Runaway Slave
America’s March to Marxism
“Financial Reform” and America’s March to Marxism
by Howard Rich | GetLiberty.org | 07/21/2010
Contrary to Barack Obama’s rhetoric about protecting consumers, his new financial reform law represents a dangerous big government power grab that willfully ignores the true roots of the recent financial crisis.
It is also the latest example of America’s “march to Marxism,” the not-so-gradual implementation of a command economic system in which the free market is taxed and regulated into oblivion while new and expanded government bureaucracies wield unprecedented power. Like last year’s failed economic stimulus (which was nothing but a bureaucratic bailout) and this year’s health care reform law (the largest entitlement expansion in a generation), Obama’s latest Orwellian scheme is once again being sold to the public as a necessary, even responsible measure.
“Because of this reform, the American people will never again be asked to foot the bill for Wall Street’s mistakes,” Obama said. “There will be no more taxpayer-funded bailouts, period.”
Of course as Obama was making this pronouncement, the taxpayer tab for bailing out government-owned mortgage behemoths Fannie Mae and Freddie Mac continued to soar. That bailout will now cost taxpayers at least $400 billion, according to the latest estimate from the Congressional Budget Office, although a deteriorating housing market could push the total above $1 trillion.
Among the chief culprits of the 2008 collapse, Fannie and Freddie became a central repository for much of the toxic debt associated with government-mandated, high-risk loans — like the $2.4 trillion pumped by the government into “mortgages for affordable housing” in 2000.
“Had Fannie and Freddie not been there to buy these loans, most of them would never have been made,” writes Mark A. Calabria, director of financial regulation studies at the Cato Institute. “And had the taxpayer not been standing behind Fannie and Freddie, they would have been unable to fund such large purchases of subprime mortgages.”
Ironically, the chief author of Obama’s so-called reform bill — Rep. Barney Frank (D-Mass.) — has had a front-row seat to this brewing crisis for years. Yet rather than correctly diagnosing and fixing the problem, he used his influence to block efforts that could have helped prevent the meltdown.
“Fannie Mae and Freddie Mac are not facing any kind of financial crisis,” Frank famously said in 2003, accusing then-Treasury Secretary John Snow of “exaggerating” problems at the lending agencies.
Trillions of tax dollars later, it’s painfully clear that it was Frank who was exaggerating (dramatically) the sustainability of government-mandated lending.
Does Obama’s new “reform” legislation address this fundamental problem?
Of course not. In fact, in addition to imposing a slew of new regulations on banks that had nothing to do with the crisis, Obama’s new law maintains the same strict government-mandated lending quotas as before. Accordingly, while Main Street lenders (which provide capital to small businesses across America) are forced to navigate a maze of new regulations and restrictions, the real culprits of the disaster are not only going unpunished — they are being allowed to conduct business as usual while receiving a steady stream of taxpayer-funded bailout money.
Obviously, this is a recipe for an even bigger disaster in the future — as is the law’s “proxy access” provision, which will permit labor unions, environmental activists and “community organizing” groups to bypass existing state laws on corporate director elections and place their representatives on corporate boards of directors. And far from ending bailouts for private sector firms (as Obama has promised) the law’s “orderly liquidation” provision permits faceless bureaucrats at the FDIC to seize control of any firm that the agency deems a threat to “financial stability” — opening the door to bailouts of companies that aren’t even asking for taxpayer largesse.
Make no mistake — this new law is a dramatic escalation of America’s “march to Marxism.”
It is also the latest example of legislation that must be repealed — and a governing philosophy that must be reversed — if America is to avoid being relegated to the ash heap of history.
Taxpayer Tab For Fannie & Freddie
Taxpayer Tab for Fannie, Freddie, Other Housing Bulges by $700 Billion
MoneyNews.com | 21 Jul 2010
Increased housing commitments swelled U.S. taxpayers’ total support for the financial system by $700 billion in the past year to around $3.7 trillion, a government watchdog said on Wednesday.
The Special Inspector General for the Troubled Asset Relief Program said the increase was due largely to the government’s pledges to supply capital to Fannie Mae and Freddie Mac and to guarantee more mortgages to the support the housing market.
Increased guarantees for loans backed by the Federal Housing Administration, the Government National Mortgage Association and the Veterans administration increased the government’s commitments by $512.4 billion alone in the year to June 30, according to the report.
“Indeed, the current outstanding balance of overall Federal support for the nation’s financial system … has actually increased more than 23% over the past year, from approximately $3.0 trillion to $3.7 trillion — the equivalent of a fully deployed TARP program — largely without congressional action, even as the banking crisis has, by most measures, abated from its most acute phases,” the TARP inspector general, Neil Barofsky, wrote in the report.
The total includes Federal Reserve programs and a myriad of asset guarantees, including Federal Deposit Insurance Corp. protection for bank deposits.
The increased government commitments more than offset about a $300 billion decline in the U.S. Treasury’s TARP commitments in the past year as programs have closed and banks have repaid taxpayer funds.
Barofsky also in the report ramped up his criticism of the Treasury’s housing relief efforts, saying that its program to reduce monthly mortgage payments for struggling homeowners was showing “anemic” participation numbers and had failed to “put an appreciable dent in foreclosure filings.”
He said Treasury had refused his repeated recommendations to announce more effective goals and benchmarks for its mortgage modification program, which could reach up to $50 billion in TARP funds.
“Treasury’s refusal to provide meaningful goals for this important program is a fundamental failure of transparency and accountability that makes it far more difficult for the American people and their representatives in Congress to assess whether the program’s benefits are worth its very substantial cost,” Barofsky wrote.
Among other recommendations repeated in the report, Barofsky called for the Treasury to consider making its voluntary mortgage principal reduction program mandatory, saying this would make it less likely for “underwater” homeowners to abandon their properties.
The Treasury has declined to adopt the recommendation, citing the prospect that mandatory principal reduction would cause mortgage servicing firms to opt out of the program and fairness issues in reducing principal for both responsible homeowners hit by value declines and homeowners who overleveraged their properties in refinancings.
U.S. Treasury officials defended the Home Affordable Modification Program, saying that it was still on track to reach its goal to keep 3 million to 4 million homeowners in their homes by the end of 2012 and was adapting to changing conditions by offering forbearance to unemployed people and extra funding for the hardest-hit markets.
Herbert Allison, Treasury assistant secretary for financial stability, said the Treasury often agrees with Barofsky’s recommendations, “but once in a while, we differ on what type of policy will best carry out our mandate.”
The report provoked swift criticism of Obama administration housing policies from U.S. Rep. Darrell Issa, a California Republican who has taken every opportunity to blast the Treasury’s handling of financial bailout programs.
“The fact that the Obama administration is treating TARP like its own personal slush-fund is beyond egregious and a complete betrayal of what the American people were told would be then when their tax-dollars were used to bailout Wall Street,” Issa said in a statement, adding that the housing efforts were “dumping good money after bad.”
The Lazy Critics and Our Response
LTE: Asheville Tea Party
Victor Harrin, Arden | Hendersonville News-Times | July 19, 2010
To The Editor: No one who has followed the Asheville Tea Party was surprised by the Times-News’ article on the tea party not endorsing Jeff Miller, after its primary candidate’s defeat. The Asheville Tea Party is led by ideologically pure Libertarians and those who favor legalizing drugs. They have no use for Republicans or anyone else for that matter.
Dan Eichenbaum, who was registered as a Libertarian until last summer, was the only one of the six candidates who ran on the Republican ticket they ever gave any serious consideration to. And now, in a real shocker (not!), as of last month, the new chairwoman of the group is a former Eichenbaum county coordinator who quit the Henderson County Tea Party because it would not endorse her converted Libertarian candidate.
This is why the Asheville Tea Party saw its tax-day protest go from more than 2,000 participants in 2009 to fewer than 200 this year. Its members had thought they had signed on for a genuine grassroots movement, not a front group for one party or one man.
Most Libertarians I know are principled people who understand that it takes a team to get something done. It’s a shame they aren’t in charge of the Asheville group.
LTE: Libertarians seem to control local party, not conservatives
Victor Harrin, Arden | Asheville Citizen-Times | July 20, 2010
No one who has followed the Asheville Tea Party was surprised by the board’s decision not to endorse Republican Jeff Miller, after the Libertarian-leaning primary candidate’s defeat. They aren’t endorsing Richard Burr over Democrat Elaine Marshall for Senate, either, and he was just ranked the ninth-most conservative U.S. senator. The Asheville Tea Party is led by ideologically “pure” Libertarians who have no use for Republicans or any other type of conservative. This is why the ATP saw its Tax Day protest go from 2,000 participants by some estimates in 2009 to fewer than 200 this year. The members had thought they had signed on for a conservative grass-roots movement. The Libertarians I know understand that it takes a team if we are going to stop Pelosi, Reid and Obama. You are either working against Shuler, or you are supporting Pelosi’s majority. You are either working to re-elect Richard Burr, or you are supporting Harry Reid’s filibuster-proof majority.
If you are an ATP member and you were ever asked if you wanted to drop Burr and Miller, please raise your hand. Nope? Me neither.
RESPONSE
The letter “Asheville Tea Party” (Hendersonville Times-News, July 19) contained several errors.
The Asheville Tea Party is comprised of Republicans, Democrats and Unaffiliated. At present, no one in our leadership is affiliated with the Libertarian Party.
The writer misunderstands the difference between a political party and a political philosophy. Among those Republicans, Democrats, and Unaffiliated in the Tea Party Movement, many hold a libertarian political philosophy. In fact, the conservative-libertarian alliance is a defining characteristic. We maintain a firm belief in the rights of the individual as derived from Natural Law; and in Constitutionally-limited government and free markets.
Contrary to the letter writer’s implication that libertarians are fringe characters, those of us who hold libertarian views are in the comfortable company of Thomas Jefferson, a hero of our American Republic.
The writer claims, “Eichenbaum…was the only one…they ever gave any serious consideration to.” This assertion is false. Every candidate was vetted through an open and fair process and given equal opportunity to earn the endorsement of our membership.
Bizarrely, the writer closes by stating “It’s a shame [more principled libertarians] aren’t in charge of the Asheville group.” The writer should really attempt some investigation before making such wild claims. Call me.
Erika Franzi
Weaverville
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RELATED
How We Endorsed
Asheville Tea PAC | March 9, 2010
What Is Classical Liberalism?
By John C. Goodman
Prior to the 20th century, classical liberalism was the dominant political philosophy in the United States. It was the political philosophy of Thomas Jefferson and the signers of the Declaration of Independence and it permeates the Declaration of Independence, the Constitution, the Federalist Papers and many other documents produced by the people who created the American system of government.
How and Why the Financial Crisis Really Happened
Easy Credit, Hard Landing
The financial insights of Raghuram Rajan.
by Christopher Caldwell | Weekly Standard | July 26, 2010
Rajan offers a bold and convincing diagnosis of how a screw-up in the regulation of poor people’s mortgages in one country has brought the world to the brink of economic disaster, where it teeters still. He goes beyond the proximate causes of the problem—the subprimes and derivatives and trade imbalances and the like. The ultimate cause, Rajan convincingly argues, is a widening of economic inequality that American politicians of both parties found politically intolerable, and chose to fix by turning the credit market into an under-the-table welfare state…
…This is an account of what ails us that is radically at odds with the familiar tale of greedy bankers in $5,000 suits. “Almost every financial crisis has political roots,” Rajan writes. The credit market—at least as regards housing—was distorted by government policy, not by a sudden and mysterious escalation in “greed.” The trends that shook the world economy came out of Fannie Mae and Freddie Mac, out of the Federal Housing Administration, and out of their “regulator,” the U.S. Department of Housing and Urban Development.
By 2000, HUD required that low-income loans make up 50 percent of Fannie and Freddie’s portfolios. Out of “compassionate conservatism,” perhaps, the Bush administration raised that mandate to 56 percent. Rajan cites Fannie Mae’s former chief credit officer, Edward Pinto, who notes that, by 2008, “the FHA and various other government programs were exposed to about $2.7 trillion in subprime and Alt-A loans, approximately 59 percent of total loans to these categories.” Peter Wallison of the American Enterprise Institute found that government-mandated loans accounted for two-thirds of “junk mortgages.”
Another way of looking at this problem is provided in a study done by Rajan’s Chicago colleagues Atif Mian and Amir Sufi. They found that, if you look at the period between 2002 and 2005, the number of mortgages obtained in a given ZIP code “is negatively correlated with household income growth.” In other words, lenders preferred un-creditworthy borrowers to creditworthy borrowers. In a market governed by “greed” and undistorted by government pressure, such a result would make no sense…
Not Taxed Enough
Administration Defends Insurance Mandate as a Tax
By Robert Pear | New York Times | July 16, 2010
When Congress required most Americans to obtain health insurance or pay a penalty, Democrats denied that they were creating a new tax. But in court, the Obama administration and its allies now defend the requirement as an exercise of the government’s “power to lay and collect taxes.”
And that power, they say, is even more sweeping than the federal power to regulate interstate commerce.
Administration officials say the tax argument is a linchpin of their legal case in defense of the health care overhaul and its individual mandate, now being challenged in court by more than 20 states and several private organizations…
RELATED
Petition to repeal Obamacare
By Caroline May | The Daily Caller | 07/16/2010
Heritage Action for America, the Heritage Foundation’s grassroots advocacy spin-off, is urging congressional leaders to sign on to Iowa Rep. Steve King’s discharge petition, aimed at repealing Obamacare.
Nullification
Thomas Woods On Nullification
Press TV | July 15, 2010
Woods is the author of Nullification: How to Resist Federal Tyranny in the 21st Century and Rollback: The Battleplan Against Big Government.
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The Right To Nullify This Government
by Thomas E. Woods, Jr. | 07/13/2010
The passive approach of crossing our fingers and hoping Washington will follow the Constitution has not worked. The only surprising thing about it is that anyone could have expected it to work in the first place. It is long past time for those of us who want to confine the federal government to its constitutional limits to try something different.
Interview with a Zombie
by Tom Woods | June 29th, 2010
YouTube video shows you how the mainstream media will handle the issue, and how we should respond.
ATP and ATPPAC lose credibility
EDITORIAL
Bill Fishburne | Asheville Tribune | July 15, 2010
A political organization such as the Asheville Tea Party has little currency other than its credibility. Sadly, the ATP and its political action committee, the ATPPAC, seem to be broke right now.
We have written before about the ATP’s ineptitude and intentional misleading of its members, and the public. The most recent instance came last week with the ATP’s claims to having received an award from The Heritage Foundation.
Asheville Tea Party Receives Award from Heritage Foundation
[Dear Erika Franzi,]
ASHEVILLE – The Asheville Tea Party is proud to announce that it is a recipient of the Heritage Foundation’s Henry Salvatori Prize for American Citizenship. Enclosed with the award was the following letter from Heritage president, Edwin J. Feulner:
“It is our pleasure to award the 2010 Salvatori Prize for American Citizenship to the citizen-patriots of the Tea Party Movement…”
“This year, because of the significance of the Tea Party movement — bringing America’s first principles to the fore of public debate, motivating millions of their fellow Americans to get involved in the effort to revive those principles, and reinvigorating the larger movement in the United States to reorient American politics toward those principles — the Henry Salvatori Prize for American Citizenship has been awarded to the Tea Party movement, and honors all those American citizens nationwide who are newly committed to the renewal of American liberty.
“Appropriate for a spontaneous, nationwide movement, the Prize does not recognize any one individual or group…
(Signed) Edwin J. Feulner, Ph.D. President.”
In addition to a handsome certificate of recognition, the Asheville Tea Party received a “First Principles Field Kit”, containing the books The Heritage Guide to the Constitution, We Still Hold These Truths: Rediscovering Our Principles, Reclaiming Our Future by Matthew Spalding, The Founder’s Almanac, the trilogy Why States? The Challenge of Federalism, How To Read the Federalist Papers, and Reading the Right Books: A Guide for the Intelligent Conservative, and 3 pocket Constitutions.
How is this misleading? the award was granted to the movement as a whole. It did not mention the Asheville Tea Party. In fact, it specifically stated, “the Prize does not recognize any one individual or group.”
The Asheville branch of the Tea Party also confuses its purpose with the zeal/neivety of its libertarian political leadership. It has blurred the blurry distinctions between the ATP, a 501(c)(3) nonprofit corporation, and its Political Action Committee, the ATPPAC. They meet concurrently every Friday night at 6 p.m. Essentially, both have the same leadership.
The ATP’s brushes with credibility came to a head March 8, 2010, when they put on a public forum for Congressional candidates that was nothing but a set-up for former Libertarian candidate Dr. Dan Eichenbaum. The ATP leadership, which includes several current or former Libertarian Party stalwarts, wrote the questions in advance, kept them secret, and did not allow questions from the floor. We point out the candidates were running in the Republican primary, not attending a Libertarian district convention.
Dr. Eichenbaum had previously run for office as a Libertarian. In the opinion of this newspaper and many impartial observers, the deck was decidedly stacked in his favor. At the forum, the ATP did not allow any of them to distribute campaign literature prior to or after the event. they controlled the message, controlled the questions, and manipulated the process.
Piling it on, a complex and nearly-inexplicable weighted voting system prevented the audience from simply selecting one candidate as the winner. To no one’s surprise, considering the questions, Eichenbaum was the clear winner. The ATPAC endorsed him and campaigned for him heavily. Their campaigning turned out a majority for Eichenbaum in Buncombe County, but turned off the Republican voters to the extent that a near-historic low of only 13 percent bothered to cast their ballots.
Eichenbaum is an articulate, engaging personality with well thought out positions on a wide variety of topics. He acknowledges he was a Libertarian “for six years” or so, and we acknowledge he would have been a very good Republican candidate. The fact is, Eichenbaum lost, Jeff Miller won, and the ATP and ATPPAC picked up their marbles and went home.
The ATP and ATPAC need to separate themselves and their leadership. Right now, they are confusingly indistinguishable. If someone shows up at an ATP event to protest taxation, are they also supporting the ATPPAC-endorsed candidate Dickie Green for Sheriff? If they go to an event to protest or influence a vote by Rep. Heath Shuler, are they allowed to carry signs supporting Republican candidate Jeff Miller?
The ATP supports the Constitution, lower taxation and limited government. Nationwide it is a grass-roots movement that, contrary to the recent NAACP resolution, is in no way racists. As a 501(c)(3), they are allowed to conduct public education campaigns on the issues. Anti-taxation rallies certainly fit that requirement. The ATPPAC supports political candidates. Does the guy on the street see the difference? Does the ATP?
It is incredible to us that the ATPAC not only endorsed a candidate in the primary, they came away as sore losers afterwards. Elections are A or B events. Support A, or support B. Nothing else matters. You’re not in the game.
The Asheville Tea Party today reminds us of an old rotary aircraft engine. It turns great gobs of energy into noise.
###
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Asheville Tribune
Erika Franzi and Tim Peck | May 17, 2010
So, the Asheville Tribune takes issue with the methods employed by the nonpartisan Asheville Tea Party in their District 11 congressional debate and straw poll that contributed ultimately to an endorsement of Dan Eichenbaum.
Asheville Tea Recognized by Heritage Foundation
by Erika Franzi | July 5, 2010
The Asheville Tea Party is proud to announce that it is a recipient of the Heritage Foundation‘s Henry Salvatori Prize for American Citizenship.
Tea Party Under Attack . . . Again
As NAACP aims to stay in national debate, charge of tea party racism draws fire
By Krissah Thompson | Washington Post | July 14, 2010
One thing is clear as the NAACP gathers this week for its 101st annual meeting: The civil rights organization is intent on being seen as still relevant…
Tea Party Preempts ‘Racist’ Resolution, Condemns ‘Bigoted’ NAACP
FoxNews.com | July 14, 2010
The nearby St. Louis Tea Party had an all-hands-on-deck response to the NAACP’s plan. The group has drafted a resolution of its own condemning the civil rights group for reducing itself to a “bigoted” and “partisan attack dog organization.”
Gotta Get the Blacks Stirred Up
By Neal Boortz | July 14, 2010
You’ve probably heard by now that the NAACP has formally accused the tea parties of racism. The resolution .. debated behind closed doors at the convention .. “calls on the tea party and all people of good will to repudiate the racist element and activities within the tea party,”.
OK … let me ‘splain this to you. It’s really not all that hard. So easy to understand, in fact, that a government education should be all you need to “get it.”
The Community Organizer is in trouble, and he’s dragging down the Democrat Socialist party with him. Even Obama’s chief mouthpiece is suggesting that the Republicans might take control of the house in the November elections. Independents are bailing on Obama as they come to realize the damage he’s not only done to our economy .. but to the economic futures of our children and grandchildren.
It’s time for damage control. Time to head to the solid and dependable Democrat voter base and get them energized. And just who are those solid and dependable Democrat voters? Union workers and blacks. So now we find Obama’s travels putting an emphasis on speeches to and photo ops with union workers. While Obama concentrates on the unions, the NAACP is working on the black voters. The tactic is simple and effective. Scream racism. Put the race pimps on horseback and run them up and down the urban streets shouting “The racists are coming! The racists are coming!”
I suppose this is going to work to some extent. Just as there are wizened citizens who will buy that “if you vote for Republicans they’re going to take away your Social Security” nonsense; there are surely blacks that will now rush to the polls in November to turn back the “racists.” The left has a problem though. They have so overused the “racism” word that most people in this country – and many blacks – now consider the word to have little serious meaning. The real-world working definition of the word “racist” now would read something like this: “Any action or utterance seen as opposing any belief or position held by a person who is not a member of the Caucasian race.”
The NAACP and Obama dog washers of various stripes are going to find out that black Americans worry about the futures of their children the same way white Americans do, and they recognize that the massive debt we are incurring under Obama’s rule will ultimately condemn their children to a life of servitude to government.
By the way … the NAACP cited this urban legend about all of those tea partiers shouting epithets and racial insults at black members of congress back during the ObamaCare drama. You do realize that there are no audio or video recordings out there which support this myth, don’t you? Well … you are now.
RELATED
The National Association for the Advancement of Coddled People
Michelle Malkin | July 14, 2010
In just a few short decades, the stalwart strivers for equality have turned into coddled whiners for hypersensitivity. The NAACP is a laughingstock. The group no longer represents the best interests of oppressed minorities, but the thin-skinned whims of the black elite and the ravenous appetite of the Nanny State. Establishment civil rights leaders now use their once-compelling moral authority to hector, bully and shake down corporate and political targets.
The NAACP’s Racist Agenda
By Frances Rice | July 13, 2010
Through its double vision racial lens, the National Association for the Advancement of Colored People (NAACP) is falsely declaring as racist Tea Party Movement activists—average Americans who do not agree with the socialist agenda of the Democratic Party—while hypocritically giving a pass to Democrats who engage in real racism.
Does FreedomWorks Speak For You?
Give Us Liberty: A Tea Party Manifesto
by Dick Armey and Matt Kibbe
Dick Armey’s FreedomWorks organisation has become front and centre in the Tea Party movement “New York Times” – one of the fastest-growing and most talked-about political phenomena in recent memory. With its strong Anti-Washington bent, Tea Party followers are outraged by the false conservatism of the Bush administration, which did nothing to shrink government spending or the deficit, and are further alarmed by President Obama’s massive bank bailouts, wasteful stimulus spending, and health-care legislation, according to Armey. In “Give Us Liberty”, the former House Majority Leader defines what the tea partiers are fighting for – including lower taxes, smaller government, and more deregulation – and how citizens can join the cause. This activist manifesto contains a battle-tested, step-by-step guide to organising and effecting change in any community. Based on the successful experiences of Tea Party movement leaders, it includes tips on building a local network, composing letters-to-the-editor, signage, organising effective and well-timed protests, and more.
Erika Franzi
Tim Peck
atpginny
teapacjane
