Fannie Mae

Fire, Ready, Aim

by Bill O'Connell on July 22, 2010

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The Sherrod incident is the latest in a long line of shoot from the lip misfires from the Obama administration, from the president on down. Here is a review of some of the more egregious of them:

President Obama, without waiting for the facts says the Cambridge, Massachusetts police department “acted stupidly,” in an incident involving African American professor Henry Louis Gates. A picture from the “beer summit” shows the president confidently striding toward the cameras while in the background Sergeant Crowley takes Professor Gates arm to help him negotiate the stairs, as Professor Gates walks with a cane. Racist?
With 13 dead Americans at the hands of terrorist Nidal Hasan, Janet Napolitano comes out and claims, “The system has worked really very, very smoothly over the course of the past several days.” A few days later she would eat those ridiculous words.
Not to be outdone by herself, after another terrorist attempt on our soil in Times Square, Secretary Napolitano quickly came out to label the attempt a “one-off” and the suspect a lone wolf. As the investigation picked up steam there were all sorts links to terror groups in the Middle East.
When the president of Honduras tried to override term limits and become the next Hugo Chavez, the Honduran government enforced its laws against the changes that its president was trying to illegally implement. The Obama administration immediately labeled the legitimate actions of the democratically elected Honduran government a coup. Hillary Clinton’s State department cancelled the visas of all members of the Honduran Supreme Court. Not to be intimidated by Chavez, Castro, or Obama, Honduras stood its ground. The Congressional Research Service looked at the Honduran Constitution and the actions of its government and found that the government acted properly and within the law.
When Arizona reached the end of its rope and could not get the Obama administration to enforce the law on the border, they passed a law to give their police greater flexibility to determine the legal status of people stopped for another police matter. The Obama administration immediately called the law unconstitutional. When asked if they read the massive 10 page law, that’s right 10 pages, both Attorney General Eric Holder and Secretary Janet Napolitano (yes, her again) both said they hadn’t read it before declaring it unconstitutional. This administration pushes through legislation running thousands of pages each and they can’t find time to read a ten page law before condemning it.
Department of Agriculture employee Shirley Sherrod gave a speech to the NAACP where she spoke about her transformation from having a racial bias in a decision she made 24 years ago, to today where she tries to treat all individuals regardless of race. Only the first part of the story was headed toward the airwaves, the part about her past discrimination, and before the news hit the air she was fired by the Obama administration. Had they watched the whole tape before acting, they wouldn’t be swimming in apologies right now.

Is this just the lack of experience or does the Obama administration need adult supervision? They jump to these wild conclusions and then end up backtracking days later. After eighteen months in office you would think they would have learned by now how to govern.

Another case without as quick a trigger is the passage of the Dodd-Frank financial reform bill. After taking office President Obama appointed a commission, the Financial Crisis Inquiry Commission to investigate the root causes of the crisis. A prudent person might say, let’s hear what the commission finds out and then write legislation to address those root causes. With months more to go before that commission’s work will be done, we have another 2,000+ page bill coming out of Congress and signed by the president to put new regulations in place on the financial services industry. Why the rush? Wouldn’t it be better to fix the real problems rather than what Chris Dodd and Barney Frank think are the problems and let them paper over their own culpability in the creating the crisis? Why were Fannie Mae and Freddie Mac excluded? In one of the hearings before the commission an argument was made that AIG did not have to be bailed out, that there were measures in place to ride out the crisis and that in the long run their policies would be fine. Whether that is true or not, will have to wait for the final report, but the “just don’t stand there, do something,” mentality is disconcerting. I certainly hope we are never faced with another Cuban Missile Crisis with this team in place.

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The Harry and Barry Show

by Bill O'Connell on July 10, 2010

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Back on the campaign trail where he feels comfortable that he knows what he is doing, Barack Obama traveled to Las Vegas to stump for Harry Reid. Harry Reid used to be a boxer and when he told Barack Obama this he said, “Barack, I wasn’t the fastest. I wasn’t the hardest-hitting, but I knew how to take a punch.” Based on all the legislation that has been passed since 2008 that an overwhelming majority of the American people have opposed, makes one wonder if Harry Reid took a few punches too many.

Shortly after taking office and settling into his “bash business” mode Obama blasted businesses for their extravagant meetings held in places like Las Vegas. Someone then whispered in the president’s ear that extravagant business meetings in Las Vegas were good for Las Vegas and Harry Reid. Oops. And there you have the crux of the problem.

What, exactly, is government’s role to tell private companies how to spend their money? What is the role of governments to say to a BP, “Give us the $20 billion, or we’ll take it from you,” as was attributed to Joe Biden, without first going to court? What is the role of government to say to its citizens, you must buy this health care product or pay a fine? Well in Hugo Chavez’s Venezuela, it is probably all fine and dandy, but in America?

Barack, the standup comic, used the analogy that he and Harry Reid had mud on their shoes, were pushing hard to get the car back on the road, and were making progress little-by-little and when they finally got one wheel on the pavement the Republicans want to throw the car into reverse. Really? I would compare it more to conservatives telling everyone to get out of the car and help push, instead of waiting for Nancy Pelosi to come back from Dunkin Donuts with free food for all the overweight union bosses jammed in the car squawking that they didn’t do manual labor. Their contract didn’t call for pushing cars out of ditches.

So, while this car should have been out of this ditch and well down the road by now, Harry and Barry will try to convince us that what they’re doing is absolutely brilliant; it’s just that we are too stupid to see it. After all, it took the greatest president in history, FDR, over eight years and a World War to get us out of the Great Depression, so relax we have another 6 ½ years to go.

Imagine what would have happened if the ever resilient American economy was allowed to work on its own without all the government intervention in the 1930s. Perhaps the Depression would have been shorter like the recession of 1920-1921, and perhaps we would not have had World War II, and Fannie Mae, and a bankrupt Social Security, and a couple of generations later all of us swimming in debt. It’s time the tow truck of the most powerful economy on the face of the earth to come along and be allowed to do its job. Tell Harry and Barry to go sit down on that stump over there, and watch how it is really done. “You’re making a mess of yourselves and embarrassing the rest us.”

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The Regulators are Dead, Long Live the Regulators

by Bill O'Connell on June 28, 2010

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As written about extensively here, government regulators have failed us in so many ways that to continue the practice of putting more control in the hands of government is lunacy. To wit:

The financial crisis, although typically blamed on Wall Street greed, was due in large part to government agencies and programs (Fannie Mae, Freddie Mac, HUD, Community Reinvestment Act, National Homeownership Strategy) that opened the door through which Wall Street followed.
The oil spill in the Gulf happened after regulators either signed off on waiver applications from BP or just didn’t enforce the regulations on the books
Anywhere from $60 billion to $100 billion is stolen from Medicare/Medicaid every year and our government can’t seem to stop it
First time homebuyer tax credit was claimed, to the tune of $9 million, by incarcerated felons.

But the current administration insists that government must get bigger to tackle our nation’s problems and must tax us more to do so.

Senator Chris Dodd and Representative Barney Frank were at the heart of the financial debacle, claiming that Fannie Mae and Freddie Mac were in sound financial shape. Meanwhile Senator Dodd was getting a sweetheart mortgage from Countrywide as a “Friend of Angelo” Mozillo, the CEO of Countrywide. Now we are to believe that Senator Dodd and Representative Frank have ridden to the rescue and have crafted the solution we have all been waiting for, just don’t ask about Fannie and Freddie, they aren’t included in this master work.

The Federal Reserve will now have more power to regulate banks, after failing to monitor what was going on at Citibank and having the government step in because they were “too big to fail.” The Treasury stepped into to bail out some banks and let other financial firms like Lehman Brothers to go under, will now have more power to determine which financial institutions are sound and which ones are not and step in to take control without allowing the bankruptcy courts to get involved. The SEC which was asleep at the switch, or too busy watching porn on taxpayer purchased computers, when the Bernie Madoff scam was delivered to them wrapped in a bow, will now have more power to decide how easy it will be to allow union pension funds to place their candidates on boards of directors.

The new legislation, which does nothing really new, runs to 2,000 pages (did you expect something less?) and leaves much of the details to the regulatory agencies themselves to fill in the blanks. And never to miss an opportunity to slip a new tax into the mix there are $19 billion in new taxes to pay for this new regulatory oversight.

So when regulators fail, the government’s response is not to look at government’s role in creating the original problem, but to blame any private interests and add more regulations that will increase the scope and power of the government, take away your liberties, and do nothing to fix the original problem. When the next crash comes, and it will, these same folks will say, “oh, dear, how did this happen?” They will blame any private interests that are anywhere near the problem, absolve government agencies of all blame, and layer on more regulations.

The only way to fix this problem is to make sure these same folks are not around in the future and to cut the government down to size.

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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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From Waterboarding to Miranda

by Bill O'Connell on June 11, 2009

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Sometimes I wonder if this is all a bad dream and I will wake up at some point, in a cold sweat, comforted in knowing that it was just that. With the enhanced interrogation techniques, aka waterboarding, that was used on exactly three very bad men, and yielded 60% of what we learned about Al Qaeda, we are now Mirandizing terrorists on the battlefield. For those who never got a sufficient dose of crime dramas on TV here is how the Miranda rights start:

“You have the right to remain silent…”

Say no more. That is all you have to know. From using a technique to compel these murderous fiends to give up information about their likeminded associates, we have moved to telling them it is their right not to say anything. Here’s my advice… steer clear of tall or government buildings.

How 9/11 Happened

This is exactly how 9/11 happened. The Clinton Administration treated terrorism as a law and order issue rather than a war on our way of life. They constructed walls between the FBI and CIA forbidding them to share information. What the CIA learned about the terrorists before 9/11 they couldn’t tell the FBI and vice versa. As a result we got blindsided.

It is interesting to note that in putting together the 9/11 Commission to investigate how it all happened and what we could do to prevent it happening again, Jamie Gorelick, the individual who constructed this barrier in her role in the Clinton White House, was added to the Commission panel when she should have been testifying before it. (Later, without any financial background she was appointed Vice Chairman of Fannie Mae, made millions during her tenure, and Fannie Mae’s actions led to the current financial debacle).

Fannie Mae

Fire, Ready, Aim

The Harry and Barry Show

The Regulators are Dead, Long Live the Regulators

Who Inherited What?

Financial Reform — NOT

Hard Luck Stories – Reading Between the Lines

Too Big To Succeed

Good Government, Bad Government

From Waterboarding to Miranda

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