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Who Inherited What?

by Bill O'Connell on April 25, 2010

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Although it is getting very tiresome and it is losing it’s bite, Democrats still are desperately clinging to “we inherited eight years of Bush policies, yada, yada, yada.” Was it eight years? If so, how did he get re-elected in 2004? I will be among the first to say that Bush wandered off the conservative reservation with his spending, but Bush didn’t create Fannie Mae and Freddie Mac either.

What Have We Inherited?

Let’s take a look at everything else we have inherited. Why stop at Bush?

With 20% of the federal budget locked in to Social Security and this also being essentially a very large ponzi scheme for which we have enormous unfunded liabilities, who did we inherit this from? Franklin Delano Roosevelt – Democrat.
What about that other ticking time bomb, Medicare and Medicaid? Thank you Lyndon Baines Johnson – Democrat.
Fannie Mae — Need I say more? Franklin Delano Roosevelt – Democrat
Department of Agriculture – elevated to Cabinet level at a time when agricultural employment in this country was 70%-80% of the population. In 2008 agricultural employment was about 2%-3% of the population. Why do we still need it? Thank you Grover Cleveland – Democrat
Department of Education – has spent $1 trillion since its founding and we all know how much it has improved education in this country. Thank you Jimmy Carter – Democrat
Department of Energy – Remember the Synfuels project where we were going to convert coal to oil after the first Arab Oil Embargo? It was a great idea as long as oil stayed above $40 per barrel at the time. Thank you Jimmy Carter – Democrat
Department of Housing and Urban Development (HUD) – think of all the wildly successful urban development projects over the years, warehousing our poor in drug infested, dangerous housing projects. Let’s not forget HUD’s contribution to the current financial meltdown where they aggressively pushed greater lending for homes in poor rural and urban areas. Thank you Lyndon Baines Johnson – Democrat
Community Reinvestment Act — another key to the housing bubble, Thank you Jimmy Carter – Democrat:

“Urged on by ACORN, congressional Democrats and the Clinton administration helped push tolerance for high-risk loans through every sector of the banking system — far beyond the sort of banks originally subject to the CRA. So it was the efforts of ACORN and its Democratic allies that first spread the subprime virus from the CRA to Fannie and Freddie and thence to the entire financial system. Soon, Democratic politicians and regulators actually began to take pride in lowered credit standards as a sign of ‘fairness’ — and the contagion spread.”

Department of Transportation – used to be part of the Department of Commerce. Split off to create another bureaucracy. Thank you Lyndon Baines Johnson – Democrat

Gee, all of this we inherited from the pantheon of Democratic gods. It makes Bush sound like a piker.

Will We Never Learn?

When this country was founded Congress created three departments: Department of War, the Department of State, and the Department of the Treasury. That pretty much fits what the founders intended. A limited federal government that would deal with external issues and defend us from our enemies. There are now fifteen federal cabinet level agencies. Why is it that Democrats feel this need to create massive new bureaucracies? Why don’t they ever go away when they have achieved their mission? We are now facing crushing deficits brought about by decades of government growth brought about by the Democrats.

It’s time to stop blaming Bush. Mr. Obama, you wanted this job. You won this job. Now, do this job and stop bitching about what you inherited. If anyone has something to bitch about it is we Americans, because you and your fellow travelers have built this house of cards and you think the only solution is to build it bigger, faster. If the load is too heavy to carry, we don’t need vitamins (VAT tax) to get stronger, we need to lighten the load. We have to shrink this beast down to a manageable size, NOW.

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Financial Reform — NOT

by Bill O'Connell on April 24, 2010

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It was like the movie Rocky the Democrats (Rocky) were getting pounded left and right over their heavy handed tactics. They crammed through a health care bill that an overwhelming majority of the country opposed. They moved on to financial reform and they still couldn’t get any traction. Their poll numbers continued to drop and it was looking like a dismal election coming up in the fall.

And then, just like in the movie Rocky swings from his heels and connects knocking the champ to the canvas. In this case it was the SEC charging Goldman Sachs with fraud. Now they could fire a full fusillade of class warfare at the Republicans and either get Republicans to help pass the financial reform bill or be tarred as the party of the evil bankers and greedy Wall Street robber barons. But unlike the movie, right after knocking the opponent down, when the referee sends Rocky back to a neutral corner he slips in his own sweat, flips on his back and knocks himself out. By that I mean the news came out that employees of the SEC spent an inordinate amount of their time watching porn instead of the financial markets. How do you expand the role of government on the heels of that disclosure?

Trying to Make Up for Bernie Madoff?

When Bernie Madoff’s ponzi scheme was in full swing, Harry Markopolos brought the scam to the SEC practically tied in a bow. The SEC did not respond. Perhaps they were too busy…, well never mind.

With the Democrats trusty weapon, class warfare, holstered it’s time to delve more deeply into this financial reform legislation.

In a letter to Senate majority leader Harry Reid and minority leader Mitch McConnell, luminaries including former SEC Chief Accountant Lynn Turner, former Labor Secretary Robert Reich, hedge fund owner Jim Chanos, former Lehman Brothers Vice Chair Peter Solomon, former S&L investigator Bill Black, former Senate Banking Committee Chief Economist Rob Johnson, economists Dean Baker, Barry Eichengreen and others pointed out that Dodd’s proposed financial reform legislation wouldn’t have prevented the current crisis … and won’t prevent the next crisis.

So tell me again why we are doing this? It’s all about more government control and more power in Washington, not about fixing any real problem. Where are Fannie Mae and Freddie Mac in this bill? They were at the very core of the financial meltdown. In other words it’s all politics and it’s all straight out of the Saul Alinsky tome Rules for Radicals:

Rule No. 13. Pick the target, freeze it, personalize it, and polarize it. In conflict tactics there are certain rules that [should be regarded] as universalities. One is that the opposition must be singled out as the target and ‘frozen.’…

“…any target can always say, ‘Why do you center on me when there are others to blame as well?’ When your ‘freeze the target,’ you disregard these [rational but distracting] arguments…. Then, as you zero in and freeze your target and carry out your attack, all the ‘others’ come out of the woodwork very soon. They become visible by their support of the target…’

“One acts decisively only in the conviction that all the angels are on one side and all the devils on the other.” (pps.127-134)

The target in this case, is Wall Street and the Banks. Demonize them. When the “others”, meaning the Republicans, come out to challenge the ineffectiveness of the bill, then they can be attacked as being for the fat cats and against the little guys; class warfare at its ugliest.

Follow the Money

But who is really in bed with the fat cats? The Political Action Committees (PACs), employees, families of employees and other associates of Goldman Sachs gave almost $1 million in campaign contributions to Obama. In this legislation, the concept of too big to fail remains untouched. There will be a $50 billion fund created with money from the top banks to standby if needed for a bailout, but this also gives the impression that the largest banks are now safer because of this fund and therefore can get a lower interest rate on their borrowings compared to smaller banks.

Democratic Congressman Brad Sherman said:

“The Dodd bill has unlimited executive bailout authority. That’s something Wall Street desperately wants but doesn’t dare ask for. The bill contains permanent, unlimited bailout authority.”

Why ask for it when the Obama administration will give it to you. All you have to do is let them smack you around a bit to prime the class warfare pump, and you’re all set.

If you are backstopped by unlimited executive bailout, go ahead, take bigger and bigger risks. The government will step in if you fail. So here we have yet another fat cat (Wall Street/Big Banks) wolf dressed in sheep’s clothing (the little guy; Main Street).

If you want real financial reform, then in the name of capitalism, the big banks and Wall Street have to learn to play with their own money. If they hit a home run, good for them. If they strikeout, they should lose their own money and if they don’t have enough to cover their losses, goodbye. They should not be allowed to take huge risks and if they pay off, everybody there gets a new mansion in the Hamptons, but if they go bust, hand the bill to us. Fannie Mae and Freddie Mac, we were told were private entities, not part of the government, but wink, wink, nudge, nudge, everyone knew the federal government was standing behind them and would not let them go bust. So they too, got the kind of interest rates, half a point lower than their competitors, based on this implied backing not based on the strength of their balance sheet.

We have to fight this one too. This is just more smoke and mirrors from the Obama administration. Another power grab without any substantive benefit to the American people.

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Hard Luck Stories – Reading Between the Lines

by Bill O'Connell on April 22, 2010

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You don’t have to go too far to find a story about people suffering in these tough economic times, and your heart goes out to them. Some have lost houses, are living in cars, really tough stuff. But there is another story under the surface that reflects common attitudes developed growing up in the nanny state kicked into high gear by Franklin Delano Roosevelt.

In the midst of these tough economic times, instead of getting out of the way by cutting taxes and red tape, the Obama administration is focused on piling on more government programs. Worthless stimulus packages, health care reform, and efforts to push cap and trade have not moved the unemployment needle a whit. They extend unemployment benefits and keep whistling past the graveyard hoping they won’t get swallowed up.

Personal Responsibility

Since the Great Depression and the growth of the nanny state, more and more people have bought into the myth that the government can provide all, and our responsibility is to enjoy the ride. An article in today’s New York Times writes about people benefitting from a government program to keep them in their houses if they face becoming homeless. But there are some subtleties in the hard luck stories that give me pause.

There is the case of Antonio Moore who lost his job as a mortgage consultant that paid him $75,000 per year. He lost his 3-bedroom house with a Jacuzzi and his Lexus sedan. He is now faced with eviction from his apartment. The article doesn’t go into details, but in most cases you don’t lose your house and car if they are all paid for. Again, it doesn’t say if Mr. Moore bought his car new or used, but when I think of a car like a Lexus I usually don’t think that fitting in the budget of someone making $75,000 living in the San Francisco Bay area. Had Mr. Moore purchased a Toyota Corolla instead of the Lexus would he be in better shape? Again, I don’t know the details. I am just wondering.

Then there is the case of Dawn Martin.

Ms. Martin is mortified to be asking for help. She grew up wealthy, with vacations spent on Caribbean cruises. “I had everything I ever wanted,” she says.

She and her husband have a painting business that until 2008 was grossing $100,000 per year, but in this tough economy it dropped to $38,000. That’s hard. But then here is the between the lines story:

Her father has money to help if it really comes down to it, she acknowledges.

“I don’t see him letting his grandkids land on the street,” she says, “but he’d hold it over our heads for a long time. That would lower me to a level that I wouldn’t want to go.”

So she is here, at Samaritan House, filling out the paperwork for the homeless prevention program.

So because of her pride, she turns to your family and mine, through higher taxes to fund a government program, to help her through her rough spot before she will turn to her own family. But don’t worry. When our money is gone, she will turn to Dad. The painting business is picking up so Ms. Martin is confident they will be able to sustain themselves. She is able to take our money to tide her over and still maintain her pride.

But what did Ms. Martin learn about money when “growing up wealthy”? Is Dad responsible for not teaching her or was she a rebellious child who ignored him and perhaps that is why he would hold it over her head for a long time. Will she do something different this time around or hope for another government program?

Perhaps I was a little torqued before reading this story by another in the Wall Street Journal that wrote about the homes underlying the Goldman Sachs fraud case. This article talks about a Ms. Onyeukwu, a 43-year old nursing home assistant with pre-tax income of $9,000 per month. She is having trouble paying her $688,000 mortgage at $5,000 per month which is 56% of her pre-tax income. Her solution? Refinance it with a $786,250 mortgage. But hey, the interest rate is lower so her payments of $5,000 per month will stay the same. What is she thinking? I could be way off base here but I’ll bet she could get a nice apartment for significantly less than $5,000 per month. Sell the house, live within your means.

Government as Savior or Government as Pusher?

This is a tale of two government programs and personal responsibility. We had or still have a massive government program that uses threats, goals, and sleight of hand to help millions achieve the American dream of home ownership. This is not through thrift, like our parents did it, but by the government threatening banks with charges of racism (there’s the race card again) if the banks didn’t lower their lending standards. As the housing market took off, the feeding frenzy intensified and everyone was trying to buy houses or finance them with less and less money down. The Community Reinvestment Act, HUD, Fannie Mae, Freddie Mac were all players in this debacle, but don’t expect our elected officials to wade into that swamp to see what happened. No, they will pile the blame on the banks and Wall Street, while they take Wall Street’s massive donations and do nothing but pass meaningless “reform legislation”. Now we need new government programs to keep these people hanging on. How similar is this to the drug pusher who gives you your first hit for free to get you hooked and dependent on them forever.

What About Personal Responsibility?

Unlike the people in the articles, I believe I have responsibility first and foremost for my actions. If I need help beyond myself I turn to my family and then the charity of my church. I believe many conservatives share my views, which is why on average conservatives give 30% more to charities than liberals. It is why I gave the moniker “Buck a Day Biden” to Vice President Joe Biden because in his financial disclosure forms he reported give only about $300 a year to charity. Here is a man who has been drawing six figure salaries from the taxpayers for years, is a millionaire, but will not reach very deep into his own pocket to help his fellow man, but has no problem reaching into your pocket and mine to create some government program to give your tax dollars to someone else.

There is a man named Dave Ramsey, who was a millionaire in his mid-twenties but later lost it all and declared bankruptcy. He now teaches others how to live without debt and take responsibility for their financial lives. It is a lesson all of us should learn and if we do, I’ll have to find something else to write about that sets me off. But in the mean time we have a lot of work to do. First we have to stop the federal government’s runaway train. Next, we have to shrink government. Then we have to go back to being responsible for ourselves and wean ourselves off the government.

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Shut Up Stupid, and Take Your Medicine

by Bill O'Connell on March 22, 2010

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“We have to pass the bill so that you can find out what is in it” – Nancy Pelosi

The White House claimed, incredibly, that most Americans support ObamaCare.

“If you take the last 12 independent polls, and you throw out four by Rasmussen, whose results the White House doesn’t like, and you throw out six others that show a wide margin of opposition, then you have two polls with results consistent with the Washington Post poll showing a fairly small margin of opposition to the Democrats’ national health care plan. And that is Benenson’s case. By the way, the headline of his article? “Most Americans want health care reform.” – Byron York, National Examiner

Governor Ed Rendell of Pennsylvania, gushed on Fox News last night, about how ObamaCare was good for Pennsylvania. Why? Well, he said, today Pennsylvania is only reimbursed 50% for Medicare while under ObamaCare Pennsylvania will be reimbursed 90%. Very cool. Er, who’s picking up the tab for that extra 40%? That question goes to the heart of the Liberal/Progressive movement which is basically you are too damn stupid to recognize a shell game when you see one.

Unless the plan is to have ObamaCare paid for with the profits from GM and Chrysler, the only thing the government does for a profit, it is all a giant shell game. The giddy governor of Pennsylvania knows that this is a shell game and that extra 40% will either come out of Pennsylvanians federal tax pocket instead of their state tax pocket or it will be subsidized by citizens in other states through their taxes. Oh wait, no, there is always those evil drug and medical device companies to tax. But where do they get their money? That’s right taxes are built into the price of their products, so expect drugs and medical devices to cost more.

The Evil Health Insurance Company Myth

Obama & Co. jumped all over a 39% premium increase by Anthem Blue Cross in California as Exhibit A justifying their takeover of the health care industry. This is not going to be fixed with ObamaCare but only made worse. An example is given by a doctor who says for the last seven years he has been reimbursed $50 for an office visit under Medicare. In that time his expenses have risen 30%. (Quick check — if the good doctor gives his staff a 4% raise each year for 7 years that comes out, compounded, to about 30%). Under ObamaCare they are proposing a 21% reduction in Medicare reimbursement, so the doctor will now get a $40 reimbursement for an office visit. The doctor can do one of two things. He can stop seeing Medicare patients, or he can charge his other patients more to make up the difference. If he chooses the latter course of action, then private insurance companies, like Anthem, will have to pay for the increase. How do they recover their costs? That’s right by increasing premiums.

Just like you never hear statists blaming government polices of HUD, Fannie Mae, and Freddie Mac for the housing bubble that triggered the financial crisis and recession (it was all those greedy, evil bankers), you won’t hear them mention their policies regarding Medicare as triggering the premium increases. It was all about greed. So government will need to step in and make sure those greedy insurance companies cannot increase prices like they have. So expenses rise, premiums are capped, insurance companies fold, and voila you have a public option, which becomes the only option. Next to keep expenses from rising, health care will have to be rationed because there are no market mechanisms in ObamaCare to actually reduce costs. No tort reform. No elimination of 3rd party payers. No true insurance that protects against catastrophic costs while you pay for the routine, like all other insurance. Just government fiat. Obama can no more order health care costs to decline than he can turn off gravity.

News flash to people around the world living under socialized medicine who travel to the United States for critical care when they need it, that door will soon be closed.

Who Is Really Stupid?

Statists believe the average American is too stupid to make decisions, or should I say the right decisions, about their lives, health, safety, etc. We need the really, really smart people in government to tell us what is good for us and follow their instructions. Or…in November we can send them the message that they were really, really stupid to ignore what the American people were screaming at them, STOP!!!! If Jefferson, Madison, Washington, Adams, Hamilton, et al, thought Americans were smart enough to look out for their own best interests, who are Pelosi, Reid, Waxman, Boxer, Rangel, Schumer, Dodd, et al, to say otherwise?

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Too Big To Succeed

by Bill O'Connell on January 21, 2010

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In the midst of the financial meltdown the government and financial pundits argued that they had to rescue the big banks because they were too big to fail. If we don’t save them, they could bring down the entire U.S. economy and in turn the economy of the entire world. Ignoring the history and responsibility for how they got there, that could be a true statement that the government had to do something to avoid a worldwide panic.

The panic averted, many banks paid the money back with interest, are in the process of paying out massive bonuses and the Obama administration is twisting itself in self-righteous knots to tax them into humility. Good luck with that. While they target the banks, they are hands off on Freddie Mac and Fannie Mae, GM and Chrysler because to tax those basket cases would just be taking money from the left taxpayer pocket and moving it to the right taxpayer pocket. If you look to the root of the problems of the fiscal meltdown you will find the government’s hand in almost every corner, but don’t expect this administration to try to get to the bottom of it.

Back Up, Go Ahead

There was an old Abbot and Costello routine where Abbot was guiding Costello in parking a car.

Costello asked what he should do and Abbot said, “Back up.”

Costello confirmed, “Back Up?”

To which Abbot replied, “Yeah, go ahead.”

“Go ahead?”

“No. back up.”

“Back up?”

“Yeah, go ahead.”

I don’t know if the Obama administration is Abbot or Costello, but they are telling banks, “Lend more money.” Then they tell the banks, we are going to raise taxes and take your money away. Then they ask the bank, “Why aren’t you lending more money?”

Programs You Can Believe In

Medicare

It is estimated that Medicare loses about $60 Billion ANNUALLY in fraud. That’s right about $60 billion of your tax dollars are stolen every year from this program.

“If you want to find Medicare fraud, the first place you should look is South Florida, where 60 Minutes and correspondent Steve Kroft were told it has pushed aside cocaine as the major criminal enterprise.” – 60 Minutes – Medicare Fraud: A $60 Billion Crime

While the Obama Administration pushes their health care program one of the ways of funding the program is through savings in Medicare fraud. However, no one has been able to stop it. Not Republicans. Not Democrats.

First Time Home Buyer Credit

This wonderful new program was designed to help first time home buyers achieve the American Dream. Unfortunately, it doesn’t take a genius to also achieve that criminal American Dream, fleecing the government.

It’s hard not to laugh when viewing the results of the federal first-time home-buyer tax credit. The credit, worth up to $8,000 for the purchase of a home, has only been available since April of last year. Yet news of the latest taxpayer-funded mortgage scam has traveled fast. The Treasury’s inspector general for tax administration, J. Russell George, recently told Congress that at least 19,000 filers hadn’t purchased a home when they claimed the credit. For another 74,000 filers, claiming a total of $500 million in credits, evidence suggests that they weren’t first-time buyers. – WSJ – First Time Fraudsters, 10/29/2009

The IRS even had to admit that in an investigation they found 53 cases where IRS employees filed “illegal or inappropriate” claims for the credit.

Too Big To Govern

A new president is elected once every four years, but the vast government bureaucracy remains. It is said that a president will only be able to address 3-4 top priorities in their term. By the time they appoint executive department heads and the Senate approves them and they set about to figure out the departments they are in charge of, it is an enormous undertaking to try to make significant changes. To try to curb fraud, to overcome the inertia of the entrenched bureaucrats who know they will outlast the appointee, and their friends in Congress who will probably be there as long, is just too tall an order to accomplish in a four year cycle. Every time a new liberal takes over, their first order of business is to make the bureaucracy larger. It does not work. It will not work.

The Only Solution

The only solution is to make the federal government smaller. It must be bold. It must be dramatic. Tweaking it at the margins will fail. Entire departments must be shut down. The Constitution should be the blueprint for this. If the power is not explicit in the Constitution, shut it down and allow the states or local governments to take it up if they choose. Then drastically cut taxes accordingly. Let people keep their money and decide at the local level if they want that service or not. Let every state try their own solution and each state can learn what works and what doesn’t from each other. But this idea of pushing every solution up to the federal and let one size fits all be forced on everyone is, quite simply, madness. We need less government and more liberty.

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Good Government, Bad Government

by Bill O'Connell on November 18, 2009

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If I asked you a simple question, what government organization works well, what would you say? Let’s take a look at two government organizations and compare their effectiveness and motivation.

The Military

Whether you support our troops on the battlefield or want them to always stay home in their barracks, most Americans will say the military does a pretty good job. Why? That is, why are they effective, not just why do people think so? Well, they put a lot of investment in training and technology. They seem to have solved the problem of integration, being based on merit rather than racial prejudice. These are all important things, but I don’ t they get to the core of the issue. The key question is, what happens if they don’t do their job? They die…they die, the guy beside them dies, their buddies die, and depending on the size of the conflict, their families and country may eventually die. With that kind of motivation, race is not even secondary. If the guy next to me has got my back and I have his, I don’t care what color he or she is. We do it right, we live; we don’t, we die.

The K-12 Teacher

K-12 education comes under fire in this country, and rightly so, for failing to produce an educated workforce. In New York, for example we spend over $14,000 per student, per year on education, far above the national average of around $9,000. Are students in New York 50% smarter than the country in general? Hardly. Is the nation as a whole turning out well educated students? Sadly, no.

Our K-12 public schools are a government run monopoly. So what happens to a K-12 teacher if they fail to do their job? If they have been in the job long enough to get tenure, nothing. They will get a raise like everyone else. So what motivates them to turn out outstanding students? I’ll wait.

Let me be clear that I don’t want to lump all teachers together. They are many teachers who, by having what I suppose is a strong moral streak, do a great job because they want to teach. Okay, so let’s look at the teaching profession where there is a group that does their best because they get satisfaction from doing a good job. Now, some studies come out that say the way to improve results is smaller classroom size. The teachers’ unions get behind it and eventually push it through. So what does that mean? If you cut the size of the class in half, you double the number of classes. If you double the number of classes, you have to double the number of teachers and thus have to go deeper into the labor pool to find them. Before you took this step, we can probably assume that all the self-motivated teachers were already on the job. So the additional teachers are motivated by what?

Co -conspirators

That brings us back to the teachers’ unions. When government’s come under pressure to cut educational expenses, the airwaves are soon flooded with the heart wrenching commercials pleading to restore the funding “for the children’s sake.” What you don’t hear is the trailer that says, “This commercial paid for by the PTA,” or “This commercial paid for by the Association of Concerned Parents.” No, what you typically hear is, “This commercial paid for by the X Teacher’s union, Joe Blow, President.”

Who do the unions really represent…really? The students? or the teachers? They want the funds restored so that their membership is not hurt and their dues are not curtailed. If their true concern was for the students, why not support school vouchers and charter schools? They fight the former with a vengeance and the latter, if it is not union organized.

Let’s Not Pick on K-12 Education

Let’s look at other government areas. Government is the only area where union membership is growing. How many people relish going to their Department of Motor Vehicles? How efficient is the Post Office? Amtrak? Fannie Mae and Freddie Mac have a bonus compensation plan, which is a step in the right direction unless it leads to cooking the books and making extremely risky loans that lead to the near collapse of our economy. How can we get this under control?

Controlling the Uncontrollable

Our government is trying to install a massive health care program that will cost a trillion dollars. At the same time, tens of billions of dollars are stolen from Medicare every year and they can’t stop it. Early this year, the Obama Administration passed a $787 billion stimulus package, spent $18 million to build a website to track it, and put Joe Biden in the role of watch dog. How is that working out? A recent report from ABC News, of all places, found that credit for creating jobs was given on the web site to Congressional Districts that do not exist. A $1,000 grant was purported to have created 50 jobs. The New York Times investigated and found that the $1,000 went to purchase a lawn mower. It took from the time of the founding of the Republic until about the mid 1990s to accumulate $6 trillion in debt. It has doubled since then, and it is projected to go from $12 trillion to $14 trillion by next year!

It cannot be controlled. It is impossible to control. The only solution is to cut the federal government down to size. Take out the Constitution and read what the true functions of government are supposed to be. The military, absolutely; the Post Office, yes it’s in there; coin money; establish patents and copyrights; establish the courts; control the District of Columbia; regulate interstate commerce; make treaties; give the State of the Union address. That pretty much sums it up and everything else should be left to the states and local government or the people.

We should jettison all the rest and cut this government down to size and get out of debt. Department of Labor–gone; Department of Health and Human Services–gone; Department ment of Housing and Urban Development–gone; Department of Transportation–gone; Department of Energy–gone; Depatrment of Education–gone; Department of Veterans Affairs–gone, rolled into the Department of Defense; Department of Homeland Security–gone, rolled into the Department of Defense; Department of the Interior–gone; Department of Agriculture–gone.

The amount of money saved would be enormous. Selling all the real estate and buildings would bring in more money. We could then cut taxes to jump start the economy and run a surplus to cut the debt. The next step would be to make it illegal for unions to organize government workers without a referendum approved by all the voters. Side benefits would be less campaign money because there would be less government to influence. Government would be more accountable to the people because it would be closer to the people, that is, at the state level or local level. We can do this proactively, or wait until the government is bankrupt and we have to sell off the parts to the Chinese.

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Obama’s Straw Men

by Bill O'Connell on May 13, 2009

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As Barack Obama famously said to Harry Reid, “I have a gift, Harry.” Yes he does. Barack Obama is quite a talented speaker. One of his many talents is his use of props. Huh? One such prop is a rhetorical device that I will call the “Straw Man.”

The Straw Man

Obama uses the straw man to create a fictitious opponent. This opponent is obviously a bad guy. He’s insensitive, greedy, self serving, and even racist where he needs to be. The problem is that he doesn’t exist. But once created, Obama deftly maneuvers the straw man into whatever camp his opponents occupy and by doing so, vilify his real opponents by polluting them with the presence of the evil straw man. Here’s an example.

When Obama was pushing for his stimulus package he said something like this, “I don’t agree with those who say we should do nothing,” and “I don’t agree with those who say only tax cuts will fix the economy,” and “Eight years of tax cuts and deregulation got us into this mess.” Like unmasking a magician, let me share the trick, so you can see it next time. Obama never says who the straw really is, because he doesn’t exist. Who said we should do nothing with regard to the economy? The Republicans who opposed him definitely had different views on what should be done, but I don’t know of anyone who said we should do nothing. So Obama creates this fictitious straw man and you can almost hear the American people booing the straw man as he says it. Okay, let’s check off the people don’t like the straw man. By pointing out his opposition to the straw man and then by pointing out the Republicans are opposed to Obama’s plan, Obama hints that the straw man is really in the Republican camp. Cue the crowd to start booing the Republicans. Pretty neat, eh? He can’t make a frontal attack on the Republicans because he will have to fight them on the battlefield of ideas. He creates an unpopular position that no one has and hangs it on his opponents.

Which regulation was lifted that resulted in the economic problems that we currently have? Which tax cut resulted in the collapse in the housing market? President Obama won’t name them because they don’t exist. Were there government programs that caused this problem? Sure, and I can name them. Fannie Mae, Freddie Mac, Community Reinvestment Act, HUD, etc. Were there people who fought against more regulation? Yes, and they have names. Barney Frank, Chris Dodd, Senator Barack Obama. But these operators and programs are all part of the government and if there is one thing we have learned about President Obama it is that government is not big enough and Americans still have too much liberty left in their own hands. His master plan is to reverse both of these.

Get the Torches Out

So now that you know what to look for, when you see President Obama float another straw man, put the torches to it. If we had a responsible press, they would ask him to reveal who, specifically, he is talking about when he creates these straw men. If he doesn’t have an answer queued up on the Teleprompter, it could be fun to watch.

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The Innocent Bystander: Government

by Bill O'Connell on February 22, 2009

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Don't Anyone Dare Say Government Caused This Mess

You can never solve a problem if you do not face up to the full scope of the problem. In listening to President Obama, and reading liberal columnists like Maureen Dowd, in the description of what caused the current economic calamity, the government is always given a pass.

We are in an economic morass because of the eight years of failed Bush policies, greed on Wall Street, tax breaks for the rich, etc. Government’s culpability which, I believe, is really the gravamen of our economic problems is never mentioned at all. Democrats and Liberals don’t dare point to Democrats and liberal policies as having anything to do with the collapsing economy. That is why they always say that this is the worst economy since the Great Depression, as they also said when Clinton ran for President. They don’t dare say it is the worst economy since Jimmy Carter, since that would remind the American people that the Democrats screwed up that one as well.

Unmentionable Causes of the Current Economic Mess

Fannie Mae and Freddie Mac out of control. Explosive increases in debt taken on under the leadership of Franklin Raines (Democrat), and Jaime Gorelick (Democrat), remember she also gave us the firewall between the CIA and FBI that hamstrung the investigation of al Qaeda. Raines made over $90 million while at Fannie Mae and at the same time was accused of overstating earnings by $10.6 billion. So, where’s the demand for a clawback of Raines’s salary?
Barney Frank (Democrat) and Chris Dodd (Democrat) — Frank blocked every attempt to put in place greater regulation over Fannie Mae. The Bush Administration tried to increase regulation over Fannie Mae, but Frank blocked it. What you hear today is that the reason for the economic problems are a lack of regulation. Chris Dodd got VIP mortgage treatment from Countrywide mortgage before they went belly-up. Asked to come clean on the mortgages, Dodd first said sure, we’ll get around to it. Then he made some papers available for viewing, but not copying, and has since clammed up.
Community Reinvestment Act — Carter (Democrat) administration program to push home ownership for low income people, by forcing banks to report how much they were offering loans in low income neighborhoods and face the consequences if it wasn’t enough.
Janet Reno (Democrat) — in the Clinton Administration Reno threatened action against financial institutions if they weren’t lending enough low income individuals. What bank doesn’t want to be publicly branded a racist institution?

So we have homeowners, who should have never qualified for a mortgage, about to receive bailouts from all the responsible people who took mortgages they could afford, when they could afford them. Do you ever hear about any of this cast of characters mentioned by President Obama or the main stream media? No. It wasn’t the government actively pushing social policy on those people least able to handle it. It was greedy banks and unscrupulous lenders, trying to avoid being branded racists, who took advantage of these poor ignorant people. Perhaps if the government hadn’t destroyed our education system, these people might have read what they were about to sign.

How Do you Solve Only Half a Problem?

As these characters are never mentioned as having a role in the problem, how can you ever hope to fix the problem if these bad actors are still going about their business doing what caused the crisis and blaming everyone else. President Obama demonstrates his inexperience more profoundly every day, seemingly making things up as he goes along. That is not leadership and what we need now in times of crisis is leadership. Obama has never shown the courage or willingness to take on his own party. Without rooting out these characters and really fixing the whole problem, it will only happen again down the road.

What we need now is a leader. Someone who actually has experience running the executive branch of a state. Someone who is not afraid to take on the entrenched power of their own party and has succeeded in doing so. Is there anyone out there who fits that bill? Gee, that sounds like Sarah Palin.

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Kennedy Shouldn’t Rush Health Care Reform

by Bill O'Connell on February 20, 2009

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Two Doctors Operating. A Lawyer, A Bureaucrat, and An Insurance Agent Oversee the Procedure

In the category, be careful what you wish for, Ted Kennedy should be careful about pushing through Universal Health Care reform. It has been reported that this effort has taken on a sense of urgency because of Mr. Kennedy’s brain cancer. But what if we already had national health care?

Would Kennedy Receive Treatment?

Ted Kennedy will be 77 on Sunday. I wish him well. However in an opinion piece by Betsy McCaughey, she quotes Tom Daschle, who nearly became the architect of health care reform before his tax problems derailed his nomination.

Daschle says health-care reform “will not be pain free.” Seniors should be more accepting of the conditions that come with age instead of treating them. That means the elderly will bear the brunt.

In other words, sorry Ted, since any treatment is not likely to significantly prolong your life such that the expense would be justified, no treatment will be paid for. You will just have to pay it yourself or die. I guess the good news is that Senator Kennedy, like Senator Dascle, and most of the ruling class who pass these commandments down from Mount Capital Hill, are rich enough to pay for private treatment, if it is allowed by law. If not, they are rich enough to take a “vacation” to, say, India and while on vacation wander into a facility their for treatment by American trained Indian doctors.

But what about you and me? Oh dear, you better get your affairs in order.

Health Care Reform You Can Believe In

As long as the treatment received by a patient is paid for by someone other than the patient, the patient really doesn’t care what it costs. The liberal solution is to have the government take it over, and a bunch of bureaucrats will “act on your/our behalf” and make those decisions. The outcome of which is that you better stay healthy. Because if you don’t, you may not get treatment until you wait a very long time for your turn, or you may not get treated at all, if the bureaucrats rule the resultant quality of life is just not worth it.

Here’s what we should really look at doing:

Get the consumer of health care actively involved. How? It’s being done today with high deductible health care plans coupled with a Health Savings Accounts. The insurance company negotiates lower treatment costs and pays them only after a hefty deductible has been paid that year. The patient is then in a position of shopping for the best health care and deciding on what treatments and tests, in conjunction with their doctor they will or will not have. The Health Savings Account is where the patient can put funds, pre-tax, and then use those funds to pay the expenses not covered by the insurance.
Tort Reforms. Get the Lawyers out of the Examining Room. Too many doctors, in my opinion, are practicing defensive medicine. They think of every possible test so that if something does not go perfectly with the treatment they won’t get sued for the test they didn’t perform. Let’s follow the British System — fixed fees for the attorneys instead of a percentage of the settlement, and loser pays. There are too many cases of people getting a $12 million settlement or judgment for something stupid (think of the woman at McDonalds who spilled coffee in her crotch and sued McDonalds because the coffee was too hot). In these cases the lawyers typically ask for no money unless they get a settlement and when they do they get 1/3 ($4 million in this example). It’s like buying a lottery ticket. Who wouldn’t take a free lottery ticket on a jackpot of millions? But who really pays for all these law suits and settlements? That’s right you and me in insurance premiums we cannot afford now.
Increased Insurance Competition. Right now most insurance is regulated by the states and in many cases policies available in one state are not available in others. Let’s open up the competition. If we have more insurance companies competing for our business, we are likely to get better and more creative policy choices.
More Tailored Insurance Policies If my wife and I are beyond the point of having children, then let me buy a policy that does not cover childbearing, birth control, well baby care. If I am young and starting out and I want those things, there are other coverages that pertain to older people that I may not want at this stage in my life. Let’s allowed tailored policies that reflect my actual insurance needs.
Immigration Control. The same people who are pushing socialized medicine are, for the most part, the same people who favor open borders. However, where do all the illegals go for the health care needs including having babies (new citizens)? They go to the only health care provider they know, the local emergency room. This is also probably the most expensive form of health care delivery and since they are illegal, they’re not paying for it, the rest of us are. I think immigrants built this great country and almost each and everyone of us can point to our forebears who came here as immigrants. I am in favor of immigration now and in the future. I believe these are hard working and basically good people. BUT, they have to come here legally and follow the process. If they are not here legally, they should be deported.
Medicare Reform. You probably want to sit down for this one, but shocking as it may seem this massive government programs loses billions upon billions of dollars every year to fraud. Who pays? Right! You and me. In higher payroll taxes, and in higher health care costs as doctors and hospitals have to make up the shortfall somewhere else to stay in business.

More Liberty Under Fire

The government in proposing universal health care wants to mandate that everyone must have health care coverage. You will not have the liberty to choose. The government demands that you comply:

“comprehensive health care legislation should include a requirement that every American carry insurance.”

That’s the requirement, now comes the heavy hand of government:

“The ideas discussed include a proposal to penalize people who fail to comply with the “individual obligation” to have insurance.”

You must obey! The government has spoken!

Here’s a novel idea. How about implementing the above points first and fix the broken system that we have before we throw it out and install another new, massive, government program. After all we can always go to the government solution in the end, confident in the knowledge that these programs work extremely well and efficiently. (e.g., Fannie Mae {bankrupt}, Freddie Mac{bankrupt} , Social Security {bankrupt}, Medicare {bankrupt}, US Postal Service {$6 billion deficit, while CEO get $850,00 salary}).

What Would the Founding Fathers Say?

A Constitution of Government once changed from Freedom, can never be restored. Liberty, once lost, is lost forever. – John Adams

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Borrow and Spend — Isn’t That How We Got Here?

by Bill O'Connell on January 8, 2009

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The American Recovery and Reinvestment Plan was unveiled today. Well, a little short on details, but if there is anything true about Washington, it’s that the first thing you have to do is come up with a catchy name. Once you craft a name that is as American as Motherhood and apple pie, the details are only a distraction. You have to start with a name that members of Congress would be afraid to vote against. “You mean, Congressman, that you are opposed to recovery? And you’re against reinvestment?” You can hear Katie Couric incredulously asking that question as the Congressman, undoubtedly Republican, struggles for an answer.

Mr. Obama said in his speech:

“It is true that we cannot depend on government alone to create jobs or long-term growth, but at this particular moment, only government can provide the short-term boost necessary to lift us from a recession this deep and severe,” Mr. Obama said. “Only government can break the vicious cycles that are crippling our economy — where a lack of spending leads to lost jobs which leads to even less spending; where an inability to lend and borrow stops growth and leads to even less credit.”

Only government can break the vicious cycles that are crippling our economy? Okay, so the government is going to borrow and spend $1 trillion dollars, give or take a few billion, and that is going to solve the problem. Borrow and Spend? Isn’t that how we got here?

Between Fannie Mae and Freddie Mac, The Community Reinvestment Act, Janet Reno in the Clinton Administration threatening banks if they didn’t make enough subprime loans, we had the housing bubble. Millions of people borrowing money they couldn’t pay back for the sub prime people, and millions of people borrowing against the equity in their homes so they could spend on the good life. The bubble burst, housing prices collapsed, mortgages went under water, and a deep recession followed.

So Barack Obama proposes borrowing $1 trillion and, unless he has a very large piggy bank from where he’s getting it, spending it to get the economy moving again. If a significant number of Americans can’t manage their debts now, how are they going to shoulder another $1 trillion? Let’s not forget, it’s We The People, the government is us. There is no rich Uncle Sam who made a killing in pork bellies, who is going to foot the bill. It is us, our children, and our grandchildren. What we have to do is live within our means.

Make the Bush tax cuts permanent. That will remove the uncertainty that has been hanging over the economy ever since the presidential campaign, blaming Bush for tax cuts for the rich. Face it, folks, tax cuts work best when they are given to people who actually pay taxes.
Take the tax code and shred it and recycle it. Let’s go to a flat tax that you can file your return on a post card. It may put a lot of accountants out of work, but it costs Americans about $200 billion a year to prepare. After five years that’s $1 trillion back in the economy.
Cut the federal government down to size. Start with the Department of Education. Since 1980 Congress has appropriated $1.06 trillion to the Department of Education. How’s that working out? My father dropped out of high school in 1934, and I would put him up against many of today’s high school “graduates” in being able to put a sentence together properly. So what has all this education spending gotten us? I’ll wait…………. Still scratching your head, I’m not surprised. I know it’s gotten us a lot of teachers. When your goal is smaller classroom sizes, rather than results, the only result you get is bigger payrolls. So not only has the Department of Education squandered $1 trillion, many school districts have seen their property taxes skyrocket. Why? Well, once you hire all those teachers you have to pay them and in many, if not most areas, that funding comes from property taxes. So the Department of Education hits your left pocket for $1 trillion and your tax assessor hits your right pocket, and what do we have to show for it? Many colleges now have to teach remedial classes to their incoming freshman to get them up to a level where they can handle freshman courses.
Social Security and Medicare — These have to be tackled NOW. This is the next ticking time bomb. Social Security is a ponzi scheme that makes Bernie Madoff look like a piker. Social Security’s inflation adjusted rate of return is about 1.23%. Any effort by Bush to allow future retiree’s to divert a portion of their contributions into a fund that gets a better return, was shouted down by the Democrats and demonized as trying to starve granny. Well, keep yukking it up, and call for another round of drinks, but the bill is coming due and when it does there will be no where to hide, and we better not be trying to digest Obama’s trillion dollar deficits at the same time.
Couple saving Social Security with term limits. If you are not a politician for life, you might have the guts to do some heavy lifting, but if you are always running for office and your goal is to offend as few people as possible and give out government goodies to as many people as possible, you are naturally disposed to make the government bigger and delay any tough decisions until after you’re. So don’t fix Social Security, just make it solvent long enough for you to pick up your spoils and go home.
Campaign Finance Reform — this folly gets rolled out around each election. Here’s my modest solution. If you hack back the size of government, there will be a lot less for lobbyists to lobby about. If they have nothing to lobby about, they will have to go find something else to do. For those that are left, it will be a lot easier to see what they’re up to, since there won’t be that many of them.
Go back to every government agency and look at the legislation that created them. Has that original mission been accomplished? If so, shut them down. When I worked in telecommunications, one of the Federal Regulatory bodies was the Rural Electrification Administration. This agency was created during the Great Depression to bring electricity to farms. I wondered what that had to do with telephones. Well, the problem of bringing electricity to farms was pretty much solved, so they needed to do something else, so why not telephones. I am sure that cell phones will be next if they are not already working on that. But what we should really do, what we should have done years ago, is throw a nice party, thank all the employers and managers for a job well done, send them on their way and put the buildings up for sale. But that doesn’t happen in Washington, agencies created for one purpose just morph into something else.
Following on the previous point is the Department of Agriculture. It was raised to cabinet level in 1889. In 1870, 70%-80% of the population worked on farms. Today that percentage is 2%-3%. So why do we still need a Department of Agriculture? Today it has an annual budget of $95 billion, so in the next ten years about $1 trillion will be spent in the Department of Agriculture. The Federal beast grows without bounds.

There you have it, $3 trillion between tax filing, the Department of Education, and the Department of Agriculture.

The federal government must tighten its belt like everyone else and stop soaking up an increasing share of the economy. Barack Obama and the federal government aren’t going to create jobs unless it is by making the beast bigger. The majority of jobs are created in this country by small businesses. What this economy needs is a degree of certainty.

If Obama really believes in fiscal discipline he should say the bailout window is closed. It was opened to keep money flowing during a crisis, now all companies should get off the line, and go back to running their businesses. As long as the window stays open there is uncertainty. Can I get a bailout? That company got a bailout, why not me?

What roils the markets is uncertainty. If the market doesn’t know if the government is going to act or not act; if the Bush tax cuts are going to continue or be rolled back; if the auto companies are going to get bailed out or not; is the government going to spend a trillion or not. The U.S. economy and the American people can work this out. The more government stays involved, the longer the uncertainty will remain, and the longer and deeper the recession will be.

BFM FHLMC Mortgsecurities Fund

Who Inherited What?

Financial Reform — NOT

Hard Luck Stories – Reading Between the Lines

Too Big To Succeed

Good Government, Bad Government

The Innocent Bystander: Government

Borrow and Spend — Isn’t That How We Got Here?

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