despite having a Democrat governor. Just 2 years later, the Democrat party will again take control of the legislature and budget, now with a $1.2 billion surplus and no Republicans to stop the taxes and spending.

According to The Tax Foundation, a non-partisan tax research group in Washington, DC, Minnesota ranks 45th in the country on the State Business Tax Climate Index. It should be no surprise that companies will continue to leave Minnesota if the tax climate remains dismal. Others have already left or laid off thousands of employees in recent years including State Farm, Polaris and Lockheed Martin.

Caterpillar is one of many companies moving to more business-friendly states, decreasing their work force or closing shop altogether. The list of companies announcing layoffs and closings includes big names like Energizer, Bristol-Meyers, US Cellular and Boeing.

Ohio-based Murray Energy is the country’s largest privately owned coal mining company. CEO Robert Murray announced layoffs for more than 100 workers citing the reelection of President Obama and the administration’s “war on coal” as deciding factors.

Perhaps the American worker should have focused more on the Obama administration’s very real “war on jobs” and less on the manufactured “war on women.”

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