All the News That's Fit to be Tied

I have an axe to grind, but unlike the New York Times, I freely admit it.

Sunday, September 28, 2008

John McCain's White Horse

With some minor exceptions media pundits tended to play down the importance of McCain's ride to Washington and try to portray it as grandstanding and politicizing the situation. On Tuesday Senate Leader Harry Reid said the bill would not pass unless McCain provided support. On Wednesday, when McCain said he would return to the Capital to work on the bill Reid said he would just get in the way. On Thursday, the Democrats called a news conference to say they had a bill and McCain's efforts would not be helpful. However, in truth there was no deal and it became clear all too quickly. McCain arrived; the President called Obama to the White House, and once everyone was in the same room the truth emerged. There was no deal. House Republicans were not included in the discussion and the bill did not have enough Republican support in the Senate to survive a cloture vote. One thing is clear. The Democrats could have passed this bill without the House Republicans, but quite frankly, they didn't and still don't have the guts. Even as late as tonight the Speaker of the House is saying she must have a substantial number of House Republicans on board or else. Why you may ask? It's because despite the necessity of this bill the public's perception of it is piss poor and no one, it seems, has really made an effort to explain it. I will probably continue with the fine points of the bill for most of the week, but I want to return to McCain's white horse. Despite the way McCain's efforts were slammed by a liberal-leaning press, his effort to force the Democrats to include the House Republicans in the discussion was very successful and has given the American people an opportunity to see this bill in its entirety on the internet. Conservative Republicans have much angst with the bill, Democrats do as well. There is every indication that the bill will work in so far as the market is concerned if the Congress would stop fooling around and pass it. McCain’s foray forced this bill into the light. A place it would not have ever seen if left to the Administration or the Democrats.

Musings from W314

When your stuck in a hospital bed in the middle of what some are calling a massive financial meltdown and you don’t have a connection to the internet so you can’t update your blog or communicate to the external media it permits you to pick-up on some details that fall victim to partisan politics, presidential politics and just divisive politics in general. What follows here are observations that have been brought to light in the past few days. They have been given short shrift by the mainstream and cable media, and shrill shrift by politicians. It’s Thursday night. The White House Meeting ended badly with both Republicans and Democrats showing their true colors. Both are choosing to ignore the real solution to the current problem and instead are trying to use the situation to fast-forward their own political philosophies. Republicans want less government intervention and Democrats want more. The President wants the money with few ties. Unfortunately he only spent a minute telling the American people what will happen if the deal collapses. So I want to take a little bit of time to tell you how this will effect your everyday life if it fails or is turned into a lightless Christmas tree and empty cupboard by December. When you walk into the supermarket there are thousands of products in high quantities. You pick what you want, you pay and go home. You don’t wonder how it got there and quite frankly that is the beauty of our economy. The same is true for most large, medium and even small retailers who must use credit to finance inventory and it is true for most. Unfortunately most people won’t get it until the shelves are not being refilled as fast as they use to be. On the other hand, the Treasury and Democratic solutions seemed okay at first, but that was because they never included the Republicans. When the Republicans forwarded their own plan the meeting ended with Democrat House Member Barney Frank (D-Mass) apparently blowing his top and saying that everything was okay until the Republicans stuck their noses in. Hello Mr. Frank. They may be in the minority, but the do have a voice. The saga continues….
Other Notes:
John McCain suspended his campaign events to perform his duties as a sitting senator and de facto leader to voice the view his party. Barack Obama invited his colleagues to call him if they needed him, until the President forced his hand and invited him to Washington.
This week all charges against disgraced representative Mark Foley (R-Florida) were dismissed. He was forced to resign because of sexually-tinged emails allegedly sent to House Pages. He was never accused of having sex with young pages like former and deceased Massachusetts Senator Gerry Studds, who was greeted with a standing ovation by the Democratic Caucus when he returned after an ethics investigation in which it was determined he had sex with young men but did not violate the spirit of the house rules. This week also NY Representative and Chairman of Ways and Means Charley Rangel has admitted to several income tax violations, illegal use of the House Garage and falsifying his annual ethics filings. The Democratic caucus voted he should not give up his chairmanship.
Florida Representative Al C. Hastings said that any one who would support toting guns and skinning moose don’t care too much about blacks and Jews. (If you capitalize Jews must you capitalize Black?)
CBS’s Katy Couric took out the long nails today asking McCain’s VP choice for specific examples of government regulation he supported besides reform of Fannie Mae and Freedie Mac. Obviously this demonstrates why she in longer the anchor of CBS news. Katy, Katy, pull in your claws.
Marc Lamont Hill, a PH.D from Temple University is a pro-black, pro-black rasict who puts every problem in the black community on the foot of white people, white government and the white world. Hill is just another emerging dull-minded luminary like the aging Cornell West whose intellectual chicanery had the academic elite on their knees for years.

Tuesday, September 23, 2008

Expert, Schmexpert, we need a solution.

As the administration, the Congress and other kibitzers try to seal the deal on the trillion dollar bailout there are two items of importance missing from the so-far proposed solutions; Fannie Mae and Freddie Mac. The solution, which is being danced around, is to dissolve Fannie Mae and Freddie Mac. Create an organization like the Resolution Trust, which was created for the Savings and Loan debacle, to sell the good Freddie and Fannie holdings to investment firms or banks at a small discount and buy up the poor holdings at a greater discount. This will help the housing market find a bottom and at least open up the possibility of a housing recovery. More importantly it will take the Federal Government out of the mortgage business. The Congressional Chairman of the House and Senate Banking Committees should be forced to resign as should their Republican predecessors. The Banking Committees battled and defeated every effort to reform Fannie and Freddie when wiser heads saw the writing on the wall. They should not “Pass Go,” but “Go Directly to Jail.” As noted in a previous column and agreed with by most experts, Fannie Mae, Freddie Mac and the U.S. Congress have led us to this disastrous moment and their only response so far is to bicker over how to spend the taxpayer money that must be injected to save the system. The problems with Fannie and Freddie did not begin last week. Some may argue that the problems started with the inception of the organizations, which were started with taxpayer money and permitted to operate as quasi-government mortgage agencies. Later when there was lots of money in the till the Congress turned Fannie and Freddie loose on the mortgage market by making them "private" companies with stock, chief executives, boards of directors and shareholders. I would say it was more recent. Truth is Fannie and Freddie operated okay for while. Having more money than anybody else they held over 40-percent of all the mortgages in America. At some point along the way the goals of Fannie and Freddie were modified. It has become a cesspool of influence peddling and a dumping ground for administration officials after their party leaves the White House. In fact, we could see Treasury Secretary Hank Paulson emerge as a major player in both organizations when President Bush leaves the White House next year. Jamie Gorelick and Franklin Raines of the Clinton Administration were paid over $100 million to lead Fannie and Freddie, and Raines was president of Fannie Mae when Barack Obama became the largest second largest receiver of contributions from the mortgage giant. Raines has gone on to become a stealth economic advisor to the candidate, as his public presence is no longer of any value. Like other Barack advisors and friends (Ayres, Rezco, Pastor Wright, Louis Farrakhan and others) those who get caught in the media light must be thrown under the bus or made silent and invisible for the good of the candidate. In the 90’s it was decided that removing racism from the mortgage market would be the new goal and Freddie Mae and Fannie Mac were perfectly happy to participate. Through Congressional regulation and financial pressure banks began to provide mortgages in neighborhoods that had been previously locked out through the process of “redlining.” It was an honest enough mistake. Most banks thought they would never see their money from these redlined districts and the Congress felt it was guaranteeing these mortgages so the banks should comply anyway. So they did. The result was an increase in foreclosures, but it was not enough to ring the alarm bells yet. The something more drastic occurred. In order to provide the home-ownership component of the American dream Congressional leaders encouraged to Fannie and Freddie to finance the no-money down, no-income check adjustable rate mortgage and constructed regulations with the help of HUD to package these sub-prime mortgages and sell them to investors in the form of mortgage bundles. This action encouraged mercenary and legitimate real estate and mortgage brokers to sell homes to people who would not have been previously qualified giving rise to the late-nineties housing bubble that pushed up housing prices around the nation. The bubble has now burst because of that old axiom: If it’s too good to be true, it probably is. However American citizens may still have a say if they call their Congressman fast enough.

Wednesday, September 17, 2008

You took the ride, now take the slide

Peel away the layers of the current economic onion. Deep in the center of this Wall Street bailout you find the foul stench of Fannie Mae and Freddie Mac. These two entities, which are controlled and protected by the U.S. Congress, are almost the sole cause of the collapse of Merrill-Lynch, Bear Sterns, AIG and the additional dominoes that will fall in the near term. These two former government agencies permitted to operate like private companies on taxpayer money peddled the dream of home ownership like a heroin dealer to people who lacked the means to pay for the long term. But like a typical government bureaucracy they were not forced to be responsible for their poor decisions. Through the miraculous procedure of federal regulation they were permitted to sell these poor-quality mortgages in bundles to investors flush with cash from the demand for savings and planning financial instruments like IRA's, Keogh's and pension funds. And naturally since Fannie and Freddie were government backed buyers knew in advance that when, not if, it went bad the government would have to come to rescue or be exposed as the culprit. It is well known that every effort to reform Fannie and Freddie was stymied by the Congress. It is also well known that Fannie and Freddie were political repositories for the loyal allies of Presidents, Representatives and Senators. One of its latest members, Franklin Raines, a former Bill Clinton budget director, was paid almost $90 million over six years. He is a major economic policy advisor to Barack Obama, who was second only to Chris Dodd of Connecticut, in political contributions from Fannie and Freddie. I think that if most Americans knew the complete story of Fannie and Freddie they would be truly outraged. The behavior of our Congress is far worse than any of the offenses for which they assail Wall Street. Their attempt to regulate the stock and bond market, as well as the banking and mortgage markets demonstrates the same heavy-handedness as their attempts to control the behavior of American citizens through the tax code. Don't be fooled by the diatribes of the political class. The current crisis falls directly at the feet of Congress. Hold them to account when its your turn to pull the lever. The action, or lack thereof, that has caused the value of your house to slide is the responsibility of the U.S. Congress, its support of Fannie and Freddie and its failure to be good stewards of taxpayer money. The $200 billion for Fannie and Freddie, the $85 billion for AIG is chump change compared to the $3 trillion of your money they spend every year. To quote Hilary Clinton, "it's time to wake up and smell the coffee."

Sunday, September 14, 2008

Okay, Everybody Back to Work

The conventions are over. Enough has been said about them to fill a hundred books so let's move on to the important stuff. Both parties have laid it out for the voters and now its time for the voters to decide. The Democrats selected Obama and Biden. The Republicans selected McCain and Palin. Both are dissatisfied. With less than two months to go this is the time when most people start to pay serious attention to the Presidential election. In that regard ABC news may have blundered when it turned Charlie Gibson loose on Sarah Palin. His obvious attempts to paint her as not "ready for prime time" were more than obvious. Apparently Gibson wanted to let McCain know he was much more knowledgeable about U.S. foreign policy and heads of state than Palin. With his glasses low on his nose, in the fashion of FOX's Brit Hume, Gibson looked down sympathetically at the young thing near the tip of his nose. On the other hand, NBC news may have made a self-saving gesture in the demotion of Chris Matthews and Keith Olbermann. Insiders (other reporters) were saying it was Brian Williams, Tom Brokaw and Andrea Mitchell that complained to upper management, but the truth is that they are just as biased as Olbermann and Matthews, and just slightly more subtle, but obvious never-the-less. The conservatives have an uphill battle against the liberal-leaning, mainstream media and the PR machine of the Academic and Hollywood elite, but the task is not hopeless, just daunting,