American Elephants


Eric Holder is Promoting Another Mortgage Crisis. by The Elephant's Child

According to the Obama administration, the nation’s largest mortgage lender —Wells Fargo Bank — and dozens of other  banks are racist bigots. Another Justice Department witch-hunt.  Attorney General Eric Holder has added Sun Trust Bank and Bank of America to the long list of bank bigots. Some 60 other lenders are under investigation for allegedly denying blacks and Latinos home loans solely due to the color of their skin, or for allegedly “steering” them into higher-cost subprime mortgage loans when they could have qualified for prime loans. If you see everything through the prism of racism, don’t be surprised if you find it everywhere.

I just advised everyone to read Gretchen Morgenson’s Reckless Endangerment.  The financial meltdown was not a pretty picture, and the interplay of Washington, Wall Street and corrupt mortgage lenders dumped a major crisis on us all. The corrupt mortgage lenders were the big mortgage giants Fannie Mae and  Freddie Mac. The financial crisis was caused by the federal government — politicians trying to be compassionate when they should have been responsible and thoughtful.

The idea in Washington was both good and compassionate. If more people owned their own homes, they would become more responsible members of the community, work for better communities and better schools. All good things would come to be if only more people were homeowners. White picket fence, apple trees, and mom and apple pie.

A lot of people in this country who are poor, are poor because they have made bad choices. There are good and kind people who may be poor too, just a little down on their luck. But there’s a big chunk of bad choices there. Dropping out of school. Getting pregnant in high school, having babies without a father to support them. Drugs, crime, prison. Gambling. Those choices reflect on creditworthiness. If you don’t have a steady job, it is hard to pay the mortgage bill. One payment missed means a future double payment.

Some have chosen to believe that the reason that poor people are turned down for mortgage loans— the only reason— is racism. Because some minorities are poor, they should be offered loans at a less discriminatory rate than those who can afford it. We are still undergoing the fallout from the mortgage crisis, and now Holder wants to do it all over again.

Holder has smeared the entire banking industry as racist — an absurd lie — in order to help lawyers and housing-rights activists to justify a bigger shakedown of the industry. The left likes to believe in FDR’s Second Bill of Rights ( without understanding the difference between a natural right and wishful thinking), which included the right to a good paying job, freedom from unfair competition and monopolies, a decent home, the right to medical care, a good education, and the right of a farmer to prosper. The left believes in this because they believe in making promises to the electorate. They don’t care if they don’t turn out. It’s the promise that matters.

Holder is attempting to turn the public against banks, erode confidence in the financial sector, erode time-tested credit standards, and to go back and do the financial crisis all over again.  He has ordered banks to “modify’ their lending practices to approve more minorities, regardless of their creditworthiness, and forced them to open branches in depressed urban areas, regardless of profitability. Wells Fargo must devote at least $50 million to down-payment assistance for homebuyers in predominately minority areas of Chicago, Baltimore, Detroit, Miami, Oakland, Cleveland, Philadelphia and Washington DC.

Well, who wants to fight the federal government? It may be more expensive than settling. Holder has not yet had to prove his charges in court.  Out of the 20 settlements so far, there has been no material evidence of lending discrimination in any of them.  In the case against Wells Fargo, Investors says:

1. Justice’s 37-page complaint covers the period 2004 to 2009, yet Wells ceased making wholesale subprime loans in July 2007.

2. Over the same period, Wells scored “outstanding” grades on its Community Reinvestment Act exams conducted by federal regulators, who monitor bank lending in minority areas and work closely with Justice prosecutors. Wells set aside more than $110 billion in mostly low-interest loans for minorities as part of so-called CRA loan commitments.

3. In the 29-page consent order, Wells denies discriminating against minority borrowers and insists that an internal review of its loan files proves its subprime borrowers had “significantly weaker credit characteristics” than its prime borrowers. Black, white or brown, they would not have qualified for prime loans.

4. In approving loan products, originators followed published underwriting guidelines and weekly “rate sheets” pegging prime and nonprime interest rates to credit scores—the higher the score, the better the rate, and vice versa. They also followed an automated checklist, “Enhanced Care Filter,” to prevent “steering” a prime candidate into subprime.

5. Wells also asserts that the government failed to conduct “an appropriate analysis” of its loan data. As in other cases, prosecutors drew their conclusions from statistical analyses showing “disparities” in loan pricing by race.

But the computer models — which were developed by a former top Center for Responsible Lending official — do not control for all credit risk variables. The former official, Eric Halperin, has long had it out for banks; yet he now serves as Justice’s lead prosecutor for “fair lending.”

6. The complaint fails to identify a single “victim” of lending discrimination; and, in fact, asks Wells to “assist in identifying allegedly aggrieved persons.” Nor does it cite any internal bank communications, such as emails, showing willful intent to discriminate against blacks or Latinos. (there’s more)

The state of the law is such that someone accused must weigh the ultimate cost of a court battle against the cost of whatever settlement is demanded. Why did Wells Fargo agree to settle, when the charges are preposterous? They said “Solely for the purpose of avoiding contested litigation with the Department of Justice.” And, Investors adds, avoiding brand damage from boycotts and negative media orchestrated by Holder. And the Community Organizer could call in his troops —ACORN and the Unions.

Eric Holder believes that his critics are motivated by racism, and an attack on him is meant as an attack on the president. He said in a speech at Columbia University the he “can’t imagine a time in which the need for more diversity would ever cease. Affirmative action has been an issue since segregation practices. The question is not when does it end, but when does it begin…When do people of color truly get the benefits to which they are entitled?”

Way back in February of 2009, Holder said the United States is “a nation of cowards.” “Though race-related issues continue to occupy a significant portion of our political discussion, and though there remain many unresolved racial issues in this nation, we, average Americans, simply do not talk enough with each other about things racial.”

At some point, all we can do for minorities is the compliment of treating them as no different than anybody else. Of not requiring special favors and special benefits, but having to earn the favors and benefits by their own efforts. We are, and remain human beings, subject to all the flaws of humanity, and there are lots of favors and benefits that depend on who you know and who you have done favors for. Oddly enough, that remains one of the most noticeable characteristics of the Obama administration. It has several names: crony capitalism, pay-offs, and “the Chicago style.”



It’s Not What Global Warming Looks Like, It’s What Mother Nature Looks Like. by The Elephant's Child

Dr. John Christy testified this week before the Senate Committee on Environment and Public Works. He noted that during the heat wave of late June and early July, high temperature extremes became major news. Headlines that said “This is what Global Warming looks like,” Christy said, were not based on climate science. He said that “it is scientifically more accurate to say that this is what Mother Nature looks like.” Dr. Christy is one of our most outstanding climatologists.

While folks in the East and Midwest were suffering from the heat, it was chilly here. I was still sleeping under a down comforter with temperatures in the 50s and low 60s, and even colder at night. Today it is 83°, mid-afternoon in August, and the first two days over 80° this year. There wasn’t any significant local strawberry crop, they were moldy. Anecdotal evidence, to be sure.

I am a pure amateur with an interest in the global warming controversy. But I have long agreed with Dr. Christy. Mother Nature does many strange things with the weather, many not well understood. Doesn’t mean the earth is in crisis. CO2 is plant food and we need it to feed ourselves and the world, and stupid alarmist attempts to suppress carbon dioxide are a waste of time and effort, not to mention money. Dr. Christy’s written testimony is here. It includes much that is not in the video. Worth your time.

Barbara Boxer (D-CA) is the chairman of the Senate committee on Environment and Public Works. Her smarmy response to Senator Jeff Sessions'(R-AL) introduction of Dr. Christy,(designed to point out that he is a noted climatologist with an outstanding reputation, and his testimony is meaningful). In the current political climate, it seems one must point out these things.

The oddity seems to be that Democrats increasingly reject Republican statements, information or testimony — because it comes from a Republican. They have their opinions, their ideas, and they bear no relation to the real world. They are informed by Liberal opinion, and increasingly get way off because they are impervious to fact. I don’t think they read books if they are by a known Republican author or columns by a conservative writer. They hate Conservatives, largely because we have the nerve to disagree with them.

Evidence; they consider the Tea Party to be a radical, dangerous, racist  movement. Health and Human Services has them on a watch list as potential terrorists. These are the ordinary folks whose most radical actions have been to carry signs, listen to and make speeches at rallies, and clean up after themselves when they have had a rally. The presence of black leaders and\ members does nothing to allay the claims of racism for any black person attending a Tea Party rally is by definition an Uncle Tom.

The Occupy movement, on the other hand, was what young America looked like, protesting the evils of Wall Street. Soon the protests would go national, and would bring about the revolution, and the Left would triumph. The rapes, molestation, drugs and murders didn’t seem to trouble them — that was just Republican propaganda. It did get a little uncomfortable and talk about the Occupy movement dropped off after the videos of vandalism and destruction in progress surfaced.

This seems to be what is going on in the climate change field. The left believes in alarmist global warming— period. Al Gore, noted climatologist, told them so. Even as countries all over the world are eliminating their subsidies for wind and solar, the left continues to support alternative energy. It does not matter if the first few projects fail, the sun is there and it’s free and sooner or later it will work, and we can power the world  “naturally”— or is it organically. Nevermind. The sun does not shine at night, and we haven’t figured out how to store the diffuse energy nor dispense with annoying clouds, Forward! into a brighter and much more expensive future. And besides, those big meetings in the world’s resort spots are really fun, and somebody else pays for them.

The divide keeps growing larger because liberals don’t look at all knowledge or information, impartially, but only at “liberal” facts. Keynesian economics, they believe, got us through the Great Depression (see the work of economists Lee Ohanian and Harold Cole from UCLA) thus Keynesian economics must be correct.

Scientific skeptics (and scientists are supposed to be skeptics) produce evidence that the earth has been gradually cooling for centuries and the current warming is nothing to get excited about, and such a notion is rejected out-of-hand. Produce evidence that temperature anomalies because of improper siting of thermometer stations, has caused evidence of warmer temperatures that exist in reality— you must be kidding and Anthony Watts is called names.

Barbara Boxer’s properly leftist professor Christopher Feld, a lead author of the IPCC’s Working Group II, testified to the committee. Dr. Roger Pielke Jr. demolishes his testimony promptly.

The politicization of climate science is so complete that the lead author of the IPCC’s Working Group II on climate impacts feels comfortable presenting testimony to the US Congress that fundamentally misrepresents what the IPCC has concluded. I am referring to testimony given today by Christopher Field, a professor at Stanford, to the US Senate.

This is not a particularly nuanced or complex issue. What Field says the IPCC says is blatantly wrong, often 180 degrees wrong. It is one thing to disagree about scientific questions, but it is altogether different to fundamentally misrepresent an IPCC report to the US Congress. Below are five instances in which Field’s testimony today completely and unambiguously misrepresented IPCC findings to the Senate. Field’s testimony is here in PDF.

Dr. Roger Pilke Jr. explains on his blog, just what he found wrong in Professor Feld’s testimony. It’s pretty interesting to see the politicization and the improbable arguments. Interesting and sad.




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