News And Views 10-10-09

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Fighting starts over Obama prize

DNC humor Czar has no sense of humorFinally,someone speaks out in defense of Glenn Beck

Wht the GOP should give O a prize

Dems change stance on miltary and Afghanistan

Meet The Man Responsible For Obama Being President…As Well As Our Economic Crisis

So who or what was the deciding factor behind Barack Obama’s election victory over John McCain?

ACORN?

David Axelrod?

Voter fraud?

Media bias?

These are just a select few of the multitude of theories posed by various political pundits as the reasons behind McCain’s defeat.
And they all carry a certain degree of validity.

However, we here at The Freedom Medium are of the opinion that McCain lost the Presidential election in large part due to the actions (and lack of action) of one man.

This guy.

The man pictured is Paul Kanjorski, a member of the U.S. House Of Representatives from Pennsylvania’s 1tth Congressional District.

So how did this man become a factor in Obama’s election victory?

It happens that there are a number of political analysts who believe that America’s economy going into a tailspin during the primaries, and carrying on into the election cycle itself, was one of the major factors in McCain’s defeat.

One of the favorite slogans of the Democrats, with the whole-hearted support of the mainstream media, was that a vote for McCain would simply be a continuation of the “failed economic policies” of George Bush.

And millions of American voters, who did not bother to learn who and what was truly behind the economic downturn were gullible enough to swallow this propaganda, were concerned enough to turn the tide in Obama’s favor.

Which still leaves the question of what part Congressman Kanjorski play in this dual debacle?

The Congressman is a senior ranking member of the House Financial Services Committee.

The Committee oversees the aspects of the nation’s housing and financial services sectors, including banking, insurance, real estate, public and assisted housing, and securities.

The Committe reviews laws and programs relating to the U.S. Department of Housing and Urban Development, the Federal Reserve, the FDIC, Fannie Mae and Freddie Mac, and international development and finance agencies such as the World Bank and the International Monetary Fund.

Another duty of the committee is to ensure enforcement of housing and consumer protection laws such as the U.S. Housing Act, The Truth In Lending Act, The Fair Credit Reporting Act, as well as numerous other tasks related to the housing markets.

He is also the Chairman of the Capitol Markets, Insurance and Government Sponsored Enterprises Subcommittee.
The primary duty of this position is the review and oversight of the very government agencies at the root cause of our current economic situation, Fannie Mae and Freddie Mac.

If all of this wasn’t enough, Kanjorski also spearheaded the efforts to enact the New Markets Initiative, one aspect of which was to enhance the availability of and reduce the cost of credit to targeted borrowing sectors.

Even though most of us have never heard of Congressman Kanjorski, the evidence of how much attention he paid to his duties is all around us.

To say that his job performance left a little something to be desired would be a short-sighted statement.
About 787 BILLION DOLLARS short!

So how was the Congressman such a dismal failure in carrying out the duties of his office?

It cannot be blamed on inexperience, he has been a member of Congress for more than 24 years.

Perhaps he didn’t have time to pay attention because he was too busy counting the campaign contributions he received from the National Association of Realtors PAC.

These folks sold a lot of houses, and made a ton of money before the tide started to turn.
Hell, they are still making money re-selling the foreclosed homes they sold in the first place!

And the way I read the data from federal election filings, they saw fit to repay the Congressman by spending more money on mailings and political ads during the last election cycle on behalf of Congressman Kanjorski than they did for any other member of Congress.

This may have been a factor in Kanjorski winning re-election to a 13th term in spite of a serious challenge from Hazleton Pennsylvania mayor Lou Barletta.

So there you have it.

Congressman is asleep at the switch, the housing market goes into the toilet, and the rest of the American economy starts to fall like a house of cards.

His fellow Democrats, never admitting to their part in this travesty, play upon the fears of the American public, and use these failures on their part to help ensure the election of a man who every day seems destined to go down in history as America’s first socialist President.

Mr. Kanjorski, you can be proud of yourself, you did a hell of a job.

China Warns Federal Reserve: Stop Printing Money!

Richard Fisher, president of the Dallas Federal Reserve Bank, said: “Senior officials of the Chinese government grilled me about whether or not we are going to monetise the actions of our legislature.”

“I must have been asked about that a hundred times in China. I was asked at every single meeting about our purchases of Treasuries. That seemed to be the principal preoccupation of those that were invested with their surpluses mostly in the United States,” he told the Wall Street Journal.

His recent trip to the Far East appears to have been a stark reminder that Asia’s “Confucian” culture of right action does not look kindly on the insouciant policy of printing money by Anglo-Saxons.

Mr Fisher, the Fed’s leading hawk, was a fierce opponent of …Read the rest of this entry

Glenn Beck: What America Wants

What is your preference as to the size of the government?

Do you support President Obama?

What are your thoughts regarding the financial future of the United States?

Is it a good or a bad idea to raise taxes during an economic downturn?

Do you trust the government?

Watch the Glenn Beck report, and see how your fellow Americans responded to this survey.

Peter Schiff Was (And Is Still) Correct on the Financial Crisis

I am man enough to admit I was wrong about Peter Schiff. I thought he was a “doom and gloomer” who was incapable of being optimistic about the economy for whatever reason. Boy was I wrong.

The problem was that I wanted Schiff to be wrong, and I wanted his warnings to be exaggerations like many of the people you will see in this video. I did not want to believe that the money I had in the market was in danger because of a coming financial crisis from the mortgage industry. And seeing smart people like Ben Stein and Neil Cavuto downplaying or dismissing Schiff’s statements was the only excuse I needed to dismiss him myself.

I wish I could have that one back, but I can’t.

What I can do though is heed what Schiff is saying now, and I suggest everyone in the country do the same.

In the following video Schiff directly addresses the problems from 2005 through 2008 that have resulted in the current recession. Those problems were government interference.

Schiff explains that for too long the government was borrowing and spending too much because of cheap cash coming primarily from China. (China has loads of cash from selling products to wealthy consumers in the US. To increase their wealth, China invests that cash in US Treasury Bonds to gain interest. These interest rates are relatively low, but China gains because of the enormous amount of cash they are investing at what is supposed to be no risk. The result is China essentially finances US debt.)

Not investing cheap Chinese cash responsibly, the federal government promoted a culture of consumer borrowing and spending to keep our new service based economy growing. This was facilitated by the Federal Reserve who kept interest rates artificially low, which incentivized more and more borrowing and consumption.

Schiff argues that this cycle was not free market, capitalist economics and therefore was not sustainable. The market should have been determining interest rates all along and the government should have acted more responsibly, promoting savings and production. It is the government’s interference in the free market that caused the problem, and their increased interference will only make the current problems even worse.

Schiff argues that our deflationary recession will soon become an inflationary depression if the government does not reverse the course it is taking. The enormous increases in the money supply (printed by the Fed) and government borrowing and spending (Obama’s budget with a $1.8 trillion deficit) will no doubt result in inflation. In fact that is the desired result to combat the current deflation. But since this kind of government intervention has never worked in the past, the prospects of future experiments do not instill much confidence.

Schiff’s recommendation does not require the government do nothing though. If the government starts promoting savings and reduction of debt again while reallocating resources back to sectors of the economy that produce goods, the recession will be much shorter lived. However, if they continue to promote consumer borrowing and spending, as they currently are, our problems could and probably will get much worse.

As you watch the video, you will see that in spite of how correctly Schiff has called it in recent years, people are still reluctant to adopt his views. Mark Haines of CNBC is a perfect example, unprofessionally poking fun at Schiff at the end of the video. Not sure where Haines, a reporter and lawyer, thinks he gets authority from on these things. I will defer to Schiff on subjects of economics.

Milton Friedman…Path To Socialism Parts One And Two

Once again we present the man that all of of us here at Freedom Medium are fans of, Milton Friedman.

In this two-part video, Mr. Friedman explains the differences between individual liberty and economic freedom vs. collectivism.

He makes an outstanding case for human prosperity being related to economic well being.

Path to Socialism, Part One:

Path to Socialism, Part Two:

Glenn Beck – Wealth Destruction, Government Style

I can see why the folks at CNN showed Glenn Beck the door.
Frankly, I’m surprised he lasted as long as he did.
What he has to say makes way too much sense for the people in charge of the Communist News Network.

In this video clip, he mentions how the Federal Reserve hopes to boost the economy by buying debt from our Treasury.
Then he asks the obvious question, something his colleagues in the mainstream media have failed (or refused) to do.

Where is the Federal Reserve getting the money to do this?

Shocking Video Unearthed! Democrats in Their Own Words Covering Up The Fannie Mae, Freddie Mac Scam That Caused Our Economic Crisis

Yesterday I did a posting, The New York Times Sees The Future, which contained an article from 2003 showcasing how Republicans in Congress were calling for greater oversight of lending giants Fannie Mae and Freddie Mac.
Now that the Democrats control the House, the Senate, and the White House, they are trying to lay the blame for the ongoing decline of our economy on the backs of everyone except those who are truly responsible.
Are Democrats incapable of telling the truth?
Or are they suffering from short-term, very selective memory lapses?
Some of us don’t forget.

The New York Times Sees The Future

Not really.

Although the New York Times has some really off the wall people on it’s staff, it has yet to hire a psychic.

But the following article did appear in the Sept.11th, 2003 edition.
I guess no one read it.

New York Times
September 11, 2003

New Agency Proposed to Oversee Freddie Mac and Fannie Mae

By STEPHEN LABATON

The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.

Under the plan, disclosed at a Congressional hearing today, a new agency would be created within the Treasury Department to assume supervision of Fannie Mae and Freddie Mac, the government-sponsored companies that are the two largest players in the mortgage lending industry.

The new agency would have the authority, which now rests with Congress, to set one of the two capital-reserve requirements for the companies. It would exercise authority over any new lines of business. And it would determine whether the two are adequately managing the risks of their ballooning portfolios.

The plan is an acknowledgment by the administration that oversight of Fannie Mae and Freddie Mac — which together have issued more than $1.5 trillion in outstanding debt — is broken. A report by outside investigators in July concluded that Freddie Mac manipulated its accounting to mislead investors, and critics have said Fannie Mae does not adequately hedge against rising interest rates.

”There is a general recognition that the supervisory system for housing-related government-sponsored enterprises neither has the tools, nor the stature, to deal effectively with the current size, complexity and importance of these enterprises,” Treasury Secretary John W. Snow told the House Financial Services Committee in an appearance with Housing Secretary Mel Martinez, who also backed the plan.

Mr. Snow said that Congress should eliminate the power of the president to appoint directors to the companies, a sign that the administration is less concerned about the perks of patronage than it is about the potential political problems associated with any new difficulties arising at the companies.

The administration’s proposal, which was endorsed in large part today by Fannie Mae and Freddie Mac, would not repeal the significant government subsidies granted to the two companies. And it does not alter the implicit guarantee that Washington will bail the companies out if they run into financial difficulty; that perception enables them to issue debt at significantly lower rates than their competitors. Nor would it remove the companies’ exemptions from taxes and antifraud provisions of federal securities laws.

The proposal is the opening act in one of the biggest and most significant lobbying battles of the Congressional session.

After the hearing, Representative Michael G. Oxley, chairman of the Financial Services Committee, and Senator Richard Shelby, chairman of the Senate Banking Committee, announced their intention to draft legislation based on the administration’s proposal. Industry executives said Congress could complete action on legislation before leaving for recess in the fall.

”The current regulator does not have the tools, or the mandate, to adequately regulate these enterprises,” Mr. Oxley said at the hearing. ”We have seen in recent months that mismanagement and questionable accounting practices went largely unnoticed by the Office of Federal Housing Enterprise Oversight,” the independent agency that now regulates the companies.

”These irregularities, which have been going on for several years, should have been detected earlier by the regulator,” he added.

The Office of Federal Housing Enterprise Oversight, which is part of the Department of Housing and Urban Development, was created by Congress in 1992 after the bailout of the savings and loan industry and concerns about regulation of Fannie Mae and Freddie Mac, which buy mortgages from lenders and repackage them as securities or hold them in their own portfolios.

At the time, the companies and their allies beat back efforts for tougher oversight by the Treasury Department, the Federal Deposit Insurance Corporation or the Federal Reserve. Supporters of the companies said efforts to regulate the lenders tightly under those agencies might diminish their ability to finance loans for lower-income families. This year, however, the chances of passing legislation to tighten the oversight are better than in the past.

Reflecting the changing political climate, both Fannie Mae and its leading rivals applauded the administration’s package. The support from Fannie Mae came after a round of discussions between it and the administration and assurances from the Treasury that it would not seek to change the company’s mission.

After those assurances, Franklin D. Raines, Fannie Mae’s chief executive, endorsed the shift of regulatory oversight to the Treasury Department, as well as other elements of the plan.

”We welcome the administration’s approach outlined today,” Mr. Raines said. The company opposes some smaller elements of the package, like one that eliminates the authority of the president to appoint 5 of the company’s 18 board members.

Company executives said that the company preferred having the president select some directors. The company is also likely to lobby against the efforts that give regulators too much authority to approve its products.

Freddie Mac, whose accounting is under investigation by the Securities and Exchange Commission and a United States attorney in Virginia, issued a statement calling the administration plan a ”responsible proposal.”

The stocks of Freddie Mac and Fannie Mae fell while the prices of their bonds generally rose. Shares of Freddie Mac fell $2.04, or 3.7 percent, to $53.40, while Fannie Mae was down $1.62, or 2.4 percent, to $66.74. The price of a Fannie Mae bond due in March 2013 rose to 97.337 from 96.525.Its yield fell to 4.726 percent from 4.835 percent on Tuesday.

Fannie Mae, which was previously known as the Federal National Mortgage Association, and Freddie Mac, which was the Federal Home Loan Mortgage Corporation, have been criticized by rivals for exerting too much influence over their regulators.

”The regulator has not only been outmanned, it has been outlobbied,” said Representative Richard H. Baker, the Louisiana Republican who has proposed legislation similar to the administration proposal and who leads a subcommittee that oversees the companies. ”Being underfunded does not explain how a glowing report of Freddie’s operations was released only hours before the managerial upheaval that followed. This is not world-class regulatory work.”

Significant details must still be worked out before Congress can approve a bill. Among the groups denouncing the proposal today were the National Association of Home Builders and Congressional Democrats who fear that tighter regulation of the companies could sharply reduce their commitment to financing low-income and affordable housing.

”These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis,” said Representative Barney Frank of Massachusetts, the ranking Democrat on the Financial Services Committee. ”The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.”

Representative Melvin L. Watt, Democrat of North Carolina, agreed. ‘I don’t see much other than a shell game going on here, moving something from one agency to another and in the process weakening the bargaining power of poorer families and their ability to get affordable housing,” Mr. Watt said.

Source of “Credit Crisis” and TARP Coming To Light

More light is being shed now on reasons why the federal government determined it was necessary to step in and take immediate action in the U.S. financial system late last year, appearing to have averted an electronic run on money market mutual funds by doing so.

Representative Paul Kanjorski – (D) Pennsylvania – told CSPAN last month that on September 18, 2008 within an “hour or two” $550 billion was pulled out of U.S. money market accounts prompting the Treasury Department to get involved. Treasury acted quickly to  ”close the operation” down and announce a gurantee of $250,000 per account in order to ease the panic. He went on to say that by Treasury’s own estimations, up to $5.5 trillion would have been pulled out of the financial system of the U.S. by the end of the day. Had they not gotten involved, this would have led to a collapse of the world economy and annihilation of the U.S. financial system.

The next day the President held a press conference in the Rose Garden at the White House, hinting at the previous day’s averted disaster, and announcing new measures by the federal government, the Federal Reserve, and the FDIC to ease the decrease in confidence. Those aware of what was happening at the time then used these events to get the “bailout bill” eventually pushed through Congress and signed into law last October. Treasury Secretary Henry Paulson then forced the TARP money onto the country’s major banks, whether they wanted it or not,  and now members of Congress, including Kanjorski, are unhappy with how those banks are spending the money.

Though much of this has been tied to the failure of Lehman Brothers three days before, it is still yet to be revealed who exactly was behind the draw down of the $550 billion from the money market accounts. It is an enormous amount of money to be pulled in one or two hours. It would be very interesting to find out which institutions, individuals, and/or countries were behind the massive electronic run on the banking system and if it was a coordinated effort. Hopefully the truth on this subject will continue to come to light and these questions will be answered.

Read more and watch video of Kanjorski and Bush here.

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