The Barney Frank Recession

Not too long ago people who wanted to buy a house would spend some time (sometimes a lot of time) working hard at a job to save enough money so that they could afford to put down a downpayment. When they thought that they had enough saved up they would go to a bank or other mortgage lender and ask to borrow money so that they could use that and the money they saved to buy the house they needed.

If the bank felt that the people asking for the money had a reasonable chance of actually paying for the mortgage they would make them suffer through the tortuous process of closing the deal before they handed them a huge sum of money with which they could buy their house. If the bank felt that there was a reasonable chance that people would not, in the end, be able to pay their mortgage based on employment, credit rating, etc., as long as it didn't involve discrimination, then the bank would say, sorry, we can't risk lending you our money.

Lots of people didn't qualify for mortgages. It wasn't necessarily their fault. It wasn't personal. They just needed to work harder, save more and/or set their sights on somewhat less of a house.

Enter the Left in the form of Barney Frank, Democrat Representive of Massachusetts, and plenty of liberal politicians with the power to influence. No longer is homeownership a privilege, a reward for hardwork and patience. It is a right. It is something that is owed to you. Affordability is no longer a factor.

So we are left with the government, with Barney Frank in the vocal lead, who believe that the banks should lend money to people to buy a house because, well, they should. And you have the banks, who know their business, who want to lend money to people who they know will be able to pay it back. Well, you know the government will put pressure on the banks to lend money to people who the banks know will be unable to pay the money back. Now there are lots of thugs in high and low places, public and private, lining up behind Barney (pardon the visual) to lead the charge for the little guy under the guise of affordable housing. But Barney is the Chairman of the House Financial Services Committee. In other words he's the voice of Capital Hill when it comes to dealing with the banking industry.

Now, the banks certainly don't want the government coming down on them (any more than they already are) so they comply, especially Fannie Mae and Freddie Mac which are essentially financial arms of the government anyway. Of course the only way the banks can even hope to arrange loans for these folks is to use sub-prime methods such as interest only payments and low adjustable rates. Of course the fact that within a couple or few years the arrangement will change. It has to. And then the folks who could barely afford the initial payments have no hope of being able to keep up with the payments and will, inevitably, in short order, be foreclosed upon.

It was quite inevitable.

Now, add the fact that these easy mortages puts a strain on the supply side of the housing market which pumps up the prices. The Fed lowers interest rates that the banks use to borrow from each other so that they can loan money to you and me which means that we can afford to pay for a bigger mortgage which means that the seller can ask more for his house and the housing market starts to balloon. The banks have the opportunity to unload these future disasters to those who would package them in nice little complicated investment devices for Wall Street to eat up so they unload. The devices are sold to entities all over the world like a virus waiting to put the body in the ICU.

Eventually, predictably, the timer ticked its last and the bomb went off. There were lots of warnings by a few people who saw what was coming. There was lots of blame to go around, in Washington and Wall Street. Lawyers who think they are economists because they were elected to Congress. Brokers who saw an opportunity to profit regardless of the quality of the investments they were dealing with. And homeowners who knew (or should have known) that there was no way they could afford the house they lived in.

Of course the obvious target for blame for everything was Bush. As if a sitting president had any real influence over the economy. Most times the economy booms or busts dispite any action by the guy who happens to be sitting in the White House. After all, the president doesn't get to be where he is by being a world class economist. No, I put this one squarely in the lap of Congress who are all too happy to nod their heads when Barney Frank rants from his chairmanship.

Which pretty much makes them all Barneys.

I recommend going to the Patriot Post at http://patriotpost.us/ vol. 9 no.7 to read Mark Alexander's spin on the economic recession.

Presidential Character

Mark Alexander
From Patriot Post Vol. 08 No. 41; Published 10 October 2008

"The public cannot be too curious concerning the characters of public men." --Samuel Adams

In his Inaugural Address on 20 January, 1961, President John F. Kennedy closed his remarks with these famous words: "And so, my fellow Americans, ask not what your country can do for you; ask what you can do for your country."
With those words, JFK, considered by many to be the most exemplary leader of the Democrat Party in the 20th century, asked Americans to put country first, a bedrock principle of the Party until the last few decades.
However today, the current slate of Democrats have turned Jack Kennedy's national challenge on end, essentially proclaiming, "ask what your country can do for you, not what you can do for your country."
In 1963, Martin Luther King stood on the steps of the Lincoln Memorial and said for all to hear, "I have a dream that my four children will one day live in a nation where they will not be judged by the color of their skin but by the content of their character."
Has his dream been realized or have Democrat leaders divided us up into constituency groups, where we are judged by all manner of ethnicity and special interests rather than the individual and national character King envisioned?
Kennedy and King had it right, but the Democrat Party has squandered their great legacy and betrayed us, enslaving many Americans as dependent wards of the state.
This is not the Democrat Party envisioned by Franklin Delano Roosevelt or Harry Truman, much less its founder, Thomas Jefferson, who would not recognize even the most vestigial elements of his once-noble Party. (This dramatic transition is evident in the Democrat Party Platforms from Kennedy to Obama.)
When asked why he left the Democrat Party, perhaps the most famous of former Democrats said, "I did not leave the Democratic Party, the Democratic Party left me." That was Ronald Reagan, who earned the respect and support of an enormous number of Democrats during his presidency. His observation, "the Party left me," has never been more true than today.
For several months, we have heard and observed two presidential candidates, centrist Republican John McCain and liberal Democrat Barack Obama. It should by now be obvious to all of us who put our country first which of these candidates possess the high qualities of a statesman, and the prerequisite moral and civic virtues for an American president.
Unfortunately, too many of my fellow Americans have difficulty distinguishing these qualities.
Every four years, at the peak of presidential election cycles, we're told by the talkingheads and the party hacks that "this election is the most important in our lifetimes." This time, however, they may be right. These are indeed perilous times.
Our nation is facing crises on several critical fronts, including an historic economic disaster, the resolution of which will require the steady hand of a statesman in possession of outstanding character -- character that has been honed over his lifetime, character that is proven consistent with our nation's legacy of liberty and equality.
That reformed Democrat, Ronald Reagan, wrote, "The character that takes command in moments of crucial choices has already been determined by a thousand other choices made earlier in seemingly unimportant moments. It has been determined by all the 'little' choices of years past -- by all those times when the voice of conscience was at war with the voice of temptation, [which was] whispering the lie that 'it really doesn't matter.' It has been determined by all the day-to-day decisions made when life seemed easy and crises seemed far away -- the decision that, piece by piece, bit by bit, developed habits of discipline or of laziness; habits of self-sacrifice or self-indulgence; habits of duty and honor and integrity -- or dishonor and shame."
For the first and final word on the necessary character traits the next president should possess, let's return to our foundation. Our Founders, those who risked all to proclaim our individual rights and responsibilities as ordained by God, outlined these traits in our Declaration of Independence and its subordinate exposition, our Republic's Constitution.
Our Founders wrote at length about character, both of those who seek high office (or, rather, those that high office seeks), and those who elect them. Here are but a few excerpts in their own words.
John Adams: "Children should be educated and instructed in the principles of freedom. ... If we suffer [the minds of young people] to grovel and creep in infancy, they will grovel all their lives. ... We have no government armed with power capable of contending with human passions unbridled by morality and religion. Avarice, ambition, revenge, or gallantry, would break the strongest cords of our Constitution as a whale goes through a net. Our Constitution was made only for a moral and religious people. It is wholly inadequate to the government of any other. ... We should be unfaithful to ourselves if we should ever lose sight of the danger to our liberties if anything partial or extraneous should infect the purity of our free, fair, virtuous, and independent elections."
Samuel Adams: "Nothing is more essential to the establishment of manners in a State than that all persons employed in places of power and trust must be men of unexceptionable characters. ... If men of wisdom and knowledge, of moderation and temperance, of patience, fortitude and perseverance, of sobriety and true republican simplicity of manners, of zeal for the honour of the Supreme Being and the welfare of the commonwealth; if men possessed of these other excellent qualities are chosen to fill the seats of government, we may expect that our affairs will rest on a solid and permanent foundation. ... [N]either the wisest constitution nor the wisest laws will secure the liberty and happiness of a people whose manners are universally corrupt. ... No people will tamely surrender their Liberties, nor can any be easily subdued, when knowledge is diffused and Virtue is preserved. On the Contrary, when People are universally ignorant, and debauched in their Manners, they will sink under their own weight without the Aid of foreign Invaders. ... Let each citizen remember at the moment he is offering his vote that he is not making a present or a compliment to please an individual -- or at least that he ought not so to do; but that he is executing one of the most solemn trusts in human society for which he is accountable to God and his country. ... Religion and good morals are the only solid foundation of public liberty and happiness."
Thomas Jefferson: "It is the manners and spirit of a people which preserve a republic in vigor. A degeneracy in these is a canker which soon eats to the heart of its laws and constitution. ... If a nation expects to be ignorant -- and free -- in a state of civilization, it expects what never was and never will be. ... The whole art of government consists in the art of being honest. Only aim to do your duty, and mankind will give you credit where you fail. ... An honest man can feel no pleasure in the exercise of power over his fellow citizens."
George Washington: "No compact among men ... can be pronounced everlasting and inviolable, and if I may so express myself, that no Wall of words, that no mound of parchment can be so formed as to stand against the sweeping torrent of boundless ambition on the one side, aided by the sapping current of corrupted morals on the other. ...[A] good moral character is the first essential in a man, and that the habits contracted [early in life] are generally indelible, and your conduct here may stamp your character through life. It is therefore highly important that you should endeavor not only to be learned but virtuous. ... The foundations of our national policy will be laid in the pure and immutable principles of private morality, and the preeminence of free government be exemplified by all the attributes which can win the affections of its citizens, and command the respect of the world. ...[W]here is the security for property, for reputation, for life, if the sense of religious obligation deserts the oaths...? Of all the dispositions and habits which lead to political prosperity, Religion and morality are indispensable supports. In vain would that man claim the tribute of Patriotism who should labor to subvert these great Pillars of human happiness -- these firmest props of the duties of men and citizens."
At the end of the Revolution, when our Founders were endeavoring "to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity," Founding brothers Alexander Hamilton and John Jay and our Constitution's author, James Madison, wrote The Federalist Papers, its most authentic and comprehensive explication.
In Federalist No. 1, Hamilton warned, "Of those men who have overturned the liberties of republics, the greatest number have begun their career by paying an obsequious court to the people, commencing demagogues and ending tyrants."
Sound familiar?
In No. 10, Madison cautioned, "Enlightened statesmen will not always be at the helm." He insisted in No. 57, "The aim of every political Constitution is or ought to be first to obtain for rulers, men who possess most wisdom to discern, and most virtue to pursue the common good of the society; and in the next place, to take the most effectual precautions for keeping them virtuous, whilst they continue to hold their public trust."
Madison's Supreme Court nominee, Justice Joseph Story, wrote, "Republics are created by the virtue, public spirit, and intelligence of the citizens. They fall, when the wise are banished from the public councils, because they dare to be honest, and the profligate are rewarded, because they flatter the people, in order to betray them."
The Founders thus warned of the perils posed by the candidate who lacks political courage; the candidate who tells us everything we want to hear.
In November 1800, John Adams, in his fourth year as president, wrote to his wife Abigail, "I Pray Heaven to bestow the best of blessing on this house, and on ALL that shall hereafter inhabit it. May none but honest and wise men ever rule under this roof!"
We should all pray likewise, now, today, this minute.
As Adams understood, "A Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever."
Almost two centuries later, Ronald Reagan reiterated, "Freedom is ... never more than one generation away from extinction. Every generation has to learn how to protect and defend it, or it's gone and gone for a long, long time."
So what of the current generation of voters and the two presidential candidates?
On 4 November, one of these candidates will receive a majority of electoral votes, and in January, be seated as our next president. But for sure, this election is much more than a referendum on the two candidates; it is a referendum on the ability of Americans to discern between one candidate who possesses the character and integrity of a statesman that the office of president requires, and one who does not. In fact, one of these candidates could not even qualify for a basic security clearance if he was applying for a government job...
At this pivotal moment in our nation's history, let's hope that a majority of us have sufficient courage and character to make that distinction, and vote on what we know rather than how we feel.
Let's put country first.
For more information on the character of the presidential candidates, link to The McCain record and The Obama record.

The Patriot Post (PatriotPost.US)