Poll shows one-quarter of world disenchanted with capitalism

BBC survey shows world disenchanted with capitalism

By Don Hank

Soon after last year’s disastrous bank crash, liberals and RINOs were quick to infer, from evidence to which only they seemed to be privy, that the capitalist system was flawed and needed regulation. Even conservatives seemed confused. Oddly, no one could come up with a uniform regulation design that would fix things or prevent such a crash. Something didn’t seem right about their take on the causes.

Not long after that, conservative pundits made an amazing revelation: Starting in the Clinton administration, an old banking law, the Community Reinvestment Act, passed under Carter for the purpose of channeling mortgages to the poor, had been strengthened. As a result, banks had been strong-armed into issuing mortgages to “underserved groups” meaning Hispanics and African Americans. Those that refused were harassed by radical groups like ACORN and/or blacklisted and/or sued by the government. Those that complied were given the highest marks and put into enviable positions from which they could make more money. The shrewdest lenders realized that this was a government-supported racket with which they could enrich themselves at little risk, as long as Fanny and Freddy were willing to back up their seemingly foolhardy lending policies. So they continued the game, and even lenders not subject to the CRA were soon cashing in, realizing that the government actually wanted them to play Russian roulette with public funds. Even when the inevitable crash came, they thought they were protected. Indeed many did get bailouts, but because of the innovative banking practice of bundling, or derivatizing, these mortgages, and then securitizing them – selling them as “securities” like stocks, bonds and mutual funds, the risk was actually multiplied to the point that even the bailouts were no longer a safeguard, because, surprise, even the US government isn’t too big to fail. The banking world on both sides of the pond, moving in lockstep like lemmings, sold and bought such “securities,” many made in the USA but also many homegrown ones, and a global disaster ensued that you are now witnessing, perhaps in person.

I know that many of you are aware of this background of the crash, but there is a whole industry devoted to telling you that this historical fact, authenticated by responsible, sober economists like Thomas Sowell, never happened. This disinformation campaign, supported by the mainstream media and universities, is overwhelming in both its magnitude and its absurdity.

I discovered this firewall of lies and distortions serendipitously while looking for articles on the issue. I had not read or heard anything lately on the causes and had also heard a Keynesian investment advisor on the radio boldly proclaiming that the capitalist system needs regulation to prevent such a crisis from recurring. Over a year ago, Sean Hannity had tried to tackle this issue, but I noticed that his grasp of the facts was a bit slippery. Later, the rest of the pundits also just dropped the ball. In retrospect, it is easy to see why. People are lazy by nature. There are a lot of esoteric concepts and language in this issue and it takes a bit of study. And after all, what’s it matter? We are only talking about your survival (please excuse the sarcasm).

To get to the bottom of this, I typed “cra causes bank crisis” in my search engine and found, compared to the legitimate articles plausibly describing the role of the CRA and government meddling in mortgages, about 20 times more articles either downplaying the role of the CRA and Fanny-Freddy and the strong-arming of banks or actually bold-facedly declaring that the CRA had absolutely nothing to do with the crisis. The gist of each one: capitalism can’t sustain itself without government regulation. We desperately need socialism under a scheme of global governance. Quick, give up your sovereignty and pledge allegiance to the UN before we all die. The truth is that government over-regulation of a toxic kind had threatened the world’s economy and those who were responsible for this outrage were self-righteously preaching to the rest of us that we were somehow the culprits and would now have to submit to their tyranny.

This is the time for conservative pundits to fly into action and defeat this insidious disinformation campaign. It is not new information that is needed, but someone must look at all the rubbish that is being written and start debunking it, because these government induced toxic loans are still ongoing. Right now the FHA has taken over the role of Fanny-Freddy in backing them and is starting to suggest that they too need a bailout. Nothing has changed. The actors are just shifting roles. We are not supposed to pull out of the crisis. It is just going to get worse — with “stimulus” money.

And that will be more evidence that the free market system “needs government control,” quick, before anyone has time to study the issues and recognize what actually hit them.

With the mainstream media and America’s – and Europe’s – professional pseudo-intelligentsia working overtime to show that global capitalism has self-destructed and that the story of the big-bad CRA and of Fanny-Freddy being the fox in the hen house are all part of a vast right-wing conspiracy, it is no wonder that the entire world is tilting to the Left in its thinking on so-called capitalism. As BBC reports (not without a certain unmistakable Schadenfreude), almost a quarter of people surveyed throughout the entire world are now saying that capitalism is fatally flawed.

Yet when you look at these statistics, you see that Americans are among the least deceived. BBC states: “In only two countries, the US and Pakistan, did more than one in five people feel that capitalism works well as it stands.”

I believe this is due to at least 3 phenomena:

1—Americans are smarter than the rest, including the BBC, because they have the commons sense to support the free market,

2–We have pundits like Rush, Savage, Farah, Beck and a whole slew of small but mighty web sites out there, like Laigle’s Forum, unspinning the spin and setting people straight.

But there’s also this I’m afraid:

2—Many Americans haven’t figured out that capitalism is no longer in place here. Many years ago they watched sanguinely as their government propped up a failing Chrysler, naively believing that the government was actually “saving” capitalism and the free market.

What was actually happening was that the stage was being set (BY BOTH PARTIES!) for Obama to come along decades later and deal the free market what was calculated to be its death blow.

There were other steps along the way to what is now being called alternately fascism, corporatism and even communism. Pick your –ism, but don’t call it capitalism, because Adam Smith would not see his ideal embodied in what we call big business in the West today.

Afterword: A reader emailed me that it was good news that 3/4 of the world still believe in capitalism. But if you go to the BBC article linked above, you see that of the 3/4 who still have not given up on capitalism, the majority by far believe the propaganda. They choose the option that capitalism “Has problems that can be addressed through regulation and reform.” A European Christian friend writes that neither capitalism nor communism are good — a conclusion that leaves socialism as the default system. If we lose this one, there will be no powerful conservative in the USA to say “tear down that wall.”

For Christians who think socialism is part of Jesus’ plan, please read the following article:

http://laiglesforum.com/2006/12/11/the-religious-left-in-bible-times-part-1/

Bankers in lockstep across the globe — coincidence?

Extrapolate the details in the following article by David Noakes to the bank crisis in the US and you get a plausible explanation for a disaster whose causes so far have not been explained or even investigated.

The author blames deregulation, although that was a secondary cause in the US. In the American media, deregulation is often blamed as well but without even a hint at the supposed mechanisms by which a “lack of regulation” might have operated to bring down the banks, and particularly how this would have happened simultaneously all over the globe. Indeed keen observers outside the elitist system have pointed out plausible causes and plausible mechanisms for our banks’ failures, such as the CRA and Fanny-Freddy and the complete lack of documentation and lack of down payments required by those semi-government Democrat-managed entities for mortgage lending. Laigle’s Forum is one of the few sites that has even attempted to tackle this issue in some depth. We find that rather than just simple deregulation or lack of regulation, it was in fact over-regulation that wrought the havoc. Specifically, Clinton had strengthened the CRA, requiring banks to make $1 trillion in loans to “underserved communities.” The only way to accomplish this was to force them into requiring no documentation of income and no down payment, absolutely suicidal policies. Bush, put up a meek fight, then went right along, urging a Zero Downpayment Initiative at his HUD web site in 2005.

But I have published the following article to show the striking similarity between the behavior of bankers on both our continents.

Knowing the extent of corruption among money managers, the below-described situation in the UK does not seem so far fetched a scenario for this country either.

Is there a clue in here for us? Note that managers of failed institutions here also got bonuses and exorbitant salaries, and none left in shame. No shame was shown on either side of the Atlantic and no one has apologized for bringing down Western finance and threatening the financial security of every citizen of dozens of countries. No accountability was demanded by government. And indeed, a dissident British banker was murdered for protesting the bad policies in place there (see below).

Compare this with the strong arm tactics used in the US when some banks wanted to refuse the bailout money. Wasn’t it really hush money?

Is it really plausible that the bizarre behavior witnessed in US banks would have mirrored the behavior of bankers on the other side of the Atlantic just by accident? How about the bailouts? They happened in concert all over Europe as well, over the protests of the citizenry, especially in Britain. Here, 90% of all calls to the US Congress urged lawmakers to vote against the bailout.

One thing is certain: International elitists in government and finance do not operate independently of each other, they are basically all in agreement, they use their willing media lackeys to overcome the public’s mistrust, and public mistrust of them is at an all-time high everywhere. There is no debate over the “wisdom” of the bailouts, no hint that the payments would be accompanied by any change in policy or regulations. And this despite the whispered accusation that bank failures were due to under-regulation – an accusation that catapulted ultra-elite, ultra-Left, ultra-incompetent Obama to power. Why wouldn’t bailout payments under Obama be predicated then on the passage of new regulations and strict compliance therewith?

Clearly, the public is being led around by their noses by an international group of cynical idealists and elitists who think we are all stupid.

It is a miracle that we have not yet seen massive protests.

But then, our bellies are still full.

Just wait…

Donald Hank

 

Did directors deliberately destroy their own banks?

By David Noakes

The Royal Bank of Scotland (RBS) went from assets of plus £88 billion in 1999 to estimated liabilities of minus £1.3 trillion in 2009 – equal to a year’s income (GDP) for the whole of Great Britain. If Directors with mental disabilities had been appointed, they might have reduced the bank’s value by half. But to utterly destroy it on so stupendous a scale took real knowledge and determination.

It seems clear the wholesale mismanagement and corruption of banks by their directors was not unbelievable incompetence, but criminal. The government huffs and puffs at bonuses and pensions paid as a reward for failure, but then in every case it lets those corrupt payments, totaling billions of pounds, stand without passing legislation to confiscate.

It looks as though these huge bonuses and pensions were intentionally paid to compensate directors precisely for destroying their own banks, and for a job well done.

HSBC quietly possesses an ethical, Christian board. They are well managed, profitable, and took no part in creating this crisis. Standard Chartered Bank’s profits actually went up, even in 2008/9.

But take the case of Abbey National. In July 2004 their risk management officer, Richard Chang, was objecting that the run down of the bank by directors was deliberate (it resulted in the Bank’s ownership being transferred to a European Bank, Santander.)  The HBOS whistleblower alleged the same.

Anonymous documents then arrived at the board with similar suggestions, with additional evidence of sexual impropriety among Directors. Richard denied he had sent them, but was called in for a two and a half hour interrogation by the directors at the hands of Kroll corporate security, during which he was bullied and threatened, and at the end he was found dead five floors below at the bottom of the internal Atrium in Abbey’s London head office in Euston.

The courts, CPS, coroner, FSA, directors and police have closed ranks to prevent a criminal prosecution or investigation. These services all have large numbers of freemasons in their senior structures.

High ranking Freemasonry runs right through this banking crisis. All the failed banks, Northern Rock, Abbey, RBS, Halifax Bank of Scotland (HBOS) had Freemasonry controlling their boards. Gordon Brown is a 33rd degree Scottish Rite Freemason, as was Tony Blair; there are 400,000 of them in Britain.

Brown’s job seems to be to take advantage of the destruction of the banks, by pouring far too much of our economy into those ready made back holes, which will destroy the Pound Sterling.

The crisis was caused by the USA and EU governments deregulating banks in 1999. Massive, self collapsing bubbles predictably formed in every market including housing, stocks, and derivatives. It is deregulation that enabled corrupt boards to wreck their own banks. They now have estimated liabilities of £7.2 trillion or £250,000 per household; they should now go bust; Britain cannot afford to save them.

Freemasonry and Common Purpose are the European Unions’ foot soldiers on the ground in Britain. They know the EU dictatorship cannot be built while there is a strong Britain on the doorstep; we stopped them twice before in 1918 and 1945, and Britain has to be destroyed if the dictatorship is to succeed.

These British traitors get their massive payoffs for handing Britain to the EU on a plate, poverty stricken and stripped of democratic defences.

Many of those won’t realise that the initial deflation of the recession they worked so hard to create will, with the trillions Brown is borrowing for the banks, turn into hyper inflation with super high interest rates, and in two years they could be starving with the rest of us, their gravy trains and bribe money useless, their houses repossessed, as ours will be.

If you wish to avoid this ghastly future, you need to do your part now in talking to people about a General Strike against the EU, our government, Law Lords, and all the senior officials who are so deliberately sabotaging our nation.                                                                 David Noakes. eutruth.org.uk. 07974 437 097

Are conservatives seeing the Keynesian light?

There is now talk of Keynesian economics – in reverent tones, on both sides of the aisle. As a quick review, John Maynard Keynes is the Big Government economist who said that even if the government paid people to dig ditches and fill them back up again, that would stimulate the economy. Obama – along with Bush, McCain and many others who voted for the bank bailout – seems to believe this.

Thus the Left is propagating the story that FDR’s initial attempts to stem the Great Depression failed not because he spent tax money but because he didn’t spend enough. They point to the way WWII stimulated the economy.

What they forget is that back then

1 – America was a huge manufacturing engine. The war primed this engine.

2 – America was on the gold standard. Money spent to stimulate it was real, not the play money we use today

The mainstream media, enamored of Big Government, are saturated with stories about how conservatives are leaving the GOP for the Democratic Party. The narrative is that, now that Bush and McCain have gone down in flames, one-time conservatives have seen the failure of conservative principles, have seen the light and are drifting leftward in droves. Capitalism needs “change.” Pro-life ideas need “change.” And change is spelled: d-e-s-t-r-o-y.

I just got done gagging on one article written in this vein. My response to the author is below.

 

Hello Mike,

Re. your article mjoseph@centredaily.com

You make some good points, but you missed the main story:

Bush did not fail because he was too conservative. He failed because he was too far left.

Look at the evidence:

— overtures toward global governance (SPP, Mexican truck highway, acquiescence on climate control)

— open borders

— attempt to massively pardon invading lawbreakers

— harsh sentence for border patrol agents who fired at fleeing drug dealer, use of this drug dealer’s testimony (with immunity) to convict the agents

— no real advances in the pro-life agenda, with abortion proceeding unabated

— majority of Syrian Christians forced to flee Iraq and now living in Sweden, their churches burned to the ground (they were safer under Saddam!)

— support for creation of a Muslim state in Europe (Kosovo)

— treatment of the far-left Lula in Brazil as a moderate

— support for a trillion dollar bailout bill with no strings attached to the giveaway

— faith-based initiatives providing a means for the State to control major aspects of church policy

— No Child Left Behind greatly expands government, further reverses Constitutional role of the states in education

— acquiescence to the Left’s agenda to strong-arm banks into lending under no-down payment, no-doc policies under the CRA, as aided by ACORN (I have a copy of Bush’s HUD site’s page touting his “Zero-Downpayment Initiative”)

Economically, Bush was a Big Government Republican like Herbert Hoover. The mistakes of this left-leaning politician posing as a conservative have misled some gullible people to believe that conservatism is not viable.

The thing that is not viable, and may never be viable, is the GOP. Their election of moderate Michael Steele as the RNC chair shows they just aren’t smart enough to win any more.

The real story for you to cover is Republicans fleeing to the American Independent Party.

Best,

Don Hank

Editor in Chief

http://laiglesforum.com

Shifting the blame from Left to greed

Blaming greed for failed leftist policies

Donald Hank

The Pope has said, over the Christmas holiday, that the world must overcome greed to get through the current economic crisis.

With all due respect for the Pope, whose stance on social issues are to be applauded, both Protestantism and Catholicism, while blaming greed, have failed to grasp the nature of the Left and its role in crises such as the financial and economic crises gripping the world.

The CRA (Community Reinvestment Act, passed under Jimmy Carter) and the way it was enforced, including the role of ACORN, played a major role in bringing down the banks. Generally, the trend to lend money, particularly mortgages, to people with no down payment and even without proof of employment, goes against all common sense and good banking practice, which has been in place since the beginning of time and throughout the world, and has proved disastrous. And yet so many are in denial, even to the utterly absurd point of casting all the blame on conservative policies and seeing the Democrats as being more economically astute and hence capable of pulling us out of the current crisis of their own making — sort of like Clinton “reforming” the failed welfare created by his party. Anyone paying attention in the years since 1995, when Clinton ordered the banks to lend a trillion dollars to “underserved communities,” would have been able to foresee this collapse. Some actually did, including a New York Times writer in 1999.

I suppose it could be argued that the Left, in its own way, represents greed, but it is probably more appropriate to call it ideologically motivated rather than greedy. Ideological motivation, rather than common sense, has caused the greatest destruction known to man — under Stalin, Mao, Pol Pot, etc.

None of these men’s political actions were greed-motivated in the accepted sense of the word. In their decisions that led to the murder and starvation of millions, they were, however, blinded by leftist utopian (revolutionary) ideology — a desire for a better world, for change, and ironically, for a world with less greed.

Ideology killed 100 million innocent people in the last century (see “The Black Book of Communism by Stephane Courtois). No other factor, including greed, has ever done anywhere near that much harm.

America lacks standing

America lacks standing

 

By Donald Hank

 

Well, the Donofrio case against Obama (one of the many court cases the media refused to tell you about for months), demanding the showing of a real birth certificate, has failed, and I am getting near-frantic emails from conservatives who had entertained hopes that Donofrio, and hence, justice for all, would prevail.

Here is what I am telling them:

The constitutional damage was first done in 1913 with the institution of the Federal Reserve and income tax, and was almost total by 1973 with Roe v Wade, when some justices unlawfully decided that the Constitution affords a right to kill, and there was no general outcry.

They stopped defending the unborn, but I wasn’t an unborn so I said nothing…

The Constitution was further undermined by G.W. Bush when he decided that, as chief law enforcer, he could pick and choose which of his constitutional duties to fulfill and chose not to comply with his duty to defend our borders. He suggested this was his duty as a Christian, saying on national TV, first, “they are good people looking for a better way of life”…and ending with “it [letting undocumented stay illegally] is good for our soul.”

Bush thereby not only overstepped his constitutional bounds but also donned the clerical hat, as though America had anointed him as their Pope, not their president. And here is where “conservatives” got egg on their faces. Many gave him a pass, believing in their hearts that Bush was sent by God as their “ruler” rather than lending him power with the reservation that he uphold the Constitution, as must be done in a Republic. Thus it wasn’t Bush who failed. It was American Christians.

They stopped defending the victims of violent crimes perpetrated by illegal aliens, but I wasn’t a victim of crimes committed by illegal aliens, so I said nothing…

McCain did likewise, supporting an illegal bill to give amnesty to lawbreakers. He too played pope, condescendingly calling illegal Mexicans “God’s little children.” Obama and his party did much the same simply by ignoring the issue.

Then the president and both candidates strongly supported an unconstitutional role of government in our economy, giving failed banks a trillion dollars in an unprecedented move to blend government and business, plunging the US into full-fledged fascism. A few conservatives bravely pointed to the role played by the Community Reinvestment Act, but then fell silent. (I received a lengthy commentary on the causes of the bank crisis, written by a “conservative” think tank. It failed to even mention the role of the CRA, a Democrat law that forced banks to lend $1 trillion to “underserved communities” notorious for bad credit, high unemployment and welfare entitlements.)

No one in the highest positions is now following the Constitution, let alone showing common sense, so how can anyone contest what Obama is doing?

We didn’t protest Wade v Roe, not enough of us protested amnesty and open borders, we allowed these to become non-issues during the campaign – for fear of the big, bad ‘bama – and now that the bailout is a fait accompli, few are protesting it any longer. And we wonder why the courts aren’t listening when someone protests that an illegal alien is president.

Then they abandoned me and there was no one left with the moral standing to defend my Constitutional right to a legitimate American born president.

It was the choice of Americans to ignore the Constitution, and the powerful undercurrent to scrap the Constitution and to substitute it with the public whim du jour may well have too much momentum to stop at this point.

So now, tell me the truth: were you really surprised that Donofrio failed?

And yet, God is still on His throne. Watch closely for His hand now.

 

 

Fascism, it’s all the rage in America

 

Donald Hank

 

A few years back I started noticing free AOL CDs on display at the local post offices. I was annoyed that AOL could get free advertising. I am a businessman too, so why wasn’t the US government advertising my business? Or yours for that matter.

So I asked an official at the window how it is that the US government can choose one business over all the others to promote? Was that legal? It certainly was not fair.

No one knew the answer to that, but I kept protesting it every time I went to the post office. The officials I spoke with were sympathetic but all said I was the only one protesting. Everyone else seemed to think this was fine.

To be fair, the advertisement was ostensibly focused on the post office’s new web page, and that was the pretext for the free plug for AOL. But it wasn’t kosher because no other internet company was mentioned. Eventually they stopped.

Of course, even further back than that we saw Chrysler getting bailed out at taxpayers’ expense. And now we see major banks getting bailed out as a reward for dismal performance and the auto workers lined up for their reward for the same kind of performance and for overpaying their workers, and it is clearly just the beginning of a burgeoning trend.

How long will it last?

I think the answer is: until such time as it fails, and like all other unconstitutional policies, it will inevitably fail due to natural causes.

 

RWTNs may save America

 

Donald Hank

 

It was a communist, Deng Xiaoping, who fixed a nation destroyed by Chairman Mao. He did it using a novel system: capitalism. The fact is, all leftist mistakes are eventually fixed by leftists using conservative methods that had been previously denounced.

Another example, it was a group of French communists (Stephane Courtois et al.) who bravely wrote “The Black Book of Communism” exposing that fact that about 100 million innocents had lost their lives on the altar of the Left in the 20th Century.

Thus, to save the day, Left inevitably drifts rightward. It will always be so as long as God is in His heaven and His natural laws are “on the books.”

By now you have probably heard of Michelle Rhee, the no-nonsense Chancellor of Washington DC’s school system, who is being entrusted with fixing what the Dems broke. She is a Dem too but is using a Republican method: discipline, for both teachers and students. Her draconian measures will include weakening the tenure system while strengthening performance pay for teachers and closing several failing schools, all to the vain protests of the teachers’ unions. Nature has won out, by proving the failure of Leftist control over education (Washington’s schools have been among the worst in the world).

The Left can hate conservatives as much as they want, but their would-be utopian world will inevitably continue to fall apart, and when they can’t stand it any more they will become RWTNs, Republicans Without The Name, the mirror image of RINOs.

As Anne Coulter famously said in a book by that title, if liberals were smart they’d be Republicans. I would modify that and say “if Republicans were smart they’d be Republicans,” but it’s a little late for that.

But to return to my story, let’s take a look at what the Dems have had to do over just the last 2 decades or so:

– Clinton was given the – for him – distasteful job of “fixing” welfare. The Republican congress forced his hand, but he would eventually have had to reform the system anyway out of sheer embarrassment. He did a passable job, short of eliminating the dreadful system altogether.

– Democrats (as well as Republicans) in Louisiana rejected Congressman William Jefferson, a Democrat who stole too much, this election.

– And note that it was a Democrat, Phillip Berg, who first sued Barack Obama and the DNC for failing to present proper credentials for their candidate.

– The Department of Public Health of the fanatically pro-homosexual government of Massachusetts recently came out with a report showing that homosexuality is unhealthy and leads to destructive behavior. (Conservatives had been saying that forever but were shouted down).

All of this is evidence of what I had tried to show in my WND article “The socialist State: a hotbed of capitalism,” namely, that behind the scenes of every leftist policy is a hidden conservative system that props up failed socialism.

So what is the secret to all of these successes of the RWTN’s? And what was the role of conservatives?

In each of these cases, conservatives had long done the research needed to lead to these positive results.

Yet, nothing happened until “liberals” were allowed to believe that they had come across the information, and the resulting solutions, on their own.

In other words, we must use the same system used successfully with all children.

Tip: To avoid out-of-control, violent tantrums, do not, under any circumstances, remind liberals that it was our idea first.

How to make a leftist squirm

Is America more immoral than Russia?

Recently the prelate of the Russian Orthodox Church gave a speech before the EU and admonished Europe for her lack of morality.

The mayor of Moscow bashed heads to stop a “gay” parade.

Christian decency and morality is on the rise in what was once the Russian Republic of the atheistic Soviet Union. A friend from my church is a missionary there and he agrees with me that Russia is much more moral than the U.S. and Europe in many ways (despite obvious shortcomings).

Good and evil are mobile. God does not have a single steady home except in the hearts of Christians, and right now, it looks like He may have moved his headquarters to a highly unlikely, more Christian-friendly venue. At any rate, He is still alive and doing quite well.

Ironically, Russia may at some point become the counterbalance for good against some vast evil empire in the West. God works in mysterious ways…

LF editors

 

How to deal with an Obamacrat

Yesterday I met a Democrat at the polling place who was handing out literature for a local candidate. I asked him about his candidate and he described him but concluded “I am further to the left than he is.”

I said “You are a leftist?”

He said he was.

I immediately said: “What caused the bank crash?”

He was taken aback but blurted out the usual nonsense about “lack of regulation.”

I said “what about the CRA?”

He had never heard of it.

I said “the Community Reinvestment Act.”

No, he never had heard of it.

I said “I’m not going to do your homework for you. Look it up. You democrats think the newspapers are God’s infallible word. You assume everything you read or hear on ABC or CNN is true and you let them make up your mind for you. Yet now when I mention the CRA it is clear even to you that you lack even the most rudimentary information on which to base your vote and your ideology.”

I went in to vote and when I passed this guy out front, he looked at me inquisitively and said: “Community Reinvestment Act, right?”

Bless his heart. He obviously was going to look it up. He wanted to know the truth. The only thing between him and the truth were the media, Obama, McCain and Bush!

Who can blame him?

Maybe one mind has been reached with the truth.

Donald Hank

 

Deregulation did not cause crisis
by James Gattuso
Issue 119 – November 5, 2008

“The trouble with the world is not that people know too little, but that they know so many things that aren’t true.”–attributed to Mark Twain

Easy answers are seldom correct ones. That principle seems to be at work as the nation struggles to discover the causes of the financial crisis now rocking the economy. Looking for a simple and politically convenient villain, many politicians have blamed deregulation by the Bush Administration.

House Speaker Nancy Pelosi, for instance, stated last month that “the Bush Administration’s eight long years of failed deregulation policies have resulted in our nation’s largest bailout ever, leaving the American taxpayers on the hook potentially for billions of dollars. Similarly, presidential candidate Barack Obama asserted in the second presidential debate that “the biggest problem in this whole process was the deregulation of the financial system.”

But there is one problem with this answer: Financial services were not deregulated during the Bush Administration. If there ever was an “era of deregulation” in the financial world, it ended long ago. And the changes made then are for the most part non-controversial today.

Read more

French mainstream press confirms our assessment of the financial crisis

French mainstream press confirms our assessment of the financial crisis

 

Some American news consumers insist that anything not based on mainstream reports is not worth their while reading. In fact, I just heard Alan Colmes attacking Jerome Corsi on his book The Obama Nation and one of his chief criticisms was that Corsi uses conservative media as factual support.

Now, I have previously refuted at this site the leftist view that our current financial crisis is due to rampant laissez-faire free-market finance. I have shown, based on various sources, that in fact, the blame lies squarely with the government, and particularly with the CRA and its beefed up enforcement under Clinton, and unfortunately, under second-term George W. Bush as well. Certainly, some readers who think like Alan Colmes were skeptical and dismissive of my facts, even though most come from neutral sources.

That is why I was delighted when a French colleague recently sent me an article from the online version of the daily newspaper Figaro confirming my assessment of the financial crisis and its origins.

Now, while the Left in France does classify Figaro as right of center, you need to understand that this is a highly respected century-old publication that enjoys a very large hardcopy readership, with over 400,000 copies distributed and with an amazing 4.224 million unique on-line visitors, making it the number one news site in France today.

By contrast, the newspaper at the other end of the political spectrum, Libération, has a hardcopy readership of only 160,000 and claims only 150,000 visitors to its web site.

Clearly, French readers on both the Left and Right trust and prefer Le Figaro.

 This is why I took the pains to translate Figaro’s recent article “Subprime accused, State guilty” by Vincent Bénard.

This translation is one item you can safely forward to your most skeptical friends.

Donald Hank

 

 

Translation  of :

Subprime: market accused, State Guilty

 
09/09/2008 | Updated : 10:43 |

 

Vincent Bénard, President of the Hayek Institute of Brussels, author of “Le Logement, crise publique, remèdes privés” (Romillat), reviews the subprime lending crisis and takes the side of the free economy when Freddie Mac and Fannie Mae, two mortgage refinancing agencies, are placed under the conservatorship of the United States government.

The cause is understood by many observers: the subprime financial crisis is due to the madness of the markets and shows the limits of unbridled finance.  And they urge more public regulation of financial institutions.

Free enterprise is the whipping boy again, because there is no market more perverted by the intervention of the federal government than that of mortgage credit in the United States.

The two institutions with the cute nicknames Fannie Mae (FNMA) and Freddie Mac (FHLMC) bear a heavy weight of responsibility in the financial unmooring of the American banking system.  The former was initially a government agency created in 1938 by the FDR administration to issue low interest mortgages thanks to federal guarantees, which supplied liquidity to a home loan market at low rates accessible to lower-income families.

In 1968, the Johnson Administration, realizing that the State-guaranteed commitments of Fannie Mae were becoming broader and would be subject to the lending capacity of a treasury department mired in financing the Vietnam War, arranged for it to be privatized.  Then in 1970, the Nixon administration created Freddie Mac to provide a semblance of competitiveness in this mortgage credit refinancing market.

This background provided Fannie Mae and Freddie Mac with a hybrid status of Government Sponsored Enterprise (GSE).  Thus, they were private but legally bound to deal exclusively in home loan refinancing under federal control in exchange for tax breaks.  Worse yet, while being officially private, the two agencies have always been considered – thanks to their public sponsorship and their social role, to benefit from an implicit guarantee on the part of the American Treasury!

Privatized benefits, collectivized losses: such a cocktail was bound to prompt the executives of the GSEs to take excessive risks if the state sponsorship came up short.  This is exactly what happened in the 1990s.  It was reminiscent of a famous French scandal…[The author is referring to the Credit Lyonnais scandal in which the French government bailed out that bank]

The sponsorship of these two enterprises was transferred to the US Housing and Urban Development Department (HUD) in 1992, because that agency wanted to influence GSE-financed loans to satisfy a major objective of any self-respecting politician in America, namely, increasing the home ownership rate among low-income populations, notably minorities.

Thus, the HUD forced Fannie Mae and Freddie Mac to increase both the volume and the proportion of refinanced subprime credits (up to 56% in 2004).  To make matters worse, one of the HUD bosses, fearing that the declaration of risks taken by the two GSEs in order to satisfy these rules, would cause the markets to lose confidence in them, solved the problem by making it perfectly legal for them not to disclose too many details about their exposures.

Thus, using increasingly complex mortgage products, Fannie Mae and Freddie Mac refinanced more than five trillion dollars in credits, or 40% of American homes, including more than half of subprime credits even though they did not have enough of their own funds to commit to such amounts.  As a result, the banks issuing these credits could afford not to be too particular about the loans they authorized, because there were two refinancers on the stock market to back them up.  Countrywide, the bank whose lending policies to lower-income families is now vilified, was incensed only three years ago by the executives of Fannie Mae for their brash subprime lending policies.

But the downturn in the economic boom multiplied borrower defaults, and the two GSEs are threatened with not being able to meet their obligations, which could spread to all institutional investors.  Now the State is urgently calling for their rescue, which will cost the taxpayer several hundred billion dollars.

A second public intervention expanded bank excesses in granting credits to insolvent families.  In the 1990s, studies showed that members of black and Hispanic communities had loan applications turned down somewhat more than whites or Asians, although these refusals only amounted to one application out of four.  Certain lobbies saw in this not a logical reflection of less wealth in these communities but rather proof of purported racism in the financial world.   

An antidiscrimination law of 1977, the Community Reinvestment Act (CRA), was thus strengthened in 1995 to crack down on banks refusing credit to minorities under penalty of greater sanctions.  The banks were thus obliged to partially relinquish the precautionary role they normally play when refusing a loan to a person who is objectively less solvent.  No big deal: Fannie Mae and Freddie Mac were there to refinance these shaky loans!

Today, many experts believe that, without the CRA, and without the GSEs, minorities would have more access to property than they now do, less quickly but more soundly.  By trying to artificially accelerate what the free economy accomplished at its own rate, it was the State that, through both regulations and legislation, led the actors in the credit chain to behave irresponsibly, causing a serious financial crisis and resulting in the failure of many families it purported to help.

Translated by Donald Hank

 


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The REAL giving myths

 

 The REAL giving myths

By Donald Hank

In an article Giving in Today’s Economic Crisis, Dr. Steve McSwain (author of the book The Giving Myths) advises Christians to keep on giving despite the economic climate. Commenting on the causes of the crisis, writes:

…It’s not just corporate big shots, however, who are to blame for the failure in our financial markets. Granted, many of them have watched their companies close while they’ve safely floated away in “multi-million dollar parachutes.” But, there are many ordinary folks who are to blame, too. The majority of people in our culture have, in the words of Will Rogers, “borrowed money they don’t have, to buy things they don’t need, to keep up with people they don’t even like.”

Dr. McSwain never once mentions government culpability in this article. While claiming to be a myth buster, he seems to be a victim of the most pernicious myth of our time, namely, that the recent bank meltdown is due almost exclusively to Wall Street executives on the one hand and to you on the other. His article shows absolutely no recognition of the root causes of the problem, namely, government forcing Government Sponsored Enterprises (GSE) like Fanny and Freddy to give (under the CRA) to their favorite charities, the interest groups, in order to score political points – by forcing them to treat high-risk borrowers like low-risk borrowers.

The press release then gives advice to parents:

Don’t fret over the money markets, especially in front of the kids.

So not only does the author deny the root causes of the crash (or is he ignorant of them?), but he actually advises parents to make sure the kids don’t catch wind of this meltdown at all. In other words, let’s make sure history gets repeated, through ignorance. Continue reading