Ignoring Reality While Killing the Economy ... Alan Caruba

Ignoring Reality While Killing the Economy
By Alan Caruba

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The powers in Washington, D.C. seem to be living in a parallel universe from the one the rest of the nation occupies. Even worse is the way the Obama White House and Democrat controlled Congress appears to be hell-bent on destroying the economy before they can be voted out of office.

No Congress since the days of the Great Depression and the Roosevelt administration has been driven to pass legislation that is more injurious to the present and future of the nation. It began with the so-called Stimulus Act that is widely seen as a failure, followed by Obamacare, the government takeover of one sixth of the economy replete with the rationing of care that will literally kill some people.

On Wednesday the President signed "financial reform" legislation that will play havoc with the financial industry while expanding government regulation still further.

Let us examine the reality. Washington tells us that the unemployment rate is 9.5%. Raghavan Mayur, president of TechnoMetrica Market Intelligence has been closely following unemployment data. His survey in May revealed that 28% of a thousand households reported that at least one member was looking for a full-time job.

Mayur’s firm owns the TIPP polling unit, a polling partner for Investors’ Business Daily and Christian Science Monitor. The June poll revealed 27.8% of households experiencing unemployment and, in the second week of July, it showed 28.6%. That translates to an unemployment rate of more than 22%!

The so-called financial reform act is likely to be as great a power grab as Obamacare, but it totally ignores the root cause of the 2008 financial crisis, Fannie Mae and Freddie Mac, the two government sponsored “entities” whose collapse revealed that many of mortgages granted by banks and lending companies, and then purchased by Fannie and Freddie for bundling and resale were inherently unsound.

Why? Because the government had long been pressuring banks and mortgage lenders to issue mortgages to people who could not afford to borrow the price of a hamburger. They were called “Ninja” loans; no job, no assets.

The concept of the government getting involved in the housing market is based on the notion of “social justice” and the belief that everyone had a “right” to own their own home.
Social justice was the basis for Social Security when it was established in the 1930s and later for Medicare/Medicad. Both programs are insolvent.

Everything the FDR administration did prolonged the Great Depression for ten years until the advent of World War Two rescued the economy. The Obama administration is repeating the same mistakes.

In June, Bloomberg Business Week took a look at four scenarios regarding the cost of the bailout of Fannie Mae and Freddie Mac. Bear in mind that together they hold or guarantee 53% of the nation’s $10.7 trillion in residential mortgages. They operated as shareholder-owned corporations that financed home loans with the tacit support of the federal government.

In February the White House Office of Management & Budget estimated a bailout cost of $160 billion; a December report by Barclays Capital analysts put the figure at $230 billion based on a doubling of defaults and losses averaging 50% of each loan. According to a Congressional Budget Office estimate in August of last year, the figure was estimated to be $389 billion and Sean Egan, president of Egan-Jones Ratings estimated it would come in closer to $1 trillion.

Wall Street and the banks were being lambasted for having purchased the bundled securities Fannie and Freddie were selling them while the White House and Congress ignored these agencies. Well, not totally ignoring them. In October 2008 the government seized control of both. They are not, however, part of the new financial “reform” legislation.

Fannie Mae and the whole system in place since 1938 functioned on what can only be called a system of winks, nods and self-deception.

That mindset led to a 2004 scandal in which the Office of Federal Housing Enterprise Oversight revealed a pervasive misapplication of accounting standards. That, in turn, led to the resignation of Fannie Mae CEO, Franklin Raines. In a spooky sidebar, Raines owns the patent on the exchange system for the trading of carbon credits, the objective of the Cap-and-Trade Act under consideration in the Senate.

The debate about what to do with either or both will not even begin until next year. It is useful to keep in mind that the two legislators, Rep. Barney Frank and Sen. Chris Dodd, who have defended Fannie and Freddie for years, are the authors of the new financial reform bill. The foxes have been in the henhouse for a very long time.

Conservatives think that both Fannie Mae and Freddie Mac should be put out of business and that mortgage loans should be a fully private market enterprise. This alone would likely guarantee that a future financial meltdown regarding mortgage lending would be avoided. A trillion dollars or even several hundred billion dollars is too high a price to permit what has occurred to occur again.

When the new, expanded government reforms kick in, there is no telling what effect they will have on the economy, but they are unlikely to be good. Believing anything the government has to say these days is a very bad idea.

Alan Caruba

© Alan Caruba, 2010

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Alan Caruba writes a daily post at http://factsnotfantasy.blogspot.com. An author, business and science writer, he is the founder of The National Anxiety Center.

Tangled Webs

Tangled Webs
Jostling Amongst Legislators For Seats On Conference Committee.

White House Prepares To Force Its Will On Conference Committee

House Members Declare “Public Option” A Must For Passage Of “ObamaCare”

A Commentary by J. D. Longstreet

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Watch for all the “stuff” mentioned in the headlines above this commentary to become fact in the next few weeks. As a matter of fact some of it has already happened. A number of US House of representatives members are demanding that the Public Option, a government run health Insurance company, be put back in the Healthcare bill before it will get their support. Truth be told – I don’t believe a word they say.

Want to know what’s going to happen? OK. There will be this great show, complete with weeping and wailing and gnashing of teeth, and then the House will pass the bill. Simple. All the fuss and bother is sorta like the old magician’s trick of “misdirection.” While you are watching the show, the real work is going on behind the scenes and the bill WILL be passed – and America will be shafted!

Look, if the White House can get it’s people into the conference committee’s meeting room, the White House “muscle” will take over and literally RUN the Conference Committee. The fascists from the White House have no problem forcing their will on Senators and they sure as heck have no problem with pushing a few lowly Congresspersons around.

Yes! Of course, this is “Stalinist” behavior by the leaders of our current government in the Executive Branch of our government! We have told you many times in the past that THIS White House is unlike any before it. This is a Socialist, Marxist, and Communist White House and they are certainly not above using Stalinist tactics to get what they want. It is an oligarchy! A handful of people have completely by-passed the legislative branch of the government and are running the government their way, which is … as a Marxist state! They are running the country with their klatch of White House “Czars!” They don’t NEED a Congress, except for show – to provide cover for their nefarious strong arm activities in the shadows. Too strong, you say? Well what would you call it when the White House threatens to shut down an Air Force Base in a certain state if the senator from that certain state does not quit stalling and support Obama’s healthcare bill in the Senate? Sounds nefarious to me! Yes, THIS White House has made the Congress totally dispensable, totally expendable, and totally meaningless.

So, what is in the healthcare bill for us to be afraid of? Huh? Again – truth be told—NOBODY KNOWS! It hasn’t even been written yet! Oh, sure, there are some “hard copies” of bits and pieces of “stuff” proposed for the bill, but the actual bill, the bill Congress will eventually vote on, has yet to be written. This frenetic rush, to get a bill passed, was all a part of the scheme to hit us, the American people, hard and fast. So fast, that we would not be able to react quick enough to stop the stream roller effect -- and -- if their plan worked, the bill would be the Law Of The Land before you and I even knew what hit us.

But, as is so often the case, a few of us old screwballs, you know, “nutz” like us who still believe in the Constitution, (For you graduates of the Public School System in America, the Constitution is the supreme law of the land. It is one of our founding documents. I understand you may never have heard of it, but you can easily look it up on the Internet and read it for yourself. It is actually easy to understand -- when you read it for yourself -- and not have it interpreted for you by a Liberal/Socialist/Marxist/Progressive/Communist judge. Try it. You’ll learn some things!) and have been around the political block a few times, took one look at it and saw right through the ruse and began alerting everyone we could about “the scam” the Socialists in the White House, and the Congress, were perpetrating on their fellow countrymen.

I came across a short list of just a handful of concerns about the proposals for the bill from a LIBERAL blog site, of all places. Take a look at these:

It forces you to pay up to 8 percent of your income to private insurance corporations -- whether you want to or not.

If you refuse to buy the insurance, you'll have to pay penalties of up to 2 percent of your annual income to the Internal Revenue Service.

After being forced to pay thousands in premiums for junk insurance, you can still be on the hook for up to $11,900 a year in out-of-pocket medical expenses.

Many of the taxes to pay for the bill start now, but most Americans won't see any benefits -- like an end to discrimination against those with pre-existing conditions -- until 2014 when the program begins.

It allows insurance companies to charge older people 300 percent more than other customers.
The cost of medical care will continue to rise, and insurance premiums for a family of four will rise an average of $1,000 a year -- meaning in 10 years, you family's insurance premium will be $10,000 more annually than it is right now.

Check this out at Jane Hamsher’s blog -- the “Fire Dog Lake” Blog. You will find her blog site HERE.

The bottom line is this: The Socialist/Stalinists in the White House are going to pass the healthcare bill no matter what the American people want. They entered the White House with the sole purpose of “changing” (remember that word – CHANGE) into a “hell-hole” of a third world country where everyone SUFFERS equally!) And, to be honest, they are making tremendous progress. Look at our national economic situation and look at the millions already out of work and soon to be joined by millions more until we reach somewhere around 20 to 23 percent unemployment. There are reports floating around to the effect that the 10% unemployment figure is not to be believed. They tell us the true figure is closer to 13% and closing fairly rapidly on 17%. Controlling the flow of accurate information to the people of the country IS Stalinist behavior.

Yes, we live in a very different America today than was envisaged by the Founding Fathers. I suspect that if they could see us now they would be asking how we ever allowed it to progress THIS far. The answer: Apathy and Ignorance instilled in at least one generation (and at least part of another) of Americans through the government controlled Public Education System which has become little more than Government Indoctrination Centers.

Go over to Lew Rockwell.Com and take a look at a piece titled:” Hooray for Stalinist America!” You’ll find it HERE.

A fight is coming. Whether it will be a hot fight or a cold fight will be determined later as it unfolds. But rest assured a fight is coming and it is going to get VERY UGLY! The chickens are being plucked and the tar is being heated as brand new rails are being split from those endangered trees we hear far too much about.

The ONLY C H A N G E Obama has been able to successfully accomplish, that I can tell, is changing this country from a Democratic Representative Republic, to a Socialist/Stalinist oligarchy. How long now until the official government approved greeting for Americans, one to another, will be “Comrade?” Not long, I suspect!

J. D. Longstreet