A Short History of the Subprime Mortgage Crisis (aka the "minority mortgage meltdown")

"Everyone has a theory about the financial crisis. These theories range from the absurd — from claims that liberal Democrats somehow forced banks to lend to the undeserving poor (even though Republicans controlled Congress) [...]" (Paul Krugman, NYT, March 7, 2010)

There that Krugman fool goes again. Wins a Nobel Prize ostensibly for economics (but probably because the left-leaning Nobel Prize committee wanted to give credibility to his paranoid leftist rants in the NYT editorial pages) and now he thinks he can veto truth, facts, and history.

Call it force or call it pressure, but the government placed LOTS of it on banks, mortgage lenders like Countrywide, and Freddie Mac and Frannie Mae in order to boost homeownership among minorities. And no one claims it was just coming from the liberal Dems. Bush Junior was just as responsible for pressuring banks to lend to underqualified minorities with low incomes and bad credit as the Dems. But don't take my word for it. Krugman's employer, the New York Times, does a great job in chronicling how leftists and politicians pressured banks and mortgage lenders to loan more to minorities.

Leftists don't want you to know that the subprime mortgage crisis was spawned by themselves and wooly-eyed politicians. Why? Because then they would have to cease and desist from their never-ending activism to "close the gap" in homeownership between whites and minorities.

In this blog, I will show how leftists and our government - with the best of intentions of course! – helped bring about the subprime mortgage crisis.

And to avoid accusations of bias, I will only use archived articles from the New York Times – Krugman's employer and our nation's premier leftist newspaper!

First some background. Congress passed the Community Reinvestment Act (CRA) in 1977 to encourage commercial banks and savings associations (basically "depository" financial institutions) to lend more in minority communities. Banks launched outreach programs to encourage creditworthy minorities to apply for home mortgages and some progress was made in "closing the gap" in homeownership. Still, progress was limited by the simple fact that many minorities did not have the income or credit standing to own homes. But leftist activists were undeterred by these inconvenient facts. For them, homeownership was a "right" - not a privilege. "You're telling us that a limited pool of qualified minorities is slowing progress? Well then standards be damned! Qualifications and eligibility be damned! Give us results. Period! Just get the dollars flowing into minority communities now, or else!!" And so after winning de-facto quotas in university admissions, job recruitment, and government contracts, leftists began to push for defacto quotas in home mortgages.

However, these leftists would have to sit tight through three Republican administrations before Bill Clinton, elected to the White House in 1992, gave them a green light to push forward with their radical plans. Clinton was not in office one year before he put teeth into the Community Reinvestment Act (CRA) to more or less "force" banks to make loans to minorities. And Congress's approval was not needed to pass these radical changes because the White House, as the executive branch of government, portrayed the moves as simply "enforcement" of the Act.

But don’t take my word from it. The New York Times – our friendly leftist newspaper! – reported on the moves at the time.

"Clinton Proposes Tough New Rules On Bias By Banks" (NYT, December 9, 1993)

The Clinton Administration proposed tough new tests today that are intended to insure that banks end discrimination in their lending to members of minority groups and to people with low and moderate incomes.

The changes are the latest effort by the Administration to broaden access to credit, financial services and investments. Officials predicted that people and businesses in these groups would gain access that they might not otherwise get to billions of dollars in credit once the proposals take effect in 1995.

The regulations, which set higher standards for banks, for the first time apply objective measurements on three levels. [Race Realist: No more outreach. Give us quotas!] Banks would be tested in several ways to determine if their overall pattern of lending in specific neighborhoods was biased, when compared to their overall lending and those of competitors. They would also be judged on whether they were making investments in a community's growth, like grants for economic redevelopment, and whether they were providing a full array of customer services.

Although Federal examiners would still have a fair amount of leeway in determining whether an institution was complying with the law, banks could for the first time face sanctions like binding orders or fines to change their practices.

That would give regulators additional power. Now, a bank's poor record in this area can affect whether the Government will permit bank acquisitions or mergers, and institutions that fall short have been sued by community groups or regulators. Lately, Federal regulators have blocked bank acquisitions when they regarded a lending pattern unfavorably. [RR: Few loans in minority communities? Sorry, won't approve your merger. This explains why it was the biggest banks – the ones who needed to curry favor with the government for approval of their mergers and therefore ramped up lending in minority communities – who were the hardest hit by the subprime mortgage crisis and ultimately had to be bailed out by the government.]

The proposal is the most important modification of equal-lending enforcement since 1977, when Congress passed the Community Reinvestment Act. That law was intended to force [RR: Hmm. NYT uses the word "force," Mr. Krugman? Is this idea really so "absurd"? And if Wall Street was so anxious to write dangerous subprime mortgages, then why did the govt have to "force" them? ] banks to make loans to individuals, businesses and groups in neighborhoods that many large financial institutions had shunned.

While the law has been effective in some ways, there were growing complaints from consumer groups that the method for evaluating a bank's lending activity was too lenient. [RR: Show us the money!] While it has been hard to measure how much discrimination has gone on, numerous studies, including one from bank regulators, reported that minority-group applicants for home mortgages, for instance, were denied loans at a higher rate than whites were offered even when other social factors were considered.

Banks did not like the law and its regulations because compliance required excessive paper work.

Under the newly proposed standards, regulators would evaluate banks based on specific lending and market-share data that would measure actual lending. But they would not set fixed credit quotas. [RR: Again, just like in university admissions, they avoid calling it quotas, but if loans don't reflect the "diversity of the community," then the heavy hand of the law will come crashing down.] The proposal is subject to further review and debate for two months, but faces no major opposition and requires no Congressional action.

Today, consumer groups and banking organizations, which have not seen eye to eye on lending regulations, praised the central elements of the Administration's plan, although each side found something to criticize in the details.

The Administration, which promised the changes months ago, has been pressing on several fronts to increase lending in poor and ethnic-minority communities. The issue of fair credit has been increasingly prominent in recent years, as several studies have shown that banks have persistently failed to provide equal credit opportunities, despite laws and regulations.

Eugene A. Ludwig, the Comptroller of the Currency and the Administration's leading advocate of fairer lending practices, said the new approach emphasized "performance over paper work."

All four Federal banking agencies are expected to issue similar rules. But some members of the Federal Reserve Board, which plays a crucial role in enforcing the law, are less enthusiastic than some of the other agencies about the new approach, something that is likely to emerge at the board's meeting on its proposed regulations on Friday.

In particular, the Fed has opposed the collection of racial data on small-business loans, as is done already with mortgage loans. Advocates of more aggressive enforcement of the fair lending law called this an important gap in the proposed new rules.

"The Fed appears to have won many of the key battles in the fights among agencies over these rules," said Deepak Bhargava of Acorn [RR: Yes, that upstanding organization we're all familiar with! The one Obama represented as an attorney and taught its activists Alinksy's "Rules for Radicals"!], a national group that lobbies for lending and housing reform. "I would almost characterize their efforts here as obstruction of the President's efforts. I would call them the George Wallace of C.R.A. reform, blocking the door to getting something done." [RR: Leftists using the old good vs. evil argument. We're moral. The opposition are racists.]

Lawrence B. Lindsey, a governor of the Federal Reserve, who appeared with other officials at the White House to discuss the proposal, said in a telephone interview that he and his colleagues had some concerns about the proposals, but were not at odds with the other banking agencies.

"This is a very radical proposal; there is no question about it," said Mr. Lindsey, who heads the board's committee on the Community Reinvestment Act. "It will benefit at this stage from public comment. We are going where no man has gone before, and if you do that, I think you want to do it right."

Among bankers, Leo F. Mullin, president of the First Chicago Corporation, said, "The proposal represents a positive and promising step toward improving the effectiveness and efficiency of the Community Reinvestment Act."

Michelle Meier, counsel for government affairs at Consumers Union, said, "The Clinton Administration is on the right track."

(snip)

For the first time, banks would have to publish data detailing where in their marketing areas they provided services like checking accounts and automated teller machines, and what types of community investments they had made.

In the past, they had to document their efforts to expand operations throughout their local markets, but these might not be good indications of actual lending.

(snip)

In the end, regulators based assessments on 12 factors, a time-consuming process that often resulted in subjective judgments..

The new rules set three evaluation standards for banks to meet. If a banks was given relatively low ratings on the tests, it would have time to improve before facing sanctions.

The lending test would evaluate direct lending as well as indirect lending through participation in loan pools or credit subsidiaries. [RR: Eventually, even subprime mortgaged-backed securities would be A.O.K! Hence banks bought up the subprime MBS to meet their unstated loan "quota."]
 
The service test would evaluate the bank's branch network in low- and moderate-income areas, and the availability of credit services like counseling.

An investment test would take into account investments in groups that foster community development, minority ownership of businesses, and affordable housing. It would also look at, for example, whether the bank is buying community bonds for housing or hospital financing.

Under the lending test, a bank would be evaluated in two ways.

First, its loans would be assessed to see how its lending patterns compared with other banks operating in the same local markets.

In a second and separate test, its loans would be analyzed without regard to how other institutions were performing, but on whether its loans were concentrated in one part of its market. Agencies would examine the ratio of the bank's loans made in neighborhoods of low and moderate income in comparison to loans throughout its service area.

The regulations would not require a bank to offer specific types of loans, to make any particular loan or investment,[RR: Yeah right. And affirmative action does not require universities or government departments to make quotas or set-asides for minorities - but we all know the hysteria that breaks out if the numbers don't match the "diversity of the community"] or to make loans or investments that were expected to lose money or otherwise undermine the bank's safety or soundness [RR: Sure. And affirmative action doesn't lead to the hiring or admission of under-qualified minorities. Please! The banks lost so much money from giving subprime mortgages to unqualified borrowers that a trillion-dollar taxpayer-funded bailout was required!]

Anyone surprised to see ACORN and the usual cornucopia of leftist organizations involved in all of this?! They frequently lodged complaints under the CRA whenever banks sought regulatory approval for mergers. They also tried to "shake down" the banks to commit a certain level of dollars to minorities, and "shame" them for not "investing" enough in minority communities.

But leftists and politicians knew that persuasion and pressure would only get them so far because – as leftists are quick to point out - the CRA only covers "depository" institutions [i.e. banks] but not mortgage-only lenders like Countrywide. This meant that incentives would also be needed to encourage both banks and mortgage lenders to lend more to minorities.

And this is where Fannie Mae and Freddie Mac came to play a central role in the Minority Mortgage Meltdown. Banks obviously did not want to make dangerous loans. But if politicians could pressure Fannie Mae and Freddie Mac – both semi-governmental agencies with a federal mandate to expand "affordable" homeownership - to buy subprime mortgages and subprime mortgage-backed securities (MBS) junk from private banks and mortgage lenders, then private banks and mortgage lenders, freed of the junk, would be willing to make even more of these junk loans!

The plan was a marvelous one and worked brilliantly, if by brilliantly you mean causing the subprime mortgage market to expand exponentially. And it all started during the Clinton administration. The Department of Housing and Urban Development (HUD, formerly headed by Henry Cisneros) pressured Fannie Mae (headed by the African-American Franklin D. Raines) to buy more subprime junk. But again, don't take my word for it. Read this old article from our friendly leftist newspaper the New York Times:

"Fannie Mae Eases Credit To Aid Mortgage Lending" (NYT, Sep 30, 1999) 

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.

Interruption. Don't you think the NYT was quite honest about what was going on while all this was considered "good work"? I, for one, am impressed :) But then again, they didn't know that the seeds were being planted for the Great Recession...

In addition, banks, thrift institutions and mortgage companies have been pressing Fannie Mae to help them make more loans to so-called subprime borrowers [RR: The government wants us to make these junk loans to minorities – ok, we will do that, but only if you take the junk off our back!] 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."

(snip)

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. [RR: These words, in 1999, were prophetic!!!]

''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.'' [RR: Again, prophetic! Conservative think tanks were already forecasting that we would face trouble down the road.]

(snip)

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 [RR: Yeah, with help from the Clinton administration which put teeth into CRA enforcement.] The number of mortgages extended to Hispanic applicants jumped by 87.2 per cent 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 per cent and the number of Asian Americans by 46.3 per cent.

In contrast, the number of non-Hispanic whites who received loans for homes increased by 31.2 per cent.
 
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. [RR: For heaven's sake! The underwriting systems are automated precisely to prevent human bias and 'discrimination' in the loan granting process! Race cannot possibly be a factor! So – let me get this straight – they're claiming that somehow mathematical algorithms discriminated against blacks? Geesh.]

So Clinton and the Dems were already pressuring Fannie Mae and Freddie Mac in the 1990s to buy up subprime mortgages and subprime mortgage-backed securities from banks since this would relieve banks of the risk and encourage them to make MORE subprime loans. Banks were happy with this arrangement because they could profit initially from originating and selling the subprime loans, and could pass to Fannie and Freddie the ticking time bombs that eventually exploded in everyone's faces causing trillions of dollars of taxpayer losses.

But Bush Junior was also anxious to get in on the action and prove his bona fides as a "compassionate conservative." The Clinton administration may have set the minority mortgage train wreck in motion, but the Bush administration revved up the engine.

Again, let's revisit an old article from our friendly leftist newspaper the New York Times early in the Bush administration.

"HUD Candidate Would Seek More Homes for Minorities" (NYT, January 18, 2001)

President-elect George W. Bush's choice for secretary of housing and urban development, Melquiades R. Martinez, told a Senate committee today that he would work to ensure that more minority families owned homes and would fight any effort to reduce the department's budget. 

''Despite record-high levels of homeownership, African-American and Hispanic-American homeownership rates remain below 50 percent,'' Mr. Martinez said. ''That is not acceptable.'' [RR: Since when does the government decide what homeownership rates are acceptable?! What's wrong with renting when that's all you can afford?]

 (snip)

''Unless we make sure that everyone is participating in this great economic expansion and until we ensure that barriers to home ownership are torn down for everyone,'' he said, ''until then, our job is not done.''

(snip)

Advocacy groups that had been wary of Mr. Martinez and his thin record on housing said today that they were not opposed to his confirmation and looked forward to working with him. [RR: Lefitsts supported Bush's nomination?! Bad sign! Who needs leftist enemies when you have conservative friends like Bush...]

''We were encouraged that he understands the country is facing a serious problem that there is not enough affordable housing for low-income families,'' said Sheila Crowley, president of the National Low Income Housing Coalition.

Senator Paul S. Sarbanes, the Maryland Democrat who is the chairman of the Committee on Banking, Housing and Urban Affairs until Saturday, when the Republicans take over, opened the hearing by announcing that the long-troubled housing agency had been removed from the government's ''high-risk'' category because of management changes under Andrew M. Cuomo, the departing secretary. [RR: Delusional Democrats! They had removed HUD from the high-risk category?!]

(snip)

Echoing Mr. Bush's campaign theme of compassionate conservatism, Mr. Martinez said he hoped to create partnerships with religious organizations and nonprofit groups to help solve housing problems. And once again, he pointed to his work in Florida as a model. [RR: Florida – also known as ground zero of the subprime mortgage crisis!]

And how about Bush's State of the Union Address on January 30, 2002: "Members, you and I will work together in the months ahead on other issues: productive farm policy, a cleaner environment, broader home ownership, especially among minorities, and ways to encourage the good work of charities and faith-based groups."

True to his promise, this was a major initiative of his. See the following NYT article at the time.

"Bush Calls Transformed Area A Model Program for Housing" (NYT, June 18, 2002)

Mr. Bush visited largely hostile political territory to make the case that his administration was working to close a gap between the percentage of whites who own houses compared with that for blacks and Hispanics.

(snip)

''There is a homeownership gap in America,'' [RR: Gap this, gap that! The real question is whether the gap reflects real differences between the races. If it does, then all the effort in the world will not close the gap. We hear today that homeownership among blacks and Hispanics fell back to pre-crisis levels following the subprime meltdown.] Mr. Bush told 450 people like politicians, architects and residents who have moved into the tidy single-family houses that have been built here. ''The difference between Anglo-American and African-American homeownership is too big.''

About 74 percent of whites own their houses, compared with 48 percent of blacks and Hispanic residents, according to government statistics that the White House cited.

(snip)

It was unclear how Mr. Bush would reach his goal of 5.5 million new homeowners from minorities by 2010. The administration seems to be relying heavily on programs developed by two federally chartered corporations, Fannie Mae and Freddie Mac, the major players in the secondary mortgage market [RR: The "secondary mortgage market" basically refers to the buying and selling of mortgages that have already been originated, or securities backed by mortgages. In other words, Bush would have Fannie and Freddia buy up the subprime mortgages and subprime mortgage-backed securities (SMBs) from banks and mortgage lenders.]

The head of Fannie Mae, Franklin Raines, said he had re-oriented many Fannie Mae programs ''to deal with people who have less than perfect credit'' and to lower down payment requirements ''to make it more easily possible'' for lower-income families to afford houses.

''Minorities are likely to be the beneficiaries,'' Mr. Raines said.

He added that Fannie Mae would increase loans to minorities, to $700 billion through 2009, a $280 billion increase over $420 billion promised in 1999, when he took over the corporation.

The NYT reports Clinton boasting, upon his leaving the White House on Jan 20, 2001 about "record levels of home ownership."

Bush made a similar boast in his 2005 State of the Union Address – two years before the subprime meltdown began - saying "We've raised homeownership to its highest level in history."

So in summary, it was leftists and wooly-eyed politicians who, through a carrot and stick approach, pressured banks and mortgage lenders to churn out subprime mortgages. The "stick" was the CRA. Politicians and leftists used the CRA to force banks to give minorities loans or risk penalties. The "carrot" was Fannie/Freddie. Politicians pressured Fannie and Freddie to buy up the subprime junk from banks and mortgage lenders like Countrywide because this would incentivize these banks and mortgage lenders to originate even more subprime loans! The CRA and Fannie/Freddie were both essential to forming the "perfect storm" that was the subprime mortgage crisis. Any leftist explanation that leaves out one or the other is biased.

With Fannie/Freddie taking the subprime junk off their books, banks and mortgage lenders went into a frenzy originating subprime loans. They invented paperless mortgage applications where you no longer needed evidence of income, savings, or even legal residency! They invented no-down-payment mortgages! Without down payments - the whole purpose of which is to keep borrowers responsible by making them put some of their own money on the line - borrower responsibility went out the window. Why not take out the biggest loan possible even if your income can't justify it? After all, you have nothing to lose if you've put nothing down!

Krugman is blinded to the truth by his partisanship and paranoid hatred for any views that might be interpreted as even slightly right of center.

It's funny. Krugman, after dismissing as "absurd" the possibility that political pressure on banks helped caused the subprime mortgage crisis, tries to buttress his argument with a research paper, but this paper also partly attributes the crisis to ideology, "stressing the way US politicians celebrated the ideal of homeownership." But Krugman cherrypicks. He generally likes the paper's conclusions, but not this one: "the authors of this paper get this wrong" he says.

Leftists like to claim that banks made subprime mortgages of their own free will on the expectation that these loans would be "profitable," and that political pressure played no role.

But if the loans were so profitable, then why was legislation needed - specifically, the Community Reinvestment Act (CRA) - to halt the practice of "redlining" and force banks to lend in minority communities? And why did Clinton have to bolster enforcement by effectively establishing quotas? The answer is clearly that the banks knew subprime mortgages were dangerous and weren't going to make these loans unless they were forced to. Sure banks could charge higher interest rates with subprime mortgages – offering the potential for higher profits – but any initial profits would be wiped out and replaced with enormous losses if the borrowers defaulted. And that's exactly how things played out. Subprime borrowers defaulted in droves and banks posted trillions of dollars in combined losses. We taxpayers are still footing the bill for this pie-in-the-sky scheme.

Leftists, however, have pulled a big one over the gullible US public, though. They have managed to reassign blame for the subprime mortgage crisis to a target everyone loves to hate – Wall Street – thereby absolving themselves of responsibility and allowing them to continue bullying banks into lending to under-qualified minorities. The public falls for this re-write of history because it is human nature to want to attribute bad outcomes (in this case a financial crisis, a nose-diving economy, record joblessness, and record indebtedness) to bad motives. Why? Because it gives us a target for venting moral outrage. It feels good to say "Those greedy Wall Street bastards cheated us!" But what if the public understood our disastrous circumstances were the result of the best of intentions? "Those caring bastards tried to expand homeownership for low-income minorities!" Hmm. See what I mean? It's hard to get riled up…

And yet we are all familiar with the phrase "The road to hell is paved with good intentions." Communism was an ideology founded on the best of intentions ("to each according to his need, from each according to his ability"), but it still created enormous misery for large swaths of humankind.

Americans need to wake up to the fact that leftists are busy at work paving a road to hell for our nation with the best of intentions. In their obsession with expanding homeownership for minorities, they destroyed the economy, driving unemployment to record highs. And never ones to learn from their mistakes, after inviting millions upon millions of illegal and legal mostly Hispanic immigrants to our country – against the will of the majority of Americans – they are obsessed with giving them free or subsidized healthcare that will most certainly bankrupt our nation by the end of this decade and diminish the quality of care (and increase the cost!) for older and middle-class Americans.

But even if leftists refuse to learn from their mistakes. We must not. We must oppose their scatterbrained ideas and policies – however well intentioned! – because nothing less than the country we leave our children and grandchildren rests upon it.

Lastly, Obama likes to pretend that he "inherited" the financial mess from the Bush administration, but Obama is not exactly clean himself. McCain tried to bring attention to Senator Obama's role in the crisis during the presidential debates. The NYT reports: "Mr. McCain has a political interest in tying Fannie and Freddie to the current crisis because the companies have long had close ties to Democrats in Congress, including Senator Barack Obama. James Johnson, a former chairman of Fannie Mae, was a former outside adviser to Mr. Obama, and Mr. Obama in recent years has received more contributions from Fannie and Freddie employees than any member of Congress other than the chairman of the Senate banking committee, Senator Christopher J. Dodd, Democrat of Connecticut." (NYT Oct 16, 2008)

Why Obama? Basically Fannie and Freddie knew they would need the help of their traditional support base in Congress – the Democrats and in particular Obama, a former ACORN attorney - since Republicans were beginning to move to rein in the excesses of these two government-chartered companies. Unfortunately McCain was and still is so bad at presenting ideas to the public that this truth never got through to the average American. They continue to buy Obama's lie that he "inherited" the crisis.

In light of all this, what is the lesson we should take home from the subprime mortgage crisis?

1) Keep the government out of the housing market! No more pie-in-the-sky schemes of promoting an "ownership society."

2) Abolish Fannie Mae and Freddie Mac. Now!! 

For more on Fannie's role in the crisis, see the following NYT article:
 
"Pressured to Take More Risk, Fannie Reached Tipping Point" (NYT, Oct 4, 2008)

Fannie, a government-sponsored company, had long helped Americans get cheaper home loans by serving as a powerful middleman, buying mortgages from lenders and banks and then holding or reselling them to Wall Street investors. This allowed banks to make even more loans — expanding the pool of homeowners and permitting Fannie to ring up handsome profits along the way.

But by the time Mr. Mudd became Fannie’s chief executive in 2004, his company was under siege. Competitors were snatching lucrative parts of its business. Congress was demanding that Mr. Mudd help steer more loans to low-income borrowers. Lenders were threatening to sell directly to Wall Street unless Fannie bought a bigger chunk of their riskiest loans.

So Mr. Mudd made a fateful choice. Disregarding warnings from his managers that lenders were making too many loans that would never be repaid, he steered Fannie into more treacherous corners of the mortgage market, according to executives.

For a time, that decision proved profitable. In the end, it nearly destroyed the company and threatened to drag down the housing market and the economy.

Dozens of interviews, most from people who requested anonymity to avoid legal repercussions, offer an inside account of the critical juncture when Fannie Mae’s new chief executive, under pressure from Wall Street firms, Congress and company shareholders, took additional risks that pushed his company, and, in turn, a large part of the nation’s financial health, to the brink.

Between 2005 and 2008, Fannie purchased or guaranteed at least $270 billion in loans to risky borrowers — more than three times as much as in all its earlier years combined, according to company filings and industry data.

(snip)

Mr. Mudd said in an interview that he responded as best he could given the company’s challenges, and worked to balance risks prudently.

“Fannie Mae faced the danger that the market would pass us by,” he said. “We were afraid that lenders would be selling products we weren’t buying and Congress would feel like we weren’t fulfilling our mission. The market was changing, and it’s our job to buy loans, so we had to change as well.”

When Mr. Mudd arrived at Fannie eight years ago, it was beginning a dramatic expansion that, at its peak, had it buying 40 percent of all domestic mortgages.

(snip)

Fannie never actually made loans. It was essentially a mortgage insurance company, buying mortgages, keeping some but reselling most to investors and, for a fee, promising to pay off a loan if the borrower defaulted. The only real danger was that the company might guarantee questionable mortgages and lose out when large numbers of borrowers walked away from their obligations.

(snip)

The company announced in 2000 that it would buy $2 trillion in loans from low-income, minority and risky borrowers by 2010.

All this helped supercharge Fannie’s stock price and rewarded top executives with tens of millions of dollars. Mr. Raines received about $90 million between 1998 and 2004, while Mr. Howard was paid about $30.8 million, according to regulators. Mr. Mudd collected more than $10 million in his first four years at Fannie.

Whenever competitors asked Congress to rein in the company, lawmakers were besieged with letters and phone calls from angry constituents, some orchestrated by Fannie itself. One automated phone call warned voters: “Your congressman is trying to make mortgages more expensive. Ask him why he opposes the American dream of home ownership.”

The ripple effect of Fannie’s plunge into riskier lending was profound. Fannie’s stamp of approval made shunned borrowers and complex loans more acceptable to other lenders, particularly small and less sophisticated banks. [RR: In other words, "If Fannie will buy this junk from us, we can take more risk and originate more subprime loans!"]

Between 2001 and 2004, the overall subprime mortgage market — loans to the riskiest borrowers — grew from $160 billion to $540 billion, according to Inside Mortgage Finance, a trade publication. Communities were inundated with billboards and fliers from subprime companies offering to help almost anyone buy a home.

(snip)

Shortly after he became chief executive, Mr. Mudd traveled to the California offices of Angelo R. Mozilo, the head of Countrywide Financial, then the nation’s largest mortgage lender. Fannie had a longstanding and lucrative relationship with Countrywide, which sold more loans to Fannie than anyone else.

But at that meeting, Mr. Mozilo, a butcher’s son who had almost single-handedly built Countrywide into a financial powerhouse, threatened to upend their partnership unless Fannie started buying Countrywide’s riskier loans.

(snip)

Capitol Hill bore down on Mr. Mudd as well. The same year he took the top position, regulators sharply increased Fannie’s affordable-housing goals. Democratic lawmakers demanded that the company buy more loans that had been made to low-income and minority homebuyers.

“When homes are doubling in price in every six years and incomes are increasing by a mere one percent per year, Fannie’s mission is of paramount importance,” Senator Jack Reed, a Rhode Island Democrat, lectured Mr. Mudd at a Congressional hearing in 2006. “In fact, Fannie and Freddie can do more, a lot more.”

(snip)

In one meeting, according to two people present, Mr. Mudd told employees to “get aggressive on risk-taking, or get out of the company.”

(snip)

“Everybody understood that we were now buying loans that we would have previously rejected, and that the models were telling us that we were charging way too little,” said a former senior Fannie executive. “But our mandate was to stay relevant and to serve low-income borrowers. So that’s what we did.”

Between 2005 and 2007, the company’s acquisitions of mortgages with down payments of less than 10 percent almost tripled. As the market for risky loans soared to $1 trillion, Fannie expanded in white-hot real estate areas like California and Florida.

(snip)

In the middle of last year it became clear that millions of borrowers would stop paying their mortgages. For Fannie, this raised the terrifying prospect of paying billions of dollars to honor its guarantees.

(snip)

Lawmakers, particularly Democrats, leaned on Fannie and Freddie to buy and hold those troubled debts, hoping that removing them from the system would help the economy recover. The companies, eager to regain market share and buy what they thought were undervalued loans, rushed to comply.

The White House also pitched in. James B. Lockhart, the chief regulator of Fannie and Freddie, adjusted the companies’ lending standards so they could purchase as much as $40 billion in new subprime loans. Some in Congress praised the move.

“I’m not worried about Fannie and Freddie’s health, I’m worried that they won’t do enough to help out the economy,” the chairman of the House Financial Services Committee, Barney Frank, Democrat of Massachusetts, said at the time. “That’s why I’ve supported them all these years — so that they can help at a time like this.”

(snip)

As the housing crisis worsened, Fannie and Freddie announced larger losses, and shares continued falling.

(snip)

Freddie was given the same message. Less than 48 hours later, Mr. Lockhart and Mr. Paulson ended Fannie and Freddie’s independence, with up to $200 billion in taxpayer money to replenish the companies’ coffers.

The move failed to stanch a spreading panic in the financial world. In fact, some analysts say, the takeover accelerated the hysteria by signaling that no company, no matter how large, was strong enough to withstand the losses stemming from troubled loans.

Within weeks, Lehman Brothers was forced to declare bankruptcy, Merrill Lynch was pushed into the arms of Bank of America, and the government stepped in to bail out the insurance giant the American International Group.

Today, Mr. Paulson is scrambling to carry out a $700 billion plan to bail out the financial sector, while Mr. Lockhart effectively runs Fannie and Freddie.

ACORN's collapse underscores importance of activism on the right

ACORN - the left-wing organization Obama represented as an attorney and where he taught Alinsky's "rules for radicals" - has officially collapsed due to a lack of funds. (Yahoo AP, March 22)

Was it conservative groups and Republican lawmakers that brought down this group? Nope. They had tried unsuccessfully for years to cut the group's federal funding (yes, our taxdollars were funding this anti-American and anti-white organization!). The organization was brought down by one man - the conservative activist James O'Keefe.

The right abhors the in-your-face activism that is the hallmark of the left. And this is understandable. Conservatives respect process and tradition, and tend to work through legitimate political channels for change. In normal times, that is fine. But the country is a run-away train that is heading off a cliff. We need to use what works. And if one thing can be said of leftist-style activism - it works!!!

Leftist organizations need to be infilitrated and exposed with videotapings made of their members' radical views. This is the age of Youtube.

A favorite trick of the left is to find some crazies in conservative organizations or gatherings - and then use them to tarnish the image of all conservatives. For example, to discredit the Tea Partiers, the mainstream media recently zeroed in on a few protesters during the recent anti-ObamaCare rally in Washington to paint all Tea Partiers as "racist" and "homophobic." Yahoo News reported March 22 that "some demonstrators hurled racial and homphobic epithets at Democratic lawmakers as they entered the Capitol." The Yahoo article linked to a New Republic article detailing homophobic epithets directed at Barney Frank - but there was not a single report of a racial epithet! I can guarantee you if there were racial epithets hurled, the leftist media would give us the juicy details. But nothing. Nada. Which leads me to believe that the media just assumed these protesters must be racists because they deigned to aim their criticism at both white AND black lawmakers. Criticism of black lawmakers by whites is by definition racist in the eyes of the media.

Anyway, the point is that conservatives can play the "guilt-by-association" game of the left, and in general we need to update our arsenal of tactics. Send in people to videotape leftist demonstrations such as Sunday's illegal alien amnesty march in Washington. Interview the protesters on video and expose their stupidity and radicalism on Youtube.

It's interesting that very few people in this country identify themselves as liberals or leftists - and yet the direction of the entire country is moving in this direction. Why? Because the in-your-face tactics of committed leftists - few in number but highly active and vocal - actually work.

Healthcare bill passes House - but the fight has just begun - calling on all middle-class Americans to "boycott" the tax system

Obama and the Dems think they've "won" by passing the healthcare bill in the House today, but only money can keep major entitlements like this alive. I say - let's starve this new entitlement beast. I'm "boycotting" the federal income tax and I call on all middle-class Americans to do the same. They can't come after all of us! This has to be a bottom-up effort because obviously the Republican leadership can't call for such a boycott. So Tea Partiers - things are just getting started! The real battle has just begun!

This healthcare overhaul is nothing but a big transfer of wealth from mostly white middle-class Americans to the hordes of impoverished Third World immigrants the leftist elitists continue to force upon us. This is ridiculous. If we were still a majority white country, I might have considered supporting a bill like this. But this is grand larceny on an inter-generational and inter-racial scale. (See my many posts below about how Third World immigration has swelled the ranks of the uninsured in this country.)

"To pay for the changes, the legislation includes more than $400 billion in higher taxes over a decade and cuts more than $500 billion from planned payments to hospitals, nursing homes, hospices and other providers that treat Medicare patients." (Yahoo AP, March 21)

So the leftists are going to thank the Greatest Generation, which saved us from fascism and Nazism, by cutting their healthcare benefits! Why? Because Obama knows older white Americans vote overwhelmingly Republican and he'll never get their votes. And they're going to screw white middle-class Americans - the bulk of taxpayers in this country - by taking more of their money in taxes to transfer to dysfunctional minorities. Maybe we can't do anything about the Medicare cuts - but we can do something about taxes! And I ain't paying. Withholding taxes? Fine, whatever, but everything else is fair game. Screw them. I've had enough.

South Africa: 90% of white farmland transferred to blacks "failing"

First, snippets from the BBC article "South Africa black-owned farms 'failing'" (March 3): 

Some 90% of farms redistributed to South Africa's black population from white farmers are not productive, the government has said.

Almost 60,000 sq km (23,000 sq miles) have been redistributed under policies aimed at benefiting black people who were left impoverished by apartheid.

Repossessing the land would provide a whole new problem for the government, our correspondent says, as any move to return the land to its former white owners is bound to be controversial.

The government had set a target of 2014 to redistribute one-third of white-owned land back to the black majority. But Mr Nkwinti acknowledged that the deadline would not be kept. He said the focus would now shift to helping the black farmers make their land productive.

"The farms - which were active accruing revenue for the state - were handed over to people, and more than 90% of those are not functional," he said.

"They are not productive, and therefore the state loses the revenue. We cannot afford to go on like that... No country can afford that."

Land reform is a sensitive issue in South Africa and has been brought into sharp focus by the decline of agriculture in neighbouring Zimbabwe, where many white commercial farmers have been violently evicted.

Leftists, whether in South Africa or the US, take wealth as a "given" and therefore assume that you can simply replace wealth-creators - generally whites and asians - with blacks or hispanics and the process of wealth creation will go on.

However, South Africa's experiment utterly refutes this crazed notion. Even if 20% or 30% of the farms were "not productive" after switching to black hands, the experiment would have been a failure, but 90%!!!?? This is unbelievable.

White farmers produced food for the local population, they employed blacks to work the fields, and they paid tax revenues to the government. In short, they made a real contribution to society. Their only sin? Being white. The funny thing is that the black government was so naive as to believe the artificially constructed leftist worldview that you can simply replace "white" with "black" hands and the wealth-creation process will continue.

But wealth is not a "given." Wealth-creation requires intelligence, skill, and hard work. Replacing whites with blacks in the wealth-creation process is like throwing rocks into a car engine and expecting the vehicle to still move forward. This is reality. The black government was only forced to confront this reality when its tax revenues started to disappear.

When will reality "hit" in the US? Affirmative action is a drain on the US economy in so many ways because underqualified blacks and hispanics are either placed in important decision-making positions that they can't handle, or meaningless positions like "race expert" or "diversity officer" (a la Michelle Obama) have to be created to employ them.

I personally think our fate will be sealed when we become a majority-minority nation and there are fewer and fewer wealth-creators for dysfunctional minorities to feed off of. If I were black or hispanic, I wouldn't be relishing the day when whitey becomes a minority. Because there'll be no point forming a gravy train when there's no one left making the gravy. Just ask bankrupt California.

It's gonna be a brave new world

I generally don't focus on crime in my blog. But the contrast in the scope of the media's reporting about two race-related events recently is rather revealing.

Contrast this:

"A male voice came over the public-address system Sunday evening at a store in Washington Township, in southern New Jersey, and calmly announced: "Attention, Walmart customers: All black people, leave the store now." (Yahoo News, Mar 18).

"Shoppers in the store at the time said a manager quickly got on the public-address system and apologized for the remark. And while it was unclear whether a rogue patron or an employee was responsible for the comment, many customers expressed their anger to store management."

(UPDATE - they have arrested a 16-year old boy for the prank. And they refuse to release his race. Hmm.. My gut feeling is that he is hispanic. If he were white, then anti-white officialdom would have been more than happy to confirm this fact and feed into the anti-white anger of minorities. But if he's another minority - well, this doesn't fit the MSM's narrative of a happy rainbow coalition among minorities, so the information must be suppressed for the 'best of intentions.' The thinking being 'Let's just let everyone assume he's white.')

With this:

"Blonde teenager Anika Smit, (17) was found murdered at her Pretoria home on March 11, 2010—with her hands and forearms chopped off."

"The girl’s limbs are missing—cut off just below the elbows—said South African police constable William Mahlaole. Nothing else was robbed." (South African paper Beeld, Mar 12)

(UPDATE - nothing to update. This isn't a priority for the police in South Africa or the MSM.)

A harmless prank at a Wal-Mart store receives not just national attention - but international attention! - I've just read this story translated into the language of my country of residence, while a little white girl is victimized in what appears to be a racially charged murder and this just gets a blip in a small newspaper. Hypersensitive blacks go into hysteria and whites fall into throes of hand-wringing and soul-searching about the deep-rooted nature of white racism when the most harmless of incidents occurs, but when a black brutally murders a little white girl, whites just 'suck it up' and draw no larger conclusions about black-on-white crime. Ho-hum. Move on. Nothing new here.

And yet South Africa has seen a surge in racially charged attacks since the country's return to majority rule in 1994. Approximately 3,000 white farmers have been brutally murdered and many of them tortured (boiled to death, etc.).

It's gonna be a brave new world - an Orwellian one where the heavy hand of government falls hard on politically incorrect pranks while brutal black-on-white crimes go ignored.

How will whites fare in America's majority-minority future? Well, I would ask why are we waiting to find out?? Are the benefits of diversity so enormous that it's worth betting our children and grandchildren's future on the sliver of hope that America will be the sole exception to the one and only constant in human history - ethnic strife?

Thankfully we (currently) have a right to bear arms in the US. But this does us little good if we're locked up when we do choose to defend ourselves. Last year a couple of black teenagers shot at a white pharmacist in Oklahoma City as they tried to rob his store (video footage here). He shot back in self-defense and killed one of the robbers, but then was promptly arrested for murdering a 'child' - to borrow the words of the district attorney who made the decision to charge him. If the jury is white he may get some sympathy from whites tired of being victimized by blacks. But what will happen when the country turns majority-minority and most of the jurors are minorities? Like in the O.J case, whitey can expect little sympathy - blacks and hispanics will use the legal system to right 'historical wrongs' irrespective of the specifics of the individual case at hand.

So we can choose not to defend ourselves and become a victim, or we can choose to fight back and be charged as the aggressor. We're damned if we do and damned if we don't.

God save us all.

Senator Byrd (D) - the author of reconciliation rules - was fundamentally opposed to using reconciliation for healthcare in 1993 and 2009

Let's suppose the Republicans were trying to ramrod major nation-changing legislation through the reconciliation process, a process traditionally reserved for budget matters, and a senior Republican Senator who CREATED the rules governing reconciliation, adamantly opposed this. We all know the media would have a field day with headlines like "Senior Republican Senator and author of rules governing reconciliation process opposes their use to advance the Republicans' right-wing agenda."

But the situation is the exact opposite - and yet not a peep from the media.

Senator Byrd, the most senior member of the Senate and a Democrat, actually AUTHORED the rules governing the reconciliation process - indeed, they're called the Byrd Rules! - and he is adamantly opposed to using the process for passing healthcare bills.

In fact, he singlehandedly stopped Clinton from passing healthcare in 1993 because he insisted that the rules which he authored were not designed for passing major legislative overhauls unrelated to budget matters (and he should know!).

Again last year, he stated "I will not vote to authorize the use of the reconciliation process to expedite passage of health care reform legislation or any other legislative proposal that ought to be debated at length by this body."

"Using reconciliation to ram through complicated, far-reaching legislation is an abuse of the budget process. The writers of the Budget Act, and I am one, never intended for its reconciliation’s expedited procedures to be used this way. These procedures were narrowly tailored for deficit reduction." (See his full statement here.)

Hear much about this in the media? I sure haven't. You'd think this would be a big story? "DEMOCRAT senator who AUTHORED the rules governing reconciliation refuses their use for Obamacare (and refused their use for Clintoncare in 1993!)."

There has been a complete blackout in the mainstream media about this. But then...

Senator Byrd recently wrote a letter to a small West Virginia newspaper - the Charleston Daily - stating that the reconciliation process could be used in a limited way if it helped reduce deficits.

The mainstream meda jumped on the story: The Washington Post headlined its article "Byrd defends use of reconciliation"! and ABC News ran with "Byrd Endorses 'Reconciliation' to Fix Health Reform Bill"!

But Byrd's letter was more nuanced. He reaffirmed his view that "The entire Senate- or House-passed health care bill could not and would not pass muster under the current reconciliation rules, which were established under my watch."

Admittedly, however, he stated in the letter that "A bill structured to reduce deficits by, for example, finding savings in Medicare or lowering health care costs, may be consistent with the Budget Act, and appropriately considered under reconciliation."

But where was the liberal mainstream media's coverage of Byrd's adamant opposition to the use of reconciliation up to this point? They had just decided to ignore him until recently because his views didn't suit their agenda of advancing the Dems' interests?

But in the end, if Byrd were really gung-ho behind the Dem leaders' efforts to use reconciliation, he would have found a better way to advertise his views than a letter to the editor of the Charleston Daily! His nuanced position in the face of intense political pressure from the Dem leadership and White House, and the outlet he chose to air his views, suggests to me he's fundamentally opposed to using reconciliation for major nation-changing legislation. Now that's the story the biased media should be running with.

State govts prefer to unleash violent criminals back into society to save money rather than cut back on Medicaid for immigrants

"In the rush to save money in grim budgetary times, states nationwide have trimmed their prison populations by expanding parole programs and early releases." (NYT, Mar 4)

No - don't touch Medicaid expenses which are skyrocketing due to the waves of impoverished (mostly Hispanic) immigrants the govt continues to invite into our country.

Release prisoners!

"State officials now find themselves trying to maneuver between saving money and maintaining the public’s sense of safety."

Note that state officials don't care about maintaining safety - only the public's SENSE of safety.

And in the ever-corrupt state of Illinois:

"In Illinois, Gov. Patrick J. Quinn, a Democrat, described as “a big mistake” an early release program that sent some convicts who had committed violent crimes home from prison in a matter of weeks. Of more than 1,700 prisoners released over three months, more than 50 were soon accused of new violations."

Oops! Who would've thunk it? Release violent criminals back onto the streets early and - surprise surprise - they go back to committing more crimes.

Criminals have gone through our justice system and are in jail for a reason! Because they are deemed a threat to society. Why on earth would you release them back early?!

White America - this ideology called liberalism serving your interests all right? Feel safe?

How about this incomprehensible statement by Patricia Caruso, the director of the Michigan Department of Corrections:

"We can live in fear and make bad policy based on fear or we can have some backbone and make policy based on what really helps our communities."

The criminials are behind bars because we have a legitimate fear that they will commit violent crimes again. This is how society deals with violent offenders. We wouldn't have to "live in fear" if you didn't release violent criminals back into our society.

She notes that the threat that someone may reoffend always looms, but adds "I worry about it. I say a rosary every day."

Well isn't that swell. She releases violent criminals back into our midst, and then prays a rosary that they won't kill or maim us!

Ms. Caruso! Wouldn't it be more effective if you didn't release them back into society in the first place?

But Republicans are equally to blame. Remember the four police officers shot in the head execution style in Seattle last November?

The killer was released early by the holier-than-thou former Governor of Arkanses Mike Huckabee who wanted to show his spirit of forgiveness and compassion.

So four lives had to be snuffed out so the self-absorbed Governor could demonstrate his "charity of spirit."

The French philosopher Detoqueville is said to have admired Americans most for their common sense. What has happened to us.

God save us all from the idiocy that is modern liberalism.

Modern liberalism, and why I am a "race realist"

Classical liberalism emphasized man's ability to better society through reason, but somewhere along the way it became intertwined with strands of Marxist thought, morphing into an ideology with an irrational and excessive focus on equality of outcome. This is the modern liberalism we are all familiar with today. The problem with modern liberalism's obsessive focus on equality of outcome is that it has shifted liberalism away from its roots as a reason-based problem-solving school of thought into an emotionally-charged ideology that is willing to turn a blind eye to inconvenient truths in order to achieve its ends.

For example, it stubbornly asserts, and demands everyone accept on blind faith – against all common sense and evidence - that no meaningful differences in cultural or genetic traits exist between the races. Of course it would be nice if we could just write off modern liberalism as a cult of idealists with no real-world consequences flowing from this leap of faith, but modern liberalism is the secular religion of the Western world, and the consequences are real. Consider: By accepting the faith-based proposition that no meaningful differences in cultural or genetic traits exist between the races, modern society also accepts - by default - the logical conclusion that no differences between the races in academic, social, or economic performance should arise. But differences do arise, they always have, and they stubbornly refuse to go away. So how does modern liberalism explain this contradiction? Quite easily. It invents a bogeyman: racism. "If only we could eliminate racism," the narrative goes, "then all racial differences in outcome would go away."

In this way, modern liberalism provides its adherents with a simplistic and convenient explanation for inequality in the world and a clear objective for eliminating this inequality: rooting out racism. For modern liberals, the pervasiveness of inequality in the world is only taken as evidence of the deep-rooted nature of racism in society, not a reflection of underlying differences between the races. And not surprisingly, the bogeyman is found everywhere. Differences in IQ? Racism. Differences in academic performance? Racism. Differences in average incomes? Racism. Differences in homeownership rates? Racism. Differences in crime rates? Racism. The important point here is that this is the only logical conclusion for explaining different outcomes between races when you accept the proposition that no meaningful differences in cultural or genetic traits exist between the races.

I call myself a race realist. I do so because I believe meaningful differences in cultural or genetic traits exist between the races, and that these account for the bulk of racial differences in outcome. The evidence is just overwhelming. And if the issue were not so politically charged, the answer would be obvious to everyone. But people – Americans in particular - like to take Thomas Jefferson's words "All men are created equal" as a literal statement of fact as opposed to a philosophical statement about man's equal standing under the law. But reality can't be wished away. As the famous saying goes "Reality is that which, when you stop believing in it, doesn't go away." The reality of meaningful differences in cultural or genetic traits between the races doesn't go away just because we refuse to acknowledge it. And we will never eliminate inequitable outcomes as long as we insist that the bogeyman of racism is the cause of this inequality, as opposed to the underlying cause: meaningful differences in cultural or genetic traits between the races. So I call on all truth-seeking, fair-minded Americans, particularly young Americans, to confront the lie of modern liberalism, and become race realists. Not racists. Because race realists do not hate other races; they're just exasperated with the ridiculous, worn-out, blind-of-faith assumptions that form the foundation of modern liberalism.

I look forward to discussing how this relates to Disparate Impact and other issues in future blogs.

The Tea Party movement

Tea Partiers are no longer fooled by phony Republicans - and that's what I like best about the movement. Conservatives used to believe that the Republican Party - being the only alternative party to the liberal/leftist Democrats - would naturally pursue a conservative agenda. But the Republican Party has betrayed conservatives time and time again. Bush Junior had to be one of the worst presidents in modern times. He did nothing to stop illegal immigration, let alone legal immigration; he pressured banks to give mortgages to people with bad credit and/or low incomes to encourage homeownership among minorities, which causd the subprime mortgage crisis and brought upon us the Great Recession (he actually promoted the incredibly irresponsible "no-down-payment policy" which encouraged every Dick, Tom, and Juan to take out a loan because borrowers would lose nothing if the market turned sour because they had invested nothing); he invaded Iraq, egged on by the neocons (Read: "conservatives" who only care about national security issues but are liberals on immigration and other social issues), damaging our reputation abroad while bankrupting us at the same time; and the Dept of Justice under his watch sued the NYC Fire Dept, which lost hundreds of brave men and women in 9/11, for racial discrimination under "disparate impact" laws (essentially blacks and Hispanics scored lower on tests asking about water pressure and ladder heights, and this alone was taken as "proof" of discrimination). The list goes on an on...

I believe a key test for the Tea Party movement will be whether or not it helps Hayworth beat John McCain - the poster child of phony conservatives - in Arizona's Republican primary for Senator. Way back in 2000 when I was more naive, I rooted for McCain against Bush as the Republican nominee for president. I was inspired by his life story (Vietnam POW, etc.). But he's become a holier-than-thou Republican. He co-sponsored an amnesty bill in the Senate with Ted Kennedy (!) to legalize the 15 million or so illegals in the country, and bad-mouthed anyone who opposed his bill as racist and xenophobic. Sorry McCain. I respect your service to our country, but it's time you stepped outside. You're a millionaire dozens of times over, and you've been hobnobbing in Washington for too long. You're out of touch with middle-class Americans, and your greatest service to our country now would be to step aside.

We need to scream from the mountain tops "No more support for phony Republicans!" They're not looking after middle-class Americans. Out with the neocons, out with the big-business Republicans, out with holier-than-thou Republicans on issues like immigration, and out with rich Republicans who only care about lowering upper income tax brackets.

Tea Partiers need to use immigration as a litmus test for all future candidates. It's not enough to be against "big government" anymore. Real Americans have always been against big government, but immigration has swelled the ranks of "gimme freebies" voters - mostly Hispanics - who know nothing of America's limited government history. When these "gimme freebies" voters reach a critical mass as a proportion of the overall electorate - as they appear to have already -America's fate will be sealed as a big-government nanny state. The increasingly impoverished US electorate will demand that the government [and by extension tax-paying White Americans] take care of their every need.

Indeed, Obama and the Dems are pushing healthcare reform to cover the swelling ranks of the uninsured, but why are the ranks of the uninsured swelling in the first place? Because the government is flooding the country with impoverished immigrants - both legal and illegal.

Stop the tidal wave of impoverished immigrants, and the problem of "big government" goes away.

States see Medicaid costs soar - but no mention of immigration

"Facing relentless fiscal pressure and exploding demand for government health care, virtually every state is making or considering substantial cuts in Medicaid, even as Democrats push to add 15 million people to the rolls." (New York Times, Feb 18)

Great. States are suffering from soaring Medicaid costs, and Obama wants to add another 15 million to the roles. Really smart.

"Concerns about health care costs are likely to dominate the winter meeting of the National Governors Association, which begins Saturday in Washington."

"In advance of the gathering, administration officials have urged governors to endorse President Obama’s health care proposals, or at least to avoid criticizing them. The Democratic plan, which is stalled in Congress, would vastly expand eligibility for Medicaid as one means of reducing the number of uninsured."

Governors are worried about rising costs, but Obama officials recommend they support Obamacare which would vastly expand eligibility and boost costs! Yep, really brilliant.

"But many governors said they were more concerned about the growth of existing health programs. The recession and high unemployment have driven up enrollment in Medicaid while depleting state revenues that help pay for it."

"A survey released Thursday by the Kaiser Family Foundation found a record one-year increase in Medicaid enrollment of 3.3 million from June 2008 to June 2009, a period when the unemployment rate rose by 4 percentage points. Total enrollment jumped 7.5 percent, to 46.9 million, and 13 states had double-digit increases."

As Robert Samuelson noted in a Dec 21, 2009 Washington Post op-ed piece:  "From 1999 to 2008, about 60 percent of the increase in the uninsured occurred among Hispanics. That was related to immigrants and their children."

So most of the increase in the uninsured is occuring among immigrants who will be lining up to take advantage of expanded Medicaid eligibility under Obamacare, pushing states to the brink of bankruptcy. Yet any mention of immigration in the NYT article? Nope, not a word.

"The National Association of State Medicaid Directors estimates that state budget shortfalls in the coming fiscal year, which begins in July in most states, will total $140 billion. Because Medicaid is one of the largest expenditures in every state budget, and one of the fastest-growing, it makes an unavoidable target."

State budget shortfalls in Medicaid will total $140 billion in the coming fiscal year!! And Obama wants to expand eligibility? Is he out of his mind? Oh, I'm sure the Dems will bribe states to support their health care plan by plugging state budget shortfalls with federal tax money. But can they do this ad infinitum? Just keep plowing the tax dollars of hard-working middle-class Americans into Medicaid to support the growing ranks of uninsured immigrants that the Dems and GOP elites insist we must keep inviting into the country?

That appears to be the plan. Indeed, that's how Obama and the Dems strong-armed the states into accepting their stimulus package which, by the way, prevents states from tightening eligibility standards for Medicaid:

"Governors and legislators have managed to defer the deepest cuts because the federal stimulus package provided $87 billion to states in Medicaid relief. The cost of Medicaid is shared by the federal and state governments, with states setting eligibility, benefit and reimbursement levels within broad federal guidelines, and Washington covering the majority of the expense."

"But the stimulus assistance is due to expire at the end of December, in the middle of many states’ fiscal years, leaving budget officials to peer over a precipice. Congress and the White House are considering extending the enhanced payments for six more months, at a cost of about $25 billion."

"The extension would not come close to filling the Medicaid gap in many states. In Georgia, for instance, Gov. Sonny Perdue assumed in his budget proposal that the additional federal money would be provided, but that the state would still face a Medicaid imbalance of $608 million, said Dr. Rhonda M. Medows, the commissioner of community health. "

States want to tighten eligibility, but the federal government has tied their hands:

"The options are limited by several realities. To qualify for Medicaid dollars provided in the stimulus package, states agreed not to tighten eligibility for low-income people. And any time a state cuts spending on Medicaid, it loses at least that much in federal matching money."

So states are damned if they do cut spending on Medicaid (because they lose federal assistance), and damned if they don't (because Medicaid costs are spiraling out of control and threatening to break their budgets).

When will white Americans and middle-class minorities wake up? Medicaid is already threatening to bankrupt the states, Obamacare promises to expand eligibility and make things worse, and yet no one in the mainstream media will even mention the word "immigration" when this is the primary factor behind rising costs. We're clearly incapable of dealing with serious problems because of taboos about immigration. I'm afraid things will have to get very worse before people wake up. 

How sad.

Dems originally made gratuitous use of the filibuster

Apparently filibusters were rarely used in the Senate's history until fairly recently.

"The biggest change came during the 2005-06 session of Congress when Democrats ramped up use of the filibuster. The party controlled 45 seats and sensed the tactic could spur political gains in 2006. Democrats threatened or used filibusters on a wide variety of issues, including legislation affecting campaign finance, abortion, war spending, the Patriot Act, and the nominations of Samuel Alito to the Supreme Court and Dirk Kempthorne as Interior Secretary." (McClatchy Newspapers in today's Yahoo, Feb 16)

So the article establishes that Democrats were first to make egregious use of the filibuster. And yet, it quotes Norman Ornstein, who is apparently oblivious to this history, as saying "Republicans have ratcheted use of the filibuster up to completely unheard of levels."

Unheard of levels?

"The Senate took a record 112 votes to cut off debate in the 2007-08 session [when the Dems were filibustering everything], about 18 percent of all Senate votes." The current Congress is on a somewhat slower pace; so far, the 42 votes are about 10 percent of the total."

And who is this Ornstein anyway? I always remembered him as a liberal op-ed writer in the Washington Post and other left-leaning newspapers. Indeed, Wikipedia describes him as a liberal. But the article says he is "an expert on Congress at the American Enterprise Institute, a center-right policy organization."

Center-right? I wish the media would describe the AEI and others of the same ilk more accurately: as NEOCON institutions.

NEOCONs tend to be conservative in money matters and the military only, while as liberal as the liberals, if not more, on social issues. I don't think of NEOCONs as looking after the interests of regular middle-class white Americans.

So anyway, in order to sound impartial in criticizing Republicans, the article quotes a "center-right" think tank which would actually be better described as a NEOCON [Read: quasi-liberal] think tank, and if that weren't bad enough, it goes to one of the think tank's few self-avowed liberals - a Norman Ornstein - for comment. Swell.

It's amazing how even when the media manages to get the facts right [for example, that Dems were actually the ones who broke precedent in making unrestrained used of the filibuster], it still puts just the right spin on things to make sure conservatives/Republicans look bad.

If the govt screens out "public charges," then why are more than half of all immigrant households w/kids receiving welfare assistance?

The Center for Immigration Studies reports that "In 2008, 53 percent of all households headed by an immigrant (legal or illegal) with one or more children under age 18 used at least one welfare program, compared to 36 percent for native households with children. Immigrant use of welfare tends to be much higher than natives for food assistance programs and Medicaid."

Now wait a second - wait a second. To get a green card (permanent residency), I thought you need to prove you will not become a public charge??

Section 212(a)(4) of the Immigration and Nationality Act (INA), an individual seeking admission to the United States or seeking to adjust status to that of an individual lawfully admitted for permanent residence (green card) is inadmissible if the individual, "at the time of application for admission or adjustment of status, is likely at any time to become a public charge."

This is a reasonable requirement. After all, there's no reason to let someone stay permanently in our country if they're just going to burden the American taxpayer. Keep the loafers out! Makes sense. Great.

But if the US Citizenship and Immigration Services (USCIS) is screening out potential public charges from among applicants for permanent residency, then why are over half of immigrants receiving at least one form of welfare?????

Surely the USCIS is not doing its job of weeding out the loafers!?

Well, no. The USCIS defines "public charge" in such a narrow sense as to be virtually meaningless.

This is the USCIS definition of "public charge": an individual who is likely to become primarily dependent on the government for subsistence, as demonstrated by either the receipt of public cash assistance for income maintenance or institutionalization for long-term care at government expense. Non-cash benefits and special-purpose cash assistance are generally not taken into account for purposes of public charge determination.

In other words, the USCIS has set the bar really low for becoming a permanent resident. So long as you're not institutionalized in a mental asylum or nursing home, or receiving direct cash payments to supplement your income, you won't be considered a public charge.

This means that you can receive Medicaid benefits; Children's Health Insurance Program (CHIP) benefits; subscribe to nutrition programs including Food Stamps, the Special Supplemental Nutrition Program for Women, Infants and Children (WIC), the National School Lunch and School Breakfast Program, and other supplementary and emergency food assistance programs; housing benefits; child care services; energy assistance such as the Low Income Home Energy Assistance Program (LIHEAP); emergency disaster relief; foster care and adoption assistance; educational assistance (such as attending public school), including benefits under the Head Start Act and aid for elementary, secondary, or higher education; job training programs; community-based programs, services, or assistance (such as soup kitchens, crisis counseling and intervention, and short-term shelter); and assistance from state and local programs that are similar to the federal programs listed above (in California, for example, Medicaid is called "Medi-Cal" and CHIP is called "Healthy Families") and still not be considered a public charge!!

In short, you can receive all the "non-cash" or "special-purpose cash benefits" the government has to offer, and this will not disqualify you from becoming a permanent resident. Welcome to America - and jump on the gravy train!

But considering Medicaid, the government's program for the poor, is heavily used by legal immigrants and is helping to bankrupt California, and Obama and the Democrats claim that Medicaid costs are spiraling out of control and threaten to bankrupt the entire nation, don't you think Medicaid recipients should be considered "public charges"??

Only makes sense to me. But then again, I, like millions of middle-class white Americans, are just paying for all of this, so who really cares what we think?

Wake up white America (and middle-class minorities too)! The liberals/leftists and ethnocentric lobby groups are pulling a big one over on all of us. They decry the swelling ranks of the uninsured on the one hand, but continue to invite masses of impoverished Third World people into our country on the other. The logical solution would be to halt the inflow of impoverished peoples. Then we could get Medicaid costs under control. But no, that makes too much sense. Their solution - in the form of Obamacare - is to provide free or subsidized medical care to all! This, combined with a never-ending flow of impoverished immigrants, ensures that the gravy train will only get longer and longer and longer...And of course the liberals, always generous with other people's money, are going to have you - and your children and grandchildren - pay for it. Oh they're so wise. So moral. So above the rest of us. And so laying the groundwork for turning America into Brazil. Splendid.

Bi-partisan healthcare summit a preordained failure?

An AP article on Feb 12 notes that "Democrats see a few scenarios that could emerge from the Feb. 25 event, planned as a half-day televised forum."

"One possibility is that Republicans make a poor showing at the summit, emboldening Democrats to strong-arm their sweeping health legislation through Congress with no GOP votes, which would require the use of controversial rules in the Senate. "

My view is that the very purpose of this bi-partisan summit is to give Democrats an excuse to ram-rod their despised healthcare legislation through Congress. They've preordained the outcome. They have no intention of compromising with Republicans. Their aim is to say, "Look, we tried to compromise with the Republicans. But their bill won't cover 30 million uninsured like ours. So we have no choice but to 'go nuclear' and use controversial rules to force the legislation through [the controversial rules are normally used for budget purposes only, not nation-altering legislation]."

 The article goes on to say "If White House officials have charted any one of these endgames, they're not saying." So the W.H. appears to have a preferred outcome to the summit! And you can bet the farm it ain't compromising with the Republicans.

Finally the article concludes

"Many Democrats believe the likeliest way forward is for the House to pass the Senate health care bill, and then for both chambers to pass a package of changes to fix elements House Democrats don't like."

This is of course the 'nuclear option.' Yet major nation-changing legislation should always win broad support through compromise to be legitimate in the eyes of all Americans. Even the flawed Civil Rights laws of the '60s went through this process. The democratic process deserves nothing less. But my sense is that the Democrats don't give a damn about process. They're idealogues. They talk about reforming healthcare to control costs, but "lowering the deficit" doesn't exactly get their hearts racing. Reducing the deficit to ease the burden of mostly white tax-paying Americans? Ho-hum. Bo-ring. Their real aim is to cover the 30 million uninsured in this country, many of whom are legal or illegal immigrants [the Democrats' bills do not include enforcement provisions to bar illegals]. And they'll do that even if it requires throwing Granny under the train: their bills call for cutting Medicare benefits for seniors to give free or subsidized care to señoritas.

Hundreds forced into labor, sex in Ohio - what have we done to Middle America?

According to an AP article today (Feb 11), human trafficking is becoming a big problem in, of all places, Ohio! Yes, Ohio, a "plane-Jane" state best known for tires and other industrial products is now becoming a far more interesting place thanks to diversity!

"About 800 immigrants are sexually exploited and pushed into sweatshop-type jobs [every year], a new report on human trafficking in the state said Wednesday."

"'Ohio is not only a destination place for foreign-born trafficking victims, but it's also a recruitment place,' said Celia Williamson, an associate professor at the University of Toledo who led the research."

Why couldn't Ohio remain the bastion of bourgeois America with good schools and safe streets that it always was? I mean, how Middle America is Ohio you ask? It is so Middle America you can't win the presidency without it (from 1904 through 2008, the Ohio victor won the presidency 25 of 27 times). What on earth has happened to Ohio, this most quinetessential of apple-pie American states?

Here's your answer:

"From 1990 to 2000, Ohio's foreign-born population increased 30 percent, and the state has a growing pool of legal and illegal immigrants who draw victims or hide victims, Williamson said. These networks are highly organized, with brothels fronting as legitimate businesses."

Why are we importing this Third World insanity into Middle America? In what way does this make our country better?

The only people to benefit from this are those who work in what I call the "sociopathological industrial complex" of do-gooder non-profits, police, welfare agencies, the criminal justice system, etc.

Indeed, the article ends by saying

"The report recommends handling child trafficking cases through the child welfare system rather than the juvenile courts."

So if it's not the criminal justice system benefiting, its some other governement agency. Geesh.

Uncompensated hospital costs are skyrocketing - wonder why?

NYT Feb 9 article:

"Nationwide, the cost of unpaid care for hospitals, which includes charity care as well as money that could not be collected from patients, was around $36 billion in 2008. It is expected to spiral higher. The number of people without insurance in this country could increase to as high as 58 million by 2014, from about 49 million now, according to an estimate by the Urban Institute."

Hmm..where is this surge in the uninsured coming from??

Cue Dr. Samuelson's recent op-ed article on Obamacare in the Washington Post: "A wild card is immigration. From 1999 to 2008, about 60 percent of the increase in the uninsured occurred among Hispanics. That was related to immigrants and their children."

Hmm. So the leftists import masses of impoverished Third World people into our country. They then scream there is a growing number of 'Americans' without health insurance and that it is a moral imperative we [white Americans] do something about it [pay for it]. Is it unreasonable to ask why we need to continue importing poor people when they are merely swelling the ranks of the uninsured, turning a manageable problem into an unmanageable one?? Oh yes, questions like this are heresy in the religion of Liberalism. When it comes to issues that intersect with race/immigration/culture, we must turn off our thinking caps and become automotons. Don't ask impertinent questions. Shut up and fork up.