Sadly, Conservatives Are Not Patriots, They are Ethnocentric Nationalists Who Love Their Plutocratic Masters

Sadly, Conservatives Are Not Patriots, They are Ethnocentric Nationalists Who Love Their Plutocratic Masters

Calls to rally the virtuous "producing classes" against evil "parasites" at both the top and bottom of society is a tendency called producerism. It is a conspiracist narrative used by repressive right wing populism. Today we see examples of it in some sectors of the Christian Right, in the Patriot movements and armed militias, and in the Far right. (see chart of US right). Producerism is involved in the relationship between Buchanan, Fulani, Perot, and the Reform Party.

Producerism begins in the US with the Jacksonians, who wove together intra-elite factionalism and lower-class Whites’ double-edged resentments. Producerism became a staple of repressive populist ideology.  Producerism sought to rally the middle strata together with certain sections of the elite. Specifically, it championed the so-called producing classes (including White farmers, laborers, artisans, slaveowning planters, and “productive” capitalists) against “unproductive” bankers, speculators, and monopolists above—and people of color below. After the Jacksonian era, producerism was a central tenet of the anti-Chinese crusade in the late nineteenth century. In the 1920s industrial philosophy of Henry Ford, and Father Coughlin’s fascist doctrine in the 1930s, producerism fused with antisemitic attacks against “parasitic” Jews.

Conservatives like to talk in big expansive terms about freedom, family and values. Dive into the details and you find their family values are all about their families, freedom is only for what they want - much like a five year old, and theyir values rest on the foundation of a cruel dog-eat-dog society perpetually at war.

President Obama Announces Initiative to Help Stop Exporting American Jobs

President Obama Announces Initiative to Help Stop Exporting American Jobs

The White House announced Wednesday that it would step up its efforts to improve the economy by encouraging both U.S. and foreign companies to generate more jobs at home of the sort that have been shipped overseas or lost to foreign competitors, a process being called by the new buzzword, "in-sourcing." Included in those efforts will be tax breaks and $12 million in new resources for the SelectUSA initiative begun last year:

    “Since day one, this Administration has been focused on encouraging investment and job creation here at home,” Vice President Biden added. “The business leaders coming here from across the country today have looked at the facts and concluded what the President and I have been saying all along: that America is the best place in the world to do business and create jobs.  We’re calling on other companies to follow their lead and bring jobs back to America—jobs that provide middle-class families not just with a paycheck, but with a fundamental sense of dignity.”

The process of "out-sourcing" has for many years contributed to the off-shoring of millions of American jobs to foreign companies and the shuttering of businesses coast to coast. The practice has hit U.S. manufacturing especially hard as emerging nations have taken advantage of an intensification of globalization, which encourages a relatively free flow of goods, services, capital and financial capital across international boundaries but maintains more or less strict immigration laws.

As a counterpoint, in-sourcing seeks to reverse the flow of jobs with government policies that encourage businesses, both U.S. businesses and foreign ones, to invest in the States. Those policies can include not only tax breaks but also tax disincentives for those who continue sending jobs overseas.

The White House announcement was made in conjunction with an in-sourcing forum that brought 14 large and small U.S. companies to meet with President Obama and discuss what kinds of policies might work to encourage the generation of jobs here instead of abroad. The 14 were Ford, DuPont, Otis Elevator, Intel, Siemens, ThyssenKrupp, Rolls Royce, Master Lock, Lincolnton Furniture, GalaxE Solutions, AGS, KEEN, Chesapeake Bay Candle and NOVO 1.

This might be all for nothing since conservatives are doing everything they can to increase the number of unemployed before the election to try and make the president look bad.

None of the 2012 Republican Presidential Candidates Are Serious About Deficit Reduction or Stopping Redistribution of Wealth to the Wealthy

None of the 2012 Republican Presidential Candidates Are Serious About Deficit Reduction or Stopping Redistribution of Wealth to the Wealthy

The 2012 Republican candidates are largely in lockstep when it comes to economic policy, wanting to give huge tax cuts to the rich and corporations while doing next to nothing to boost consumer demand or help the middle class and the unemployed who have been battered by the Great Recession. In fact, according to an analysis by Citizens for Tax Justice, the average tax cuts received by the richest 1 percent of Americans under the Republican plans would be 270 times as large as the cut received by the middle class:

    The share of tax cuts going to the richest one percent of Americans under these plans would range from over a third to almost half. The average tax cuts received by the richest one percent would be up to 270 times as large as the average tax cut received by middle-income Americans.

Perry wins the award with a tax cut for the richest 1 percent that is 270 times larger than his middle class tax cut, while Gingrich’s is 190 times larger. Santorum and Romney pull up the rear with tax cuts for the rich that are 100 times larger than the cuts for the middle class, while CTJ did not analyze Jon Huntsman or Ron Paul’s plans. (CTJ uses a current law baseline, rather than a current policy baseline, to calculate its cuts. Using a current policy baseline, millions of middle class families would see a tax increase under Romney’s plan.)

CTJ also noted that “the cost of the tax plans proposed by Republican presidential candidates would range from $6.6 trillion to $18 trillion over a decade.” Therefore, “even the meager tax cuts that would go to low-income and middle-income taxpayers under these plans would almost surely be offset by the huge cuts in public services that would become necessary as a result.”

The conservative field of candidates are classic example of robbing Peter to pay Paul, or putting a little more money in one pocket of the middle-class and taking it out of the other. One of the results of progressive taxation is that a little bit of the extraordinary wealth accumulated at the top goes back to help pay for bridges, roads, medical research, firefighting equipment, public universities and so forth. All of those things and more will suffer even more budget cuts. For what? So multimillionaires and billionaires can hoard even more unearned income than they already have.

The Conservative claim that the NAACP "demands" food stamps shows why Republicans still have racism issues

The Conservative claim that the NAACP "demands" food stamps shows why Republicans still have racism issues

If Rick Santorum is upset that pretty much nobody believed him when he said he wasn’t talking about “black people” living off “somebody else’s money,” he has Newt Gingrich to blame. A day after the GOP’s flavor of the week changed stories and claimed, “I didn’t say black,” when he said,  “I don’t want to make [something sounding like black] people’s lives better by giving them somebody else’s money,” Gingrich again called President Obama “the food stamp president.” He told reporters in New Hampshire, “I will go to the NAACP convention and tell the African-American community why they should demand paychecks instead of food stamps.”

On Thursday I performed the mental exercise of giving Santorum the benefit of the doubt, and laid out the way the GOP’s ’60s era rhetoric about “welfare queens” and “welfare cheats” has been updated to include much of the multiracial working class, including whites – including anyone who has a public sector job, a union-protected job, or collects unemployment, Social Security or Medicare. It seemed theoretically possible – while still hard to believe – that Santorum was merely sharing the new GOP line that we’re all welfare queens now, any of us who’ve ever benefited from a government program.

Then Gingrich made my thought exercise seem unduly kind, by demonstrating exactly why people should be inclined to distrust Santorum’s new story and believe he was talking about black people: The modern GOP seems unashamed of its prejudice.

It’s impossible not to believe that having our first black president unleashed a new round of GOP race-baiting, even leaving birtherism aside. In August, one of Obama’s few Republican friends, Sen. Tom Coburn, lapsed into shameful racial stereotyping trying to “defend” the president, telling an Oklahoma constituent that Obama’s “intent is not to destroy … It’s to create dependency because it worked so well for him … As an African-American male, coming through the progress of everything he experienced, he got tremendous benefit through a lot of these programs.” A black guy raised by a (white) single mother gets into Harvard Law School: In the everyday vocabulary of today’s Republican Party, he’s looking for a handout.

Ronald Reagan wrapped up the ugly racism of earlier Republicans in pretty paper when he claimed, “We fought a war on poverty, and poverty won,” and made the case that welfare — which he associated with Democrats — created “dependency” that harmed its recipients. You didn’t have to be angry or racist anymore to oppose welfare programs; you could say you were trying to help their recipients. Reagan also muted the rhetoric that associated welfare with race, at least a little. More than 30 years later, having a black president makes it seem safe, and necessary, to unwrap Reagan’s pretty paper and once again make plain the GOP’s political association between welfare and African-Americans.  Make that, having a black Democratic president. This wouldn’t happen to President Herman Cain, would it?

Whether it is now or the 1980s most people receiving aid to dependent children ( what everyone calls welfare, but requires that the recipient work forty hours a week) there are more white folks receiving it than African-Americans. Yet when conservatives talk about aid programs to help the working poor they always seem to drag black Americans into the discussion. Newt said "And so I'm prepared, if the NAACP invites me, I'll go to their convention and talk about why the African American community should demand paychecks and not be satisfied with food stamps". Why didn't he say he was ready to meet with poor southern whites and ask why they don't demand paychecks instead of food stamps and having their jobs shipped to China because of conservative trade policy. 

Freedom is Only For the Elite - Welcome to Republican America Which is Willing To Raise Payroll Taxes On 113 Million Households To Spare 345,000 Millionaires From Tiny Surtax

Freedom is Only For the Elite - Welcome to Republican America Which is Willing To Raise Payroll Taxes On 113 Million Households To Spare 345,000 Millionaires From Tiny Surtax

Senate Democrats yesterday introduced legislation — as they’ve been promising to — that would extend a soon-to-expire payroll tax cut, and pay for it by implementing a surtax on income above $1 million. Republicans, of course, are opposing the plan, reviving their false claims that taxing the very wealthiest Americans will hit small businesses and job creators.

In essence, the GOP is saying that it’s willing to allow higher taxes on middle- and lower-income Americans in order to prevent tax increases on the very wealthy. According to an analysis by Citizens for Tax Justice, provided to the Washington Post’s Greg Sargent, the surtax would affect exceedingly few taxpayers, while a payroll tax cut expiration would wallop more than 100 million households:

    The surtax would impact around 345,000 taxpayers, roughly 0.2 percent of taxpayers, or one in 500 of them. Those people would pay on average an additional 2.1 percent of their overall income, or just over 1/50th of that overall income, in taxes.

    In a majority of states, only one-tenth of one percent, or one in 1,000 taxpayers, would pay this surtax.

    And how many people would benefit from the payroll tax cut? According to the group, around 113 million tax filing units — either single workers or families that include more than one worker — would see their payroll tax cut extended. That’s a lot of people — well over 113 million workers, in fact.

Allowing the payroll tax cut to expire at the end of the year would hit middle-class families with a $1,000 tax increase, providing a substantial drag on the economy. In fact, according to Macroeconomic Advisers, allowing the payroll tax cut to lapse “would reduce GDP growth by 0.5 percent and cost the economy 400,000 jobs.” Other estimates are even worse, with Barclays’s estimating that a payroll tax increase could say 1.5 percent off of GDP growth.

The GOP has, time and again, blocked any legislation that would increase taxes by the slightest amount on the ultra-wealthy, even with tax revenue at a 60 year low, taxes on the rich the lowest they’ve been in a generation, and income inequality out of control. Instead, Republicans would prefer to raise taxes on the middle-class, knocking the economy where it can least afford it.

Be sure and vote conservative Republican in 2012 so the United States of America can look and operate more like 16th century France. When will conservatives start wearing flowing velvet robes and silk brocaded vests so we can all better distinguish the elite from the common folk.

Rupert Murdoch The Anti-American International Business Mogul and His Fox News:: Student Indoctrination Is OK, But Only If The Teacher's a Proto-Fascist Conservative

Georgia Confederate Republican Loon Bill Looman is an Embarrassment to America

Georgia Confederate Republican Loon Bill Looman is an Embarrassment to America

A business owner in western Georgia instituted a new company policy recently: “We are not hiring until Obama is gone.”

Bill Looman, who owns U.S. Cranes, LLC in Waco, Georgia, explained that while “I’ve got people that I want to hire now,” he didn’t think he would be able to foot the expense “unless some things change in D.C.”

Not content to simply implement the new policy internally, Looman decided to plaster it on all his company’s trucks. He did so, as 11Alive noted, “for all to see as the trucks roll up and down roads, highways and interstates.” Watch it:

The notion that President Obama’s economic policies preclude small businesses from hiring new workers isn’t the only ludicrous claim Looman pushes. A cursory glance at Looman’s public Facebook page shows he is prone to anti-Obama conspiracy theories. Earlier this month, he posted a false report that Larry Sinclair – the man who claimed he did drugs and had sex with President Obama – had died and implied foul play, writing “MAKES YOU WONDER HUH?” Looman’s page is also riddled with pro-confederate and anti-Muslim postings.

More importantly, Looman’s assertion that he would be able to hire more workers but for Obama’s economic policies defies reason. In the last few months alone, Obama has proposed giving major tax credits to businesses that hire new workers, including a $4,000 credit for hiring the long-term unemployed. Just this week, Obama signed a law to give additional tax credits to businesses that hire veterans.

Ironically, despite the fact that he claims to want to hire new workers, Looman’s anti-Obama anti-hiring stance will prevent his business from enjoying any of these new incentives.

Since taking office President Obama has given small businesses 17 tax cuts. Small businesses in the U.S. now have the lowest tax rate since 1960. That's right, Obama's tax rats are lower than Saint Ronnie Reagan. Looman, a fan of the treasonous Confederacy is doing a lot of people a favor. Who would want to work for this treasonous nut bag who pushes tin-foil wrapped conspiracy theories. 

How Private Banks Caused the Economic Crisis

The CDO Daisy Chain

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The CDO Daisy Chain (Guide to graphic above)

Here's how the Wall Street Money Machine worked in the run-up to the financial collapse: Banks created CDOs from mortgage-backed securities. Banks often retained the large top portion, called the "Super Senior." The bottom portion, or "Equity," was often sold off to hedge funds. The middle portion, or "Mezzanine," often went into new CDOs. The main buyers of those new CDOs were once again the banks.


How Private Banks Caused the Economic Crisis

A ProPublica analysis shows for the first time the extent to which banks -- primarily Merrill Lynch, but also Citigroup, UBS and others -- bought their own products and cranked up an assembly line that otherwise should have flagged.

The products they were buying and selling were at the heart of the 2008 meltdown -- collections of mortgage bonds known as collateralized debt obligations, or CDOs.

As the housing boom began to slow in mid-2006, investors became skittish about the riskier parts of those investments. So the banks created -- and ultimately provided most of the money for -- new CDOs. Those new CDOs bought the hard-to-sell pieces of the original CDOs. The result was a daisy chain that solved one problem but created another: Each new CDO had its own risky pieces. Banks created yet other CDOs to buy those.

Individual instances of these questionable trades have been reported before, but ProPublica's investigation, done in partnership with NPR's Planet Money, shows that by late 2006 they became a common industry practice.

An analysis by research firm Thetica Systems, commissioned by ProPublica, shows that in the last years of the boom, CDOs had become the dominant purchaser of key, risky parts of other CDOs, largely replacing real investors like pension funds. By 2007, 67 percent of those slices were bought by other CDOs, up from 36 percent just three years earlier. The banks often orchestrated these purchases. In the last two years of the boom, nearly half of all CDOs sponsored by market leader Merrill Lynch bought significant portions of other Merrill CDOs.

ProPublica also found 85 instances during 2006 and 2007 in which two CDOs bought pieces of each other. These trades, which involved $107 billion worth of CDOs, underscore the extent to which the market lacked real buyers. Often the CDOs that swapped purchases closed within days of each other, the analysis shows.

There were supposed to be protections against this sort of abuse. While banks provided the blueprint for the CDOs and marketed them, they typically selected independent managers who chose the specific bonds to go inside them. The managers had a legal obligation to do what was best for the CDO. They were paid by the CDO, not the bank, and were supposed to serve as a bulwark against self-dealing by the banks, which had the fullest understanding of the complex and lightly regulated mortgage bonds.

It rarely worked out that way. The managers were beholden to the banks that sent them the business. On a billion-dollar deal, managers could earn a million dollars in fees, with little risk. Some small firms did several billion dollars of CDOs in a matter of months.

"All these banks for years were spawning trading partners," says a former executive from Financial Guaranty Insurance Company, a major insurer of the CDO market. "You don't have a trading partner? Create one."
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The executive, like most of the dozens of people ProPublica spoke with about the inner workings of the market at the time, asked not to be named out of fear of being sucked into ongoing investigations or because they are involved in civil litigation.

Keeping the assembly line going had a wealth of short-term advantages for the banks. Fees rolled in. A typical CDO could net the bank that created it between $5 million and $10 million -- about half of which usually ended up as employee bonuses. Indeed, Wall Street awarded record bonuses in 2006, a hefty chunk of which came from the CDO business.

The self-dealing super-charged the market for CDOs, enticing some less-savvy investors to try their luck. Crucially, such deals maintained the value of mortgage bonds at a time when the lack of buyers should have driven their prices down.

But the strategy of speeding up the assembly line had devastating consequences for homeowners, the banks themselves and, ultimately, the global economy. Because of Wall Street's machinations, more mortgages had been granted to ever-shakier borrowers. The results can now be seen in foreclosed houses across America.

The incestuous trading also made the CDOs more intertwined and thus fragile, accelerating their decline in value that began in the fall of 2007 and deepened over the next year. Most are now worth pennies on the dollar. Nearly half of the nearly trillion dollars in losses to the global banking system came from CDOs, losses ultimately absorbed by taxpayers and investors around the world. The banks' troubles sent the world's economies into a tailspin from which they have yet to recover.

The banks did what we usually see in sitcoms where the character uses one credit card to make payments on another and yet another credit yard to pay another and so forth. Similar to a Ponzi scheme. It is not in the interests of citizens who support and open and healthy capitalist free market system to try and shift blame for what these super big banks to the working poor. Such thinking and myth making only makes it more likely there will be another collapse. As a matter of fact since conservatives in Congress have fought to keep new financial reforms from actually being acted on, the banks are back to buying and selling CDOs.

Anti-American Conservative Newt Gingrich Was Pro Health Care Mandate Before He Was Against It

Gingrich Backs Away From Individual Mandate: ‘I Never Focused On It Much’

In 1993, then-Speaker Newt Gingrich endorsed the concept of a national individual mandate, saying on Meet the Press, “I am for people, individuals — exactly like automobile insurance — individuals having health insurance and being required to have health insurance.” He reiterated the principle in 2007 — writing in a Des Moines Register op-ed, “Personal responsibility extends to the purchase of health insurance. Citizens should not be able to cheat their neighbors by not buying insurance” — and again in 2008: “Finally, we should insist that everyone above a certain level buy coverage (or, if they are opposed to insurance, post a bond).” His for-profit think tank, the Center for Health Transformation (CHT), still promotes the concept on its website, writing, “Anyone who earns more than $50,000 a year must purchase health insurance or post a bond.”

But since the requirement is also included in the Affordable Care Act, presidential candidate Newt Gingrich is against it and believes it to be unconstitutional. During an interview with the Union Leader on Monday, he announced that despite the long public record, he actually “never focused on it much on the federal level”:

    GINGRICH: I never focused on it much on the federal level. I talked about it at the center, at the state level and what we were trying to solve, we just concluded you couldn’t do it, it was too hard…As you work through it, at the time it was designed to block Hillarycare and the more you thought about it, the more you realized, a Congress that can compel you to do something like that, could compel you to do anything. What’s the limit to Congress’ power to dictate your life? And that, I think, will be heart of the argument at the Supreme Court?

The limit is actually fairly clear. The Supreme Court grants the Congress broad deference in regulating the country’s economic activities, so long as the activity is itself economic in nature. And since we all have bodies and they all get old and sick, health care costs are shifted to other payers throughout the country. In 2008, the government spent $43 billion providing uncompensated care to uninsured individuals. In that sense, even the failure to buy a product constitutes an “economic activity.”

For over sixty years conservative leaders such as Gingrich have been lying the Constitution. They say they believe in it literally word for word. While that kind of interpretation is not one the Founders intended - they did not have broadcast airwaves or air travel to regulate back in 1775 for one thing. Conservatives consistently cannot pass their own litmus tests. They decide to believe in whatever screwy point of view and than they find some way to shoe horn in their beliefs into the Constitution. This approach to living in a modern democratic republic is inherently Anti-American.

Conservatism Down The Rabbit Hole - America deserves better from its business leaders: Making a profit shouldn't be the only bottom line

Conservatism Down The Rabbit Hole - America deserves better from its business leaders: Making a profit shouldn't be the only bottom line

Do corporations have a social responsibility to be decent, upstanding citizens? Is there a moral imperative that the likes of Bank of America, General Electric and Apple should boost employment, refrain from contributing to inequality, or restrain themselves from despoiling the environment, simply because those are the right things to do?

If you spend even a cursory amount of time investigating this question, you will speedily find yourself reckoning with the answer delivered four decades ago by the economist Milton Friedman: A most emphatic no.

In “The Social Responsibility of Business Is to Increase Its Profits,” originally published in the New York Times Sunday Magazine in 1970, Friedman, the arch-deacon of free market economics, declared that any businessman who thinks a corporation should take “seriously its responsibilities for providing em­ployment, eliminating discrimination, avoid­ing pollution and whatever else” was “preach­ing pure and unadulterated socialism.”

    Busi­nessmen who talk this way are unwitting pup­pets of the intellectual forces that have been undermining the basis of a free society these past decades … In a free-enterprise, private-property sys­tem, a corporate executive is an employee of the owners of the business. He has direct re­sponsibility to his employers. That responsi­bility is to conduct the business in accordance with their desires, which generally will be to make as much money as possible while con­forming to the basic rules of the society, both those embodied in law and those embodied in ethical custom.

The great irony of Friedman’s hard line is that in 1970, his words probably sounded much more extreme than they do today. Despite decades of lip service to the idea of “corporate social responsibility,” the notions that corporations do best when most untrammeled by regulatory constraint or that they should only be guided by a desire to generate the maximum return on investment for their shareholders are now bedrock ideological fixations of the contemporary Republican Party.

In fact, one could well argue that we are currently closer to Friedman’s utopia than during any other period in living memory. The Supreme Court has vastly loosened restrictions on corporate spending on the political process, trade policy has supported a decades-long trend toward foreign investment, offshoring and outsourcing, corporate taxes are at a historic low, and even the worst financial crisis in decades has hardly resulted in more than a slap on the regulatory wrist for the guilty parties.

America had at least five decades of that shrill, pompous and self-righteous messaging from conservatives about "values". Where are they? America keeps waiting and getting screwed over by the "values" party. Maybe they meant they had the values of despots, plutocrats or Medieval monarchs. When is middle-class America going to wake up and stop getting the shaft from people who think think values are the same thing as economic tyranny.

Anti-American Senate candidate Josh Mandel (R) Wants To Destroy National Forest for His Special Interests Friends

Anti-American Senate candidate Josh Mandel (R) Wants To Destroy National Forest for His Special Interests Friends

Ohio’s transparency-allergic treasurer and U.S. senate candidate Josh Mandel (R) is finally stepping out on stage by offering a certain type of policy positions: wildly unpopular. Mandel endorsed Gov. John Kasich’s (R) anti-labor law early this summer, insisting that Senate Bill 5 — a bill that was resoundingly defeated by police and firefighters — “is about respecting police and firefighters.” Now, Mandel is demanding that Ohio officials open up a national forest in Ohio to fracking — a policy 70 percent of Ohioans oppose. And he wants it done immediately.

Ohio’s Wayne National Forest is host to oil and gas wells, but none as deep and dangerous as those created by fracking, a method of deep natural gas drilling. The plan to lease 3,302 acres during a Dec. 7 public auction “inspired new fears” in Athens, OH about the possible pollution of the area water supply. These concerned prompted Wayne National Forest supervisor Anne Carey to withdraw the auction and begin an evaluation process that could take up to six months. Mandel slammed Carey for her concern, insisting that places like Mahoning Valley (which is about 150 miles away from the park) “will greatly benefit from fracking“:

    “The Mahoning Valley is one of the areas that will greatly benefit from fracking,” said Mandel, who called The Vindicator on Thursday to discuss the issue as well as criticize a decision by a national forest supervisor in the Athens area for postponing a plan to lease more than 3,000 acres for oil and gas drilling.[...]

    Mandel said the gas-and-oil business is booming and “a delay in drilling is a delay in job creation for the state of Ohio.”

    The business can “rejuvenate parts of Ohio,” including the Valley, he said.

Once again, Mandel’s idea of “benefit” is questionable. Fracking has a long history of groundwater pollution, leaving entire towns with highly-contaminated water supplies. Indeed, some contaminated wells have been found to contain extremely high levels leukemia-causing benzene while others left people filling dizzy and caused horses and pets to lose their hair.

I'm not sure what the United States of America has done to senate candidate Josh Mandel (R) for him to hate it so much. Maybe he should take some of that corporate cash he is getting and buy a plane ticket to some right-wing banana republic. He'll feel right at home.

What Caused the Financial Crisis? Or What Some Call The Great Recession

What Caused the Financial Crisis? Or What Some Call The Great Recession

One group has been especially vocal about shaping a new narrative of the credit crisis and economic collapse: those whose bad judgment and failed philosophy helped cause the crisis.

Rather than admit the error of their ways — Repent! — these people are engaged in an active campaign to rewrite history. They are not, of course, exonerated in doing so. And beyond that, they damage the process of repairing what was broken. They muddy the waters when it comes to holding guilty parties responsible. They prevent measures from being put into place to prevent another crisis.

Here is the surprising takeaway: They are winning. Thanks to the endless repetition of the Big Lie.

A Big Lie is so colossal that no one would believe that someone could have the impudence to distort the truth so infamously. There are many examples: Claims that Earth is not warming, or that evolution is not the best thesis we have for how humans developed. Those opposed to stimulus spending have gone so far as to claim that the infrastructure of the United States is just fine, Grade A (not D, as the we discussed last month), and needs little repair.

Wall Street has its own version: Its Big Lie is that banks and investment houses are merely victims of the crash. You see, the entire boom and bust was caused by misguided government policies. It was not irresponsible lending or derivative or excess leverage or misguided compensation packages, but rather long-standing housing policies that were at fault.

Indeed, the arguments these folks make fail to withstand even casual scrutiny. But that has not stopped people who should know better from repeating them.

The Big Lie made a surprise appearance Tuesday when New York Mayor Michael Bloomberg, responding to a question about Occupy Wall Street, stunned observers by exonerating Wall Street: “It was not the banks that created the mortgage crisis. It was, plain and simple, Congress who forced everybody to go and give mortgages to people who were on the cusp.”

What made his comments so stunning is that he built Bloomberg Data Services on the notion that data are what matter most to investors. The terminals are found on nearly 400,000 trading desks around the world, at a cost of $1,500 a month. (Do the math — that’s over half a billion dollars a month.) Perhaps the fact that Wall Street was the source of his vast wealth biased him. But the key principle of the business that made the mayor a billionaire is that fund managers, economists, researchers and traders should ignore the squishy narrative and, instead, focus on facts. Yet he ignored his own principles to repeat statements he should have known were false.

Why are people trying to rewrite the history of the crisis? Some are simply trying to save face. Interest groups who advocate for deregulation of the finance sector would prefer that deregulation not receive any blame for the crisis.

Some stand to profit from the status quo: Banks present a systemic risk to the economy, and reducing that risk by lowering their leverage and increasing capital requirements also lowers profitability. Others are hired guns, doing the bidding of bosses on Wall Street.

They all suffer cognitive dissonance — the intellectual crisis that occurs when a failed belief system or philosophy is confronted with proof of its implausibility.

And what about those facts? To be clear, no single issue was the cause. Our economy is a complex and intricate system. What caused the crisis? Look:

*Fed Chair Alan Greenspan dropped rates to 1 percent — levels not seen for half a century — and kept them there for an unprecedentedly long period. This caused a spiral in anything priced in dollars (i.e., oil, gold) or credit (i.e., housing) or liquidity driven (i.e., stocks).

*Low rates meant asset managers could no longer get decent yields from municipal bonds or Treasurys. Instead, they turned to high-yield mortgage-backed securities. Nearly all of them failed to do adequate due diligence before buying them, did not understand these instruments or the risk involved. They violated one of the most important rules of investing: Know what you own.

*Fund managers made this error because they relied on the credit ratings agencies — Moody’s, S&P and Fitch. They had placed an AAA rating on these junk securities, claiming they were as safe as U.S. Treasurys.

• Derivatives had become a uniquely unregulated financial instrument. They are exempt from all oversight, counter-party disclosure, exchange listing requirements, state insurance supervision and, most important, reserve requirements. This allowed AIG to write $3 trillion in derivatives while reserving precisely zero dollars against future claims.

• The Securities and Exchange Commission changed the leverage rules for just five Wall Street banks in 2004. The “Bear Stearns exemption” replaced the 1977 net capitalization rule’s 12-to-1 leverage limit. In its place, it allowed unlimited leverage for Goldman Sachs, Morgan Stanley, Merrill Lynch, Lehman Brothers and Bear Stearns. These banks ramped leverage to 20-, 30-, even 40-to-1. Extreme leverage leaves very little room for error.

•Wall Street’s compensation system was skewed toward short-term performance. It gives traders lots of upside and none of the downside. This creates incentives to take excessive risks.

• The demand for higher-yielding paper led Wall Street to begin bundling mortgages. The highest yielding were subprime mortgages. This market was dominated by non-bank originators exempt from most regulations. The Fed could have supervised them, but Greenspan did not.

• These mortgage originators’ lend-to-sell-to-securitizers model had them holding mortgages for a very short period. This allowed them to get creative with underwriting standards, abdicating traditional lending metrics such as income, credit rating, debt-service history and loan-to-value.

• “Innovative” mortgage products were developed to reach more subprime borrowers. These include 2/28 adjustable-rate mortgages, interest-only loans, piggy-bank mortgages (simultaneous underlying mortgage and home-equity lines) and the notorious negative amortization loans (borrower’s indebtedness goes up each month). These mortgages defaulted in vastly disproportionate numbers to traditional 30-year fixed mortgages.

*To keep up with these newfangled originators, traditional banks developed automated underwriting systems. The software was gamed by employees paid on loan volume, not quality.

*Glass-Steagall legislation, which kept Wall Street and Main Street banks walled off from each other, was repealed in 1998. This allowed FDIC-insured banks, whose deposits were guaranteed by the government, to engage in highly risky business. It also allowed the banks to bulk up, becoming bigger, more complex and unwieldy.

*Many states had anti-predatory lending laws on their books (along with lower defaults and foreclosure rates). In 2004, the Office of the Comptroller of the Currency federally preempted state laws regulating mortgage credit and national banks. Following this change, national lenders sold increasingly risky loan products in those states. Shortly after, their default and foreclosure rates skyrocketed.

Bloomberg was partially correct: Congress did radically deregulate the financial sector, doing away with many of the protections that had worked for decades. Congress allowed Wall Street to self-regulate, and the Fed the turned a blind eye to bank abuses.

The previous Big Lie — the discredited belief that free markets require no adult supervision — is the reason people have created a new false narrative.

All the right-wing conservative Anti-American presidential candidates have done their part in telling the Big Lie. They seem to anyone - working class Americans, minorities, government, liberalism. The truth hurts. The free market is great when it workers. It only works when properly regulated. That's not communism or fascism or any other ism, its common sense and an honest history of the greed that always kicks in when regulations are too lax or not enforced.

America Hater Newt Gingrich Has Ethics. They Just Happen to Be Abominable

America Hater Newt Gingrich Has Ethics. They Just Happen to Be Abominable

The GOP presidential primary is a lot like a kindergarten t-ball game: When it comes to being in first place, just about everybody gets a turn. And now, congratulations, Newt Gingrich: It’s your turn!

Steve Kornacki wrote about the Public Policy Polling survey that found Gingrich is following in the footsteps of Donald Trump, Michele Bachmann, Rick Perry and Herman Cain as the Republican flavor of the week. Gingrich benefits from three things: A lot of Republicans can’t stand Mitt Romney, Cain and Perry have shamed themselves in public, and by contrast, he’s had no bad debates. So far he’s come off as smart and affable, trying to rally his rivals against the big, bad media that’s trying to get them to fight.

Since Gingrich has mostly been in single digits, far back in the polls, his rivals have humored him and ignored his liabilities. That’s about to change, and Gingrich, like Perry, Cain and Michele Bachmann before him, will likewise wither under the hot sun of political scrutiny. The seemingly affable professor and author is a hothead with many political liabilities and almost as many enemies. He’s committed so many political and ethical transgressions that his baggage has baggage.

Gingrich is probably best known for serving his wife with divorce papers while she was recovering from cancer surgery, so he could marry his mistress, whom he later divorced to marry a staffer. But he’s also probably the only politician, who when you’re asked “What’s the worst thing he’s done?” has done a lot of things that rival leaving his cancer-stricken wife for his mistress. For most people in the world, in fact, that would be the hands-down worst act ever; for Gingrich, it’s just not that clear-cut (h/t Jamie Kilstein).

For instance, he’s the only House speaker in American history to be disciplined by Congress for ethics violations.  In 1998, he paid a $300,000 fine after he was found to have been misusing his tax-exempt foundations for political gain.

OK, those have to be the two worst things, dumping his wife who had cancer for his mistress, and congressional ethics sanctions, right?

But wait, but there’s more:

    Shutting down the government in 1995 at least partly because President Clinton allegedly snubbed him by seating him in the rear of Air Force One on a flight home from Yitzhak Rabin’s funeral. No, really, he told reporters the “snub” was “part of why you ended up with us sending down a tougher continuing resolution.”
    Advocating that the children of welfare recipients be taken away from their parents and raised in orphanages.
    Leading the drive to impeach Clinton over lying about adultery when he was himself lying about adultery, cheating on his wife with a staffer, Callista Bisek, who became his third wife.
    Insisting President Obama suffers from “a Kenyan anti-colonial mindset” like his Kenyan father, even though he barely knew his Kenyan father.
    Denouncing Paul Ryan’s radical budget (that was actually smart) as “right-wing social engineering,” then flip-flopping and warning that “any ad which quotes what I said Sunday is a falsehood.”
    Railing against Obama’s alleged “class warfare” when he’s run up a $500,000 tab at Tiffany’s.
But my all-time favorite Newt Gingrich “worst” was the time he blamed the horrendous case of Susan Smith, the South Carolina mother( a Republican who was having an affair with her Republican father-in-law) who murdered her young sons in 1994, on Democrats. Smith, you’ll recall, first blamed her son’s drowning deaths on a black man who supposedly car-jacked her, but it turned out, she did it herself. Just before the 1994 election, in which his party swept back into power, Gingrich said:

     I think that the mother killing the two children in South Carolina vividly reminds every American how sick the society is getting and how much we need to change things. The only way you get change is to vote Republican. That’s the message for the last three days.

Two days later, Gingrich defended his comments by insisting he’d been saying the same thing for years: that Democratic rule had frayed the moral fabric of the country: “We need very deep change if we’re going to turn this country around.” Asked directly if he was saying electing Republicans could stop killings like Smith’s, he said flatly: “Yes. In my judgment, there’s no question.”

He later blamed the Columbine and Virginia Tech killings on liberals, too.

America has never been perfect, but its "moral" fabric has always been in most danger by conservatism. Conservatism - forget the names of the political parties Republicans and Democrats, liberals and conservatives were in both parties until the 1980s - has always been the biggest threat to America. Conservatism by its very nature is anti-American. Conservatism as a movement has more in common with the ultra-nationalism of the Japanese leading up to WW II. Gingrich fits in perfectly. he believes in a dog-eat-dog culture and economy. He believes America should be ruled by the elite and voting rights given only to those who believe in the far Right agenda.


Scott Walker recall, Day 1, by the numbers and you can download a Walker recall form here. Beware of false recalls conservative nuts who will throw your recall petition in the trash.

Individual Health Insurance Mandate Was Newt Gingrich’s Idea, And Mitt Romney Implemented It

Individual Health Insurance Mandate Was Newt Gingrich’s Idea, And Mitt Romney Implemented It

On the same day the Supreme Court announced it would take up lawsuits against the Affordable Care Act, Rep. Michele Bachmann (R-MN) took aim at GOP frontrunner Mitt Romney and insurgent Newt Gingrich for their role in crafting one of the law’s key components — the individual mandate:

    BACHMANN: Our candidate can’t be compromised. We have candidates that are compromised on the individual health care mandate, which is Obamacare. It was Newt Gingrich’s idea, and Mitt Romney implemented it.

Watch it:

In many ways, Bachmann is absolutely right. The concept of the individual mandate actually originated at the conservative Heritage Foundation, but Gingrich was an early and strong supporter. “I am for people, individuals — exactly like automobile insurance — individuals having health insurance and being required to have health insurance,” Gingrich said on Meet the Press in 1993. He supported it as recently as 2007, writing in a Des Moines Register op-ed, “Personal responsibility extends to the purchase of health insurance. Citizens should not be able to cheat their neighbors by not buying insurance.”

Romney himself pointed this out in a debate, saying, “Actually Newt, we got the idea of the individual mandate from you…and the Heritage Foundation.” And of course, as has been repeatedly noted, the groundbreaking universal health care program Romney implemented as governor of Massachusetts was very similar to President Obama’s Affordable Care Act and employed the individual mandate. Romney actively lobbied for the mandate
to be included in his reform.

Conservatives stand for something. The problem seems to be they and the rest of America can't figure out exactly what conservatives stand for. They seem pretty consistent about standing up for the financial elite at the expense of average Americans. They're consistent about wanting to start unending wars. They're all for gutting the safety net they helps millions of seniors and the disabled out of poverty. Who knows someday conservatives might stand for something that is pro-America. Though don't hold your breath.

Over The Last Forty Years America Has Often Followed The Path of Conservative Economic Policy - That Path Has Come Back to Haunt The Middle-Class

Over The Last Forty Years America Has Often Followed The Path of Conservative Economic Policy - That Path Has Come Back to Haunt The Middle-Class

A few weeks ago, as the Occupy Wall Street protests were first spreading, something amazing happened: For 10 whole seconds, the local reporter on my TV screen actually talked about the realities of the recession. He even uttered the phrase “economic inequality.”

My guess is that you’ve seen something similar on your local affiliate — and that’s no minor event. When even the most local of television journalists are compelled to acknowledge this crushing emergency in a country whose media aggressively promotes American dream agitprop, it means the Occupy protesters have scored a monumental victory. You can almost imagine a Wall Street CEO turning to an aide and muttering a slightly altered riff off LBJ: “If we’ve lost Ron Burgundy, we’ve lost Middle America.”

In response to this stunning turn of events, conservative politicians are retreating to non sequiturs. They seem to think that if they shout the phrase “class warfare” enough, the nation will go back to not caring about the divide between the rich and poor.

But something has changed.

For most of the post-World War II era, we tolerated relatively high inequality because we envisioned it as a necessary side effect of an exceptional economy that (supposedly) guaranteed opportunities for advancement. As the Wall Street Journal put it, we believed that “it is OK to have ever-greater differences between rich and poor … as long as (our) children have a good chance of grasping the brass ring.”

However, the last three decades have invalidated our standing hypothesis. After the conservatives’ successful assault on the New Deal, America has lived a different reality — one perfectly summarized by a new Federal Reserve study revealing that today’s increasing inequality accompanies comparatively low social mobility.

“U.S. family income mobility has decreased over the 1969-2006 time span, and especially since the 1980s,” notes the Fed paper, adding that “a family’s position at (the) end of (the) 2000s was … more correlated with its start position than was the case 20 years earlier.”

Of course, some class mobility still exists. The trouble is that it’s primarily of the downward kind. As the Pew Charitable Trusts reports, roughly a third of those who grew up in the middle class have now fallen below that station in adulthood.

This is why, for all the right-wing mythology about “Eurosocialism” snuffing out upward mobility, data from the Organization for Economic Cooperation and Development show that social mobility in uber-capitalist America is actually lower than in most industrialized countries.

This is why almost three-quarters of respondents just told the Hill newspaper’s pollsters that income inequality is a problem.

This is why my local TV news is suddenly airing pieces on economic inequality between sports, weather and all the “you stay classy” small talk.

And this is why, among all the fights over economic policy, the debate about taxes is the most crucial of all.

As the Fed noted in a separate report, the federal tax code — which remains vaguely progressive — has been the one proven way to “mitigate income inequality.” But with congressional Republicans gradually flattening federal income tax rates and with already-regressive state tax rates in GOP bastions like Texas, Wyoming, Tennessee, South Dakota and Mississippi, the tax system has lately been preserving or exacerbating existing inequality.

David Sirota is a best-selling author of the new book "Back to Our Future: How the 1980s Explain the World We Live In Now."

Conservatives have been hyper shrill lately. Claiming that a return of the tax rates of the prosperous Clinton years will be a return to Marxism or even the end of our civilization. You can't reason with people like that, people who have clearly gone off the deep end. They seemed to have taken the zealotry of some religious cults to and applied it to economics. They believe what they believe and they want no part of being rational adults.

The Conservative Redistribution of Income is Grand Theft for Plutocrats

Here(chart), from the CBO report, are the changes, in percentage points, of the shares of income going to three groups. The top quintile excluding the top 1 percent – which is basically the abode of the well-educated who aren’t among the very lucky few – has only kept pace with the overall growth in incomes. Just about all of the redistribution has taken place from the bottom 80 to the top 1 (and we know that most of that has actually gone to the top 0.1).

 Oligarchy, American Style

Inequality is back in the news, largely thanks to Occupy Wall Street, but with an assist from the Congressional Budget Office. And you know what that means: It’s time to roll out the obfuscators! [Here, from the CBO report, are the changes, in percentage points, of the shares of income going to three groups. The top quintile excluding the top 1 percent – which is basically the abode of the well-educated who aren’t among the very lucky few – has only kept pace with the overall growth in incomes. Just about all of the redistribution has taken place from the bottom 80 to the top 1 (and we know that most of that has actually gone to the top 0.1).]

Anyone who has tracked this issue over time knows what I mean. Whenever growing income disparities threaten to come into focus, a reliable set of defenders tries to bring back the blur. Think tanks put out reports claiming that inequality isn’t really rising, or that it doesn’t matter. Pundits try to put a more benign face on the phenomenon, claiming that it’s not really the wealthy few versus the rest, it’s the educated versus the less educated.

So what you need to know is that all of these claims are basically attempts to obscure the stark reality: We have a society in which money is increasingly concentrated in the hands of a few people, and in which that concentration of income and wealth threatens to make us a democracy in name only.

The budget office laid out some of that stark reality in a recent report, which documented a sharp decline in the share of total income going to lower- and middle-income Americans. We still like to think of ourselves as a middle-class country. But with the bottom 80 percent of households now receiving less than half of total income, that’s a vision increasingly at odds with reality.

In response, the usual suspects have rolled out some familiar arguments: the data are flawed (they aren’t); the rich are an ever-changing group (not so); and so on. The most popular argument right now seems, however, to be the claim that we may not be a middle-class society, but we’re still an upper-middle-class society, in which a broad class of highly educated workers, who have the skills to compete in the modern world, is doing very well.

It’s a nice story, and a lot less disturbing than the picture of a nation in which a much smaller group of rich people is becoming increasingly dominant. But it’s not true.

Workers with college degrees have indeed, on average, done better than workers without, and the gap has generally widened over time. But highly educated Americans have by no means been immune to income stagnation and growing economic insecurity. Wage gains for most college-educated workers have been unimpressive (and nonexistent since 2000), while even the well-educated can no longer count on getting jobs with good benefits. In particular, these days workers with a college degree but no further degrees are less likely to get workplace health coverage than workers with only a high school degree were in 1979.

So who is getting the big gains? A very small, wealthy minority.

The budget office report tells us that essentially all of the upward redistribution of income away from the bottom 80 percent has gone to the highest-income 1 percent of Americans. That is, the protesters who portray themselves as representing the interests of the 99 percent have it basically right, and the pundits solemnly assuring them that it’s really about education, not the gains of a small elite, have it completely wrong.

If anything, the protesters are setting the cutoff too low. The recent budget office report doesn’t look inside the top 1 percent, but an earlier report, which only went up to 2005, found that almost two-thirds of the rising share of the top percentile in income actually went to the top 0.1 percent — the richest thousandth of Americans, who saw their real incomes rise more than 400 percent over the period from 1979 to 2005.

Who’s in that top 0.1 percent? Are they heroic entrepreneurs creating jobs? No, for the most part, they’re corporate executives.

 Republicans - who really should be called the Right-wing Elitist Party - tells us that to complain about this redistribution of income from the working class to millionaires is socialism. Don't fall for that old canard. America has become an economy that gives rich people money just for being rich not because they worked for it. They get that wealth from where all wealth starts, from average Americans producing goods and services. The 1% are the leeches and the 99% are the producers.

Did Fannie Mae, Freddie Mac Or The Community Reinvestment Act Cause the Recession

Private lenders issued vast majority of sub-prime loans

Did Fannie Mae, Freddie Mac Or The Community Reinvestment Act Cause the Recession

In the four years since the housing bubble burst, triggering a collapse in global financial markets whose value had been propped up through the repackaging and trading of home loans via complex financial instruments, there's been plenty of blame to go around. The Occupy Wall Street protests have called new attention to the root causes of the crisis, and led Republicans to reiterate their claim that government-backed lenders Fannie Mae and Freddie Mac were the primary villains. The facts about the subprime mortgage market prove that claim false: Private firms dominated the subprime market boom of 2004-06, and were not even subject to the 1977 Community Reinvestment Act some Republicans vilify. Thanks to decades of financial deregulation, capped by President Bush's decision to appoint Wall Street regulators who believed their job was to help banks rather than curb banking abuses, financial giants were able to turn the mortgage market into a high-stakes casino. As investigative reporters and Congress' Financial Crisis Inquiry Commission have all shown, it was deregulation mixed with irresponsible and potentially illegal practices by private firms on Wall Street that caused both the bubble and the collapse.

Republicans Blame The Financial Crisis On Fannie Mae, Freddie Mac, And Government Policy

Facts Show Private Lenders Who Were Not Subject To CRA, Not Government-Backed Ones Who Were, Drove The Subprime Mortgage Market

Deregulation Of Financial Markets And GOP-Appointed Absentee Regulators Paved The Way For The Subprime Bubble To Cause A Broad Collapse

"Financial Crisis Inquiry Commission" Expert Panel Found Wall Street Recklessness Caused The Crisis

Author Of Top Book On Financial Crisis Says There Is No Evidence For Blaming Either The CRA Or Fannie And Freddie

Republicans Blame The Financial Crisis On Fannie Mae, Freddie Mac, And Government Policy

Speaker Boehner: "Government Mortgage Companies...Triggered The Whole Meltdown." From House Speaker John Boehner's (R-OH) May 9, 2011, speech on Wall Street: "And the government mortgage companies that triggered the whole meltdown went untouched." [Boehner Remarks, 5/9/11]

Sen. Graham: "Fannie Mae And Freddie Mac" Were Behind "The Problem That Got Us Into This Mess." On the January 2, 2011, edition of NBC's Meet the Press, Sen. Lindsey Graham (R-SC) said: "[T]he financial regulation bill really left unattended Fannie Mae and Freddie Mac, and when you have government entities this large who own this much of housing, who've been pushing mortgages on people who couldn't afford to pay them, and you do nothing about it, it's pretty hard for me to say you've reformed the problem that got us into this mess. [...] To me, [the solution] is to get Fannie Mae and Freddie Mac in a, in a more privatized environment where risk/reward is, is, is more traditionally accepted. That--the American dream is to own a home you can afford. And to look at these entities and get more private-sector involvement and control who they lend money to and basically wind them down and make them more private." [Meet the Press, 1/2/11]

Sen. DeMint: "Liberal Housing Goals...Fueled The Housing Crisis." From Sen. Jim DeMint's (R-SC) blog: "Senator McCain has offered an amendment that would repeal their liberal housing goals that encouraged more risky lending and fueled the housing crisis, as well as end their dominance of the mortgage market and let the private sector back in. While more needs to be done to quickly end the permanent bailout of these mortgage giants, the McCain amendment is an important first step. True financial reform must include Freddie Mac and Fannie Mae. Congress cannot pretend to have ended 'too big to fail' without ending these out of control institutions." [DeMint.Senate.gov, 5/11/10]

Rep. Hensarling: "The Financial Crisis Was Caused By Failed Federal Policies" With Fannie And Freddie "At The Epicenter." From Rep. Jeb Hensarling's (R-TX) website: "The financial crisis was caused by failed federal policies that strong-armed, incented, and cajoled financial institutions into loaning money to people to buy homes that they couldn't afford to keep.  At the epicenter of this were Fannie Mae and Freddie Mac." [Hensarling.House.gov, accessed 10/13/11]

At GOP Presidential Debate, Rep. Bachmann Blamed The Community Reinvestment Act And Fannie Mae And Freddie Mac For The Crisis. At the October 11, 2011, GOP presidential primary debate, Rep. Michele Bachmann (R-MN) said: "I think if you look at the problem with the economic meltdown, you can trace it right back to the federal government, because it was the federal government that demanded that banks and mortgage companies lower platinum-level -- level -- lending standards to new lows. [...] It was the federal government that pushed the subprime loans.  It was the federal government that pushed the Community Reinvestment Act.  It was Congressman Barney Frank and also Senator Chris Dodd that continued to push government-directed housing goals.  They pushed the banks to meet these rules.  And if banks failed to meet those rules, then the federal government said, we won't let you merge; we won't let you grow.  There's a real problem:  It began with the federal government, and it began with Feddie and -- Freddie and Fannie." [GOP Debate, 10/11/11, via CFR.org]

Facts Show Private Lenders Who Were Not Subject To CRA, Not Government-Backed Ones Who Were, Drove The Subprime Mortgage Market

Private Firms, Not Fannie And Freddie, Dominated The Subprime Mortgage Market

2007: The Collapse Of The Housing Bubble And Widespread Defaults On Subprime Loans Triggered A Banking Crisis That Led To A Massive Recession. From Slate: "The only near consensus is on the question of what triggered the not-quite-a-depression. In 2007, the housing bubble burst, leading to a high rate of defaults on subprime mortgages. Exposure to bad mortgages doomed Bear Stearns in March 2008, then led to a banking crisis that fall. A global recession became inevitable once the government decided not to rescue Lehman Bros. from default in September 2008. Lehman's was the biggest bankruptcy in history, and it led promptly to a powerful economic contraction. Somewhere around here, agreement ends." [Slate, 1/9/10, emphasis added]

The Subprime Market Surged From 2004 To 2006. As reported by McClatchy: "Subprime lending offered high-cost loans to the weakest borrowers during the housing boom that lasted from 2001 to 2007. Subprime lending was at its height from 2004 to 2006." [McClatchy, 10/12/08]

From 2004 To 2006, Fannie And Freddie's Share Of Subprime Market Fell From Almost Half To Just Under One-Quarter. As reported by McClatchy: "But these loans, and those to low- and moderate-income families represent a small portion of overall lending. And at the height of the housing boom in 2005 and 2006, Republicans and their party's standard bearer, President Bush, didn't criticize any sort of lending, frequently boasting that they were presiding over the highest-ever rates of U.S. homeownership. Between 2004 and 2006, when subprime lending was exploding, Fannie and Freddie went from holding a high of 48 percent of the subprime loans that were sold into the secondary market to holding about 24 percent, according to data from Inside Mortgage Finance, a specialty publication." [McClatchy, 10/12/08, emphasis added]

    Fannie And Freddie Faced Tougher Regulatory Standards Than The Private Firms. As reported by McClatchy: "One reason is that Fannie and Freddie were subject to tougher standards than many of the unregulated players in the private sector who weakened lending standards, most of whom have gone bankrupt or are now in deep trouble." [McClatchy, 10/12/08]

2006: Private Firms Issued About Six Out Of Every Seven Subprime Mortgages. As reported by McClatchy:

    Federal Reserve Board data show that:

        More than 84 percent of the subprime mortgages in 2006 were issued by private lending institutions.
        Private firms made nearly 83 percent of the subprime loans to low- and moderate-income borrowers that year.
        Only one of the top 25 subprime lenders in 2006 was directly subject to the housing law that's being lambasted by conservative critics. [McClatchy, 10/12/08, emphasis added]

2008: The 15 Largest Subprime Servicers Were All Private Companies, Despite Large Drops In The Volume Of Their Subprime Business Compared To 2007. McClatchy prepared a graphic based on Inside Mortgage Finance data showing the 15 largest subprime service companies in 2008:

     [McClatchy, 10/12/08]

"Conservative Campaign That Blames The Global Financial Crisis On A Government Push To Make House More Affordable" Is Disproved By The Data. As reported by McClatchy: "As the economy worsens and Election Day approaches, a conservative campaign that blames the global financial crisis on a government push to make housing more affordable to lower-class Americans has taken off on talk radio and e-mail. Commentators say that's what triggered the stock market meltdown and the freeze on credit. They've specifically targeted the mortgage finance giants Fannie Mae and Freddie Mac, which the federal government seized on Sept. 6, contending that lending to poor and minority Americans caused Fannie's and Freddie's financial problems. Federal housing data reveal that the charges aren't true, and that the private sector, not the government or government-backed companies, was behind the soaring subprime lending at the core of the crisis." [McClatchy, 10/12/08, emphasis added]

Fannie And Freddie Don't Issue Loans, But Buy Them From Private Banks So Banks Can Continue Lending. As reported by McClatchy: "Conservative critics claim that the Clinton administration pushed Fannie Mae and Freddie Mac to make home ownership more available to riskier borrowers with little concern for their ability to pay the mortgages. [...] Fannie, the Federal National Mortgage Association, and Freddie, the Federal Home Loan Mortgage Corp., don't lend money, to minorities or anyone else, however. They purchase loans from the private lenders who actually underwrite the loans. It's a process called securitization, and by passing on the loans, banks have more capital on hand so they can lend even more." [McClatchy, 10/12/08, emphasis added]
The CRA Didn't Apply To The Private Firms That Inflated The Subprime Bubble

Conservatives Blame The Community Reinvestment Act Of 1977 (CRA) For The Subprime Boom Of The Early 2000s. From former Director of the U.S. Treasury's Office of Thrift Supervision Ellen Seidman:

    It has lately become fashionable for conservative pundits (Larry Kudlow, George Will) and disgruntled ex-bankers (Vernon Hill, for example, in his March 7 American Banker editorial) to blame the current credit crisis on the Community Reinvestment Act. This is patent nonsense. The sub-prime debacle has many causes, including greed, lack of and ineffective regulation, failures of risk assessment and management, and misplaced optimism. But CRA is not to blame.

    First, the timing is all wrong. CRA was enacted in 1977, its companion disclosure statute, the Home Mortgage Disclosure Act (HMDA) in 1975. While many of us warned against bad subprime lending before the turn of the millennium, the massive breakdown of underwriting and extension of risky products far down the income scale-without bothering to even check on income-was primarily a post-2003 phenomenon. To blame a statute enacted in 1977 for something that happened 25 years later takes a fair amount of chutzpah. [...]

    Second, CRA does not either encourage or condone bad lending. Bank regulators were decrying bad subprime lending before the turn of the millennium (see Interagency Guidance on Subprime Lending), and warning the CRA-covered institutions we regulated that badly underwritten subprime products that ignored consumer protections were not acceptable. Lenders not subject to CRA did not receive similar warnings. [New America Foundation, 9/22/08, emphasis added]

The CRA Did Not Affect The Vast Majority Of Subprime Loans. From Businessweek: "The Community Reinvestment Act, passed in 1977, requires banks to lend in the low-income neighborhoods where they take deposits. Just the idea that a lending crisis created from 2004 to 2007 was caused by a 1977 law is silly.

A History of Sexual Harassment is The Least of The Corrupt Wing-Nut Herman Cain's Problems

A History of Sexual Harassment is The Least of The Corrupt Wing-Nut Herman Cain's Problems

Mark Block, whose face is now familiar to thousands as the Smoking Man in the Cain campaign's latest video, told reporters that Cain was unaware of any settlements paid to the two women who made the accusations while Cain served as president and CEO of the National Restaurant Association, as Politico reported. But the reasons for Block's discomfort likely went beyond Cain's situation to his own. Just hours before Politico burst forth with its explosive accusations, the Milwaukee Journal Sentinel laid out a case that suggests significant illegal campaign activity on Cain's behalf by a nonprofit organization, Prosperity USA (also known as America's Prosperity Network), controlled by Block and linked to David Koch's Americans for Prosperity. As AlterNet has reported, Block, the former director of AFP's Wisconsin chapter, has long been known for playing dirty in politics.

Pay to Play?

Prosperity USA, described as a 501(c)(3) in its incorporation documents (and which now seems to be defunct), appears to have been footing the bill for Cain campaign expenses, including a highly unusual payment of $100,000 to the right-wing Congress of Racial Equality in advance of a major speech by Cain. Daniel Bice, who writes the Journal Sentinel's No Quarter blog, reports that the payment to CRE appears to have been disbursed from $150,000 in loans raised from unnamed donors. While Bice asserts that Cain was apparently not paid for that appearance, the New Yorker's Jane Mayer this month uncovered information suggesting that Cain's speaking fees are not directly reported as such on his disclosure forms to the Federal Elections Commission, but are shielded from public view as transactions that take place between his private company and the speaker's bureau representing him. Writes Mayer:

    Yet, mysteriously, Cain discloses no payments from the Washington Speakers Bureau on his federal forms. Instead, on his 2011 F.E.C. form, he lists unspecified payments of between $50,000-$100,000 to his company, the New Voice, which he describes as a “public speaking” and “publishing” entity.

A Visit With Mr. Koch

Among Bice's revelations is a record showing that Prosperity USA paid for Block's travel to meet with David Koch, the billionaire right-wing funder behind Americans for Prosperity and its foundation, and AFP president Tim Phillips in Washington, D.C., in January -- after Block was named "chief of staff" of the Cain campaign. Although the records Bice combed through do not specify a date for that trip, we know that both Phillips and Koch were in the nation's capital to celebrate the swearing in of the new congress on January 6, and to see the speaker's gavel passed from Rep. Nancy Pelosi, D-Calif., to John Boehner, R-Ohio.

Koch and Phillips had much to celebrate that day, not only in the transfer of power from the Democrats to the Republicans in the House of Representatives, but also for the high number of Tea Party-allied freshmen lawmakers in the new class who owed their good political fortunes to Koch and Americans for Prosperity. They were particularly successful in Wisconsin, where they helped to elect two new congressmen, Sean Duffy and Reid Ribble, and managed to unseat long-time U.S. Sen. Russell Feingold with their ally, Ron Johnson.

Until he signed on as Herman Cain's campaign manager in December, Block ran the Wisconsin state chapter of Americans for Prosperity. In addition to helping to send a handful of Koch-backed lawmakers to Washington, Block also helped elect Scott Walker to the governor's mansion along with a cadre of right-wingers to the state legislature, where they wasted no time in launching an assault against Wisconsin's public employees and their unions. And it was Block who recruited Herman Cain to run for president.

Taxpayer Subsidy for Cain's Private Jet?

Nonprofit organizations classified as 501(c)(3) under the IRS code are forbidden to engage in electioneering. Yet Prosperity USA lists on a rather messy statement of profit and loss, uncovered by Bice, that it is owed more than $40,000 from Friends of Herman Cain (the official name of the fundraising arm of Cain's presidential campaign), including at least $16,000 for Cain's travel on the charter jets of Hill Aircraft to appear at events sponsored by Americans for Prosperity, as well at an event in Chicago called RightNation, which the statement says Cain attended at the "request of AFP." Hill Aircraft, on its Web site, offers this description of its services:

    Our world class FBO facilities offer all the amenities for both passengers and pilots, including computer work stations with internet access, plasma TV screens for catching up on national and world events, pilots lounge with theatre seating and security camera monitors and state of the art flight planning facilities. Our line technicians are NATA Safety 1st trained and Hill Aircraft is a State of Georgia recognized drug free workplace. Our concierge services can take care of passenger and crew ground transportation, hotel reservations and catering, we can even arrange for sporting event tickets or a round of golf. Let Hill Aircraft show you why we have been named the #1 FBO in Georgia multiple times.

Payment for this campaign travel by a tax-exempt organization, which Prosperity USA claims to be, would amount to a taxpayer subsidy of plush accommodations for a political candidate. It appears, according to the Journal Sentinel, that Prosperity USA also forked over $3,700 for iPads used by the Cain campaign.

Koch-Linked Nonprofit Pays Singer of Cain Anthem

The records unearthed by the Journal Sentinel also note a payment of $1,500 to Krista Branch, who sings the Cain anthem, "I Am America" in the campaign's videos. Bice also reports that Branch's husband, who composed the song, works for the Cain campaign:

    Branch's husband, Michael, who wrote the song, has been paid $11,250 in his role as the Cain campaign's Tennessee director and $7,360 as a fundraising consultant.

Prosperity USA also appears to have provided the funding for Prosperity 101, the Koch-linked workplace indoctrination program on which AlterNet (in partnership with the Investigative Fund at the Nation Institute) published an exposé last June. Our reporting showed Prosperity 101, which was fronted by Cain and Wall Street Journal editorial board member Stephen Moore, to be a for-profit venture, with Linda Hansen, the Cain campaign's current fundraiser, listed as its registered agent. Prosperity USA's profit and loss statement shows $12,000 billed to the nonprofit by Hansen's apparently for-profit workplace program, with a note saying that another $30,000 worth of bills from Prosperity 101 had just been submitted by Hansen for payment.

Perhaps Cain should be running for president of some backwards banana republic. One that buys and sells power and votes like the infamous Koch brothers. Conservatives have long run an extensive shadow network of dirty money. Its what they do. Conservatism by definition is the corruption of democracy. That is why they wrap in in the flag in the bible. They have actually got some poor rubes believing they love their country and want the best for America.