Friday, January 11th, 2013 and is filed under Blog, Economy, Issues
In 2010, Congress passed the Dodd-Frank Act, which created the new “Bureau of Consumer Financial Protection (CFPB),” an all-powerful agency vested with the power to limit the choices of consumers in financial markets, making it harder and more expensive to obtain credit. This unaccountable agency operates autonomously within the Federal Reserve and will not be subjected to congressional appropriations or oversight.
Today, the CFPB announced its new statist mandates on mortgage lending institutions and banks, limiting the ability of people to obtain mortgages. Here is the gist of it from CQ (subscription required):
Under the proposed rule, lenders would have to examine consumers’ financial information, including employment status, income and assets, debt and credit history. Lenders could not offer loans with little or no documentation, which was a hallmark of the subprime era.
Borrowers would need to have sufficient assets or income to repay their loan. Lenders would be required to evaluate a borrower’s long-term ability to repay, rather than simply the ability to do so during an initial period.
The rule would set new underwriting standards that lenders would have to meet in order for loans to be considered “qualified mortgages,” a status that provides some protection against future liability. Going forward, the new standard is expected to largely define the type of mortgages that will be available.
For a mortgage to be qualified, it cannot require the borrower to pay excessive points or include risky features. Those would include a term longer than 30 years, interest-only payments or negative-amortization payments that increase the principal amount of the loan.
In an effort to ensure that consumers are able to meet financial obligations in addition to homeownership, qualified mortgages will generally be unavailable to people with debt-to-income ratios greater than 43 percent.
Sounds pretty much like commonsense, right? Banks should only lend to those who have the ability to pay it back? So why would banks need these new regulations?
This is a consummate example of the arsonist acting like the firefighter. Obama’s allies fought for years to create entire offices and programs dedicated to forcing banks to underwrite risky mortgages under the dubious goal of universal home ownership. Concurrently, Fannie Mae and Freddie Mac bought up the lion’s share of the subprime mortgage securities and fueled the toxic asset bubble. The bubble popped, bringing down the entire economy with it.
All we have to show for it is $140 billion in taxpayer bailouts for Freddie/Fannie and a $16.3 billion shortfall at the Federal Housing Administration.
When Obama was a young community organizer, he made a lot of money off of instigating lawsuits against banks for so-called “red-lining.” In addition, let’s not forget that he is a big fan of the Community Reinvestment Act, which is the catalyst for risky mortgages.
Yesterday, I caught up with Congressman David Schweikert (R-AZ), who sat on the Financial Services subcommittee with jurisdiction over housing policy in last Congress. He is not impressed with Obama’s sudden aversion to risky loans. “It is incomprehensible to me how the President can support a program like the Community Reinvestment Act. This government litmus test, amended during the Clinton Administration, played a key role in the housing market crash five years ago. How much more proof do we need to see that the President continues to take us down the wrong path to recovery?”
Additionally, Obama has championed the HAMP (Home Affordable Modification Program) and HARP (Home Affordable Refinance Program) programs, which provide refinancing to high-risk underwater applicants. He backs the Menendez bill, which would essentially open the floodgates on refinancing by eliminating most of the already lax qualifications for refinancing currently in place.
And evidently, he has no problems with 3% down loans from the FHA, so long as the taxpayer is shouldering the risk.
Obama is forcing private institutions to abide by guidelines that are antithetical to the goals he has pursued through government and as a community organizer – the very goals that have encouraged and coerced banks to engage in risky lending practices for years.
What’s next? Will he hire Barney Frank to be the next housing czar?
Cross-posted from RedState.com
Wednesday, January 9th, 2013 and is filed under Debt, News
It’s that time of year again – time to formulate the FY 2014 federal budget. Like every family, business, and organization, the federal government must draft an annual budget. Unfortunately, Obama and the Democrats treat this fundamental necessity with callous disregard.
Pursuant to the 1974 Budget Act, the president must submit a budget to Congress on the first Monday in February, roughly seven months prior to the start of the new fiscal year. After reviewing the budget, along with analysis from the Congressional Budget Office (CBO), each house of Congress must pass its own budget resolution by April 15.
Friday, December 14th, 2012 and is filed under Blog, Foreign Policy
Well, know a man by his friends. Obama is reportedly planning on choosing former arch RINO senator Chuck Hagel as the next Secretary of Defense. That tells us everything we need to know about his plans for a second term foreign policy.
Normally, the Secretary of State is chosen from a group of globalist leftists, irrespective of who is president. However, the Secretary of Defense is typically someone who subscribes to a belief in peace through strength and a strong national security. But Obama is about to choose a man to head Defense that is to the left of the current Secretary of State – if that is even possible.
Chuck Hagel is a big fan of the UN and an ardent supporter of negotiations with Iran, Hamas, and just about every enemy of our country and way of life. He was known as one of the most anti-Israel members of the Senate – ever. Among his many leftwing extracurricular activities, he is the chairman of the Atlantic Council. Here is the front page of their website:
Monday, October 29th, 2012 and is filed under Blog, Elections
As we noted last week, there is some confusion in the polling data that is creating a bimodal projection as to who will ultimately win the election. The national polls seem to show Romney with a steady lead, and with Obama failing to break 47% as an incumbent. On the other hand, a number of state polls show the race tied or Obama slightly ahead in the key battleground states.
However, when you examine the party breakdown of the polls, they are really reflecting the same reality. There is almost a linear correlation between the level of Obama’s support and the size of the Democrat advantage in the given sample (duh?). Most of the national polls show a reasonable D/R split (not overwhelmingly optimistic, but somewhere between 2004 and 2008 turnout), while most of the state polls that show Obama ahead have a sample that is more advantageous to Democrats than 2008! Does anyone really believe that the turnout will be worse for us than 2008 when the enthusiasm level is completely reversed from 4 years ago?
The one common theme from all the polls is that Romney is winning Independents and other key swing constituencies that are needed to win. Some polls have him winning them by historic margins. As such, the only way Obama can win is if the D/R split is more favorable for him than 2008. And that is exactly what PPP and others are predicting. However, if he performs only slightly worse than 2008 in terms of D vs. R turnout, there is no way he can win, given the strong support for Romney among Independents.
Take a look at this chart put together by Josh Jordan of National Review, and tell me how Obama can win. (note that some of this is a day or two outdated, but the overall picture remains the same):
Friday, October 26th, 2012 and is filed under Blog, Elections
There is an emerging narrative percolating throughout the political world; the prospect that Romney could win the popular vote but lose the Electoral College. The theory is predicated on the seemingly contradictory data between state and national polls. National polls seem to show Romney with a consistent 2-4% lead, while state polls show the candidates tied or Obama slightly ahead in Ohio, Iowa, and Wisconsin.
Some analysts are attempting to harmonize the state and national polls by theorizing that Romney’s national lead is driven by historic gains among whites in red states and a strong showing in Pennsylvania and Michigan. They suggest that ultimately the Electoral College boils down to Ohio (or Wisconsin, if Romney loses Ohio), a state where Obama’s much-vaunted ground game and oversaturation of ads could flip the state and the entire election to Obama.
This analysis is dead wrong. Either the state polls are correct, and this is a dog fight, or the national polls are correct, and this is a Romney win. The both cannot reflect reality.
It’s not just that the national polls show Romney ahead by 3%; it’s that 3 respected, yet diverse, national polls converged yesterday on the exact same number in one day – Romney 50% Obama 47% (today Gallup is Romney +5 and ABC/WaPost is Romney +1). So Romney is at 50% and the incumbent is at 47% (how ironic!) with undecided voters likely to break against him in an election defined by the stagnating economy. But it’s more than that. The Washington Post poll has Romney leading by 19-20 among Independents; Rasmussen shows him with a 17-point lead. Romney is now crushing Obama on the economy and even leading in favorability. It is almost impossible to lose the Electoral College under normal circumstances when leading by more than 1% nationally. It’s certainly impossible to lose when polling this well in all the internals.
In order for Romney to win by such margins in the popular vote, yet lose the Electoral College, he would have to outperform Bush in a number of non-swing-states, though he is unlikely to do so.
The math doesn’t add up.
Monday, October 22nd, 2012 and is filed under Blog, Elections
Two weeks before Election Day, all signs point to this being a very tight election. Romney clearly seized the momentum with his debate win two weeks ago – one which Obama failed to stop with his stronger performance last week. Most national polls show Romney with a 2-3 point lead; however, the state polls show an even tighter race.
One thing has not changed in terms of the Electoral College; the election will still boil down to Ohio, Ohio, Ohio. However, there is one major development over the past two weeks that has strengthened Romney’s hand in the Electoral College. The national surge in support for Romney has created such strong momentum in Florida, Virginia, and Colorado – both in the top line numbers and internal numbers – that it’s hard to see him losing any of those states.
So who cares? Well, once we allow for the assumption that Romney wins those three states, it is absolutely impossible – not just improbable – for Obama to win the election without Ohio. Even if he were to run the table in the rest of the battleground states (NH, IA, NV, and WI), he would still come up short. Take a look at how that would work.
Perforce, Obama cannot win without Ohio.
On the other hand, although it is still unlikely that Romney will win without Ohio, he is beginning to open up a legitimate alternative to 270. Many polls show Romney leading in New Hampshire, a reflection of his surge in support from white voters. Moreover, he has the momentum in Wisconsin and Iowa. Unfortunately, he appears to have stalled out in Nevada, polling about 2-3 points behind Obama. Any realistic alternative to 270 bypassing Ohio must include a victory in Wisconsin. Once he wins Wisconsin (from his base of 257), he has 267 votes, and needs to win either N.H.
Of course, this is predicated on the assumption that Obama keeps Nevada, which is a likely result in the event that he wins Wisconsin and Iowa.
Thursday, October 18th, 2012 and is filed under Blog, Issues
Obama employed a useful strategy during Tuesday night’s debate. When pressed about the failures of his record, even on policies that he once openly flaunted, Obama denied that his policies ever existed. Nowhere is this more evident than when he spoke about energy policy.
OBAMA: “So what I’ve tried to do is be consistent. With respect to something like coal, we made the largest investment in clean coal technology to make sure that even as we’re producing more coal, we’re producing it cleaner and smarter.” (President Barack Obama, Presidential Debate, Hempstead, NY, 10/16/12)
Reality: During the 2008 campaign, Obama openly bragged that his cap and trade bill will bankrupt coal-fired plants. “So, if somebody wants to build a coal plant, they can — it’s just that it will bankrupt them, because they are going to be charged a huge sum for all that greenhouse gas that’s being emitted.” (Sen. Barack Obama, Interview With The San Francisco Chronicle’s Editorial Board, San Francisco Chronicle, 1/17/08)
Also, never forget Joe Biden’s moments of candor:
“No Coal Plants Here In America.” (Joe Biden, Remarks At A Campaign Event, Maumee, OH, 9/16/08)
“We’re Not Supporting Clean Coal.” (Joe Biden, Remarks At A Campaign Event, Maumee, OH, 9/16/08)
Thursday, October 18th, 2012 and is filed under Blog, Debt, Economy
In many respects, this country no longer looks like the American Republic that our parents and grandparents experienced. More than ever before, government is destroying private enterprise on the one hand, and offering permanent dependency on the other hand. With all the focus on big bird, binders, and the 47%, the most important figure is the $1.03 trillion – the cost of combined federal and state welfare spending per year.
Total welfare spending has been flirting with the $1 trillion number in recent years, and now according to a new report from the Senate Budget Committee, we have breached that ceiling. The Daily Caller has the details:
The government spent approximately $1.03 trillion on 83 means-tested federal welfare programs in fiscal year 2011 alone — a price tag that makes welfare that year the government’s largest expenditure, according to new data released by the Republican side of the Senate Budget Committee.
The total sum taxpayers spent on federal welfare programs was derived from a new Congressional Research Service (CRS) report on federal welfare spending — which topped out at $745.84 billion for fiscal year 2011 — combined with an analysis from the Republican Senate Budget Committee staff of state spending on federal welfare programs (based on “The Oxford Handbook of State and Local Government Finance”), which reached $282.7 billion in fiscal year 2011.
Wednesday, October 17th, 2012 and is filed under Blog, Taxes
Anyone descending to Earth from Mars to view last night’s presidential debate would come away with the impression that rich people are free loaders and swindlers who pay no taxes, while the poor/middle-class shoulder the lion’s share of the tax burden. Obama incessantly repeated the fallacy that the rich don’t play by the rules. Anyone who lives on planet Earth should be asking, “what planet do you live on, Mr. Obama?”
Unfortunately, instead of uprooting the entire premise related to the demographic share of the tax burden, Romney played defense and swore profusely that he would never cut taxes on the rich. That’s not exactly something conservatives would like to hear.
The problem with the tax issue is that there is a wide bifurcation between the public perception of the tax burden and the reality of who pays taxes. Our system of withholdings is distorting the public perception on the entire tax issue. Withholdings give many people the perception that they pay taxes, even when they don’t. In fact, they often enjoy a negative tax liability. For example, a tax filer might have $6,000 taken out of his pay check throughout the year, but receive a $10,000 check in refundable tax credits at the end of the year. That person actually makes $4,000 from the system and still receives full Social Security benefits (despite the fact that the refundable credits zeroed out that contribution), yet he would think that he pays taxes.
On the other hand, many people who pay a significant amount in taxes don’t appreciate how much they pay. They never factor in gross pay, and are often ignorant of how much they would earn sans Uncle Sam. If we would abolish the withholdings process and have everyone pay taxes once a year, we would be looking at a different electorate. The person in our first example would see that he paid no taxes and actually got a $4,000 check. The person in the latter example would have to write one big fat check at the end of the year. Withholdings truly is a game changer.
Wednesday, October 17th, 2012 and is filed under Blog, Elections
Whenever we analyze the content of presidential debates, we must observe the event with two distinct lenses; one with the lens of a political horserace analyst and another with the lens of a conservative.
In terms of the horserace, this one is real simple. The debate was somewhat of a draw and will not fundamentally alter the current trajectory of the race (which currently favors Romney).
Most debates do not result in one candidate surging in the polls. Both candidates usually stick to their talking points in tight two-minute sound bites. Most of the details of their responses only serve as fodder for political junkies, not the average voter. The first presidential debate was different because Romney scored a knockout punch. It moved the polls and fundamentally altered the course of the race. Obama needed to put in a similar performance to change the dynamic. While he came across as more aggressive than in the last debate, Romney was just as aggressive in responding. Any perceived draw will benefit the current leader in the race, which is Romney.
Moreover, I believe that the superlative and decisive moment came at the end of the debate. The last question was a gift to Romney (in a debate when most of them were gifts to Obama), and Romney delivered. It played into the entire dynamic of the race.
As everyone has already observed, this race should be unwinnable for Obama. He has totally failed, the economy is languishing under a record protracted period of stagnation, and there is no hope and change in the air. No president has ever won reelection with this record. What has kept Obama virtually tied in this race is his successful character assassination of Romney. The last voter in the audience asked the candidates to name one misconception about themselves that they would like to dispel. This question allowed Romney to speak directly to the voters in a very human demeanor. It came off very well. Meanwhile Obama said that he is mischaracterized as a lover of big government when in fact he appreciates free enterprise. Does anyone think that a single voter will buy that?
The bottom line is that Romney needed to come across as steady and likeable, and he largely succeeded. Obama needed to make the case for a second term. Instead, Romney reminded voters of the disasters from his first term.