Monday, September 22, 2008

Monday Morning Rant 56

The most outrageous assertion of the previous week has come from those who wish to disassociate from the so-called financial meltdown. To fully understand what led to the failure of the huge mortgage companies does not require a major degree in economics but rather only requires a minor dose of common sense.

To garner constituent support and show how they stand up for poor Americans, during the administration of Jimmy Carter, the Democrat party supported the passage of the Community Renewal Act. The proposed purpose of the act was to eliminate the usage of “red-lining” by mortgage companies to ban those persons who did not have the security or the credit and employment history to receive a home loan. They allegedly sought to enable the “underserved population” to buy homes and start businesses. One of the prime pushers of this legislation was Acorn and their host of community organizers. The biggest opponent was the banking community who traditionally has sought proper collateral and repayment ability before making loans. As a result, the bankers, under force of law, were compelled to make bad loans.

In 1995 during the administration of Bill Clinton, the Department of Housing and Urban Development strengthened the mandate of the CRA and loosened even further the requirements for loans by bureaucratic mandate without the approval of the congress. These under-capitalized loans acted to further weaken the value of the banks that held the paper.

This “easy money” encouraged the acceleration of the housing boom and the subsequent rise in the price of homes in many areas of the country. Saddled with federal regulations, the banking industry was helpless to stem the tide of improperly secured loans.

George W. Bush, during his first term in 2003, recognized the problem and sought a remedy through legislation. Supporting congressmen offered their lucid explanations of the danger to the republic caused by the reckless loan policy. Despite their best efforts, the Democrat party united to block passage of the necessary bills.

Fannie Mae and Freddie Mac, quasi governmentally supported agencies, had the role of buying this marginal paper and grew to gigantic proportions. Why would their leadership do such a risky thing? Executives are normally rewarded for growth and exceptional growth earns exceptional compensation. Never mind that it was all a farce of paper work. The mortgages they were encouraged to buy were for the most part, worthless. They gratefully accepted their bonuses and engineered political donations in the hundreds of thousands to Chris Dodd (D-Conn.) chair of the house banking committee, Chuck Schummer (D-NY), and everybody’s favorite community organizer, Barack Obama (D-Ill.).

So what is the bottom line here? Simply stated; it is failed social policy at its worst. It is not a matter of greed on the part of the banking community but socialist interference in a capitalistic society. Just about every solid American knows that you don’t loan money to poor risk family members—you either give it to them or refuse. The most galling thing is to listen to the proponents of this CRA junk (stronger word not acceptable) now claim that they sought remedies in advance of the nearly trillion dollar bail out. Do not be deceived.

If you read the papers, watch television, or listen to the pundits you may become convinced that the market has gone to live with Lucifer. Keep the following in mind:

Thursday and Friday had the biggest 2-day rally since 1987!
The Dow is up 40 points for the past 30 days!
The Dow is up 18% over the last 5 years!
And …… The Dow is up 44% over the last 10 years!

PBS does it again

Here we have a reference to the PBS poll to ask their listeners if Sarah Palin is fit to be vice-president. Conspicuously absent is a poll to ask about the suitability of Barack Hussein Obama, Joe Biden or for that matter, John McCain. I wonder, is it a woman thing, or possibly a moose hunter thing, or perhaps a mother thing? At least I now know what PBS stands for: Patently Blatant Socialist!

A Bible or a rabbit’s foot

I have given this thought before but I am heartened to know that I’m not the only one to think about it. I do not throw spilled salt over my shoulder. I do not fear unexpected guests so I throw my hat wherever it lands. I do not recognize the special properties of a black cat when it crosses my path. I am careful about walking under ladders because I have personally inadvertently dropped many tools from ladders which, if they hit your noggin, would definitely constitute “bad luck.” Furthermore,I am happy to report I do not believe it necessary to carry any sort of talisman to avoid such “bad luck.”

You may wish to check out this revealing article from academia on the relationship between belief in God and advanced education. The education part is not the villain here. It is the attitude of those who “instruct” which I question. Frankly the figures bear out that which I have suspected. The deeper meaning to me then is the unwarranted attack on faith at the universities by the faculty. If one is a non-believer why is it so essential that others then share that non-belief?

This may well be the reason that the elites are so quick to pick up on the myth of global warming and turn it into a substitute (poor) for faith in the true and living God. This may also shed some light on the near messianic appeal of Obama. Since it is natural to seek a higher power it is possible that is the best some folks can come up with. This all goes back to the series I presented on the “critical thinkers.” The exception here is that those who have replaced God with their own version of a higher power often attribute too much to Gaia, science, celebrities, politicians, or what have you, with more rabid enthusiasm and conviction than many of the religiously faithful I know. If these folks are so convicted of the cause of the day, where is the room for growth? Anyway, it’s something to think about; as if you didn’t have enough already.

Be sure and check in later in the week and find out whether I have learned to put a post up in the absence of the bride.You’ll be the first to know.

In His abiding love,

Cecil Moon

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