August, 2017, Part 4, The Unfolding Disaster That Is Obama Care: Obama's Illegal Obama Care Money Laundering and Medicaid's Continuing Financial Problems

Every month for years now we have had to discuss how bad Obama Care is turning out to be under the continuing theme, “the unfolding disaster that is Obama Care.” This month is no different. As the legislation continues to march through America, driving up health care and health insurance prices as it serves as dead weight on economic growth, it cements its rightful place as the worst piece of legislation Washington has ever produced.

It never had a chance to be successful since it really never addressed the underlying root causes of our ever increasing health costs in the country:

• Americans eat too much of the wrong kind of food, resulting in obscenely high obesity rates for the country.
• Our food chain is infested with overdoses of high fructose corn syrup, salt, sugar, and other unhealthy additives.
• Americans smoke too much.
• Americans do not exercise enough.
• The country is in serious need of health care tort reform.
• Barriers to insurance company competition across state lines need to come down.
• Obama Care never “followed the money” to find out who is actually profiting from the ever escalating healthcare costs in this country and how to get those factors under control.
• Obama Care never got the immense amount of fraud and abuse in current government healthcare programs, Medicare and Medicaid, under control in order to save money to efficiently fund other government health care initiatives.
• Obama Care never put serious research money towards curing the major diseases that drive high healthcare costs such as high frequency cancers and dementia type diseases.

You cannot resolve any problem unless you understand and address the underlying root causes. No difference here: Obama Care legislation never addressed these listed root causes and thus, has no chance of ever being successful.

But it is not just missing the root causes of our healthcare costs that makes Obama Care so horrible. It resulted in millions of Americans losing access to their favored doctors, hospitals, and insurance policies. It has caused insurance premiums, deductibles and copays to escalate substantially. It will likely add trillions of dollars to the national debt. It has exposed millions of Americans to higher than necessary identity theft chances. It has created government bureaucracies that are wastefully spending taxpayer wealth and being exploited by criminal elements. It has stifled economic growth and job creation.

These are just a sample of the types of idiocy that we have been reviewing for the past several years in this blog relative to Obama Care., To read those past posts, just enter the phrase, “the unfolding disaster,” in the search box above.

1) Not only was Obama Care a failure in every legal way possible, it now appears that it was a failure from an illegal perspective also. According to a new stash of government documents (about 3,500 documents in total) that have become available:

• The Obama administration took profits from Freddie Mac and Fannie Mae and illegally funneled those funds to the Obama Care process.
• That is the bottom line of the analysis of a new set of documents that showed that this was the case and that it was not an accidental accounting screw up, it was an intentional misuse and illegal use of government resources to prop up the failures of Obama Care.
• Once Fannie and Freddie recovered from their horrific financial losses as a result of the 2008 recession, the Obama administration changed the terms of the loans that Fannie and Freddie took out to refinance themselves and basically stiffed those that had loaned them the money and their ability to recover their loan dividend payments.
• Instead, those dividend payments were swept out of Fannie and Freddie’s profits into the general Treasury fund.
• The bulk of these stolen funds were used to pay the health insurance subsidies promised in the Obama Care legislation, without which the whole Obama Care house of cards would have collapsed back in 2012 according to some estimates since the money expected to be generated to fund the subsidy pools did not materialize to the levels promised.
• This information was discovered only after years of litigation were needed to unlock the access to this illegal money laundering scheme.

Thus, not only has Obama Care failed on a financial basis, an economic basis, a health care basis, a health insurance basis but apparently it should have also failed back in 2012 as a subsidy basis if not for the illegal transfer and manipulation of the loan terms of Fannie and Freddie.

2) We have often talked about how wretched a program Medicaid is from a number of different perspectives:

• Research study after research study have showed that people on Medicaid are either only as healthy as people with no health insurance or sometimes are found to be LESS healthy than people without health insurance.
• Obama Care promised that the number of emergency room visits would go down if people had Medicaid but since many, many doctors do not accept Medicaid patients, the increased number of Medicaid patients as a result of Obama Care has caused emergency room visits to increase, the exact opposite of what was supposed to happen.
• Medicaid costs have been escalating rapidly, so much so that four states devote over 30% of their state government budget just to Medicaid funding, leaving less money for schools, infrastructure and other state government needs.

Chris Pope, writing for the National Review recently, highlighted some of the other troubling aspects of Medicaid:

• Almost 60% of Obama Care costs in 2017 ($70 billion out of $119 billion) will be solely to support Medicaid recipients so as Medicaid costs continue to go up, the overall Obama Care costs will continue to drive upwards.
• While the original beneficiaries of Medicaid, the elderly, the disabled, and pregnant women, receive a 50% to 75% subsidy for medical services, Obama Care provided a 90% subsidy to able bodied, non-pregnant, non-elderly people who came on board the Medicaid train as a result of the Obama Care legislation, i.e. Obama Care financially took better care of those that could take care of themselves than the elderly, disabled and pregnant.
• While Medicaid enrollment has gone up just under 100% from 2000 to 2015, Medicaid spending has gone up almost 150%, 50% faster than the growth in enrollment, indicating a cost spiral that is out of control.

So that is the current, sad situation of Medicaid. But Mr. Pope does provide a solution to this Medicaid problem that is reasonable and would definitely help alleviate the high and rising cost of the program with minimal impact to benefits. His complete plan and reasoning can be accessed at:

http://www.nationalreview.com/article/450097/medicaid-expansion-dilemma-how-capita-caps-point-way-compromise?utm_source=Sailthru&utm_medium=email&utm_campaign=NR%20Daily%20Monday%20through%20Friday%202017-08-03&utm_term=NR5PM%20Actives

That will do it for today: illegal goings on during the Obama administration that were needed to keep Obama Care from collapsing and Medicaid out of control and ineffective but with a proposed solution that might actually work. In fact, any solution would work better than Obama Care itself.

Tomorrow we will, as always, take a step back from the global numbers and results that highlight Obama Care’s failures and look at some real life stories of real life Americans and how Obama Care wrecked parts of their lives, their wallets, and their health.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:


http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

November, 2015, Part 4, By The Numbers: The Economy Stinks and These Federal Reserve Charts Prove It (Continued)

This is the fourth post among a few days worth of discussion of “by the numbers.” We do this theme occasionally where we look at the reality of the numbers in the world and not the lies, deceptions, and spin of the American political class. I used to work for a boss whose favorite quote was: “There is nothing more devastating to an opinion than the correct number.” By looking at the statistics, trends, and numbers in our world we can cut through the politicians’ smoke screen to truly understand what is going on and hopefully, remedy the issues of the day.

The numbers we will look at this week will often have a common thread running almost through all of them: the views, positions, and opinions of the majority of Americans are often the exact opposite of the views and related actions that our politicians own. Since we are supposed to be living in a representative government system one would hope that the laws, rules, and government functions that our politicians oversee reflect the thinking, hopes, and views of the American citizenry.

As the numbers will usually show, that is nowhere close to reality, which I think reflects two underlying negative trends:

1. American politicians vote and act for their own personal interests first, Americans’ interests and well being being of secondary consideration. If a politician’s actions can get them more votes or more campaign cash for their perpetual reelection campaigns, than that is their priority, usually not the priorities of their constituents.
2. Second, I personally believe that today’s American politicians take care of their special interest friends and financiers first and foremost, and the interests of those special interest friends (e.g.unions, corporations, lobbyists, etc.) are usually not in alignment with what the majority of Americans have as their priorities.

Keep these two possibilities in mind as we go “by the numbers” for this week and try to show the major disconnect between what Americans want and what politicians are doing:

Yesterday, we reviewed the latest monthly economic statistics from the Federal government. Although there were a few glimmers of economic hope, for the most part those glimmers are still being overwhelmed by the overall economic situation:

• The labor participation rate is still bouncing around at the same low levels not seen for the past four decades. 
• Almost 14 million Americans are either unemployed or are working at part time jobs even though they would prefer full time jobs. 
• Minority unemployment rates are still much higher than the total national unemployment rate. 
• Over 45 million Americans are still receiving Federal food assistance every month.

These are the short term economic results and numbers. They are not good. But the Daily Caller recently published some long term trend data from the Federal Reserve Board and guess what: the long term economic results and numbers are just as bad. 

Yesterday, we looked at five of the nine long term trend charts that the Federal Reserve recently published. Today, we will look at the final four charts but the results, numbers, and conclusions are still the same: Washington politicians probably could not have screwed things up worse if they had tried to.

6) As we discussed yesterday, and many times previoulsy, the number of people and the amount of taxpayer wealth spent on food assistance every month, while down slightly, is still more than double higher than what it was prior to the recession and six years AFTER the recession ended (click on chart for a larger view):

7) Student debt is rapidly approaching a whopping $1 TRILLION, is about nine times higher than what it was prior to the recession and has skyrocketed since the recession ended. And since a lot of this debt is guaranteed and backed by the Federal government, there is a good chance that American taxpayers are going to get caught with this bad debt and investment at some point in time.

8) Twenty five years ago, the Democrats in Congress and the White House decided it was worth risking trillions of dollars via taxpayer backed loans to credit risky home owners in order to increase the homeownership level of American families. Twenty five years later, and hundreds of billions of dollars spent to bail out Fannie Mae, Freddie Mac and other financial institutions, the home ownership rates for American families is actually lower than where it was back then. As with the other Fed measurements, the rate of homeownership decline has accelerated AFTER the recession ended.

9) And finally, this last Fed chart shows that not only have wages stagnated during the Obama years but American median family income is less than it was was in 1998. While bouncing back somewhat since the recession ended, the median is still below where it was prior to the recession and lately its improvement trend has been flattening out.



That will do it for today. But the results and conclusions from the nine Federal Reserve charts we have reviewed over the past two days charts definitely prove three things: the Obama administration, the current Congressional members, and Federal bureaucrats have saddled us with tremendous amounts of debt, stagnant wages, and tepid job creation. Seems you could not do a worse job managing the economy if you were trying.Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:
www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

Retro 5: Who Really Caused The Great Recession? Part 1 - "Duped America" Highlights

Given family engagements in town this week, we will be rerunning some of our most popular posts, posts that have garnered the most attention and which showed that we are currently enduring the worst set of politicians America has ever had.

MONDAY, MAY 14, 2012

Who Really Caused The Great Recession? Part 1 - "Duped America" Highlights

One character flaw about President Obama that constantly bugs me and which we have discussed many times before in this blog (see:http://loathemygovernment.blogspot.com/2009/08/blame-game-part-2.html), is his refusal to accept any responsibility for the failures of his administration. In his mind, the mostly non-existent accomplishments of his Presidency are due to a variety of external forces including:

- His favorite whipping boy excuse, the Bush administration. Never mind that the country's economy really started to come apart (soaring unemployment and soaring national debt and budget deficits when the Democrats, Nancy Pelosi, and Harry Reid took over Congress in 2007 after the 2006 midterm elections), as the following graphs illustrate (double click on the graphs to get a bigger picture):

- The Japanese tsunami.
- ATM machines.
- Europe's financial woes.
- The Arab spring, which increased oil prices.
- Wall Street
- Banks
- Congress.
- Republicans, even though from 2007 through the end of 2011 the Democrats controlled 80% of the Federal government:

There is any old saying that goes as follows: "Don’t tell me how rocky the sea is, just bring the darn ship in." Obama has never understood this concept. No one forced him to be President. Any good manager coming into a new job should assess what the situation is and then try to progress from that point.

That is what leaders do, they look forward. Obama continues to look back to blame anyone or any organization for the failures and inadequacies of his administration. Rather than focus on the future and how to get there, he wastes time and energy to cover his own shortcomings. Blaming others in the past does not calm the seas he inherited and does not bring in the darn ship.

But if he honestly did look into the past, which I doubt he is capable of doing, he would not like what he sees. In the next two days we will present an argument that says the Great Recession was not caused by the following factors:

• The Bush administration
• The Japanese tsunami
• ATM Machines
• Europe's financial woes
• The Arab Spring
• Republicans in Congress
• Republicans in general
• Wall Street
• Banks

What really caused the Great Recession and the destruction of wealth, high unemployment, and general economic malaise that still haunts us today, were Washington Democrats. It was not Wall Street, it was not greedy banks, it was not Bush, it was not Republicans, etc.

It was purely and simply the insistence of Democrats in Washington that home ownership in predominantly Democratic voting areas be made easier to accommodate. That was the single root cause of all of our current economic troubles. Sure, Wall Street banks took advantage of the situation for a while to make big profits. Sure, mortgage lenders made shady deals to close mortgages and make their money upfront.

But as we will try to prove over the next two days, based on experts in the industry, none of this happens without the aiding and abetting by Obama's fellow Democrats and Obama himself. His career profited politically by allowing the malfeasance to continue until the crash, an economic crash that wiped out banks, mortgage dealers, construction jobs, home building companies, housing equity wealth, stock market wealth, job growth, etc.

Today we will review the work of Richard Bernstein who has written a book called "Duped America." According to his bio on his website:


Author Richard Bernstein, a former lifelong Democrat, has organized this masterpiece into 31 short easy-to-read chapters. In each and every chapter Bernstein explains how the Democrat Party and their allies in the Mainstream Media have repeatedly attempted to dupe Americans. Each chapter is filled with enough facts to allow you to become more than just knowledgeable about each subject. Duped America is so thoroughly researched it has almost 1,000 footnotes.


Included below is a chapter from the book that he allows anyone to download from his website and thus, I am pretty sure he would not have a problem with me including it here. I am referencing his work since many of the statistics and historical facts he refers to I have already confirmed in previous posts in this blog, making me feel comfortable enough that he has his sources and statistics correct.

The chapter he allows people to download concerns the decades of housing policy abuses by Democrats in Washington that eventually led to the Great Recession. Let me list a few highlights/excerpts from the chapter before you read it in total and let me know what common thread Mr. Obama would realize if he read the chapter himself (the link to Mr. Berstein's website can be accessed viahttp://www.dupedamerica.com/):

• Democrats created the lax mortgage policies that precipitated the crisis while simultaneously stifling Republican efforts to prevent it.
• The history of the crisis started with the Community Reinvestment Act (CRA), signed into law by Democrat President Jimmy Carter in 1977.
• When Democrat Bill Clinton became President in 1992, he broadened the Community Reinvestment Act in ways Congress had never intended.
• When the Republicans attempted to restore fiscal sanity by paring back the CRA, they were stymied by Democrats.
• Democrats such as Barney Frank (D-MA), Ted Kennedy (D-MA) and Maxine Waters (D-CA) allied with the Clinton administration to broaden the acceptability of these risky mortgage loans.
• In 1995, an unrestrained ClintonDemocratic administration announced a comprehensive strategy to push home ownership in America to new heights – regardless of the compromise in credit standards that this would require.
• Democrat Clinton legalized the securitization of these mortgages, which allowed Fannie and Freddie to finance everything by buying loans from banks, then repackaging and securitizing them for resale on the open market.
• Fannie Mae and Freddie Mac were big campaign donors, with the bulk of their money going to Democrats.
• Between 1989 and 2008, the leading recipient of Fannie/Freddie campaign money was Connecticut Democrat Chris Dodd, the Senate Banking Committee Chairman, who collected more than $165,000. In second place was then-Democrat Senator Barack Obama, who, in just three years in the U.S. Senate, took in $126,000. Third, was MassachusettsDemocrat John Kerry, who received $110,000.
• Since the 1990s, Fannie Mae and Freddie Mac have been run by Democrat appointees.
• From 1991 to 1998, Fannie Mae was led by James Johnson, a long-time aide to formerDemocrat Vice President Walter Mondale.
• Johnson’s successor as head of Fannie Mae, Franklin Raines, had previously served as a budget director to Democrat President Bill Clinton.
• In July 2003, Senators Chuck Hagel (R-NE), Elizabeth Dole (R-NC) and John Sununu (R-NH) introduced legislation to address regulation of them [Fannie Mae and Freddie Mac]. The bill was blocked by theDemocrats.
• But the legislation [which was reintroduced in 2005] didn’t become law for a single reason:Democrats opposed it on a party-line vote in the Senate Banking Committee.
• Rep. Artur Davis (D-AL) now admitsDemocrats were in error.

Obviously, the common theme is that the seeds for the destruction of the housing market which led to the destruction in the banking industry which led to high unemployment was planted long ago and tended to fruition by Democratic Presidents, Congressmen, and bureaucrats.

But these are just the headlines. If you really want to be depressed, please read the following downloaded chapter from Mr. Bernstein. The details are far worst according to his research and writings. The political class selfishness, personal enrichment, and abuses of power make their duping of us even more egregious.

****************************
MORTGAGE CRISIS…

Americans wondering who was responsible for the mortgage crisis should ask themselves a question: is owning a home a privilege or a right? Despite the meltdown in 2008, the seeds for the mortgage crisis were sown much earlier by a Democrat Party long convinced home ownership was an entitlement.

As this chapter shows, once that basic premise became conventional wisdom, it was all downhill from there. If one listens to the mainstream media and many Democrats, the blame for the mortgage crisis rests with the Republicans and the Bush administration. They’ve convinced the public that Democrats had nothing whatsoever to do with our current financial woes.

Precisely the opposite is true: Democrats created the lax mortgage policies that precipitated the crisis while simultaneously stifling Republican efforts toprevent it. The history of the crisis started with the Community Reinvestment Act (CRA), signed into law by Democrat President Jimmy Carter in 1977.

The law was designed to foster home ownership in low-income communities by pushing banks to aggressively lend to low and moderate income people. At first, it was easy to comply with the CRA. Banks merely had to demonstrate that they did not discriminate in making loans in poor and black neighborhoods.

When Democrat Bill Clinton became President in 1992, he broadened the Community Reinvestment Act in ways Congress had never intended. In 1995, rather than submit legislation that the Republican-led Congress was certain to reject, Clinton bypassed Congress entirely, ordering the TreasuryDepartment to rewrite the CRA rules.

 As a result, banks were forced to fulfill loan “quotas” in low income neighborhoods. That wasn’t the only problem. CRA also allowed community activist groups such as ACORN (Association of Community Organizations for Reform Now), for whom Barack Obama once worked in Chicago, and NACA (Neighborhood Assistance Corporation of America) to file complaints that could affect a bank’s CRA rating.

Failure to comply with CRA or a bad rating meant a bank might not be allowed to expand lending, add new branches or merge with other companies. Banks with poor CRA ratings were also hit with stiff fines. This rewrite of CRA gave activist groups like ACORN and NACA unprecedented power. Protests often held in bank lobbies or in front of the homes of bank officials, coupled with threats of litigation, allowed these groups to extort huge sums of money from financial institutions.

In response, financial institutions began allocating more funds to low-income, high risk borrowers.Loans started being funded on the basis of race and often little else. CRA became an excuse for lowering credit standards.

Many Democrats have claimed that banks subject to the CRA represented few of the mortgages that led to our current problems. Not true. Nearly 4 in 10 subprime loans made between 2004 and 2007 were funded by CRA-covered banks such as Washington Mutual and Indy Mac. Many other subprime lenders not covered by the Act were, in effect, beholden to CRA mandates because they were owned by banks that were subject to it.

Since CRA only covered banks, the Clinton administration created a separate department at Housing and Urban Development to police “fair lending” policies at other institutions such as Countrywide and lending behemoths, Fannie Mae and Freddie Mac.

The result? Countrywide made more loans to minorities than any other lender, and not surprisingly, was one of the first lenders overwhelmed by loan defaults. As groups like ACORN ran their intimidation campaigns against local banks, they eventually hit a roadblock. Banks told them they could afford to reduce their credit standards by only a little – since Fannie Mae and Freddie Mac refused to buy up these risky loans for resale on the secondary market.

ACORN realized that unless Fannie and Freddie were willing to relax their credit standards as well, local banks wouldn’t make enough loans to individuals with bad credit histories or with very little money for a down payment. Democrats such as Barney Frank (D-MA), Ted Kennedy (D-MA) and Maxine Waters (D-CA) allied with the Clinton administration to broaden the acceptability of these risky mortgage loans. When the Republicansattempted to restore fiscal sanity by paring back the CRA, they were stymied by Democrats — and by ACORN.

In 1995, an unrestrained Clinton administration announced a comprehensive strategy to push home ownership in America to new heights – regardless of the compromise in credit standards that this would require. Fannie and Freddie were given massive subprime lending quotas, which would increase to about half of their total business by the end of the decade.

Then came the single most catastrophic decision leading to the housing crisis: Clinton legalized the securitization of these mortgages, which allowedFannie and Freddie to finance everything by buying loans from banks, then repackaging and securitizing them for resale on the open market.

Thus, began the meltdown. In 1997, Bear Stearns handled the first securitization of CRA loans — $385 million worth — all guaranteed by Freddie Mac. Subsequently, a subprime market that had been a relatively modest part of the mortgage business with $35 billion in loans in 1994 soared to $1 trillion by 2008.

Regrettably, this massive bundling of subprime mortgages wound up poisoning the entire mortgage industry. Fannie and Freddie used their “affordable housing mission” to avoid restrictions on their accumulation of mortgage portfolios. They arguedthat if they were constrained, they wouldn’t be able to adequately subsidize affordable housing. As a result, by 1997, Fannie was offering mortgages witha down payment of only 3 percent. By 2001, it was purchasing mortgages with “no down payment at all.”

 By 2007, Fannie and Freddie were required by Housing and Urban
Development to show that 55 percent of their mortgage purchases were to low and moderate income borrowers, and, within that goal, 38 percent of all purchases were to come from underserved areas (usually inner cities).

Meeting these goals almost certainly required them to purchase loans with low down payments and other deficiencies that would characterize them assubprime or Alt-A. The decline in lending standards was also facilitated by competition. Fannie and Freddie were now competing with private-label mortgage lenders such as investment and commercial banks to fulfill the affordable housing requirements imposed by Congress.

The inevitable result? Everyone was scraping the bottom of the mortgage barrel in search of new borrowers. Once the looser lending standards were offered to low and middle income buyers, it was naïve to believe that they wouldn’t lead to more relaxed standards for higher-income and prime borrowers as well. This spreading of looserstandards to the prime market greatly increased the availability of credit for mortgages, and ultimately led to the bubble in housing prices.

Unsurprisingly, Fannie Mae and Freddie Mac were huge campaign
contributors to Congress, spending millions to ensure no reform would be implemented to restrict them. In all, 354 members of Congress receivedfunds. The bulk of the money went to Democrats.

Between 1989 and 2008, the leading recipient of Fannie/Freddie campaign money was ConnecticutDemocrat Chris Dodd, the Senate Banking Committee Chairman, who collected more than $165,000. Dodd opposed restrictions on Fannie and Freddie and pushed hard for the continuance of subprime loans. In second place was then-Senator Barack Obama, who, in just three years in the U.S. Senate, took in $126,000. Third, was Massachusetts Democrat John Kerry, who received $110,000.

Since the 1990s, Fannie Mae and Freddie Mac have been run by Democrats. From 1991 to 1998, Fannie Mae was led by James Johnson, a long-time aide to former Democrat Vice President Walter Mondale. Johnson made headlines in 2008 when Barack Obama picked him to chair his vice presidential selection committee. He had to resign in disgrace when it was revealed he had taken out at least five below-market real estate loans totaling more than $7 million from Countrywide Financial Corporation.

Johnson’s successor as head of Fannie Mae, Franklin Raines, had previously served as a budget director to President Bill Clinton. From 1995 to 2005, Raines pocketed nearly $100 million in compensation before leaving because of a scandal involving profit and loss reports manipulated to increase his annual bonuses.

Another well-known Democrat, Jamie Gorelick, served as vice chair of Fannie from 1998 to 2003. Prior to that, she was Janet Reno’s Deputy Attorney General during the Clinton years, when the Clinton Justice Department was aggressively compelling banks to make subprime loans to unworthy borrowers.

And Rahm Emanuel, current White House Chief of Staff, also served as a director at Freddie Mac. Most Americans are not aware that Fannie and Freddie, while lining the pockets of politicians, also funnels hundreds of millions of dollars to a host of leftist groups and causes promoting the Democrat agenda.

The grantmaking arms of Fannie and Freddie – specifically the Fannie Mae Foundation and the Freddie Mac Foundation – gives tens of millions of dollars each year to predominantly left-wing organizations such as the American Civil LibertiesUnion; the NAACP and National Urban League;pro-illegal immigration groups like the Mexican American Legal Defense and Education Fund, and the National Council of La Raza; pro-Democrat community activist groups like ACORN; and former president Jimmy Carter’s Carter Center.

The Republicans were not oblivious to Fannie and Freddie’s problems. Bush’s 2001 budget called runaway subprime lending a “potential problem”and warned of “strong repercussions in financial markets.” In July 2003, Senators Chuck Hagel (R-NE), Elizabeth Dole (R-NC) and John Sununu (R-NH) introduced legislation to address regulation of them.

The bill was blocked by the Democrats. 30 In September 2003 Bush’s Treasury Secretary, John Snow, proposed what The New York Times called “the most significant regulatory overhaul (of Fannie and Freddie) in the housing finance industry since the savings and loan crisis a decade ago.”

Did the Democrats in Congress welcome reform? Here’s how Barney Frank (D-MA), the ranking Democrat on the Financial Services Committee,responded:

“I do not think we are facing any kind of a crisis. That is, in my view, the two government sponsored entities we are talking about here, Fannie Mae and Freddie Mac, are not in crisis…. I do not think at this point there is a problem with a threat to the Treasury…. I believe that we, as the FederalGovernment, have probably done too little rather than too much to push them to meet the goals of affordable housing and to set reasonable goals.”

In 2005, Republican Senators Hagel, Sununu, Dole, and later John McCain reintroduced legislation to once again address regulation of Fannie and Freddie. In essence, the bill would have required Fannie and Freddie to eliminate their investments in risky subprime loans. According to Kevin Hassett, writing in Bloomberg.com, “if that bill had become law, then the world today would be different.”

But the legislation didn’t become law for a single reason: Democrats opposed it on a party-line vote in the Senate Banking Committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democrat opposition, couldn’t even get the Senate to vote on the bill.

Had the bill passed in 2005, the mortgage meltdown would have been far less intense. In 2005, 2006 and 2007, approximately $1 trillion of these terrible mortgage loans were funded by Fannie and Freddie at a time when housing prices were at their highest. When housing prices fell dramatically, losses from those mortgages turned out to be tremendous.

Bottom line: if Fannie Mae and Freddie Mac weren’t buying these subprime loans, the market for them would likely not have existed. Rep. Artur Davis (D-AL) now admits Democrats were in error:

“Like a lot of my Democratic colleagues, I was too slow to appreciate the recklessness of Fannie and Freddie. I defended their efforts to encourageaffordable home ownership when in retrospect I should have heeded the concerns raised by the regulator in 2004. Frankly, I wish my Democraticcolleagues would admit when it comes to Fannie and Freddie, we were wrong.”

**********************************
Edward R, Murrow once eloquently stated: "Our major obligation is not to mistake slogans for solutions." I do not intend to tell anyone who to vote for in November. However, I do ask that any voter fulfill their major obligation to be as informed as possible and not be easily swayed by shallow slogans like Hope, Change, Winning The Future, Forward, etc.

Understand the root causes of our problems like Mr. Bernstein does above relative to the current economic situation we are stuck in. It takes some work but both our personal and national futures depend on understanding the motives of our usually selfish politicians and how their actions have caused so much pain and agony. Unless you understand the root causes and causers of our problems, we will never find the solutions to resolve them.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

July, 2015, Part 4, Political Class Insanity: Obscene Government Salaries, Obscene Wordlwide Violence, Madoona Gets Taxpayer Money, and More

At the beginning of each month we take a week or so to review the latest insanity from the American political class. Insanity from them includes a wide range of very depressing actions which can include wasteful spending, idiotic quotes, an inefficient and ineffective government bureaucracy, failed economic policies, etc. Every month we continue to prove that we are being served by the worst set of politicians ever.

And as you will see, this month’s review and discussions do nothing to prove that this thesis is wrong in any way:

1) It is both funny and frustrating when a politician or government bureaucrat acts like they are smarter than the rest of us. Given the track record of politicians and bureaucrats in wasting taxpayer wealth and never operating an efficient and effective government program, for any of them to talk to down to us or think we are less smart than them is just plain insane.

Let’s start this insanity off with some background data. According to a Pew Research effort from mid-2014, 53% of Americans either believe that the Earth is not warming or that it is warming naturally with mankind’s existence and actions having nothing to do with the warming. Given that background, consider the condescension from current EPA administrator, Gina McCarthy relative to global warming doubters: “When I put a report out on acting on climate like we did yesterday that shows how dramatically our world will change if we don’t act, and just the benefits we can deliver if we do. I am doing that not to push back on climate deniers. You can have fun doing that if you want, but I’ve batted my head against the wall too many times and if the science already hasn’t changed their mind it never will.

But in any democracy, it’s not them that carries the day. It is normal human beings that haven’t put their stake into politics above science. It’s normal human beings that want us to do the right thing, and we will if you help us.”

Now, many times in this blog, in fact every month, we have discussed the reality that being a global warming doubter and a believer in science is a perfectly sane and rational position to hold. In fact, in 2014, NASA admitted that it was not able to explain “the mystery of why global warming appears to have slowed in recent years.” In addition, despite rising CO2 levels in the atmosphere, there has been no statistically significant global warming since 1997. 

Despite all of the data and realities, Ms. McCarthy believes that 53% of Americans are not “normal human beings.” Maybe she needs to be reminded that regardless of what she thinks, regardless of how condescending she is, she just insulted 53% of Americans by calling us not normal, the same people that pay for her high salary and standard of living.

2) A major, overarching foreign relations policy objective of any American Presidency should be to protect the safety of every American. One way to do that is to minimize the violence and tyranny in the world to better shield Americans and American interests.

Now, given the narcissistic nature of this President, I am sure he thinks that he has been a superstar when it comes to foreign policy. In fact, he recently stated that he made the U.S. the most respected country in the world again, a position we soundly rebuked at the following link:

http://loathemygovernment.blogspot.com/2015/06/june-2015-politicians-say-darndest.html

But it is pretty difficult to say his foreign policy is a success since as the leader of the strongest country in the world, he has oversaw a substantial increase in the amount of violence throughout the world, which indirectly (so far) places every American’s life in a higher chance of danger:

• According to a recent article by the UK Telegraph paper: “The theory that human beings are evolving into more placid, cooperative creatures is undermined by research that suggests the world is considerably less peaceful than it was eight years ago.”
• “Last year 180,000 people were killed in internal conflicts, a number 3.5 times higher than it was in 2010″ and “death from terrorism has risen fivefold – killing more than 32,000 people in 2014,” quoting Dr. David Hammond of the Institute for Economics and Peace.
• The article reports that the United Nations estimates that almost 1% of the world’s population is now refugees.
• This translates into 60 million people having been displaced because of the increased violence, making this level of refugees being at the highest it has been since the Second World War”
• In another measure of increasing violence, worldwide military and security spending was a whopping $14.3 TRILLION in 2014, an increase of over 15% since 2008.
• The $14.3 TRILLION is the equivalent of the combined economies of Brazil,Canada, France, Germany, Spain, and the United Kingdom.

Since much of world’s violence and military activity is in the Middle East, an area where the Obama administration has been actively involved, from Iran to Syria to Libya, it is pretty clear that this administration’s foreign policy efforts have been a failure.

Tough to make the world more violent when your public intent is to make it less violent, epic insanity.

3) As we all know, Fannie Mae and Freddie Mac were prime reasons why the Great Recession occurred. It resulted in the American taxpayer spending almost $200 billion to bail out these poorly managed, politically corrupt government entities. 

Thus, it seems a little stupid and wrong when both organizations announced recently that the CEOs of Fannie Mae and Freddie Mac will get a raise in their annual salaries from $600,000 to $4 million. $4 million a year, ten times more than what the President is paid. The reason given for the seven fold increase is that higher salaries were needed to attract good executives. 

To its credit, the Obama administration opposed the obnoxious pay raises but legally could not stop them. Just another area where this administration is powerless to have any influence or pull, not even being able to exert its will within the Federal government it supposedly leads. No government employee deserves a $6 million annual salary.

4) We have reported many times in this blog how the farm subsidy programs of the Federal government have made it easy for rich, non-farmers to get handsome sums of money in the form of subsidies even though most of them never farm the land they own. In the latest episode of American taxpayers paying huge sums to rich landowners, the New York Post recently reported that Madonna is the latest millionaire to get government subsidies.

The Post reported that Madonna purchased a taxpayer owned piece of land next to her $4.9 million mansion in the Hamptons on Long Island, New York. Apparently, she said she plans to use the land for a tree nursery. In fact, she has been planting Leyland Cypress, eastern white pines and Robusta juniper trees. Unbelievably, she is now entitled to collect multiple tax benefits because of the land’s “agricultural” use.

But the dealings are a little shady. The county and town of Southampton had purchased the the 24 acre parcel for $10 million in 2010 and had planned to preserve it as is. Somehow, Madonna paid only $2.2 million for it just five years later. In addition, since the land was zoned for “production for commercial purposes of agricultural products,” local residents say she is only growing the trees out of a legal obligation and to give her mansion more privacy and tax subsidies. 

According to the article, Madonna will receive big tax breaks from the county that are only given to farmers, and will pay just $2,260.28 a year in local property taxes on the 24 acre plot, all because she is planting a few trees. For comparison, the owner of one acre across the street from this parcel pays $6,841.52 in taxes annually.

“That’s not a nursery,” area farmer John White said. “She just doesn’t want people to see her riding — and falling.”

So, as we see, it is not only the Federal government that gives away taxpayer money to wealthy Americans for doing nothing under farm subsidy laws, local and county governments also get into the act of giving away taxpayer wealth.

That will do it for today. Giving millionaires taxpayer money for not farming, giving away millions of taxpayer dollars to leaders of dysfunctional government entities, increased world wide violence levels since the Obama administration came into power, and a top Obama executive calling the majority of Americans “not normal.” 

The diversity of political class insanity continues to astound, depress, and infuriate all of us.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

December, 2014, Part 8, Political Class Insanity: Over Regulation, Job Security In The Federal Government, More Iraq Wasteful Spending, and More

It’s the beginning of another month which means it is time again to review the latest political class insanity from America’s politicians. Whether it is wasteful spending, inane quotes, faulty government operations, or insulting the American public, there is always new material spewing forth from these people, usually enough to fill up half a dozen or so posts every month. Given what we know today, this month should be no different as the insanity seems to be expanding exponentially from those in office today.

This is our eighth and final installment this month and we are getting near to the end of the latest insanity from our politicians. A lot of what you will see today comes from events that happened this past summer. It is only now that we have been able to get through the recent insanity that we can now review older, but still crazy, political class insanity. 

We will move onto other topics tomorrow, not because we have covered all of the current and recent past insanity but because it is getting too depressing to review such idiocy in such a short time.

1) One of the main components that drove the country to into the Great Recession and close to a worldwide financial meltdown was the fact that many Americans families bought houses that they could not afford. And the main driver of that problem was the fact that banks and mortgage dealers sold mortgages to millions of Americans that required little or no down payment on the house.

As a result American families over extended themselves, buying more house than they could afford, and many, many ended up in foreclosure. It was a brutal economic lesson to learn: do not allow someone to buy a home with so little of a down payment, tit can lead to events like the Great Recession.

Or was the lesson learned? According to a recent Associated Press report, the Federal government, via Fannie Mae and Freddie Mac, will encourage banks and other financial organizations to sell mortgages to Americans and require as little as 3% of the purchase prices as a down payment. Unreal, having just survived a financial meltdown because of over extended mortgage holders, the Federal government is encouraging Americans to overextend themselves again on housing.

"These underwriting guidelines provide a responsible approach to improving access to credit while ensuring safe and sound lending practices," Mel Watt, director of the Federal Housing Finance Agency, said in a statement. The FHFA oversees Fannie Mae and Freddie Mac, which have been under government caretaking since 2008 because of the housing bust. 

How in the world is this a “responsible approach” when the last time Fannie and Freddie allowed this type of reckless behavior the American taxpayer had to bailout both Fannie and Freddie to the tune of almost $200 billion? And according to the Associated Press report, this low down payment approach is targeted to first time buyers, the very type of people that cannot afford to overextend themselves. Insane.

This is the equivalent of getting hit with a right upper cut in a boxing match and after getting off the mat, doing the exact same thing to get hit with the same upper cut again. Has Washington learned nothing from how its behavior created the Great Recession?

2) More bad news out of Iraq, as if we have not had enough of it. According to a Washington Post report, after the downfall of Hussein in Iraq in 2003, the American taxpayer spent $25 billion to train, fund, and equip a rebuilt Iraqi army. 

Iraq’s new Prime Minister, Haider al-Abadi, recently publicly made the announcement that the Iraqi government had been paying for at least 50,000 soldiers who simply do not exist. These so-called ghost soldiers draw salaries but review of Iraqi military rolls showed that there are upwards of 50,000 false names in those military rolls

It appears that Iraqi military officers were making up the fake soldiers and simply pocketing the salaries of these ghost soldiers. This may help explain why the Iraqi military forces folded so easily when attacked by ISIS terrorists earlier this year, many of those forces may have not even existed. How much of that $25 billion that the U.S. spent on the Iraqi forces was not reported but you can bet that a lot of that $25 billion never made it to its ended end purpose. 

There seems to be no end on how many different and unique ways the U.S. Federal government and its Defense Department can waste, lose, and abuse taxpayer money. Whether it is in Iraq, Afghanistan or elsewhere.

3) Tom Hinchey, writing for the Heritage Foundation, uncovered another National Science Foundation (NSF) disaster and more wasteful and corrupted spending. We have never been a fan of the National Science Foundation, given how it has spent taxpayer money on a whole range of inane and stupid projects that have little to do with the problems facing Americans today. For a summary of the wasteful spending, just enter “national science foundation” into the search box above.

The latest NSF stupidity comes from an audit of the non-profit National Ecological Observatory Network (NEON) in November by the National Science Foundation (NSF) inspector general and the Defense Contract Audit Agency (DCAA). The audit found that NEON billed NSF for normally unallowable costs for entertainment, lobbying, and alcohol:

· $25,000 for a Christmas party 

· $11,000 for coffee services for employees 

· $3,000 for Board of Director dinners (which included alcohol) 

· $3,000 for t-shirts and other apparel for Contractor employees 

· $83,000 for business development 

· $112,000 for lobbying 

· $150 million in questionable construction costs

The audit report also found that the NSF had lousy accounting controls and other safeguards in place to track spending in any phase of its funding processes. Just another project in the long line of useless and out of control projects mismanaged by the NSF.

Also included in the writing by Mr. Hinchey were other inane NSF projects that even we had not heard of but which were just as useless as the ones we were aware of and reported on:

• Senator Tom Coburn released a report in 2011 identifying more than $1.2 billion in losses from waste, fraud, duplication, and mismanagement at the NSF. 
• The NSF spent $80,000 to study why the same college basketball teams always dominate March Madness.
• It spend $1 million for an analysis of how quickly parents respond to trendy baby names.
• It spent $581,000 on whether online dating site users are racist.
• And last but no least, it wasted $2 million to figure out that people who often post pictures on the Internet from the same location at the same time are usually friends.

$1.2 billion could have fed and sheltered a lot of hungry and homeless Americans, it could have treated a lot of drug addicts, and it could have given proper medical care to underserved veterans. Bad, bad priorities.

4) Years after the Great Recession ended, economic growth in this country still stinks. Median household incomes are still trending downwards, there are about 16 million Americans who are under employed or unemployed, about 46 million Americans need Federal food assistance every month, the job creation rate is still pretty anemic, and the labor force participation rate is at a 35 year low.

Tremendous economic mismanagement by the Washington political class years after the recession ended. One reason for the bad business, job, and economic environment could be the fact that the Federal government keeps issuing thousands of new regulations every year. The Daily Caller website recently reported that the Obama administration issued an amazing 3,415 NEW government regulations just before Thanksgiving.

To see how inane this overregulation binge is, 3,415 new regulations means that on average, the Federal government issued over nine new regulations EVERY DAY during the year. So much regulation does two very bad things:

1. First, business owners are faced with more and more time distracting government reporting and regulation requirements, taking time away from growing their businesses, hiring more workers, and expanding the economy.
2.  Many of these regulations also cost money and with more money going to an inefficient and incompetent Federal government, there is less money left in businesses to grow, hire more workers, and grow the economy.

And really, given that the Federal government has been around for well over two hundred years, do we really need nine new government regulations EVERY DAY? Or is it simply the reality that government bureaucracies have gotten so large and so out of control that they start to create work and new regulations that do not help Americans but only help justify the continued existence of these same bureaucracies? Look no further than overregulation to find out why this economic recovery is a historical worse.

The fact that the Obama administration released these new regulations just before the Thanksgiving holidays to minimize the fallout says that 1) many of these new regulations are useless and no defensible, and 2) as always, this administration is sneaky, cowardly, and as non-transparent as possible.

5) One last piece of insanity for this month. Readers of these monthly political class insanity posts cannot help but come away with the feeling that the Federal government has gotten so large and so bureaucratic that it is a very dysfunctional human endeavor. Wasteful spending, bloated bureaucracies, rampant criminal fraud, ineffective leadership, and other general incompetencies are rampant throughout the Federal government.

And probably the most frustrating aspect of the whole insanity is that usually no one within the Federal government is ever held accountable for the messes that are created. According to a recent analysis of government data by Eric Katz, using data from the website www.govexec.com, in 2013 only 9,244 workers out of the civilian Federal workforce of 1.87 million were fired for poor performance or misconduct. This comes out to an annual firing rate for misconduct or poor performance of just 0.49%, less 1 in 200 a year. Most federal firings are for misconduct, with a smaller share for poor performance.

No matter what data source you look at for the firing rate of employees in private companies, you will see that the firing rate of Federal employees is a tiny, tiny percentage of people being fired in the real world. As Eric Katz’s following chart shows, despite a dysfunctional Federal government, it is almost impossible to get fired once the Federal government hires you:

That will do it for this month’s insanity. Today we learned that the NSF is still wasting our money, billions of dollars were sent to non-existent Iraqi soldiers, we are overregulated by the Federal government which kills economic growth, the Federal is consciously recreating the housing conditions that caused the Great Recession, and despite overall dysfunction and incompetence, Federal government employees are almost never fired. Insanity.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org
http://www.conventionofstates.com
http://www.youtube.com/watch?v=08j0sYUOb5w

Retro 4: Who Really Caused The Great Recession? Part 1 - "Duped America" Highlights

Note: Given the Thanksgiving holiday this week and the resultant preparations, family visitors, and other commitments, we will be rerunning the top rated and most popular blog posts from the past five years. These posts cover a wide variety of political class insanity, wasteful spending, inane quotes, and other idiocy and are the discussions that most resonated with our readers. We will be back next week with fresh material, starting with our monthly update on "Political Class Insanity."

MONDAY, MAY 14, 2012

Who Really Caused The Great Recession? Part 1 - "Duped America" Highlights

One character flaw about President Obama that constantly bugs me and which we have discussed many times before in this blog (see:http://loathemygovernment.blogspot.com/2009/08/blame-game-part-2.html), is his refusal to accept any responsibility for the failures of his administration. In his mind, the mostly non-existent accomplishments of his Presidency are due to a variety of external forces including:

- His favorite whipping boy excuse, the Bush administration. Never mind that the country's economy really started to come apart (soaring unemployment and soaring national debt and budget deficits when the Democrats, Nancy Pelosi, and Harry Reid took over Congress in 2007 after the 2006 midterm elections), as the following graphs illustrate (double click on the graphs to get a bigger picture): 

- The Japanese tsunami.
- ATM machines.
- Europe's financial woes.
- The Arab spring, which increased oil prices.
- Wall Street
- Banks
- Congress.
- Republicans, even though from 2007 through the end of 2011 the Democrats controlled 80% of the Federal government:

There is any old saying that goes as follows: "Don’t tell me how rocky the sea is, just bring the darn ship in." Obama has never understood this concept. No one forced him to be President. Any good manager coming into a new job should assess what the situation is and then try to progress from that point. 

That is what leaders do, they look forward. Obama continues to look back to blame anyone or any organization for the failures and inadequacies of his administration. Rather than focus on the future and how to get there, he wastes time and energy to cover his own shortcomings. Blaming others in the past does not calm the seas he inherited and does not bring in the darn ship. 

But if he honestly did look into the past, which I doubt he is capable of doing, he would not like what he sees. In the next two days we will present an argument that says the Great Recession was not caused by the following factors:

• The Bush administration
• The Japanese tsunami
• ATM Machines
• Europe's financial woes
• The Arab Spring
• Republicans in Congress
• Republicans in general
• Wall Street
• Banks

What really caused the Great Recession and the destruction of wealth, high unemployment, and general economic malaise that still haunts us today, were Washington Democrats. It was not Wall Street, it was not greedy banks, it was not Bush, it was not Republicans, etc. 

It was purely and simply the insistence of Democrats in Washington that home ownership in predominantly Democratic voting areas be made easier to accommodate. That was the single root cause of all of our current economic troubles. Sure, Wall Street banks took advantage of the situation for a while to make big profits. Sure, mortgage lenders made shady deals to close mortgages and make their money upfront. 

But as we will try to prove over the next two days, based on experts in the industry, none of this happens without the aiding and abetting by Obama's fellow Democrats and Obama himself. His career profited politically by allowing the malfeasance to continue until the crash, an economic crash that wiped out banks, mortgage dealers, construction jobs, home building companies, housing equity wealth, stock market wealth, job growth, etc.

Today we will review the work of Richard Bernstein who has written a book called "Duped America." According to his bio on his website:


Author Richard Bernstein, a former lifelong Democrat, has organized this masterpiece into 31 short easy-to-read chapters. In each and every chapter Bernstein explains how the Democrat Party and their allies in the Mainstream Media have repeatedly attempted to dupe Americans. Each chapter is filled with enough facts to allow you to become more than just knowledgeable about each subject. Duped America is so thoroughly researched it has almost 1,000 footnotes.

Included below is a chapter from the book that he allows anyone to download from his website and thus, I am pretty sure he would not have a problem with me including it here. I am referencing his work since many of the statistics and historical facts he refers to I have already confirmed in previous posts in this blog, making me feel comfortable enough that he has his sources and statistics correct.

The chapter he allows people to download concerns the decades of housing policy abuses by Democrats in Washington that eventually led to the Great Recession. Let me list a few highlights/excerpts from the chapter before you read it in total and let me know what common thread Mr. Obama would realize if he read the chapter himself (the link to Mr. Berstein's website can be accessed viahttp://www.dupedamerica.com/):

• Democrats created the lax mortgage policies that precipitated the crisis while simultaneously stifling Republican efforts to prevent it.
• The history of the crisis started with the Community Reinvestment Act (CRA), signed into law by Democrat President Jimmy Carter in 1977.
• When Democrat Bill Clinton became President in 1992, he broadened the Community Reinvestment Act in ways Congress had never intended.
• When the Republicans attempted to restore fiscal sanity by paring back the CRA, they were stymied by Democrats.
• Democrats such as Barney Frank (D-MA), Ted Kennedy (D-MA) and Maxine Waters (D-CA) allied with the Clinton administration to broaden the acceptability of these risky mortgage loans.
• In 1995, an unrestrained Clinton Democratic administration announced a comprehensive strategy to push home ownership in America to new heights – regardless of the compromise in credit standards that this would require.
• Democrat Clinton legalized the securitization of these mortgages, which allowed Fannie and Freddie to finance everything by buying loans from banks, then repackaging and securitizing them for resale on the open market.
• Fannie Mae and Freddie Mac were big campaign donors, with the bulk of their money going to Democrats.
• Between 1989 and 2008, the leading recipient of Fannie/Freddie campaign money was Connecticut Democrat Chris Dodd, the Senate Banking Committee Chairman, who collected more than $165,000. In second place was then-Democrat Senator Barack Obama, who, in just three years in the U.S. Senate, took in $126,000. Third, was MassachusettsDemocrat John Kerry, who received $110,000.
• Since the 1990s, Fannie Mae and Freddie Mac have been run by Democrat appointees.
• From 1991 to 1998, Fannie Mae was led by James Johnson, a long-time aide to formerDemocrat Vice President Walter Mondale.
• Johnson’s successor as head of Fannie Mae, Franklin Raines, had previously served as a budget director to Democrat President Bill Clinton.
• In July 2003, Senators Chuck Hagel (R-NE), Elizabeth Dole (R-NC) and John Sununu (R-NH) introduced legislation to address regulation of them [Fannie Mae and Freddie Mac]. The bill was blocked by theDemocrats.
• But the legislation [which was reintroduced in 2005] didn’t become law for a single reason:Democrats opposed it on a party-line vote in the Senate Banking Committee.
• Rep. Artur Davis (D-AL) now admitsDemocrats were in error.

Obviously, the common theme is that the seeds for the destruction of the housing market which led to the destruction in the banking industry which led to high unemployment was planted long ago and tended to fruition by Democratic Presidents, Congressmen, and bureaucrats.

But these are just the headlines. If you really want to be depressed, please read the following downloaded chapter from Mr. Bernstein. The details are far worst according to his research and writings. The political class selfishness, personal enrichment, and abuses of power make their duping of us even more egregious.

****************************
MORTGAGE CRISIS…

Americans wondering who was responsible for the mortgage crisis should ask themselves a question: is owning a home a privilege or a right? Despite the meltdown in 2008, the seeds for the mortgage crisis were sown much earlier by a Democrat Party long convinced home ownership was an entitlement.

As this chapter shows, once that basic premise became conventional wisdom, it was all downhill from there. If one listens to the mainstream media and many Democrats, the blame for the mortgage crisis rests with the Republicans and the Bush administration. They’ve convinced the public that Democrats had nothing whatsoever to do with our current financial woes.

Precisely the opposite is true: Democrats created the lax mortgage policies that precipitated the crisis while simultaneously stifling Republican efforts to prevent it. The history of the crisis started with the Community Reinvestment Act (CRA), signed into law by Democrat President Jimmy Carter in 1977.

The law was designed to foster home ownership in low-income communities by pushing banks to aggressively lend to low and moderate income people. At first, it was easy to comply with the CRA. Banks merely had to demonstrate that they did not discriminate in making loans in poor and black neighborhoods.

When Democrat Bill Clinton became President in 1992, he broadened the Community Reinvestment Act in ways Congress had never intended. In 1995, rather than submit legislation that the Republican-led Congress was certain to reject, Clinton bypassed Congress entirely, ordering the TreasuryDepartment to rewrite the CRA rules.

 As a result, banks were forced to fulfill loan “quotas” in low income neighborhoods. That wasn’t the only problem. CRA also allowed community activist groups such as ACORN (Association of Community Organizations for Reform Now), for whom Barack Obama once worked in Chicago, and NACA (Neighborhood Assistance Corporation of America) to file complaints that could affect a bank’s CRA rating.

Failure to comply with CRA or a bad rating meant a bank might not be allowed to expand lending, add new branches or merge with other companies. Banks with poor CRA ratings were also hit with stiff fines. This rewrite of CRA gave activist groups like ACORN and NACA unprecedented power. Protests often held in bank lobbies or in front of the homes of bank officials, coupled with threats of litigation, allowed these groups to extort huge sums of money from financial institutions.

In response, financial institutions began allocating more funds to low-income, high risk borrowers.Loans started being funded on the basis of race and often little else. CRA became an excuse for lowering credit standards.

Many Democrats have claimed that banks subject to the CRA represented few of the mortgages that led to our current problems. Not true. Nearly 4 in 10 subprime loans made between 2004 and 2007 were funded by CRA-covered banks such as Washington Mutual and Indy Mac. Many other subprime lenders not covered by the Act were, in effect, beholden to CRA mandates because they were owned by banks that were subject to it.

Since CRA only covered banks, the Clinton administration created a separate department at Housing and Urban Development to police “fair lending” policies at other institutions such as Countrywide and lending behemoths, Fannie Mae and Freddie Mac.

The result? Countrywide made more loans to minorities than any other lender, and not surprisingly, was one of the first lenders overwhelmed by loan defaults. As groups like ACORN ran their intimidation campaigns against local banks, they eventually hit a roadblock. Banks told them they could afford to reduce their credit standards by only a little – since Fannie Mae and Freddie Mac refused to buy up these risky loans for resale on the secondary market.

ACORN realized that unless Fannie and Freddie were willing to relax their credit standards as well, local banks wouldn’t make enough loans to individuals with bad credit histories or with very little money for a down payment. Democrats such as Barney Frank (D-MA), Ted Kennedy (D-MA) and Maxine Waters (D-CA) allied with the Clinton administration to broaden the acceptability of these risky mortgage loans. When the Republicansattempted to restore fiscal sanity by paring back the CRA, they were stymied by Democrats — and by ACORN.

In 1995, an unrestrained Clinton administration announced a comprehensive strategy to push home ownership in America to new heights – regardless of the compromise in credit standards that this would require. Fannie and Freddie were given massive subprime lending quotas, which would increase to about half of their total business by the end of the decade.

Then came the single most catastrophic decision leading to the housing crisis: Clinton legalized the securitization of these mortgages, which allowedFannie and Freddie to finance everything by buying loans from banks, then repackaging and securitizing them for resale on the open market.

Thus, began the meltdown. In 1997, Bear Stearns handled the first securitization of CRA loans — $385 million worth — all guaranteed by Freddie Mac. Subsequently, a subprime market that had been a relatively modest part of the mortgage business with $35 billion in loans in 1994 soared to $1 trillion by 2008.

Regrettably, this massive bundling of subprime mortgages wound up poisoning the entire mortgage industry. Fannie and Freddie used their “affordable housing mission” to avoid restrictions on their accumulation of mortgage portfolios. They arguedthat if they were constrained, they wouldn’t be able to adequately subsidize affordable housing. As a result, by 1997, Fannie was offering mortgages witha down payment of only 3 percent. By 2001, it was purchasing mortgages with “no down payment at all.”

 By 2007, Fannie and Freddie were required by Housing and Urban
Development to show that 55 percent of their mortgage purchases were to low and moderate income borrowers, and, within that goal, 38 percent of all purchases were to come from underserved areas (usually inner cities).

Meeting these goals almost certainly required them to purchase loans with low down payments and other deficiencies that would characterize them assubprime or Alt-A. The decline in lending standards was also facilitated by competition. Fannie and Freddie were now competing with private-label mortgage lenders such as investment and commercial banks to fulfill the affordable housing requirements imposed by Congress.

The inevitable result? Everyone was scraping the bottom of the mortgage barrel in search of new borrowers. Once the looser lending standards were offered to low and middle income buyers, it was naïve to believe that they wouldn’t lead to more relaxed standards for higher-income and prime borrowers as well. This spreading of looserstandards to the prime market greatly increased the availability of credit for mortgages, and ultimately led to the bubble in housing prices.

Unsurprisingly, Fannie Mae and Freddie Mac were huge campaign
contributors to Congress, spending millions to ensure no reform would be implemented to restrict them. In all, 354 members of Congress receivedfunds. The bulk of the money went to Democrats.

Between 1989 and 2008, the leading recipient of Fannie/Freddie campaign money was ConnecticutDemocrat Chris Dodd, the Senate Banking Committee Chairman, who collected more than $165,000. Dodd opposed restrictions on Fannie and Freddie and pushed hard for the continuance of subprime loans. In second place was then-Senator Barack Obama, who, in just three years in the U.S. Senate, took in $126,000. Third, was Massachusetts Democrat John Kerry, who received $110,000.

Since the 1990s, Fannie Mae and Freddie Mac have been run by Democrats. From 1991 to 1998, Fannie Mae was led by James Johnson, a long-time aide to former Democrat Vice President Walter Mondale. Johnson made headlines in 2008 when Barack Obama picked him to chair his vice presidential selection committee. He had to resign in disgrace when it was revealed he had taken out at least five below-market real estate loans totaling more than $7 million from Countrywide Financial Corporation.

Johnson’s successor as head of Fannie Mae, Franklin Raines, had previously served as a budget director to President Bill Clinton. From 1995 to 2005, Raines pocketed nearly $100 million in compensation before leaving because of a scandal involving profit and loss reports manipulated to increase his annual bonuses.

Another well-known Democrat, Jamie Gorelick, served as vice chair of Fannie from 1998 to 2003. Prior to that, she was Janet Reno’s Deputy Attorney General during the Clinton years, when the Clinton Justice Department was aggressively compelling banks to make subprime loans to unworthy borrowers.

And Rahm Emanuel, current White House Chief of Staff, also served as a director at Freddie Mac. Most Americans are not aware that Fannie and Freddie, while lining the pockets of politicians, also funnels hundreds of millions of dollars to a host of leftist groups and causes promoting the Democrat agenda.

The grantmaking arms of Fannie and Freddie – specifically the Fannie Mae Foundation and the Freddie Mac Foundation – gives tens of millions of dollars each year to predominantly left-wing organizations such as the American Civil LibertiesUnion; the NAACP and National Urban League;pro-illegal immigration groups like the Mexican American Legal Defense and Education Fund, and the National Council of La Raza; pro-Democrat community activist groups like ACORN; and former president Jimmy Carter’s Carter Center.

The Republicans were not oblivious to Fannie and Freddie’s problems. Bush’s 2001 budget called runaway subprime lending a “potential problem”and warned of “strong repercussions in financial markets.” In July 2003, Senators Chuck Hagel (R-NE), Elizabeth Dole (R-NC) and John Sununu (R-NH) introduced legislation to address regulation of them.

The bill was blocked by the Democrats. 30 In September 2003 Bush’s Treasury Secretary, John Snow, proposed what The New York Times called “the most significant regulatory overhaul (of Fannie and Freddie) in the housing finance industry since the savings and loan crisis a decade ago.”

Did the Democrats in Congress welcome reform? Here’s how Barney Frank (D-MA), the ranking Democrat on the Financial Services Committee,responded:

“I do not think we are facing any kind of a crisis. That is, in my view, the two government sponsored entities we are talking about here, Fannie Mae and Freddie Mac, are not in crisis…. I do not think at this point there is a problem with a threat to the Treasury…. I believe that we, as the FederalGovernment, have probably done too little rather than too much to push them to meet the goals of affordable housing and to set reasonable goals.”

In 2005, Republican Senators Hagel, Sununu, Dole, and later John McCain reintroduced legislation to once again address regulation of Fannie and Freddie. In essence, the bill would have required Fannie and Freddie to eliminate their investments in risky subprime loans. According to Kevin Hassett, writing in Bloomberg.com, “if that bill had become law, then the world today would be different.”

But the legislation didn’t become law for a single reason: Democrats opposed it on a party-line vote in the Senate Banking Committee, signaling that this would be a partisan issue. Republicans, tied in knots by the tight Democrat opposition, couldn’t even get the Senate to vote on the bill.

Had the bill passed in 2005, the mortgage meltdown would have been far less intense. In 2005, 2006 and 2007, approximately $1 trillion of these terrible mortgage loans were funded by Fannie and Freddie at a time when housing prices were at their highest. When housing prices fell dramatically, losses from those mortgages turned out to be tremendous.

Bottom line: if Fannie Mae and Freddie Mac weren’t buying these subprime loans, the market for them would likely not have existed. Rep. Artur Davis (D-AL) now admits Democrats were in error:

“Like a lot of my Democratic colleagues, I was too slow to appreciate the recklessness of Fannie and Freddie. I defended their efforts to encourageaffordable home ownership when in retrospect I should have heeded the concerns raised by the regulator in 2004. Frankly, I wish my Democraticcolleagues would admit when it comes to Fannie and Freddie, we were wrong.”

**********************************
Edward R, Murrow once eloquently stated: "Our major obligation is not to mistake slogans for solutions." I do not intend to tell anyone who to vote for in November. However, I do ask that any voter fulfill their major obligation to be as informed as possible and not be easily swayed by shallow slogans like Hope, Change, Winning The Future, Forward, etc.

Understand the root causes of our problems like Mr. Bernstein does above relative to the current economic situation we are stuck in. It takes some work but both our personal and national futures depend on understanding the motives of our usually selfish politicians and how their actions have caused so much pain and agony. Unless you understand the root causes and causers of our problems, we will never find the solutions to resolve them.

Our book, "Love My Country, Loathe My Government - Fifty First Steps To Restoring Our Freedom And Destroying The American Political Class" is now available at:

www.loathemygovernment.com

It is also available online at Amazon and Barnes and Noble. Please pass our message of freedom onward. Let your friends and family know about our websites and blogs, ask your library to carry the book, and respect freedom for both yourselves and others everyday.

Please visit the following sites for freedom:

Term Limits Now: http://www.howmuchworsecoulditget.com
http://www.reason.com
http://www.cato.org
http://www.bankruptingamerica.org

http://www.conventionofstates.com

http://www.youtube.com/watch?v=08j0sYUOb5w