Michael Gaynor
Obama would transform recession into depression
By Michael Gaynor
Tragically, many have been fooled by Obama's rhetoric and manner and erroneously assumed that he was moderate because his rhetoric and manner contrasted so favorably with his predecessors as African-American Democrat presidential hopeful, Reverends Jesse Jackson and Al Sharpton, instead of realized he was masquerading in order to win.
The title to Charles Krauthammer's March 6, 2009 article put it powerfully and plainly: "Deception at Core of Obama Plans."
Those "Obama Plans" were formulated and that deception was practiced long before Election Day 2008, but the truth was not generally appreciated becaused the liberal media established successfully managed the news, especially the machinations and malevolence of ACORN, the Association of Community Organizations for Reform Now, and its ties to now President Obama.
The Soviet Union failed to conquer the United States and collapsed instead, but socialist subversion is a greater threat than the Soviet Union was.
Ironically, the cunning socialist "community organizers" and their contemptible Congressional Democrat allies managed to poison the national economy and then elect "the ACORN man" as President with substantial Democrat majorities in both houses of Congress by blaming others.
In "Blame Obama's ACORN for the Financial Crisis," posted on September 29, 2008, I wrote:
"Don't expect the mainstream media to identify ACORN and its favorite community organizer and lawyer, rookie United States Senator and current Democrat presidential nominee Barack Hussein Obama, Jr. among the villains in the current financial crisis.
"But media bias does not change facts.
"Pittsburgh Tribune Review, 'Barack Obama's Closet,' Dateline D.C., January 14, 2007:
'...in Chicago, the Association of Community Organizations for Reform Now (ACORN) is more important than Iraq or Washington. ACORN and its associated Midwest Academy, both founded in the 1970s, continue to train and mobilize activists throughout the country, often using them to manipulate public opinion through 'direct action.' It's sometimes a code for illegal activities.
'Prior to law school, Barack Obama worked as an organizer for their affiliates in New York and Chicago. He always has been an ACORN person — meeting and working with them to advance their causes. Through his membership on the board of the Woods Fund for Chicago and his friendship with Teresa Heinz Kerry, Obama has helped ensure that they remain funded well.
'Since he graduated from law school, Obama's work with ACORN and the Midwest Academy has ranged from training and fundraising, to legal representation and promoting their work.'"
I noted that Stan Liebowitz, professor of Economics at the University of Texas' Business School at Dallas, had explained the genesis of the financial crisis in "The Real Scandal: How Feds Invited the Mortgage Mess," published in The New York Post on February 5, 2008.
Professor Liebowitz had explained:
"PERHAPS the greatest scandal of the mortgage crisis is that it is a direct result of an intentional loosening of underwriting standards — done in the name of ending discrimination, despite warnings that it could lead to wide-scale defaults.
"At the crisis' core are loans that were made with virtually nonexistent underwriting standards — no verification of income or assets; little consideration of the applicant's ability to make payments; no down payment.
"Most people instinctively understand that such loans are likely to be unsound. But how did the heavily-regulated banking industry end up able to engage in such foolishness?
"From the current hand-wringing, you'd think that the banks came up with the idea of looser underwriting standards on their own, with regulators just asleep on the job. In fact, it was the regulators who relaxed these standards — at the behest of community groups and 'progressive' political forces.
"In the 1980s, groups such as the activists at ACORN began pushing charges of 'redlining' — claims that banks discriminated against minorities in mortgage lending. In 1989, sympathetic members of Congress got the Home Mortgage Disclosure Act amended to force banks to collect racial data on mortgage applicants; this allowed various studies to be ginned up that seemed to validate the original accusation.
"In fact, minority mortgage applications were rejected more frequently than other applications — but the overwhelming reason wasn't racial discrimination, but simply that minorities tend to have weaker finances.
"Yet a 'landmark' 1992 study from the Boston Fed concluded that mortgage-lending discrimination was systemic.
"That study was tremendously flawed — a colleague and I later showed that the data it had used contained thousands of egregious typos, such as loans with negative interest rates. Our study found no evidence of discrimination.
"Yet the political agenda triumphed — with the president of the Boston Fed saying no new studies were needed, and the US comptroller of the currency seconding the motion.
"No sooner had the ink dried on its discrimination study than the Boston Fed, clearly speaking for the entire Fed, produced a manual for mortgage lenders stating that: 'discrimination may be observed when a lender's underwriting policies contain arbitrary or outdated criteria that effectively disqualify many urban or lower-income minority applicants.' "Some of these 'outdated' criteria included the size of the mortgage payment relative to income, credit history, savings history and income verification. Instead, the Boston Fed ruled that participation in a credit-counseling program should be taken as evidence of an applicant's ability to manage debt.
"Sound crazy? You bet. Those 'outdated' standards existed to limit defaults. But bank regulators required the loosened underwriting standards, with approval by politicians and the chattering class. A 1995 strengthening of the Community Reinvestment Act required banks to find ways to provide mortgages to their poorer communities. It also let community activists intervene at yearly bank reviews, shaking the banks down for large pots of money.
"Banks that got poor reviews were punished; some saw their merger plans frustrated; others faced direct legal challenges by the Justice Department.
"Flexible lending programs expanded even though they had higher default rates than loans with traditional standards. On the Web, you can still find CRA loans available via ACORN with '100 percent financing . . . no credit scores . . . undocumented income . . . even if you don't report it on your tax returns.' Credit counseling is required, of course.
"Ironically, an enthusiastic Fannie Mae Foundation report singled out one paragon of nondiscriminatory lending, which worked with community activists and followed 'the most flexible underwriting criteria permitted.' That lender's $1 billion commitment to low-income loans in 1992 had grown to $80 billion by 1999 and $600 billion by early 2003.
"Who was that virtuous lender? Why — Countrywide, the nation's largest mortgage lender, recently in the headlines as it hurtled toward bankruptcy.
"In an earlier newspaper story extolling the virtues of relaxed underwriting standards, Countrywide's chief executive bragged that, to approve minority applications that would otherwise be rejected 'lenders have had to stretch the rules a bit.' He's not bragging now.
"For years, rising house prices hid the default problems since quick refinances were possible. But now that house prices have stopped rising, we can clearly see the damage caused by relaxed lending standards.
"This damage was quite predictable: 'After the warm and fuzzy glow of 'flexible underwriting standards' has worn off, we may discover that they are nothing more than standards that lead to bad loans . . . these policies will have done a disservice to their putative beneficiaries if . . . they are dispossessed from their homes.' I wrote that, with Ted Day, in a 1998 academic article.
"Sadly, we were spitting into the wind. "These days, everyone claims to favor strong lending standards. What about all those self-righteous newspapers, politicians and regulators who were intent on loosening lending standards? "As you might expect, they are now self-righteously blaming those, such as Countrywide, who did what they were told."
Mr. Krauthammer:
"Forget the pork. Forget the waste. Forget the 8,570 earmarks in a bill supported by a president who poses as the scourge of earmarks. Forget the '$2 trillion dollars in savings' that 'we have already identified,' $1.6 trillion of which President Obama's budget director later admits is the 'savings' of not continuing the surge in Iraq until 2019 — 11 years after George Bush ended it, and eight years after even Bush would have had us out of Iraq completely.
"Forget all of this. This is run-of-the-mill budget trickery. True, Obama's tricks come festooned with strings of zeros tacked onto the end. But that's a matter of scale, not principle.
"All presidents do that. But few undertake the kind of brazen deception at the heart of Obama's radically transformative economic plan, a rhetorical sleight of hand so smoothly offered that few noticed."
Tragically, many have been fooled by Obama's rhetoric and manner and erroneously assumed that he was moderate because his rhetoric and manner contrasted so favorably with his predecessors as African-American Democrat presidential hopeful, Reverends Jesse Jackson and Al Sharpton, instead of realized he was masquerading in order to win.
WRONG!
Obama's extreme tax, health, environmental and education policies threaten to transform a recession for which the "community organizers" and their Congressional Democrat allies are responsible into a depression.
It is become obvious that Obama's priority is not resoring the national economy, but redistributing wealth and rewarding for his backers with undemocratic things like depriving workers of the secret ballot, at the expense of national well-being and America's democratic heritage.
"Joe the Plumber" was right about Obama.
Mr. Krauthammer:
"The logic of Obama's address to Congress went like this:
'Our economy did not fall into decline overnight,' he averred. Indeed, it all began before the housing crisis. What did we do wrong? We are paying for past sins in three principal areas: energy, health care, and education — importing too much oil and not finding new sources of energy (as in the Arctic National Wildlife Refuge and the Outer Continental Shelf?), not reforming health care, and tolerating too many bad schools.
"The 'day of reckoning' has now arrived. And because 'it is only by understanding how we arrived at this moment that we'll be able to lift ourselves out of this predicament,' Obama has come to redeem us with his far-seeing program of universal, heavily nationalized health care; a cap-and-trade tax on energy; and a major federalization of education with universal access to college as the goal.
"Amazing."
I'd say horrifying revisionist history (which was the specialty of Obama's Marxist professors).
Mr. Krauthammer:
"As an explanation of our current economic difficulties, this is total fantasy. As a cure for rapidly growing joblessness, a massive destruction of wealth, a deepening worldwide recession, this is perhaps the greatest non sequitur ever foisted upon the American people."At the very center of our economic near-depression is a credit bubble, a housing collapse and a systemic failure of the entire banking system. One can come up with a host of causes: Fannie Mae and Freddie Mac pushed by Washington (and greed) into improvident loans, corrupted bond-ratings agencies, insufficient regulation of new and exotic debt instruments, the easy money policy of Alan Greenspan's Fed, irresponsible bankers pushing (and then unloading in packaged loan instruments) highly dubious mortgages, greedy house-flippers, deceitful homebuyers.
"The list is long. But the list of causes of the collapse of the financial system does not include the absence of universal health care, let alone of computerized medical records. Nor the absence of an industry-killing cap-and-trade carbon levy. Nor the lack of college graduates. Indeed, one could perversely make the case that, if anything, the proliferation of overeducated, Gucci-wearing, smart-ass MBAs inventing ever more sophisticated and opaque mathematical models and debt instruments helped get us into this credit catastrophe in the first place.
"And yet with our financial house on fire, Obama makes clear both in his speech and his budget that the essence of his presidency will be the transformation of health care, education and energy. Four months after winning the election, six weeks after his swearing in, Obama has yet to unveil a plan to deal with the banking crisis. "What's going on? 'You never want a serious crisis to go to waste,' said Chief of Staff Rahm Emanuel. 'This crisis provides the opportunity for us to do things that you could not do before.'"
EXACTLY!
It is NOT a coincidence that Congressional Democrats blocked Treasury Department oversight of Fannie Mae and Freddie Mac or that disaster ultimately resulted from pressuring banks to issue loans to the un-creditworthy.
Mr. Krauthammer:
"The markets' recent precipitous decline is a reaction not just to the absence of any plausible bank rescue plan, but also to the suspicion that Obama sees the continuing financial crisis as usefully creating the psychological conditions — the sense of crisis bordering on fear-itself panic — for enacting his 'Big Bang' agenda to federalize and/or socialize health care, education and energy, the commanding heights of post-industrial society.
"Clever politics, but intellectually dishonest to the core. Health, education and energy — worthy and weighty as they may be — are not the cause of our financial collapse. And they are not the cure. The fraudulent claim that they are both cause and cure is the rhetorical device by which an ambitious president intends to enact the most radical agenda of social transformation seen in our lifetime."
THAT'S THE PLAN!
Obama intends to maintain political power through wealth redistribution, calculating that the voter numbers will be on his side, wrecking the national economy in the process.
No wonder the stock market surged just before Election Day 2008, as McCain closed the gap, and has fallen so far since Obama was elected, even more since his inauguration than between his election and inauguration.
© Michael Gaynor
March 10, 2009
Tragically, many have been fooled by Obama's rhetoric and manner and erroneously assumed that he was moderate because his rhetoric and manner contrasted so favorably with his predecessors as African-American Democrat presidential hopeful, Reverends Jesse Jackson and Al Sharpton, instead of realized he was masquerading in order to win.
The title to Charles Krauthammer's March 6, 2009 article put it powerfully and plainly: "Deception at Core of Obama Plans."
Those "Obama Plans" were formulated and that deception was practiced long before Election Day 2008, but the truth was not generally appreciated becaused the liberal media established successfully managed the news, especially the machinations and malevolence of ACORN, the Association of Community Organizations for Reform Now, and its ties to now President Obama.
The Soviet Union failed to conquer the United States and collapsed instead, but socialist subversion is a greater threat than the Soviet Union was.
Ironically, the cunning socialist "community organizers" and their contemptible Congressional Democrat allies managed to poison the national economy and then elect "the ACORN man" as President with substantial Democrat majorities in both houses of Congress by blaming others.
In "Blame Obama's ACORN for the Financial Crisis," posted on September 29, 2008, I wrote:
"Don't expect the mainstream media to identify ACORN and its favorite community organizer and lawyer, rookie United States Senator and current Democrat presidential nominee Barack Hussein Obama, Jr. among the villains in the current financial crisis.
"But media bias does not change facts.
"Pittsburgh Tribune Review, 'Barack Obama's Closet,' Dateline D.C., January 14, 2007:
'...in Chicago, the Association of Community Organizations for Reform Now (ACORN) is more important than Iraq or Washington. ACORN and its associated Midwest Academy, both founded in the 1970s, continue to train and mobilize activists throughout the country, often using them to manipulate public opinion through 'direct action.' It's sometimes a code for illegal activities.
'Prior to law school, Barack Obama worked as an organizer for their affiliates in New York and Chicago. He always has been an ACORN person — meeting and working with them to advance their causes. Through his membership on the board of the Woods Fund for Chicago and his friendship with Teresa Heinz Kerry, Obama has helped ensure that they remain funded well.
'Since he graduated from law school, Obama's work with ACORN and the Midwest Academy has ranged from training and fundraising, to legal representation and promoting their work.'"
I noted that Stan Liebowitz, professor of Economics at the University of Texas' Business School at Dallas, had explained the genesis of the financial crisis in "The Real Scandal: How Feds Invited the Mortgage Mess," published in The New York Post on February 5, 2008.
Professor Liebowitz had explained:
"PERHAPS the greatest scandal of the mortgage crisis is that it is a direct result of an intentional loosening of underwriting standards — done in the name of ending discrimination, despite warnings that it could lead to wide-scale defaults.
"At the crisis' core are loans that were made with virtually nonexistent underwriting standards — no verification of income or assets; little consideration of the applicant's ability to make payments; no down payment.
"Most people instinctively understand that such loans are likely to be unsound. But how did the heavily-regulated banking industry end up able to engage in such foolishness?
"From the current hand-wringing, you'd think that the banks came up with the idea of looser underwriting standards on their own, with regulators just asleep on the job. In fact, it was the regulators who relaxed these standards — at the behest of community groups and 'progressive' political forces.
"In the 1980s, groups such as the activists at ACORN began pushing charges of 'redlining' — claims that banks discriminated against minorities in mortgage lending. In 1989, sympathetic members of Congress got the Home Mortgage Disclosure Act amended to force banks to collect racial data on mortgage applicants; this allowed various studies to be ginned up that seemed to validate the original accusation.
"In fact, minority mortgage applications were rejected more frequently than other applications — but the overwhelming reason wasn't racial discrimination, but simply that minorities tend to have weaker finances.
"Yet a 'landmark' 1992 study from the Boston Fed concluded that mortgage-lending discrimination was systemic.
"That study was tremendously flawed — a colleague and I later showed that the data it had used contained thousands of egregious typos, such as loans with negative interest rates. Our study found no evidence of discrimination.
"Yet the political agenda triumphed — with the president of the Boston Fed saying no new studies were needed, and the US comptroller of the currency seconding the motion.
"No sooner had the ink dried on its discrimination study than the Boston Fed, clearly speaking for the entire Fed, produced a manual for mortgage lenders stating that: 'discrimination may be observed when a lender's underwriting policies contain arbitrary or outdated criteria that effectively disqualify many urban or lower-income minority applicants.' "Some of these 'outdated' criteria included the size of the mortgage payment relative to income, credit history, savings history and income verification. Instead, the Boston Fed ruled that participation in a credit-counseling program should be taken as evidence of an applicant's ability to manage debt.
"Sound crazy? You bet. Those 'outdated' standards existed to limit defaults. But bank regulators required the loosened underwriting standards, with approval by politicians and the chattering class. A 1995 strengthening of the Community Reinvestment Act required banks to find ways to provide mortgages to their poorer communities. It also let community activists intervene at yearly bank reviews, shaking the banks down for large pots of money.
"Banks that got poor reviews were punished; some saw their merger plans frustrated; others faced direct legal challenges by the Justice Department.
"Flexible lending programs expanded even though they had higher default rates than loans with traditional standards. On the Web, you can still find CRA loans available via ACORN with '100 percent financing . . . no credit scores . . . undocumented income . . . even if you don't report it on your tax returns.' Credit counseling is required, of course.
"Ironically, an enthusiastic Fannie Mae Foundation report singled out one paragon of nondiscriminatory lending, which worked with community activists and followed 'the most flexible underwriting criteria permitted.' That lender's $1 billion commitment to low-income loans in 1992 had grown to $80 billion by 1999 and $600 billion by early 2003.
"Who was that virtuous lender? Why — Countrywide, the nation's largest mortgage lender, recently in the headlines as it hurtled toward bankruptcy.
"In an earlier newspaper story extolling the virtues of relaxed underwriting standards, Countrywide's chief executive bragged that, to approve minority applications that would otherwise be rejected 'lenders have had to stretch the rules a bit.' He's not bragging now.
"For years, rising house prices hid the default problems since quick refinances were possible. But now that house prices have stopped rising, we can clearly see the damage caused by relaxed lending standards.
"This damage was quite predictable: 'After the warm and fuzzy glow of 'flexible underwriting standards' has worn off, we may discover that they are nothing more than standards that lead to bad loans . . . these policies will have done a disservice to their putative beneficiaries if . . . they are dispossessed from their homes.' I wrote that, with Ted Day, in a 1998 academic article.
"Sadly, we were spitting into the wind. "These days, everyone claims to favor strong lending standards. What about all those self-righteous newspapers, politicians and regulators who were intent on loosening lending standards? "As you might expect, they are now self-righteously blaming those, such as Countrywide, who did what they were told."
Mr. Krauthammer:
"Forget the pork. Forget the waste. Forget the 8,570 earmarks in a bill supported by a president who poses as the scourge of earmarks. Forget the '$2 trillion dollars in savings' that 'we have already identified,' $1.6 trillion of which President Obama's budget director later admits is the 'savings' of not continuing the surge in Iraq until 2019 — 11 years after George Bush ended it, and eight years after even Bush would have had us out of Iraq completely.
"Forget all of this. This is run-of-the-mill budget trickery. True, Obama's tricks come festooned with strings of zeros tacked onto the end. But that's a matter of scale, not principle.
"All presidents do that. But few undertake the kind of brazen deception at the heart of Obama's radically transformative economic plan, a rhetorical sleight of hand so smoothly offered that few noticed."
Tragically, many have been fooled by Obama's rhetoric and manner and erroneously assumed that he was moderate because his rhetoric and manner contrasted so favorably with his predecessors as African-American Democrat presidential hopeful, Reverends Jesse Jackson and Al Sharpton, instead of realized he was masquerading in order to win.
WRONG!
Obama's extreme tax, health, environmental and education policies threaten to transform a recession for which the "community organizers" and their Congressional Democrat allies are responsible into a depression.
It is become obvious that Obama's priority is not resoring the national economy, but redistributing wealth and rewarding for his backers with undemocratic things like depriving workers of the secret ballot, at the expense of national well-being and America's democratic heritage.
"Joe the Plumber" was right about Obama.
Mr. Krauthammer:
"The logic of Obama's address to Congress went like this:
'Our economy did not fall into decline overnight,' he averred. Indeed, it all began before the housing crisis. What did we do wrong? We are paying for past sins in three principal areas: energy, health care, and education — importing too much oil and not finding new sources of energy (as in the Arctic National Wildlife Refuge and the Outer Continental Shelf?), not reforming health care, and tolerating too many bad schools.
"The 'day of reckoning' has now arrived. And because 'it is only by understanding how we arrived at this moment that we'll be able to lift ourselves out of this predicament,' Obama has come to redeem us with his far-seeing program of universal, heavily nationalized health care; a cap-and-trade tax on energy; and a major federalization of education with universal access to college as the goal.
"Amazing."
I'd say horrifying revisionist history (which was the specialty of Obama's Marxist professors).
Mr. Krauthammer:
"As an explanation of our current economic difficulties, this is total fantasy. As a cure for rapidly growing joblessness, a massive destruction of wealth, a deepening worldwide recession, this is perhaps the greatest non sequitur ever foisted upon the American people."At the very center of our economic near-depression is a credit bubble, a housing collapse and a systemic failure of the entire banking system. One can come up with a host of causes: Fannie Mae and Freddie Mac pushed by Washington (and greed) into improvident loans, corrupted bond-ratings agencies, insufficient regulation of new and exotic debt instruments, the easy money policy of Alan Greenspan's Fed, irresponsible bankers pushing (and then unloading in packaged loan instruments) highly dubious mortgages, greedy house-flippers, deceitful homebuyers.
"The list is long. But the list of causes of the collapse of the financial system does not include the absence of universal health care, let alone of computerized medical records. Nor the absence of an industry-killing cap-and-trade carbon levy. Nor the lack of college graduates. Indeed, one could perversely make the case that, if anything, the proliferation of overeducated, Gucci-wearing, smart-ass MBAs inventing ever more sophisticated and opaque mathematical models and debt instruments helped get us into this credit catastrophe in the first place.
"And yet with our financial house on fire, Obama makes clear both in his speech and his budget that the essence of his presidency will be the transformation of health care, education and energy. Four months after winning the election, six weeks after his swearing in, Obama has yet to unveil a plan to deal with the banking crisis. "What's going on? 'You never want a serious crisis to go to waste,' said Chief of Staff Rahm Emanuel. 'This crisis provides the opportunity for us to do things that you could not do before.'"
EXACTLY!
It is NOT a coincidence that Congressional Democrats blocked Treasury Department oversight of Fannie Mae and Freddie Mac or that disaster ultimately resulted from pressuring banks to issue loans to the un-creditworthy.
Mr. Krauthammer:
"The markets' recent precipitous decline is a reaction not just to the absence of any plausible bank rescue plan, but also to the suspicion that Obama sees the continuing financial crisis as usefully creating the psychological conditions — the sense of crisis bordering on fear-itself panic — for enacting his 'Big Bang' agenda to federalize and/or socialize health care, education and energy, the commanding heights of post-industrial society.
"Clever politics, but intellectually dishonest to the core. Health, education and energy — worthy and weighty as they may be — are not the cause of our financial collapse. And they are not the cure. The fraudulent claim that they are both cause and cure is the rhetorical device by which an ambitious president intends to enact the most radical agenda of social transformation seen in our lifetime."
THAT'S THE PLAN!
Obama intends to maintain political power through wealth redistribution, calculating that the voter numbers will be on his side, wrecking the national economy in the process.
No wonder the stock market surged just before Election Day 2008, as McCain closed the gap, and has fallen so far since Obama was elected, even more since his inauguration than between his election and inauguration.
© Michael Gaynor
The views expressed by RenewAmerica columnists are their own and do not necessarily reflect the position of RenewAmerica or its affiliates.
(See RenewAmerica's publishing standards.)
