American Elephants

Doorbell by The Elephant's Child
January 15, 2013, 7:30 pm
Filed under: Capitalism, Economy, Politics, Taxes | Tags: , ,

The Financial Crisis Was So Much Fun, Let’s Do It Over Again! by The Elephant's Child
January 15, 2013, 7:24 pm
Filed under: Capitalism, Economy, Law, Politics, Progressivism | Tags: , ,

New mortgage rules issued last week by the Obama administration will have the effect of forcing lenders to approve prime loans to borrowers who would normally only qualify for subprime loans carrying higher interest rates and fees to cover the added risk of default.

Banks are already under renewed pressure from federal prosecutors and regulators to make home loans to low-income borrowers with blemished credit as part of the administration’s stepped-up enforcement of anti-redlining laws.

Those two astounding paragraphs are from an editorial from Investors. The debate over the role that the Community Reinvestment Act played in the buildup to the Financial Crisis has been heated. Conservatives believe that The CRA is a classic case of government action leading to unintended consequences— in this case a lowering of normal prudent underwriting standards that have been a policy of good banking.  The lowered standards led to a buildup of bad loans that poisoned the financial markets.

Liberals have typically disagreed, because they view getting low-income buyers into their own homes a societal good, so they have searched for other reasons for the financial crisis — usually settling on Bush’s two wars or waterboarding or some other Bush misdeed.

Here are the conclusions of “Did the Community Reinvestment Act (CRA) Lead to Risky Lending?” by Sumit Agarwal of the National University of Singapore’s business school, Efraim Benmelech of Northwestern University’s Kellogg School of Management. Nittai Bergman of MIT’s Sloan School of Management, and Amit Seru of the University of Chicago’s Booth School of Business:

There is a belief on the left that you can increase the middle class by subsidizing things that middle class people have. If middle class people have houses, and go to college, then if more people own houses and go to college then the middle class will expand and poverty will disappear. But owning a home and going to college are not a cause of membership in the middle class, but a result. It’s called Reynolds’ Law. The ability to save, practice self-discipline, and deter gratification will help you to enter and remain in the middle class, not the other way around.

The CRA was added to, reinforced, and reemphasized over the years. That’s what Community Organizers did — organize low-income people to demonstrate and protest at banks, to accuse lenders of “redlining” when the actual matter was simply making loans on the basis that the customer could actually repay the loan.

Obama has repeatedly indicated that low-income people were preyed upon by evil bankers who made them take out loans that they couldn’t afford because they couldn’t understand the fine print.

Groundhog Day?

Democrats Don’t Criticize Their Own, Republicans Can’t Stop! by The Elephant's Child

Have you noticed that Democrats do not criticize their own? Republicans, on the other hand can’t stop.

Democratic candidates do not make gaffes. They occasionally misspeak, but if so, it was nothing worth mentioning, just a slip of the tongue, nothing to see here, just move along.

The Chairman of the Democratic National Committee, Debbie Wasserman Schulz said remarkably false and offensive things at every opportunity, yet they were not gaffes, nor did she misspeak, for she is an official of the Democratic party and cannot be in error. No one ever acknowledged that she might have said anything awry.

Stephanie Cutter, Deputy Obama Campaign Manager, came out with blatant lies about Governor Romney, was called on it, and continued to lie. Unacknowledged. When a Democrat is criticized, the party rallies round.

President Obama frequently faces the problem of saying one thing today, and quite the opposite on a previous YouTube video that appears on the internet promptly. Fortunately the president never makes a gaffe, the things that Republicans claim he said are just Republican lies and anyway that ‘s what he pays Jay Carney for, to explain away the inexplicable.

You may have noticed in the recent election campaign that Mitt Romney made all sorts of ridiculous claims about the economy, which is recovering nicely, unemployment, which is recovering nicely, and did not recognize that General Motors was once again No. 1 and Obama ordered the killing of bin Laden. Mitt Romney, a rich plutocrat, was doing what Republicans always do — promising more tax cuts for the rich.

President Obama spent little time on the economy which is recovering nicely, and concentrated on the really important issue which was how rich and uncaring, Romney was, how mean, woman-hating (he kept them in binders, and wouldn’t let them have contraceptives), plutocratic, rich, sends jobs to China, rich, corporate raider, uncaring, racist, is mean to animals, makes his dog ride on the roof of his car, fires people, and he is really, really rich.

Republicans were deeply disappointed in the outcome of the election. They believed that voters cared about jobs and the economy, which they apparently did. But voters thought that President Obama cared about them, and after more than a year of being told how mean Mitt Romney was, voters thought maybe he didn’t.

Republicans immediately saw clearly that they lost the election because they didn’t appeal to Hispanics. And Romney committed all these gaffes, and let Obama talk about his dog on the roof.  Republicans went through the long list of things Mitt Romney shouldn’t have said. They also blamed Paul Ryan, John McCain, Sarah Palin, John Boehner, Mitch McConnell, George W. Bush, Dick Cheney, Bill Kristol, Karl Rove, Tea Party activists, Moderates, RHINOs, Republicans, Conservatives, Establishment Republicans, Republican voters, the Religious Right, those who were too concerned about social issues, and those who don’t care enough about social issues.

It has been 70 days since election day, and Republicans are still busy blaming each other. It’s what Republicans do. Democrats are always convinced that an electoral loss and the accompanying accusations are an indication that the Republican Party is over, failed, done, and Democrats will win forever and consign Republicans to the proverbial ash heap of history.

Republicans can’t help the blaming and dissension. It comes naturally.  Republicans care about the free market, free people, small and responsive government, and low taxes for everyone. Republicans are deeply worried about the profligate spending of the Obama administration. They do their worrying in public. Because they care so much about these things, they each have different ways of dealing with the problem. Arguing in public is what citizens are supposed to do; not plot behind closed doors, cooking up and passing bills that no one has seen or read. It is what the Founders intended.

This is also why we have three divisions of government. Democrats hate to be disagreed with, but they are supposed to argue and debate with their opposition.  The debate is supposed to be slow and deeply considered, not “my way or the highway.” President Obama’s latest political slander is a case in point. The president cannot stop campaigning and dividing.

But it seems as if what’s motivating and propelling at this point some of the House Republicans is more than simply deficit reduction. They have a particular vision about what government should and should not do, so they are suspicious about government’s commitments, for example, to make sure that seniors have decent health care as they get older. They have suspicions about Social Security. They have suspicions about whether government should make sure that kids in poverty are getting enough to eat or whether we should be spending money on medical research. So they’ve got a particular view of what government should do and should be.

That is not a case of ‘misspeaking. That is saying that because your opponents have the nerve to disagree, they should be slandered as uncaring. Obama has presided over four years in which 46 million Americans have descended into poverty, with no sign of a recovering economy. Let’s see how Jay Carney deals with that.

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