Tuesday, September 30, 2008

Thank You, House Republicans

Here's the latest blog entry from Mark Levin on National Review Online regarding yesterday's failed House vote on the financial bailout:

I have read the posts here and elsewhere. Sometimes these things are made to look more complicated than they really are. From an economic perspective, if the problem is liquidity and credit, there simply is no need for the federal government to assume massive amounts of debt on its book by assuming loans in anticipation that their holders or borrowers will default. This seems to me like a brand new expanse of government power that is not justified (if it ever is) by the arguments made on its behalf.

The government controls monetary policy through supply and interest rates, among other things. It can further ease money supply and credit, thereby increasing the flow of capital. The government controls tax policy. It can increase liquidity and the flow of new money into the economy both from within the country and from foreign sources by eliminating the corporate income tax and the capital gains tax even on a mid-term basis. No matter what is done, some financial institutions will fail, as they did in the 1981-82 recession and have since. And the Fed and Treasury and other instrumentalities of government will have to determine, on a case-by-case basis, whether to intervene and how to intervene. They will also have to determine whether other policies require modifying, such as the McCain proposal today, in which he suggests increasing federal insurance for individual depositors from $100,000 to $250,000.

Other smart suggestions include modifying the mark-to-market rule requiring financial institutions to downgrade the valuation of assets. If the goal is to prevent panic in the economy by investors and depositors, then increase credit, liquidity, and the flow of capital, and deal with problem institutions that are significant enough in size that their demise could resonate to the wider economy. But the Soviet-style, top-down five year plan a la Paulson's proposal, and to a significant extent the proposal that was voted down yesterday, could easily do more damage to both the economy and our governmental structure. So, in this respect, I must depart from NRO's editorial.

Also, count me among those few here who want to thank the House Republicans for taking a bold stand against what had been a stampede on a scale I have never before witnessed on matters of huge consequence. Conservatism is more than a quaint belief-system to be embraced and debated over donuts at Starbucks. It is more than a list of talking points. It is the foundation of the civil society. The liberal uses crises, real or manufactured, to expand the power of government at the expense of the individual and private property. He has spent, in earnest, 70 years evading the Constitution's limits on governmental power. If conservatives don't stand up to this, who will? If they don't offer serious alternatives that address the current circumstances AND defend the founding principles, who will? The House Republicans have done both. And I, for one, thank them.

Incidentally, if you want to buy a home or car today you can. And if your credit is decent, you can get loans at a good rate. Last week we were told that if a deal was not struck by last Friday, our economy would collapse. It has not. That is not to say the evidence of economic troubles or worse should be ignored. It is to say that now is a time for reasoned decisions based on tried and true principles, not for abandoning them. I notice that the socialist, who, for the last 30 years, has insisted that private institutions make risky loans based on non-economic factors, still has not abandoned his policies. Socialism does not work. We shouldn't support more of it.

Monday, September 29, 2008

"Let's Go to the Video Tape..."

Please spend a few moments and watch the video below with clips from the 2004 House hearing on the regulation of Fannie Mae and Freddie Mac. Perhaps someone should forward a copy of this video to Madame Speaker!! I'm sure she would want to clarify her statements of the past few days blaming Bush and the Republicans for the financial mess. When will America learn?

Bailout Bill Fails to Pass House

This afternoon, the House failed to pass the most current version of the $700 billion+ financial bailout bill by a vote of 228-205. Kudos from the R.C. Blog to those Conservatives, led by Rep. Mike Pence (R-IN), as well as Democrats, who together saw the poorly-crafted and rushed bill for what it was -- a feeble attempt by the Bush Administration, the Democrat House leadership, and the moderate Republicans to keep the world's financial markets from falling further, not from solving the problem.

Today's defeat of the bill was a positive step and sent a message to the House leadership and the White House that most of America is not in favor of the government's plan to nationalize/socialize our country's leading financial institutions, at least not without some checks and balances and guarantees that once these firms return to strong performance, the taxpayers get the first rewards -- not the CEOs, lobbyists, or members of Congress.

The Congress and Federal Government need to get out of the business of providing unlimited financial support, bailouts, incentives, and plum financing to private enterprises. It has been going on for decades and is spiraling completely out of control with this latest problem. If Congress sets a precedent for federal bailouts of private companies that have a tremendous impact on the economy and stock market, who will be next? Ford? GM? United Airlines? The auto and airline industry already get significant "financing" and incentives from the government, but they'll come looking for much more after this bailout package passes.

Am I happy that the markets crashed and burned today? Of course not. But it was a small price to pay to be sure that the final version of the bailout bill, which will ultimately get through, has all the unnecessary "fluff" pulled out of it to ensure that my children and their children are not caught holding the tab for the greed of CEOs, traders, Congressional members, and citizens who got in WAY over their heads with mortgages and equity lines. Just because my neighbor decides to buy a $500K house and a $60K car with money he/she does not have should not put me in a position to pick up the shortfall.

Finally, I listened to House Speaker Pelosi both this morning and this afternoon (and laughed...)as she blamed the Republicans for (1) causing the entire financial mess and (2) voting against the bailout bill. Isn't she the leader of the Democratic party in the House? Today's vote only needed a simple majority, which the Dems hold comfortably. If she was doing her job instead of making excuses and blaming others, she should have been able to unify her own party and get this bill passed without even one Republican vote. Perhaps she should look in the mirror before throwing accusations at the other side (actually, she probably shouldn't...).

The real reason it didn't pass today is that the Dems are afraid, very afraid. They don't have the guts to attached their majority status to such an important and controversial piece of legislation. They loved taking over the majority, as long as it only meant getting basic and non-controversial legislation through the House. Time for Madame Speaker to stand up and lead her party. This should be fun to watch....

Sunday, September 28, 2008

Why I Oppose the Bailout -- by Rep. Mike Pence

Rep. Mike Pence shows once again why he is the voice of the Reagan Conservatives on Capitol Hill. We need to get him into Richard Lugar's Indiana Senate seat ASAP so we can start preparing him for the Presidency...

September 28, 2008

Dear Colleagues:

Our nation has been confronted by a serious crisis in our financial markets. The President and this Congress were right to act with all deliberate speed in addressing this crisis.

We now have a deal that promises to bring near-term stability to our financial turmoil, but at what price? Economic freedom means the freedom to succeed and the freedom to fail.

The decision to give the federal government the ability to nationalize almost every bad mortgage in America interrupts this basic truth of our free market economy.

Republicans improved this bill but it remains the largest corporate bailout in American history, forever changes the relationship between government and the financial sector, and passes the cost along to the American people. I cannot support it.Before you vote, ask yourself why you came here and vote with courage and integrity to those principles.

If you came here because you believe in limited government and the freedom of the American marketplace, vote in accordance with those convictions.

Duty is ours, outcomes belong to God.

We have fought the good fight. Now we need to finish the race and make sure that posterity and the American people know there were conservatives who opposed the leviathan state in this dark hour.

And if you do this I promise you, I will stand with you and, I believe with all my heart, the American people will stand with you as well.


Mr. Pence, a Republican, represents the 6th District of Indiana in the U.S. House of Representatives. He was chosen as the HUMAN EVENTS "Man of the Year" in 2005.

Saturday, September 27, 2008

Initial Review to McCain/Obama Debate No. 1

Debate No. 1 in Mississippi is over and now all the talking heads on the networks are breaking down just about every word spoken.

Here is my initial review:

(1) Nothing took place during this debate that will end up being that significant "moment" when one of the campaigns pulls away.

(2) McCain was ineffective in going after Obama and the Democrats in the first 30 minutes when the questions related to the financial industry mess. Obama did MUCH better in "selling" himself to America on the economic issues. I personally do not believe most of what he said, but from an "impact" perspective, Obama came across as more effective on the economy.

(3) In the second half of the debate, McCain made Obama look like a high school debater in the second half of the debate when the questions dealt with foreign affairs and security.

(4) Related to the "intangibles", Obama seemed to have difficulties at certain times, especially on the foreign affairs questions, putting his thoughts together. His smirking at several of McCain responses also seemed immature for someone running for president.

(5) I will definitely be interested to see how Henry Kissinger responds to how his opinion on presidential negotiations with foreign leaders without preconditions was argued by the two candidates. This issue could be one to blow up in the next few days...

(6) McCain (fortunately) did not let Obama get him riled up. He also would have been better served to point out why Obama is inexperienced as opposed to just saying that he is.

All in all, I would score it 10-8 for McCain, but I was hoping for a larger McCain victory with the topics covered. We'll sit back and see how the polls shake out in the next few days.

Friday, September 26, 2008

Bishop Slattery's Letter to Pelosi and Biden

A big thanks to one of my friends for getting me a copy of a letter from Bishop Slattery of the Diocese of Tulsa, Oklahoma, regarding the erroneous and scandalous comments made by Speaker Pelosi and Sen. Joe Biden on the matter of abortion. This letter in particular stands out as being one of great evangelism on the dignity of human life and the need to end abortion in our society. See for yourself!

In recent weeks, Speaker of the House Nancy Pelosi and Sen. Joe Biden have been asked by Tom Brokaw on "Meet the Press" to explain their personal opinions on the question of “When does Human Life Begin?” The essence of their views, which they both claim are developed from their experience as Catholics, is first, that the tradition is inconsistent (Pelosi), and second, that even if it is clear, it is a matter of personal faith which, in a democracy, ought not be imposed on others (Biden). Having made their views public, and by presenting themselves as Catholics, both Speaker Pelosi and Sen. Biden have invited a discussion about the legitimacy of their views.

I, and other bishops, have already stated that Speaker Pelosi’s position is clearly inconsistent with Catholic teaching, and to promote such a view is scandalous. There are many witnesses in the tradition that clearly state the Catholic view in opposition to Speaker Pelosi.

In view of the absolute duty that we all have of protecting innocent human life, it is also necessary to respond publicly to Sen. Biden’s remarks. In his interview, Sen. Biden explained that although he was prepared as a matter of faith to accept the teaching that life begins at the moment of conception, it would be wrong in a pluralistic society to impose that judgment on everyone else, who may be just as ardent as he is in their own faith. He remarked that abortion is “a personal and private issue.”

Sen. Biden’s remarks reflect two erroneous beliefs. It is plainly false to assert that the answer to the question of when human life begins is limited to the realm of personal and private faith and that therefore there is no basis for preferring one position over another. While it is true that Christian revelation provides a framework for understanding human nature, there is also biological evidence on when human life begins, that all persons of good will, and not just Christians, may examine. Also, the division that Sen. Biden creates between privacy and social responsibility is tenuous. He supposes that social responsibility ends at the point that we turn the decision over to individuals.

Modern science clearly proves that human life begins at conception. At the moment when DNA from the mother and the father combine, a new, unique human being, who will develop continuously until death, is created. From then on, the early zygote functions as a human being. It has specifically human enzymes and proteins, and, over time, it develops complex human tissues and organs. After this genetic transfer, it can never develop into any other kind of being. Even as it develops through the process of pregnancy, the human nature of the zygote, embryo, fetus, or baby never changes. It is this nature that directs and causes the miraculous physical transformation that takes place during the pregnancy.

In fact, the desire of some persons to destroy embryos in order to harvest stem cells is dependent upon the reality that they are already biologically human. Sen. Biden’s support for increased federal funding of embryonic stem cell research would therefore be at odds with his stated belief that life begins at conception. Contrary to some misconceptions, the early human embryo is not a vague collection of tissues without specificity. In fact the exact opposite is true. The first cells of this new human being contain all of the information that will guide its development throughout life. The process of embryonic and fetal development involves “switching off” the complete power of the early cells so that they only take on one function, like being a heart cell.

While there are some members of our society who would like to define this biological human being as someone who does not share our basic human rights, such as the right to its own existence, this is a dangerous path. We, as a human society, have gone this way before, with disastrous results. Inevitably, it ends with the act of murdering those whom we objectify, as we have seen with the lynching of African Americans, or the Holocaust, or the countless other genocides of the 20th century. Whenever we treat another human being as an object, a thing, that we may do with as we please, rather than as a human person made in the image and likeness of God, we diminish, and inevitably destroy that being, and ourselves.

It is also paradoxical to suggest that by throwing the cloak of “privacy” over the act of abortion, that individual choice can transform an evil act into something that is good, or even tolerable. If, as Sen. Biden believes, human life begins at conception, it is difficult to see how that view can be reconciled with the position that we, as a society, should legally allow individual persons to decide on their own if murder is wrong.

The modern day notion of “privacy” assumes that there is a neat division between the individual who makes a decision, and the rest of the human community. A “private” decision is one that is limited to the individual. However, in the case of abortion, this decision has implications not only for the mother, but also for the father, both of their immediate families, and, in fact, for all of our society. The mother and the father lose a child, the family a niece or nephew, or grandchild, and the rest of us, a companion in life. How we protect, or ignore, these smallest members of our human community defines who we are as human persons.

A democracy, in order to flourish, must attend to the defense of the values that are essential to the human community. Ignoring this hard work and simply relegating abortion to the sphere of individual choice allows a cancer to eat at our very core, as we permit some human persons to sacrifice the lives of others for their own personal reasons. As Catholics, we cannot accept the premise that in the name of “privacy” all choices are equally right.Sen. Biden has opposed federal funding of abortions and backed the ban on partial birth abortions, and for that he should be commended. Yet, his justification for continuing to allow Roe v. Wade to stand as the law of the United States is incompatible with Catholic teaching.

Once an evil is truly seen for what it is, neither can an emphasis on “privacy” excuse one’s moral responsibility to act to stop it, nor can defining murder as a “right to choose” change what it is that is actually chosen.Trusting always in the protection of Our Blessed Lady, whose immaculate womb first tabernacled the Word made Flesh, and asking for your prayers, I am

In Domino

Edward J. Slattery
Bishop of Tulsa

Heritage Foundation Founder Paul Weyrich Provides Comments on Financial Bailout

Free Congress Foundation Commentary
Questionable Economics at the Presidential Level
By Paul M. Weyrich

September 26, 2008

Messages have poured in asking my opinion of the trillion-dollar bailout announced by President George W. Bush late last week. I hesitate to discuss this topic because I am not an economist nor do I have any special insight which would enable me to offer an informed comment. I can provide my opinion. For what it is worth, here it is.

The White House arranged a conference call with an official who had been working on the matter. I sat in on the discussion. Surprisingly, there were only two questions asked. Mine was one of them. I asked the White House economist to give me an estimate of what this bailout eventually would cost the taxpayer. He replied that he had no idea. It depended, he said, upon how well the new entity which would buy and re-sell assets handles the situation. In a best case scenario the entity actually would make money. That would happen if the entity were able to buy low and sell high. On the other hand, if things didn’t work out, the economist said, the taxpayer could be on the line for a lot.

President Bush, in defending the hundreds of billions required to bail out AIG, said it was too big to fail. However, there are many thriving businesses inside AIG not in any danger of going under. AIG has assets of $17 trillion whereas $100 billion was needed in twenty-four hours to prevent bankruptcy. AIG could not get its hands on cash fast enough, it would seem. That being the case, I don’t understand why the highly profitable parts of AIG couldn’t have been separated out while letting the part of AIG which experienced the shortfall declare bankruptcy. One thing, at least we won’t have to suffer through those AIG commercials with precious children who know more about running their businesses than their parents. One of the children always confesses that his parents are with AIG to the cheers of everyone else.

I also don’t understand the Federal Government’s picking and choosing which investment banking firms are to survive and which are to disappear. The market is supposed to determine this. In fact, I thought one of the cornerstones of the free-enterprise system is that companies which are run poorly likely will fail. An elderly gentleman called in to Austin Hill’s radio show on WMAL Radio in Washington. He said he had come to the United States four years ago from the former Soviet Union. He told Hill that the Russians, despite recent problems, are advancing free enterprise whereas we in the USA are promoting socialism. I am afraid he is correct.

What of the big one? What of the Bush proposal that has the Federal Government picking up all bad debts to allow the banking system to behave as usual? Essentially this would create a two-tier system in which we have capitalism for profits and socialism for losses. This goes against everything in which I ever believed. Ninety-three percent of mortgage holders pay their bills on time. Why not let the other 7% default? If some mortgage bankers are stuck with bad paper because they foolishly gave home loans to people who could not afford them those bankers should have to sink. It seems to me we would be stronger for it in the long run, even though there would be significant disruption in the short term. I hope I am wrong. The stock markets surely liked Bush’s proposal. It wiped out all loses of the previous week. If Bush is proved to be correct, he will go down in history, like Harry S. Truman, as a courageous leader who bit the bullet when the going was tough. If he is not, he will replace Herbert Hoover and Jimmy Carter as a failed President.

Paul M. Weyrich is Chairman and CEO of the Free Congress Foundation.

Let's Start from the Beginning

Special thanks to "The Great One" Mark Levin for posting these two articles from the late 1990s, which help clarify the start of the Fannie Mae/Freddie Mac debacle. Connect the dots people!

September 30, 1999

Fannie Mae Eases Credit To Aid Mortgage Lending

By Steven A. Holmes, New York Times

In a move that could help increase home ownership rates among minorities and low-income consumers, the Fannie Mae Corporation is easing the credit requirements on loans that it will purchase from banks and other lenders.

The action, which will begin as a pilot program involving 24 banks in 15 markets -- including the New York metropolitan region -- will encourage those banks to extend home mortgages to individuals whose credit is generally not good enough to qualify for conventional loans. Fannie Mae officials say they hope to make it a nationwide program by next spring.

Fannie Mae, the nation's biggest underwriter of home mortgages, has been under increasing pressure from the Clinton Administration to expand mortgage loans among low and moderate income people and felt pressure from stock holders to maintain its phenomenal growth in profits.

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers. These borrowers whose incomes, credit ratings and savings are not good enough to qualify for conventional loans, can only get loans from finance companies that charge much higher interest rates -- anywhere from three to four percentage points higher than conventional loans.

''Fannie Mae has expanded home ownership for millions of families in the 1990's by reducing down payment requirements,'' said Franklin D. Raines, Fannie Mae's chairman and chief executive officer. ''Yet there remain too many borrowers whose credit is just a notch below what our underwriting has required who have been relegated to paying significantly higher mortgage rates in the so-called subprime market.''

Demographic information on these borrowers is sketchy. But at least one study indicates that 18 percent of the loans in the subprime market went to black borrowers, compared to 5 per cent of loans in the conventional loan market.

In moving, even tentatively, into this new area of lending, Fannie Mae is taking on significantly more risk, which may not pose any difficulties during flush economic times. But the government-subsidized corporation may run into trouble in an economic downturn, prompting a government rescue similar to that of the savings and loan industry in the 1980's.

''From the perspective of many people, including me, this is another thrift industry growing up around us,'' said Peter Wallison a resident fellow at the American Enterprise Institute. ''If they fail, the government will have to step up and bail them out the way it stepped up and bailed out the thrift industry.''

Under Fannie Mae's pilot program, consumers who qualify can secure a mortgage with an interest rate one percentage point above that of a conventional, 30-year fixed rate mortgage of less than $240,000 -- a rate that currently averages about 7.76 per cent. If the borrower makes his or her monthly payments on time for two years, the one percentage point premium is dropped.

Fannie Mae, the nation's biggest underwriter of home mortgages, does not lend money directly to consumers. Instead, it purchases loans that banks make on what is called the secondary market. By expanding the type of loans that it will buy, Fannie Mae is hoping to spur banks to make more loans to people with less-than-stellar credit ratings.

Fannie Mae officials stress that the new mortgages will be extended to all potential borrowers who can qualify for a mortgage. But they add that the move is intended in part to increase the number of minority and low income home owners who tend to have worse credit ratings than non-Hispanic whites.

Home ownership has, in fact, exploded among minorities during the economic boom of the 1990's. The number of mortgages extended to Hispanic applicants jumped by 87.2 percent from 1993 to 1998, according to Harvard University's Joint Center for Housing Studies. During that same period the number of African Americans who got mortgages to buy a home increased by 71.9 percent and the number of Asian Americans by 46.3 percent.

In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 percent.

Despite these gains, home ownership rates for minorities continue to lag behind non-Hispanic whites, in part because blacks and Hispanics in particular tend to have on average worse credit ratings.

In July, the Department of Housing and Urban Development proposed that by the year 2001, 50 percent of Fannie Mae's and Freddie Mac's portfolio be made up of loans to low and moderate-income borrowers. Last year, 44 percent of the loans Fannie Mae purchased were from these groups.

The change in policy also comes at the same time that HUD is investigating allegations of racial discrimination in the automated underwriting systems used by Fannie Mae and Freddie Mac to determine the credit-worthiness of credit applicants.


May 31, 1999

Minorities’ Home Ownership Booms Under Clinton but Still Lags Whites’

By Ronald Brownstein, L.A. Times

It’s one of the hidden success stories of the Clinton era. In the great housing boom of the 1990s, black and Latino homeownership has surged to the highest level ever recorded. The number of African Americans owning their own home is now increasing nearly three times as fast as the number of whites; the number of Latino homeowners is growing nearly five times as fast as that of whites.

These numbers are dramatic enough to deserve more detail. When President Clinton took office in 1993, 42% of African Americans and 39% of Latinos owned their own home. By this spring, those figures had jumped to 46.9% of blacks and 46.2% of Latinos.

That’s a lot of new picket fences. Since 1994, when the numbers really took off, the number of black and Latino homeowners has increased by 2 million. In all, the minority homeownership rate is on track to increase more in the 1990s than in any decade this century except the 1940s, when minorities joined in the wartime surge out of the Depression.

This trend is good news on many fronts. Homeownership stabilizes neighborhoods and even families. Housing scholar William C. Apgar, now an assistant secretary of Housing and Urban Development, says that research shows homeowners are more likely than renters to participate in their community. The children of homeowners even tend to perform better in school. Most significantly, increased homeownership allows minority families, who have accumulated far less wealth than whites, to amass assets and transmit them to future generations.

What explains the surge? The answer starts with the economy. Historically low rates of minority unemployment have created a larger pool of qualified buyers. And the lowest interest rates in years have made homes more affordable for white and minority buyers alike.

But the economy isn’t the whole story. As HUD Secretary Andrew Cuomo says: “There have been points in the past when the economy has done well but minority homeownership has not increased proportionally.” Case in point: Despite generally good times in the 1980s, homeownership among blacks and Latinos actually declined slightly, while rising slightly among whites.

All of this suggests that Clinton’s efforts to increase minority access to loans and capital also have spurred this decade’s gains. Under Clinton, bank regulators have breathed the first real life into enforcement of the Community Reinvestment Act, a 20-year-old statute meant to combat “redlining” by requiring banks to serve their low-income communities. The administration also has sent a clear message by stiffening enforcement of the fair housing and fair lending laws. The bottom line: Between 1993 and 1997, home loans grew by 72% to blacks and by 45% to Latinos, far faster than the total growth rate.

Lenders also have opened the door wider to minorities because of new initiatives at Fannie Mae and Freddie Mac – the giant federally chartered corporations that play critical, if obscure, roles in the home finance system. Fannie Mae and Freddie Mac buy mortgages from lenders and bundle them into securities; that provides lenders the funds to lend more.

In 1992, Congress mandated that Fannie and Freddie increase their purchases of mortgages for low-income and medium-income borrowers. Operating under that requirement, Fannie Mae, in particular, has been aggressive and creative in stimulating minority gains. It has aimed extensive advertising campaigns at minorities that explain how to buy a home and opened three dozen local offices to encourage lenders to serve these markets. Most importantly, Fannie Mae has agreed to buy more loans with very low down payments–or with mortgage payments that represent an unusually high percentage of a buyer’s income. That’s made banks willing to lend to lower-income families they once might have rejected.

But for all that progress, the black and Latino homeownership rates, at about 46%, still significantly trail the white rate, which is nearing 73%. Much of that difference represents structural social disparities–in education levels, wealth and the percentage of single-parent families–that will only change slowly. Still, Apgar says, HUD’s analysis suggests there are enough qualified buyers to move the minority homeownership rate into the mid-50% range.

The market itself will probably produce some of that progress. For many builders and lenders, serving minority buyers is now less a social obligation than a business opportunity. Because blacks and Latinos, as groups, are younger than whites, many experts believe they will continue to lead the housing market for years.

But with discrimination in the banking system not yet eradicated, maintaining the momentum of the 1990s will also require a continuing nudge from Washington. One key is to defend the Community Reinvestment Act, which the Senate shortsightedly voted to retrench recently. Clinton has threatened a veto if the House concurs.

The top priority may be to ask more of Fannie Mae and Freddie Mac. The two companies are now required to devote 42% of their portfolios to loans for low- and moderate-income borrowers; HUD, which has the authority to set the targets, is poised to propose an increase this summer. Although Fannie Mae actually has exceeded its target since 1994, it is resisting any hike. It argues that a higher target would only produce more loan defaults by pressuring banks to accept unsafe borrowers. HUD says Fannie Mae is resisting more low-income loans because they are less profitable.

Barry Zigas, who heads Fannie Mae’s low-income efforts, is undoubtedly correct when he argues, “There is obviously a limit beyond which [we] can’t push [the banks] to produce.” But with the housing market still sizzling, minority unemployment down and Fannie Mae enjoying record profits (over $3.4 billion last year), it doesn’t appear that the limit has been reached.

All signs point toward a high-velocity collision this summer between two strong-willed protagonists: HUD’s Cuomo and Fannie Mae CEO Franklin D. Raines, the first African American to hold the post. Better they reach a reasonable agreement that provides more fuel for the extraordinary boom transforming millions of minority families from renters into owners.

Archbishop Chaput on Faith and Politics

Not only does religion have a place in the public square, a democracy needs the input of religious morals and convictions to remain healthy and strong, says the archbishop of Denver.

Taking religion out of play, adds Archbishop Charles Chaput, author of "Render Unto Caesar: Serving the Nation by Living Our Catholic Beliefs in Political Life," is the fastest way to destroy a democracy.

In this interview with ZENIT's Karna Swanson, Archbishop Chaput talks about the ideas put forth in his book on Catholics and politics, and comments on what he thinks are the important issues facing voters this November.

Q: Catholicism in the public square in the United States has had a long and complicated journey, and you say that Catholics have a lot to offer the political process, but that more often than not they keep their beliefs and convictions separate from their political actions. Why is that?

Archbishop Chaput: Catholics have always been a minority in the United States, and prejudice against Catholics in this country has always been real, even before the founding. Sometimes the bias has been indirect and genteel. Just as often it has taken more vulgar forms of economic and political discrimination, and media bigotry. Either way, prejudice always fuels the appetite of a minority to fit in, to achieve and to assimilate, and American Catholics have done that extraordinarily well -- in fact, too well.

In the name of being good citizens, a lot of Catholics have bought into a very mistaken idea of the “separation of Church and state.” American Catholics have always supported the principle of keeping religious and civil authority distinct.

Nobody wants a theocracy, and much of the media hand-wringing about the specter of “Christian fundamentalism” is really just a particularly offensive scare tactic. The Church doesn’t presume to run the state. We also don’t want the state interfering with our religious beliefs and practices -- which, candidly, is a much bigger problem today.

Separating Church and state does not mean separating faith and political issues. Real pluralism requires a healthy conflict of ideas. In fact, the best way to kill a democracy is for people to remove their religious and moral convictions from their political decision-making. If people really believe something, they’ll always act on it as a matter of conscience. Otherwise they’re just lying to themselves. So the idea of forcing religion out of public policy debates is not only unwise, it’s anti-democratic.

Q: A chapter of the book was dedicated to St. Thomas More. In the same chapter you mention John F. Kennedy, the first Catholic president of the United States. What is the fundamental difference between these two Catholic political leaders?

Archbishop Chaput: As I say in the book, we should be wary of drawing too close a parallel between More’s situation and the problems facing American public officials. But More and his friend John Fisher stay so vivid in our memories for a reason. They kept their integrity at the cost of everything they had, including their lives. They put God before Caesar.

As for Kennedy, we need to remember the context of his 1960 campaign. Kennedy had plenty of talent and courage, but he also had to overcome 200 years of ingrained Protestant suspicion.
Unfortunately, in easing those Protestant fears, he created a new and very flawed Catholic model of separating public service from private conviction. He was acting in good will, and of course he couldn’t see the future -- but he did a great deal of damage. Over the past 40 years, his example has guided every Catholic public official who is “personally opposed” to some grave evil, but won’t do anything about it. We’re still suffering the effects.

Q: You also note that the new media culture has created a new environment for public debate in which a "serious marketplace of ideas" is replaced by sound bites. How can faithful Catholic politicians operate in this environment?

Archbishop Chaput: There’s no easy answer to that. American Catholics need to take a much more critical attitude toward the mass media, including the news industry. Many very good people work in journalism, for example. But the picture of reality reported by the news media is always colored by at least three things: the technology of the medium, the need to make a profit and the bias of the organization.

What we see and hear in political reporting is often a dumbed-down version of the facts. Individual citizens need to be alert to how the media shape public appetites and mold our opinions. And Catholic political officials need to learn how to use the media -- honestly, of course -- and not be used by them.

Q: Did you hope the book, which was published months ahead of the presidential elections in the United States, would impact the election process in some way?

Archbishop Chaput: Actually, I finished the text in July last year and made final revisions last November. I wanted the book to appear in March this year to put some space between it and the campaign season. But the publisher makes those decisions.

It’s not my intention, in the book or anywhere else, to tell people how to vote. I don’t endorse candidates, I don’t use code language to get people to like or dislike any political party. That’s not the job of a pastor.

People need to vote their conscience. But “conscience” doesn’t miraculously appear out of nothing; it’s not a matter of personal opinion or private preference. Conscience is always grounded in truth bigger than ourselves. People who claim to be Catholic need to be honest with themselves and with the believing community. They need to really act “Catholic” in private and in public, and that includes the way they make their political choices. And it’s very much the job of a pastor to teach Catholics their faith and to encourage them to apply it.

Q: In this election year there seems to be more talk of "wider" social issues that Catholics should consider when voting. How do you see this trend? And what do you see as the biggest issues facing Catholic voters this November?

Archbishop Chaput: The moral witness of the Church doesn’t change, whether it’s an election year or not. We face a lot of very important issues this fall: the economy, immigration reform, the war in Iraq. These are urgent and compelling, but they can’t be used as an excuse to ignore the unborn child.

No matter how much we want to cover it over with talk about “wider social issues,” the abortion struggle remains the foundational social issue of our time. There’s no way of wriggling around the profits, the brutality and the injustice of abortion with pious language or theatrical gestures. Abortion is legalized homicide. It has to stop. Every other right depends on the right to life.

Q: The book is written mainly for a U.S. audience as it directly speaks of the Church in the United States. What could an international audience take away from the book?

Archbishop Chaput: All Catholics, wherever they live, whatever their country, need to remember that we’re citizens of heaven first. That’s our home. We serve our nation in this world best by living our Catholic faith fully and authentically, and bringing our Catholic witness for human dignity vigorously into our nation’s political life.

We need to stop being embarrassed to speak and work for the truth. We can be disciples, or we can be cowards. In today’s world, there’s no room for anything else. We need to choose.

Media Double Standards Become Even More Obvious

Just finished reading the following article in National Journal from Stuart Taylor, Jr., who typically leans left of center. The blatancy of the liberal bias from the mainstream media during this presidential election is becoming even too obnoxious for people like him...


Campaign Lies, Media Double Standards

The media can no longer be trusted to provide accurate and fair campaign reporting and analysis.

by Stuart Taylor
Saturday, Sept. 20, 2008

Some who have been admirers of John McCain think that the war hero has debased himself by using gross distortions to trash Barack Obama and his record. Others see the media fury over McCain's campaign ads as more evidence of a double standard driven by liberal bias at most major news organizations.

Both are right. Although each candidate is responsible for many distortions -- hardly a novelty -- McCain has lately been leading the race to the bottom. (Since the print version of this column went to press, Obama may have pulled even with McCain in the race to the bottom, or even ahead of him, by launching a scurrilously dishonest new Spanish-language TV ad. It misleadingly portrays McCain "and his Republican friends" as anti-immigrant bigots who say "lies just to get our vote." It also associates McCain with deceptively out-of-context quotes by Rush Limbaugh -- no friend of McCain's -- about "stupid and unskilled Mexicans." Jake Tapper of ABC News provides details.)

At the same time, many in the media have been one-sided, sometimes adding to Obama's distortions rather than acting as impartial reporters of fact and referees of the mud fights.
We still have many great journalists, but I no longer trust the major newspapers or television networks to provide consistently accurate and fair reporting and analysis of all the charges and countercharges. This in an era when the noise produced by highly partisan TV hosts and blogs creates a crying need for at least one newspaper that we can count on to play it straight.
Indeed, one reason that candidates get away with dishonest campaign ads and speeches may be that it is so hard for undecided voters like me to discern which charges are true, which are exaggerated, and which are false. Most people can't spend hours every day cross-checking diverse sources of information to verify the accuracy of slanted stories and broadcasts such as these:

* In Sarah Palin's first big media interview, on September 11, Charlie Gibson of ABC News asked: "You said recently, in your old church, 'Our national leaders are sending U.S. soldiers on a task that is from God.' Are we fighting a holy war?" Palin responded: "You know, I don't know if that was my exact quote." Gibson pressed: "Exact words."

Viewers had no way of knowing that, in fact, Gibson was distorting Palin's meaning by leaving out critical context and thus making an unremarkable exhortation to prayer sound like a declaration of holy war. Palin had not said that the war was a task from God. She had urged her listeners to "pray" that it was a task from God. A September 3 Associated Press report by Gene Johnson distorted Palin's meaning in exactly the same way.

* A front-page story in the September 12 Washington Post, by Anne Kornblut, was headlined: "Palin Links Iraq to Sept. 11 in Talk to Troops in Alaska." This was misleading, as were the first two paragraphs. They implied that Palin had advanced the long-discredited "idea that the Iraqi government under Saddam Hussein helped Al Qaeda plan the attacks on the World Trade Center and the Pentagon." In fact, Palin's reasonably clear meaning was not that Saddam had a role in the 9/11 attacks but that (as the article backhandedly acknowledged) the troops would be fighting Al Qaeda in Iraq, which is related to the group that launched the 9/11 attacks.

* The New York Times did a huge (3,120-word) front-page story on February 21 implying that McCain had had a sexual affair with a female lobbyist while doing her political favors. But the article lacked strong evidence either that there had been a sexual affair or that McCain had crossed legal or ethical lines to do favors. Would The Times have printed the same story had the senator been Barack Obama or John Kerry? I doubt it.

* The Times also rushed to assert, in a front-page story on September 2 questioning how carefully McCain vetted Palin's background, that she "was a member for two years in the 1990s of the Alaska Independence Party, which has at times sought a vote on whether the state should secede." This turned out to be erroneous. (Her husband had previously been a member.)

This is not to deny that McCain deserves much of the criticism he has received for his distortions about Obama. But not all of it. Take the ad on which the most-bitter media complaints -- "blizzard of lies" and the like -- have focused. It asserts that Obama's "one accomplishment" in the area of education was "legislation to teach 'comprehensive sex education' to kindergarteners."

But the bill was not Obama's (he was not a sponsor), was not an accomplishment (it never passed), and would not have been his "only" accomplishment even if it had passed. More important, it called for extending only "age appropriate" sex ed from sixth grade down to kindergarten. There is no reason to doubt Obama's explanation that he wanted kindergartners to be taught only the dangers of inappropriate touching.

But a Times editorial overstated the case in saying that "the kindergarten ad flat-out lies" and that "at most, kindergartners were to be taught the dangers of sexual predators." In fact, whatever Obama's intention, the bill itself was designed "to mandate that issues like contraception and the prevention of sexually transmitted diseases be included in sex-education classes for children below sixth grade, and as early as kindergarten," as Byron York demonstrates in a detailed National Review Online article.

McCain has also lowered himself by claiming repeatedly, and incorrectly, that Obama's proposals would raise taxes on the middle class. (In fact, Obama would cut middle-class taxes more than McCain would.) And his campaign has descended into fatuousness by implausibly claiming that Obama was trying to demean Sarah Palin when he used the "lipstick on a pig" analogy to criticize McCain's economic proposals.

Obama seems to prefer a more civil discourse. But he, too, has sometimes lowered himself, without provoking anything like the media outcry against McCain. Obama falsely claimed in February that McCain "is willing to send our troops into another 100 years of war in Iraq." In fact, McCain had made it clear that just as "we've been in Japan for 60 years," he could see a 100-year presence in Iraq -- but only "as long as Americans are not being injured or harmed or wounded or killed."

More recently, Obama has run misleading ads claiming that McCain has voted to cut education funding and would give "$200 billion more to special interests while taking money away from public schools"; implying that his aides are still lobbying for special interests; and more.
McCain also deserves criticism for the ugly culture-warring epitomized at the Republican convention by Rudy Giuliani's keynote speech and sneers about Obama's stint as a community organizer. But who started the culture-warring? Democratic talking heads and pols -- although not Obama -- heaped disdain on Palin's social class, religion, and anti-abortion values from the moment that McCain plucked her from obscurity.

I was deeply dismayed by the 72-year-old McCain's reckless choice of the inexperienced and untested Palin to be a heartbeat away from the presidency. But I am also deeply skeptical when I see front-page headlines like "As Mayor of Wasilla, Palin Cut Own Duties, Left Trail of Bad Blood" (Washington Post, September 14), or "Once Elected, Palin Hired Friends and Lashed Foes" (New York Times, same day). Such loaded language is a badge not of a newsroom committed to impartial investigation but of an ideological echo chamber.

Many media commentators also exude a conviction that Republicans have long played dirtier and more dishonest political hardball than do Democrats. Maybe, but I'm not so sure. We are often reminded of Republican sins ranging from the (accurate) Willie Horton ads of 1988 to the (over-the-top) "Swiftboating" of 2004. We hear a lot less about Democratic sins such as President Clinton's distortions of Bob Dole's position on Medicare in 1996 and the NAACP's stunningly scurrilous ad campaign in 2000 associating George W. Bush's opposition to a hate crimes bill with the racist murderers who dragged James Byrd behind a truck.

Ironically, there is some evidence that media venting about McCain's ads may be helping McCain. The venting, especially on TV gabfests, draws much more attention than the ads themselves, while distracting attention from the issues on which Obama wants to focus. Indeed, reportedly the McCain campaign often buys little or no TV time to air the ads, preferring to get them on the air free, denunciations and all.

Consider also a fascinating Washington Post piece by Shankar Vedantam on September 15. He cites studies showing not only that "misinformation can exercise a ghostly influence on people's minds [even] after it has been debunked" -- especially among those predisposed to believe it -- but also that refutations sometimes backfire by increasing the number of people who believe the original misinformation.

The studies found this refutation "backfire effect" among conservatives but not liberals. Part of the explanation may be that conservatives have more-rigid views than liberals, as political scientists quoted by Vedantam suggest. And part of it may be that conservatives have more reason to distrust the usual refuters.

Correction: My September 13 column erred in saying that in 2003, as an Illinois legislator, Barack Obama "unsuccessfully" opposed a bill nearly identical to the federal "Born Alive Infant Protection Act." In fact, he helped kill the bill.

Thursday, September 25, 2008

McCain's Bold Move

It's been 24 hours since McCain's public announcement that he would suspend his campaign on Thursday and bypass the first presidential debate with "The Messiah" (a.k.a. Barrack Hussein Obama) on Friday night in order to ensure his full and active participation as a U.S. Senator on the financial bailout legislation currently under consideration in the Congress.

I must admit that my first reaction was "What the heck is he doing now?!" It was an extremely bold move, especially when considering he has lost all of his post-convention bump and is back to trailing by a few points nationally in most polls. McCain has been making some serious mistakes in his campaign over the past few weeks (see tomorrow's R.C. Blog post...).

As you have probably already read in the mainstream newspapers this morning, they are profiling McCain as "scared", "overreacting", or "running away from the debate". Regarding the debate, nothing could be further from the truth. Without a teleprompter, Obama is going to have trouble speaking, let alone articulating, his positions on issues. Regardless of his actual performance, the press will tearfully praise him and compare him to Martin Luther King.

After sleeping on it, I feel a little bit better (only a little...) about the move to suspend the campaign. Only time will tell if this move was successful or a disaster in the eyes of voters, especially the estimated 18 percent in our country who have not yet made a decision on their candidate. It could be the "tipping point" of the entire campaign. For those opposed to Marxism invading our country starting January 20, 2009, I hope and pray that voters look at the move as bold and presidential.

Seven Sons Lay Hero Dad to Rest

Here's an article from this week's National Catholic Register on a Northern Virginia Catholic gentleman who truly gave his life to his family. As a society, we need to stop idolizing the musicians, athletes, and actors and give credit to heroes and role models like Mr. Vander Woude.

Thomas Vander Woude Died as He Lived — Giving His Life for a Son

BY Tim Drake
Register Senior Writer

September 28-October 4, 2008 Issue

NOKESVILLE, Va. — The story of a Catholic father dying to save his son started being told in a small town in Virginia. Then on the front page of the The Washington Post. Then it began to be repeated on blogs and in online discussions from coast to coast.

But those who know him say they always knew Thomas Vander Woude was special. Whether it was installing a gymnasium floor, training altar boys or coaching sports, when the daily communicant father of seven saw a need, he stepped in.

That trait led to the ultimate sacrifice on Sept. 8, when he dove into a septic tank to save the life of his son.

Anne Carroll, director of Seton High School, in Manassas, where Vander Woude coached, served on the board and volunteered, said Vander Woulde sacrificed for others “on a daily basis.”
“He died as he lived,” Carroll said.

Born in Sioux Falls, S.D., in 1942, Vander Woude left the farm to join the Navy. A pilot, he served the country for 17 years and was a Vietnam War veteran. He married Mary Ellen Earley in 1964, and the couple raised seven sons: Tom, Steve, Dan, Bob, Chris, Pat and Joseph. In 2002, he retired after 26 years as a commercial airline pilot. Between 2002 and 2007, he served as athletics director at Christendom College in Front Royal.

The more than 2,000 people, 70 priests and one bishop who attended his funeral Mass on Sept. 15 at Holy Trinity Catholic Church in Gainesville, all came to pay their respects to a man who inspired them not only in life, but also in death.

Vander Woude’s son Father Thomas Vander Woude celebrated the Mass and gave the homily. Bishop Paul Loverde of Arlington, Va., presided.

A Selfless Life

Vander Woude’s life was marked by selflessness and humility. His third son, Dan, who lives next door to his parents in Nokesville, said that when his father saw a need, he didn’t worry about whether he was the most qualified — he just stepped in.

“He didn’t know soccer, but there was a need, so he went to coaching clinics to learn that,” Dan recalled. “Whether it was coaching basketball, soccer or directing altar boys, he was very good with young men.”

There were several things about his father’s spiritual life that stood out for him.

“When others asked about the secrets of success for raising Catholic families, he was always quick to point to the family Rosary,” said Dan. “He was definitely devoted to Our Lady.”

“He also did a Holy Hour between two and three in the morning and was a daily communicant. With the Rosary, he used to say a prayer to St. Joseph,” added Dan. “Those were the things in front of us that we saw of our father. In this culture, which is selling a lot of stuff, I had a father on his knees who was showing me how to be a man of God.”

Vander Woude’s devotion to the Blessed Mother also led the family to host an annual Marian festival/procession/picnic on their farm the last Sunday of May. Hundreds of family friends and acquaintances would attend the celebration, which the family held for nearly two decades.

A Father’s Love

Vander Woude, 66, died while helping his youngest son, Joseph, 20, who has Down syndrome. Joseph fell through an old cover that gave way into a septic tank on their property. Vander Woude yelled to a workman to call 911 and jumped in, forcing himself past Joseph so that he could get underneath him to hold him up.

According to family friend Michael McGrath, Vander Woude told the worker, “You pull, I’ll push.”

“As he lifted Joseph up, his eyes closed, and he collapsed into the tank,” said McGrath. “When the paramedics came, they were unable to resuscitate him.”

Those who knew him said that his love for his sons was paramount.

“His son Bob said, ‘It’s so right that he died saving one of us,’” said Peter Westhoff, a former teacher at Seton, where Vander Woude’s sons went to school.

“One time on the farm, he told me, ‘You know, I don’t want any of the boys to ever leave. I’d love to have them around me all my life,’” recalled Westhoff.

To that end, Vander Woude had his 26-acre property split up, giving an acre of land to each of his sons. Two of his sons live on the nearby parcels.

Westhoff remembers a time in the mid-1990s when a school in Washington, D.C., was closing, and he went there to get materials for his school. When Westhoff entered the biology lab, there among the jarred lab specimens was a human fetus. Westhoff didn’t feel it was appropriate to leave it, but he wasn’t sure what to do.

He called Vander Woude’s eldest son, Father Thomas Vander Woude, now pastor of Queen of Apostles Church in Alexandria. “He said, ‘I’m sure my dad and mom would have a burial on the farm,’” said Westhoff. “When I called Mr. Vander Woude, there wasn’t any hesitation.”

Friend Pete Scheetz built a small pine coffin for the child. “When Mr. Vander Woude saw the pine coffin, he commented, ‘Where can we get in line for ours?’” remembers Westhoff.

After Vander Woude’s death, Scheetz built another simple pine coffin for his friend. Scheetz’ wife and the Vander Woude daughters-in-law added a personal touch, sewing in the wedding dress of Mary Ellen, Vander Woude’s wife, as the lining.

Faithful to the End

As difficult as Vander Woude’s passing has been for his family, son Dan said that there have been many blessings. One comfort is that their father, who was dedicated to the Rosary, died on the feast of the Nativity of the Blessed Virgin Mary and was buried on the feast of Our Lady of Sorrows.

“One consolation is that God is using Dad’s witness to touch a lot of people’s hearts,” said Dan.
Vander Woude’s dying act was “truly saintly” and “the crown of a whole life of self-giving,” Bishop Loverde said at the Mass, according to The Washington Post. “May we find in his life inspiration and strength.”

Said Dan, “We’ve heard of priests in Spain and Colorado preaching about my dad’s death during their homilies on the feast of the Triumph of the Cross. I’ve also heard from many friends that his story is inspiring other husbands and fathers for how they should be leading their daily lives.”

Wednesday, September 24, 2008

Congressman Pence Gets It Right!

My favorite member of the Congress, U.S. Congressman Mike Pence from Indiana, is circulating the following “Dear Colleague” letter among his fellow House Republicans regarding the current economic conditions and bailout proposals....


Republicans Should Oppose the Bailout Plan

“Nationalizing Every Bad Mortgage in America Is Not the Answer”

Dear Republican Colleague:

Our financial markets are in turmoil and the Administration was right to call for decisive action to prevent further harm to our economy, but nationalizing every bad mortgage in America is not the answer.

As Bill Kristol wrote in “A Fine Mess” in today's New York Times:

"And I acknowledge that there are serious people who think the situation too urgent and the day too late to allow for a real public and Congressional debate on what should be done. But — based on conversations with economists, Wall Street types, businessmen and public officials — I’m doubtful that the only thing standing between us and a financial panic is for Congress to sign this week, on behalf of the American taxpayer, a $700 billion check over to the Treasury. "

The Administration's request amounts to the largest corporate bailout in American history. Congress should act, but should act in a way that protects the integrity of our free market and protects the American taxpayer from more debt and higher taxes. Congress must not hastily embrace a cure that may do more harm to our economy than the disease of bad debt.

And the stakes for our free market could not be higher.

As George Will observed on ABC's This Week with George Stephanopoulos program yesterday,

"When the British Labour Party was socialist, it defined socialism as government control of the commanding heights of the economy. And in Britain, at that time, it was coal, steel, and railroads. The commanding heights of the American economy are financial services, and they are now controlled by the government. "

To avoid a slide into socialism for our financial sector, Congress must consider all available options to put our nation's economy back on its feet. There are no easy answers but there are alternatives to massive government spending.

As was observed in an editorial titled “A Bad Bank Rescue” by Sebastian Mallaby published in The Washington Post on Sunday, September 21, 2008:

"Within hours of the Treasury announcement Friday, economists had proposed preferable alternatives. Their core insight is that it is better to boost the banking system by increasing its capital than by reducing its loans. Given a fatter capital cushion, banks would have time to dispose of the bad loans in an orderly fashion. Taxpayers would be spared the experience of wandering into a bad-loan bazaar and being ripped off by every merchant. "

Alternatives to a massive federal bailout must be fully considered and debated before Congress acts.

Finally, any new expenditure of taxpayer dollars should be paid for with fiscal discipline and reform. If Congress decides to spend nearly 1 trillion dollars on a corporate bailout, it must find budget savings to prevent that cost from being passed along to the American people.

As our distinguished former Republican Speaker of the House, Newt Gingrich, wrote in a post titled “Before D.C. Gets Our Money, It Owes Us Some Answers” on The Corner on National Review Online yesterday and prominently displayed today on the homepage under the headline “Newt: Wait One Minute”:

"Congress has an obligation to protect the taxpayer. Congress has an obligation to limit the executive branch to the rule of law. Congress has an obligation to perform oversight. Congress was designed by the Founding Fathers to move slowly, precisely to avoid the sudden panic of a one-week solution that becomes a 20-year mess. "

I urge you to join me and other conservative voices in opposing the bailout plan. Republicans should demand that Congress take time in deliberating the merits of any legislation until the facts and competing solutions can be fully debated. We should demand consideration of free market alternatives to massive government spending and we should fight to pay for the solution through budget cuts and reform instead of more debt or taxes.


Mike Pence
Member of Congress

Tuesday, September 23, 2008

Greatest Movie Line Ever!

Sorry for not posting over the past several days. Hoping to post daily starting today. I am in the process of changing over the R.C.'s YouTube videos to some newer technology, so please be patient with the video feeds until the kinks are out.

Here's a short video that contains one of the greatest movie lines ever. Kudos to legendary Bob Hope for telling it like it is!

Wednesday, September 17, 2008

Dear Mr. Obama

Tuesday, September 16, 2008

More Liberals Connected to Fannie and Freddie

Here's another Heritage Foundation piece from July 2008 on the criminal actions by employees and members of Congress related to Fannie and Freddie. Check out the hyperlinks for more background. As I said last week on R.C., if these were Conservatives involved, the Lib-led Congress would stop everything else to start investigations...


In 2004, after a tip from a whistleblower who was later fired, the Office of Federal Housing Enterprise Oversight (OFHEO) issued a report finding that the government-sponsored entity Fannie Mae had engaged in Enron-like accounting machinations that allowed Fannie to overstate its earnings and underestimate the risk the company faced. The accounting wizardry Fannie engaged in was designed so that Fannie could meet profit targets to maximize bonus payments to company executives like Clinton administration deputy attorney general Jamie Gorelick and Carter administration assistant director for domestic policy Franklin Raines.

For years, conservatives have been critical of how Fannie, and Freddie Mac, have leveraged their government-sponsored advantages (including exemptions from state and federal taxes, lower capital requirements, and the ability to borrow at rates well below those paid by private companies), to create a co-monopoly in the housing finance sector. When Fannie’s accounting scandal came to light in 2004, conservatives pushed hard for reforms to phase out Fannie and Freddie. Led by former Walter Mondale and Barack Obama campaign adviser James Johnson, Fannie and Freddie pushed back hard, raising millions of dollars for members of the relevant oversight committees and opening up “Partnership Offices” that funneled money into various housing projects in districts of key members of Congress.

Fannie also bought off activist groups such as the corrupt Association of Community Organizations for Reform Now (ACORN), which has been indicted, multiple times across the country, for vote fraud (Obama worked closely with ACORN as a street organizer in Chicago). Fannie’s lobbying efforts paid off as liberal politicians such as Sen. Chuck Schumer (D-N.Y.) and Rep. William Clay (D-Mo.) worked to kill any real reform of Freddie and Fannie. The Washington Post reports: “In an internal memo in 2004, Fannie Mae executive Daniel H. Mudd affirmed what the company’s critics had long contended: In the political arena, ‘we always won’ and ‘we took no prisoners.’”

Fannie was created during the New Deal to make homes more affordable for lower- and middle-income Americans. Freddie was added years later for the same purpose. Fannie and Freddie have long outlived their purpose as the market for repackaging loans as securities is now well developed. When the housing market is booming, they are not needed, and they have both gone well beyond their original mission and are now backing loans for wealthy (witness Speaker Nancy Pelosi’s continued efforts to raise the cap on the size of the loans that Fannie and Freddie can buy).

Many parts of the bill the Senate passed last week only continue the worst aspects of the crony capitalism at the hard of Freddie’s success. This is especially true of the Community Development Block Grant funds that have long been a goal of partisan housing activist groups like ACORN. There is an opportunity here to use the recapitalization the White House is now proposing to re-organize housing finance by breaking up Fannie and Freddie and creating several smaller truly private entities that can compete.

Monday, September 15, 2008

Heritage Foundation Weighs In on Today's Financial Situation

In what some observers are calling a reshaping of Wall Street, two of the world’s largest investment banks, Merrill Lynch and Lehman Brothers, are set to disappear. Lehman has announced it will file for Chapter 11 bankruptcy protection, and Merrill Lynch was bought by Bank of America. For all the complicated financial instruments and relationships involved in the current financial turmoil, the underlying cause is still relatively simple: the bursting of the housing bubble.

One market strategist told The New York Times: “We are in the grip of a vicious circle and the only thing that to me will break that is for home prices to stop going down.” The most dangerous thing we can do right now is to assume that massive government intervention is needed to shore up home prices. After all, massive government intervention is what caused the housing bubble in the first place.

Fannie Mae and Freddie Mac were created by Presidents Franklin D. Roosevelt and Lyndon B. Johnson to make homes more affordable for Americans. They accomplish this by buying, repackaging and then selling home loans that other institutions make, thus freeing institutions to offer more loans. Contrary to what some defenders of big government assert, Fannie and Freddie were also key players in the sub-prime mortgage market. In 2004 alone, they bought 44 percent of all sub-prime securities. Every dollar that Fannie and Freddie gave to companies like Countrywide Financial for bundled sub-prime mortgages was another dollar Countrywide gave out in new sub-prime mortgages.

When President Bill Clinton took office, Fannie and Freddie were viewed as “key” to Clinton’s plans to expand home ownership. The Washington Post reports: “The result was a period of unrestrained growth for the companies. … The companies increasingly were seen as the engine of the housing boom.” As the companies grew, conservatives repeatedly warned that their size posed a systemic risk to the financial system. As Sarah Palin put it, thanks to the implicit federal guarantee of their debt, Fannie and Freddie had become too big and too expensive to the taxpayers.

But Fannie and Freddie pushed back hard, turning to friends on the left for protection. Former Walter Mondale and Barack Obama campaign adviser James Johnson led a fierce lobbying campaign to fight reform of Freddie and Fannie. Clinton administration OMB director Franklin Raines told investors when he was Fannie Mae CEO in 1999: “We manage our political risk with the same intensity that we manage our credit and interest rate risks.” Fannie and Freddie’s lobbying power over the left continues to be strong to this day. According to the Center for Responsive Politics, the top three recipients of campaign donations from Freddie and Fannie’s PACs and employees are all Democrats. From 1989 through today, Sen. Chris Dodd received $165,400, Barack Obama $126,349, and John Kerry $111,000. The Washington Post concludes: “Blessed with the advantages of a government agency and a private company at the same time, Fannie Mae and Freddie Mac used their windfall profits to co-opt the politicians who were supposed to control them.”

Nobody wants to see anybody lose their home. The current Wall Street turbulence will not settle until home prices do. But before we move to some new massive government spending effort to prop up home prices at some artificial level, we should also remember what the historical record teaches us about the unintended consequences of well-meaning market interventions.

The Basics on Fannie and Freddie and What Happened

What are Fannie Mae and Freddie Mac?
They are called government-sponsored enterprises because they initially were formed by the federal government. Fannie Mae is a common name for Federal National Mortgage Assoc. in Washington, D.C. Freddie Mac is a common name for Federal Home Loan Mortgage Corp. in McLean, Va.

What do Fannie Mae and Freddie Mac do?
Fannie Mae and Freddie Mac buy mortgages from savings and loans, banks and other lenders to generate more cash for those lenders to make more home loans. Together they hold or guarantee $5.4 trillion of mortgages, about half of the US's outstanding home loans.

What happened?
As home prices fell, foreclosures went up, and lenders ran into trouble, so did Fannie and Freddie. Loans they backed went bad, capital became harder to come by and it was harder for Fannie Mae and Freddie Mac to sell their loan packages. Thus, like any desperate, compromising soul, they lowered their standards and backed riskier mortgages and all this came back to bite them.

What effect on mortgage rates?
Like many Americans having trouble selling their homes, Fannie and Freddie have been having trouble selling their packages of loans. The investors who typically buy from them have become much pickier about what they’ll buy - with good reason - they were worried about increased risk as mortgage defaults rose and home prices fell. Since the two companies own or insure about $5 trillion in mortgages (nearly half of the nation’s total), the world has been watching them very carefully. Especially the American government.

In the opinion of the government leaders, Fannie & Freddie were headed toward failure. Since they’re so big, their failure would have dramatic (likely worldwide) consequences. So Uncle Sam officially stepped in.

So why are mortgage rates falling now? Fannie and Freddie are like big insurance companies. Before the federal bailout, investors worried that Fannie or Freddie might not be around to pay if mortgages they bought went sour. Worried investors = high mortgage rates for consumers. Now that Uncle Sam has stepped in, mortgage bond holders feel much safer. Happy investors = lower mortgage rates for consumers.

Who are the losers?
Us, the American taxpayers. This bailout is not free. No one knows the final damage this bailout will do to the Treasury, but most believe that the losses will be in the hundreds of billions. Considering that Fannie and Freddie holds approximately $5 trillion in home loans and currently more than 9% of loans are in the process of defaulting, then simple math tells us that these two companies could potentially lose $450 billion. Additionally, taxpayers will have to pay for the upkeep and operations of these companies so the costs will keep on increasing for years to come.

Who are the winners?
Banks that invested in Fannie and Freddie's debt. Fannie and Freddie sold trillions of dollars in mortgaged backed securities to central banks all around the world. For example, China's People's Bank owns more than $300 billion in Fannie and Freddie's mortgage backed securities. If both of these companies defaulted on all of these securites the Chinese national bank may have gone bankrupt.

Friday, September 12, 2008

New Video from CatholicVote.com

Democratic "Insider" Poll Gives Nod to Palin

In this week's National Journal, which hit the streets this morning, its "Congressional Insiders Poll" asked, "Which vice presidential nominee boosts his or her ticket's chances more?"

The results were:

Democrats (33 votes)
Biden -- 33 percent
Palin -- 45 percent
No Difference -- 21 percent

Republicans (39 votes)
Biden -- 0 percent
Palin -- 100 percent
No Difference -- 0 percent

My favorite comment from a Dem: "The ultimate swing voters in this race -- white women -- have moved from narrowly Obama to comfortably McCain. If that trend line somehow holds, Obama would have to post the best Democratic numbers with white men since 1976. As for Biden, the least consequential vice presidential pick in the modern era was Jack Kemp in 1996. Biden is on pace to match him."

Thursday, September 11, 2008

Remembering 9/11

Today commemorates the seventh anniversary of one of the worst days in American history and for sure the worst of my lifetime. Today, all Americans should (1) pray for the nearly 3,000 victims of that day, their families, and America and (2) understand that we are still at war although we have not experienced an attack. The perpetrators still hate America for what we stand for and our freedoms and they will continue to plot future attacks.

The most riveting recap of the events of 9/11 was a documentary originally aired on CBS a few weeks after the attacks. Below are a few clips from the documentary, which can be purchased on Amazon.Com by clicking here. It is a must watch to not only see incredible footage of the attacks but also get a real sense for the heroism of the New York City's firefighters, police officers, and emergency responders.

Note: Reaction of firefighters seeing the first plane hit includes some profanity on first video...

First Plane

Second Plane

First Tower Collapse

Second Tower Collapse

On the morning of September 11, 2001, brothers Jules and Gedeon Naudet were working on a documentary about a rookie New York City firefighter. Hearing a roar in the sky, Jules turned his camera upward--just in time to film the only existing image of the first plane crashing into the World Trade Center. In a fateful instant, Jules and Gedeon became eyewitnesses to the most shocking and defining incident of our time.

With cameras rolling, the Naudets followed NYC firefighters into the heart of what would be known as Ground Zero. What emerged is an unforgettably powerful visual document and a stirring tribute to real-life heroes who, in their city's darkest hour, rose to extraordinary acts of courage and compassion.

Wednesday, September 10, 2008

Connect the Dots...

I found the following contributions summary provided by the Federal Election Commission (FEC) quite interesting. I am sure that the Democratic-led Congress will call for hearings soon on the mismanagement of Fannie Mae and Freddie Mac, as they did when the Enron news broke out.

Top Recipients of Fannie Mae and Freddie Mac
Campaign Contributions, 1989-2008

1. Senator Christopher J Dodd (D-CT) $133,900
2. Senator John Kerry (D-MA) $111,000
3. Senator Barack Hussein Obama (D-IL) $105,849
4. Senator Hillary Clinton (D-NY) $75,550
5. Rep. Paul E. Kanjorski (D-PA) $65,500

6. Sen. Robert Bennett (R-UT) $61,499
7. Sen. Tim Johnson (D-SD) $61,000
8. Sen. Kent Conrad (D-ND) $58,991
9. Rep. Tom Davis (R-VA) $55,499
10. Sen. Christopher S 'Kit' Bond (R-MO) $55,400

Includes contributions from PACs and individuals.

Tuesday, September 9, 2008

Fannie and Freddie...What Next?

Today, the Heritage Foundation released a "Web Memo" on its recommendations for the future of Fannie Mae and Freddie Mac, now that the Treasury Department has stepped in and seized control of the two mortgage giants.

It is interesting to note that Heritage produced a report in June 2005 that detailed its recommended steps for reforming Fannie and Freddie. Sadly, they were left to falter on their own and now we, the American taxpayer, will suffer the consequences of the actions of highly paid executives at the two institutions.

The Fannie and Freddie Disaster is another example of why private-sector operations do not belong in the public arena. Too much bureaucracy and too little scrutiny to make it effective.

September 9, 2008

Fannie and Freddie: Time to Clean up the Mess and Move Forward
J.D. Foster, Ph.D., David C. John and Stephen Keen
WebMemo #2055

After years of warning and months of high drama, the Treasury Department recently took the unfortunate but necessary step of seizing Fannie Mae and Freddie Mac (Fannie and Freddie).

Treasury placed the two institutions into conservatorship and provided the means and terms by which Treasury would recapitalize them as necessary. The cost to the taxpayer is unknown at this time and represents payment for serious mistakes made years ago and repeated regularly.

The Treasury's actions were unfortunate because the problems with Fannie and Freddie could have been avoided had previous Congresses heeded the many warnings about their systemic risk.[1] The actions were necessary, however, because the collapse of either or both of Fannie and Freddie would have had devastating repercussions for the housing market, credit markets, and the economy generally. By acting as it did, Treasury chose the lesser of two evils.

The takeover of Fannie and Freddie was a vital move toward reform, but this should be seen only as the first step. Fannie and Freddie are the result of outdated "Great Society" programs, and they should be wound down—not replaced, reformed, or rejuvenated. The private sector can and should be allowed to perform the roles formerly exercised by Fannie and Freddie. At the very least, as Congress crafts future legislation it must ensure that neither Fannie and Freddie nor any successor institution ever again becomes a systemic risk by becoming "too big to fail."

The First Step

Placing Fannie and Freddie into a conservatorship is not an end unto itself but a first step toward the final breakup. Unfortunately, the vital step of settling the long-term policy will have to be left to the next President and Congress.

Looking to the future, the worst action Congress could take would be to retain the current structure whereby Fannie and Freddie are quasi-governmental entities with conflicted goals and distorted incentives. This system has failed at an as yet untold cost to U.S. taxpayers.

The Treasury's current plan is to shrink Fannie and Freddie's portfolios of mortgage-backed securities gradually over the coming years. Just as important is denying Fannie and Freddie the authority to continue securitizing mortgages in the future. Many years ago the private sector could not have picked up this business, which is why Fannie Mae was created in the first place. However, the private sector today is already a major participant, rising to a market share that reached 56 percent in 2006. Fannie and Freddie should be forced to step aside and allow private-sector participants to perform this role. If preserved in any form, Fannie and Freddie should be so constrained in their activities that they can never again be suspected of being too big to fail.

Going Forward

First, clean up the mess. Then, implement real reform. The Treasury Department was put in a tough spot, and Secretary Henry Paulson did what was necessary. Decades of policy mistakes creating and protecting Fannie and Freddie finally led the predicted system risk to become a dangerous financial reality. However, once the market is stabilized, free-market reform must be implemented to prevent a recurrence. The next President and Congress should allow Fannie and Freddie in their current form to wither to extinction. The private sector is ready, well-prepared, and subject to the proper incentives to continue to ensure a steady flow of correctly priced capital to America's housing markets.

J. D. Foster, Ph.D., is Norman B. Ture Senior Fellow in the Economics of Fiscal Policy, David C. John is Senior Research Fellow in Retirement Security and Financial Institutions, and Stephen A. Keen is a Research Assistant in the Thomas A. Roe Institute for Economic Policy Studies at The Heritage Foundation.

[1] Ronald D. Utt, "Time to Reform Fannie Mae and Freddie Mac," Heritage Foundation Backgrounder No. 1861, June 20, 2005, at http://www.heritage.org/Research/GovernmentReform/bg1861.cfm.

Monday, September 8, 2008

Liberals Out of Touch with Americans

Column in today's Financial Times on the problems facing the American liberal establishment...

Democrats must learn some respect
September 7, 2008
Financial Times
by Clive Crook

This article is not the first to note the cultural contradiction in American liberalism, but just now the point bears restating. The election may turn on it.

Democrats speak up for the less prosperous; they have well-intentioned policies to help them; they are disturbed by inequality, and want to do something about it. Their concern is real and admirable. The trouble is, they lack respect for the objects of their solicitude. Their sympathy comes mixed with disdain, and even contempt.

Democrats regard their policies as self-evidently in the interests of the US working and middle classes. Yet those wide segments of US society keep helping to elect Republican presidents. How is one to account for this? Are those people idiots? Frankly, yes – or so many liberals are driven to conclude. Either that or bigots, clinging to guns, God and white supremacy; or else pathetic dupes, ever at the disposal of Republican strategists. If they only had the brains to vote in their interests, Democrats think, the party would never be out of power. But again and again, the Republicans tell their lies, and those stupid damned voters buy it.

It is an attitude that a good part of the US media share. The country has conservative media (Fox News, talk radio) as well as liberal media (most of the rest). Curiously, whereas the conservative media know they are conservative, much of the liberal media believe themselves to be neutral.

Their constant support for Democratic views has nothing to do with bias, in their minds, but reflects the fact that Democrats just happen to be right about everything. The result is the same: for much of the media, the fact that Republicans keep winning can only be due to the backwardness of much of the country.

Because it was so unexpected, Sarah Palin’s nomination for the vice-presidency jolted these attitudes to the surface. Ms Palin is a small-town American. It is said that she has only recently acquired a passport. Her husband is a fisherman and production worker. She represents a great slice of the country that the Democrats say they care about – yet her selection induced an apoplectic fit.

For days, the derision poured down from Democratic party talking heads and much of the media too. The idea that “this woman” might be vice-president or even president was literally incomprehensible. The popular liberal comedian Bill Maher, whose act is an endless sneer at the Republican party, noted that John McCain’s case for the presidency was that only he was capable of standing between the US and its enemies, but that should he die he had chosen “this stewardess” to take over. This joke was not – or not only – a complaint about lack of experience. It was also an expression of class disgust. I give Mr Maher credit for daring to say what many Democrats would only insinuate.

Little was known about Ms Palin, but it sufficed for her nomination to be regarded as a kind of insult. Even after her triumph at the Republican convention in St Paul last week, the put-downs continued. Yes, the delivery was all right, but the speech was written by somebody else – as though that is unusual, as though the speechwriter is not the junior partner in the preparation of a speech, and as though just anybody could have raised the roof with that text. Voters in small towns and suburbs, forever mocked and condescended to by metropolitan liberals, are attuned to this disdain. Every four years, many take their revenge.

The irony in 2008 is that the Democratic candidate, despite Republican claims to the contrary, is not an elitist. Barack Obama is an intellectual, but he remembers his history. He can and does connect with ordinary people. His courteous reaction to the Palin nomination was telling. Mrs Palin (and others) found it irresistible to skewer him in St Paul for “saying one thing about [working Americans] in Scranton, and another in San Francisco”. Mr Obama made a bad mistake when he talked about clinging to God and guns, but I am inclined to make allowances: he was speaking to his own political tribe in the native idiom.

The problem in my view is less Mr Obama and more the attitudes of the claque of official and unofficial supporters that surrounds him. The prevailing liberal mindset is what makes the criticisms of Mr Obama’s distance from working Americans stick.

If only the Democrats could contain their sense of entitlement to govern in a rational world, and their consequent distaste for wide swathes of the US electorate, they might gain the unshakeable grip on power they feel they deserve. Winning elections would certainly be easier – and Republicans would have to address themselves more seriously to economic insecurity. But the fathomless cultural complacency of the metropolitan liberal rules this out.

The attitude that expressed itself in response to the Palin nomination is the best weapon in the Republican armoury. Rely on the Democrats to keep it primed. You just have to laugh.

The Palin nomination could still misfire for Mr McCain, but the liberal reaction has made it a huge success so far. To avoid endlessly repeating this mistake, Democrats need to learn some respect.

It will be hard. They will have to develop some regard for the values that the middle of the country expresses when it votes Republican. Religion. Unembarrassed flag-waving patriotism. Freedom to succeed or fail through one’s own efforts. Refusal to be pitied, bossed around or talked down to. And all those other laughable redneck notions that made the United States what it is.
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