About those Bush eight years...

Here's a video reminder of who contributed to the housing bust.

Politicians on a dragonslaying mission

Harrison Price adroitly summed up the Dodd-Frank financial reform bill yesterday. This bill is a victory for Fannie Mae cheerleaders, Chris Dodd and Barney Frank. They will sell it to the public as a great accomplishment by liberal government to make the financial sector "safe." Yet, Fannie Mae and Freddie Mac are allowed to run their treasury busting business without nary a slap on the wrist---they continue to lose billions of taxpayer dollars each quarter. Liberals are going to claim that this bill is a great achievement. That is, of course, until another collapse rears its ugly head and then they will look to blame someone or something else.

The "Jobs" Bill makes it through the Senate

From NPR:

Companies that hire unemployed workers will get a temporary payroll tax holiday under a bill that easily won final congressional approval Wednesday.

The bipartisan 68-29 vote in the Senate sends the legislation to the White House, where President Barack Obama has promised to sign it into law.

It will be the first of several election-year jobs bills promised by Democrats to be enacted into law, though there's plenty of skepticism that the measure will do much to actually create jobs. Optimistic estimates predict the tax break could generate perhaps 250,000 jobs through the end of the year, but that would be just a tiny fraction of the 8.4 million jobs lost since the start of the recession.

The measure is part of a campaign by Democrats to show that they are addressing the nation's unemployment problem...

Here we go again. More political running in place to "do something" about the weak job market. Congress sure has passed many laws to move the economy into a positive place with little, if not weak, results. But here we are again with half measures and soap box speeches. That's OK, it's not like they're spending their money anyway. And besides, the farce of "pay-go" was once again obliterated by reality. Liberal economists are hoping that a cyclical recovery and low interest rates by the Fed move the economy along--we can already see plenty of postive indicators--so that soon to be laws like the "Jobs" bill, will look like it was just the right thing to do. Sorry, but any recovery will not be due to a "Jobs law" or a massive pork program like the "stimulus." It will be due to the business cycle and the private economy. So for those that voted for this bill and the stimulus, thanks for nothing.

The Fannie Mae monster needs to burn more cash

OK, hang on to your hat's, dear friends. The vacuum cleaner known as Fannie Mae is about to swallow gobs of taxpayer dollars again---$15 billion worth of it:

Fannie Mae needs another $15.3 billion in federal assistance, bringing its total to more than $75 billion. And worse, the mortgage finance company warned that its losses will continue this year.

The rescue of District-based Fannie Mae and sister company Freddie Mac is turning out to be one of the most expensive after-effects of the financial meltdown. The new request means the total bill for the duo will top $126 billion.

And the pain isn't over. Fannie warned Friday that it will need even more money from the Treasury, as unemployment remains high and millions of Americans lose their homes through foreclosure.

Fannie Mae reported Friday that it lost $74.4 billion, or $13.11 a share, last year, including $2.5 billion in dividends paid to the government. That compares with a loss of $59.8 billion, or $24.04 a share, a year earlier.

Fannie Mae, which was seized by federal regulators in September 2008, has racked up losses totaling $136.8 billion over the past three years.

The WaPo article fails to mention that Fannie Mae debt is NOT added to the federal budget. So it is essentially "off the books." Anyone that is following the financial crisis in Greece knows how dangerous and dishonest it is to have massive government debt hidden away from public view.

BTW, remember how Barney Frank defended Fannie Mae? Now, he wants to eliminate Fannie and Freddie. Incredible.

No Consequences

Since it was our government working through an aggressive "affordable housing" campaign that was mainly responsible for the housing bubble and it’s subsequent collapse, and which then led to the financial storm that followed, why does anyone really believe that any legislation that comes out of Congress will address any "lack" of oversight of the financial sector? This legislation is obviously “red meat” for citizens fed the liberal narrative (Thank you, MSM!) that the entire collapse was due to "greed" and "lack of regulation." Where is the movement to remove Barney Frank and Chris Dodd from their powerful committee posts? Afterall, those two were right in the thicket of this whole national nightmare.

Thomas Sowell - The Housing Boom and Bust

Comment: When some conservatives noted that the Community Reinvestment Act had some factor in the housing collapse, liberal commentators responded by saying that the CRA program and those that participated in it had very little default rates. While this is true, the point that is missed by liberal critics is that the CRA created a culture outside of the CRA program where "affordable" housing activists via progressive politicians effectively influenced financial regulators into pressuring banks to make more loans to less-than-creditworthy borrowers than they would normally be willing to risk. The political epitome of this is Mr. Barney Frank. He constantly pushed public policy to address a "housing affordibilty problem." The results of his work is the housing bubble and collapse.

Thomas Sowell - Housing Boom and Bust

Thomas Sowell is a national treasure.

HT: Liberty Pen

The Coming Storm

You know its coming and it will not be pretty: Get ready for inflation and higher interest rates.

Financial Crisis Made Simple

27 Visualizations and Infographics to Understand the Financial Crisis

Another $7.5 Billion For GMAC

Now that the Obama Administration has set Fiat and the UAW as owners of GM, I expect more tax dollars to shore up GM and Chrysler for many years to come.

BTW, GM might still end up bankrupt even with all the taxpayer funds thrown its way.

Political Charade and Deregulation

Thomas Sowell on the housing crisis:

The word repeated endlessly in these political charades is "deregulation." The idea is that it was a lack of government supervision which allowed "greed" in the private sector to lead the nation into crises that only our Beltway saviors can solve.

What utter rubbish this all is can be found by checking the record of how government regulators were precisely the ones who imposed lower mortgage lending standards— and it was members of Congress (of both parties) and who pushed the regulators, the banks and the mortgage-buying giants Fannie Mae and Freddie Mac into accepting risky mortgages, in the name of "affordable housing" and more home ownership. Presidents of both parties also jumped on the bandwagon.

Ron Paul vs. Bernanke

Watch as Ron Paul poses some very incisive questions and comments to Ben Bernanke during a recent congressional hearing. Also notice how Bernanke, a very intelligent and learned man, simply does not understand that he is part of a government bureaucracy that is slowly dragging the American economy into the hands of big government power.

Obama Motors!

So, we have Obama's word (whatever that's worth to you) that the government will back GM warranty's. Oh, that is just super.

Barney Frank: "What housing bubble?"

Before the financial crisis, many members of Congress cheered subprime mortgages simply because they aptly served affordable housing goals. In this video, we see Barney Frank running interference for mortgage giants Freddie Mac and Fannie Mae several years before the feds had to step in to save them.

HT: SBVOR

Raising Taxes Explained...

This one minute video clearly explains why raising taxes during a recession is not good policy.

Taxes and Fees. oh my!

Aside from raising taxes while accepting stimulus funds, cities around the country now want to tag citizens with an array of "fees." If you accidentally smack your car into a pole and police and firefighters show up, expect to receive a bill from the city.

"Deficits Don't Matter."---Dick Cheney

While Obama cites "signs of progress" in the economy, the national deficit swells.

Is a Bailout of the FHA on the Horizon?

This may come to pass soon:

WASHINGTON (AP) — The number of troubled loans backed by the government's mortgage insurance program is on the rise as economic problems mount, and lawmakers are worried that taxpayers will be stuck with the final bill.

Sen. Kit Bond, R-Mo., warned Thursday that the Federal Housing Administration is a "powder keg" waiting to explode, and said the Congress and the Obama administration shouldn't place a greater financial burden on the already strapped agency.

Defenders of the Community Reinvestment Act claim that since the CRA has low rates of defaults, due to a rigorous application process, it is therefore not to be blamed for the housing debacle. I always counter that the CRA has some defaults, albeit small, and that this is enough of a reason to question the merits of the program since taxpayers end up footing the bill for any losses no matter how small. I see the current dilemma with the FHA as being a very similar case as the CRA; good and noble intentions gone awry as the taxpayer foots the bill. BTW, this isn't the first time that the FHA has had financial issues.

China--Please, don't buy our debt!

"The 'independent' Federal Reserve will monetize the debt by buying Treasurys in the open market with money created out of thin air."

Mr. Sanchez, it is not all about Greed

Don Boudreaux of Cafe Hayek responds to Rick Sanchez of CNN regarding this program:

Here's a letter that I sent a couple of weeks ago to a CNN on-air personality:
16 March 2009

Mr. Rick Sanchez, Host, CNN NewsRoom

Dear Mr. Sanchez:

Re your interview today with economics students at Georgia State University: when a young man said that he is skeptical of government regulation and that he values individual liberty, you derisively accused him of believing that the economy would work well "without any rules."

The smug assurance of your accusation reveals your gross misunderstanding of the case for free markets. That case is not that rules are unnecessary. Rather, it's that rules written by politicians and enforced by bureaucrats generally work much less well than do rules that emerge decentrally - rules that evolve from the voluntary interactions and successes and mistakes of individuals each pursuing his or her own goals without being herded by a central authority - rules that are enforced by competition and by the exercise of personal responsibility and that, when sufficiently important, become formalized in case law declared by courts.

The distinction between what you think of as rules and the kinds of rules that permeate successful market economies is perhaps subtle. But it's also real and important. You should try to grasp it.

Sincerely,
Donald J. Boudreaux

I must say that Prof. Boudreaux was succinct in his observation and comment.