Saturday, September 27, 2008

An Enemy of the State

I softened my emphasis on politics last week at the expense of not making an all-out examination of an “enemy of the state.” The “crisis” of the meltdown of the mortgage industry has occupied the minds of the chattering classes as the pundits struggle to make an appropriate comparison. The worst disaster in terms of finance since WWII easily describes the mess of the failure of segments of the financial community.

New York City and the country as a whole took a huge financial hit from the attack seven years ago. The insurance industry was on the hook for about $40 billion. The federal government ponied up tens of billions more for emergency relief, survivor compensation, Homeland Security, and small business (13,000 were damaged or destroyed) assistance. Although the final costs have not been tabulated it is fair to say they are in the neighborhood of $250 billion plus immeasurable human suffering.

The first thought in the minds of most Americans was: “who did this to us? Conspiracy theories not withstanding, the enemy has been clearly identified and action has been taken to take down the perpetrators of these heinous acts. There has been little resistance to the actual acceptance of naming those responsible in spite of the incumbent disturbance of our attitudes toward political correctness. Even though we have substituted euphemistic ID’s for those responsible it was without question elements of radical Islam which flew airplanes into the World Trade Center, the Pentagon, and a Pennsylvania cornfield. We know who did it, how they did it and the awful result.

We also know the costs. From an isolated dollar perspective, the damage caused by acquiescing to failed policies urged on the American system by ACORN (The Association of Community Organizations for Reform Now) and their sympathizers have proven to be a far larger drain on the public treasury than even the tragic events of 9/11. The popular figure for the bailout of the distressed mortgage companies is $700,000,000,000.00. That amounts to $2300 for every man, woman and child in the United States. For Jan and me it is $4600. For my beloved friends in the Upper Peninsula of Michigan it would amount to $16100. For my son, his wife, three kids and three grand kids if would be $18,400.00. By retaining that amount of money could they accelerate the payments on their existing personal mortgage? Could the folks in Michigan afford a new car? Could Jan and I replace the carpet and install new hardwood floors throughout? The answers are clear; yes, yes, and “yes dear!”

Is anyone interested in tracking down the “progressive” actions of the persons actually responsible for this debacle? I covered much of this in the last Monday Morning Rant. In the paragraph about the donations from Freddie Mac and Fannie Mae I made an error and attributed one of the outlandish contributions to their campaign funds to Chuck Schummer. I was in error; it was Hillary Clinton who was one of the prime (in excess of $100,000) recipients. What I failed to cover is the fact that ACORN receives approximately 35% of its operating budget from the Federal Treasury through a subsidiary organization. By so doing, we find ourselves subsidizing an organization which seeks to give every Tom, Dick and Harry a mortgage whether they are qualified or not. The result is that the taxpayer is actually paying for the failed policies which brought about the debacle in the first place.

When we last sought a mortgage, we walked into the closing and were faced with two stacks of paper, about 1 ¾” high, piled on the conference table. We had already furnished every possible detail about the property and our personal lives. This is with a bank through which we had already paid off a prior mortgage. As a result we have a note with a fixed rate of interest which is automatically deducted from our account on the 1st of every month. We fully realize, as does the bank, that if we default we could possibly (certainly?) lose our home. We not only had to provide proof of our earned income but also documentation of social security deposits. Money we received “under the table” would not have figured into our eligibility. The note was conditional on an appraisal which showed the property to be worth twice the amount of the principal. From the point of view of the bank and us, this was business as usual and satisfactory to both parties.

There has been for the last thirty plus years, a segment of society who have endured no such onerous requirements for borrowing. Upon the insistence of “progressive” members of the congress, others have been encouraged to borrow, with nothing down, by law. These same socialist elements are the ones screaming the loudest about the failure of quasi-governmental agencies which are in the process of “biting the dust.” We have previously outlined just how this happened.

Any attempt to pin this debacle on the current administration is ingenuous at best and patently false. When the administration detected the fault (finally!) and attempted a correction several years ago by stiffening the requirements for mortgage availability it was stoutly defeated along party lines by those socialists who saw in it only a diminished vote count for re-election.

There are people in our government who actually hate this country and yearn for its demise. They comprise, as a group, what I consider to be an enemy of the state. They will through often unnoticed and insidious socialist programs engineer the destruction of the republic. Economics can be as damaging to a nation as falling buildings and a few thousand dead citizens. They are the cancer on the body politic and need to be excised as surely as one would the rotten tissue in one’s own body. We are besieged by rabbit trails of cleverly titled cures and programs which only further the damage. Whenever a solon or legislator stands up to the forces of socialist endeavor they spare no effort in painting the individual with the worst tarring brush available. The average citizen seems to “get it” because of the polls which indicate they are highly displeased with the group as a whole. Whether this will carry over into the voting booth remains to be seen.

In His abiding love,

Cecil Moon

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