Sunday, July 31, 2011
The Debt-Ceiling Diversion
by Robert Ringer
Wednesday, July 27, 2011
Watching the nonstop commentaries on television about the debt-ceiling debate only reinforces the reality that most people — including many perceived conservatives — still don’t get it. If they did, they would not allow themselves to be diverted by a political circus.
It amazes me how the vast majority of conservatives — both in and outside of the media — still take Barack Obama seriously and believe he is desperately trying to save the U.S. from economic disaster. Don’t get me wrong. Barack Obama wants to do what is right for America, but his vision of “right” is wealth redistribution on a massive scale carried out by an all-powerful federal government.
As Obama continues to toy with Republicans over raising the debt ceiling, he is well aware that the continuation of his policies will destroy the U.S. economy beyond repair. I believe his strategy from the outset has been to follow the Saul Alinsky model: Win the presidency through a semi-legitimate election, then tighten your grip over everything and everybody, move swiftly to create economic chaos, and use the chaos you’ve created to establish a dictatorship.
Now don’t go giving Obama too much credit for originality. He’s really just a slick and clever copycat. Getting elected and then using your powers to eliminate all competition is an old trick used by power-hungry thugs throughout history.
Of all the dictators over the past hundred years, I believe Obama’s rise to power mirrors that of Adolf Hitler’s more than anyone else. I know, I know … I can practically hear readers chuckling. Enslaved people throughout history have a propensity for chuckling — until they wake up one morning and find themselves in chains. So, by all means, feel free to chuckle — but do hear me out.
Though most people don’t realize it, Hitler was legitimately chosen to be chancellor of Germany in 1933 by President Paul von Hindenburg. At his swearing in ceremony, Hitler faithfully repeated the oath of office: “I will employ my strength for the welfare of the German people, protect the Constitution and laws of the German people, conscientiously discharge the duties imposed on me, and conduct my affairs of office impartially and with justice to everyone.”
Nice words … similar to those uttered by Obama when being sworn into office. Hitler was a charming, eloquent speaker who carried on incessantly about change. (Sound familiar?) Then, once elected, he moved quickly to establish a dictatorship — accomplishing that seemingly impossible feat in fifty-two days. Obama moved swiftly as well, but opposing forces in America made it impractical to establish a quick dictatorship.
The upstart Nazi Party (which was the commonly used name for the National Socialist German Workers’ Party … repeat, Socialist) staged a slobbering love affair between Hitler and the German people. (Sound familiar?) When Hitler spoke for the first time as chancellor, it was said that “he was greeted with an outpouring of worshipful adulation unlike anything ever seen before in Germany.” (Sound familiar?)
In The Road to Serfdom, F.A. Hayek explained the way countries travel the road from democracy to dictatorship:
It is important to remember that, for some time before 1933, Germany had reached a stage in which it had, in effect, had to be governed dictatorially. … Hitler did not have to destroy democracy; he merely took advantage of the decay of democracy and at the critical moment obtained the support of many to whom, though they detested Hitler, he yet seemed the only man strong enough to get things done.
Under the Articles of Confederation, the central government of America was very weak – which was a good thing. It was true then, and it’s true now: You can have a strong government and a weak people, or a strong people and a weak government – but you cannot have both. Today, we have a draconian, out-of-control government and a very weak people.
Arguably, democracy in this country started to break down in 1787 when the Constitution created a strong federal government. It got worse — much worse — under the fascist policies of Woodrow Wilson’s reign from 1912 to 1920. Then, beginning in 1932, FDR’s failed socialist policies took away even more individual freedom from American citizens. And the final disintegration of true democracy in the U.S. was catalyzed by the left-wing revolutionaries of the sixties.
So if you’re wondering how Obama and his Marxist cronies have been able to violate the Constitution as though it didn’t exist, the answer is that they are merely taking advantage of the decay of democracy in the U.S. that was already present when they came to power. While Americans have been busy focusing on sports, reality TV, eating out three nights a week, and trying to pay their mortgages, the fascistic socialists in Washington have been quietly working to establish a dictatorship based on the ruins of our democracy (which actually began as a republic).
Get it? I hope so. Because if a vast majority of everyday folks don’t get it soon, it will be too late. As I have repeatedly said, the debt-ceiling debate is nothing more than a distraction from the real, underlying problem we all face: We are losing our freedom.
Our focus should be on stopping Barack Obama and his Marxist allies in Washington from establishing a communist dictatorship — politely referred to by conservative media commentators as an “imperial presidency.” But regardless of what one calls it, the important thing to understand is that under a dictatorship, everything else becomes irrelevant — including the debt-ceiling “crisis” that political junkies are spending so much time fretting about.
To be forewarned is to be forearmed.
You have permission to reprint this article so long as you place the following wording at the end of the article:
Copyright © 2011 Robert Ringer
ROBERT RINGER is the author of three #1 bestsellers and host of the highly acclaimed Liberty Education Interview Series, which features interviews with top political, economic, and social leaders. Ringer has appeared on numerous national talk shows and has been the subject of feature articles in such major publications as Time, People, The Wall Street Journal, Fortune, Barron's, and The New York Times.
To sign up for his one-of-a-kind, pro-liberty e-letter, A Voice of Sanity, visit: www.robertringer.com
Poofness - 7-31-11 Get That Black Man Out Of The WH!
Sent: Sunday, July 31, 2011 3:29 PM
To: 2goforth@Safe-mail.net
Subject: Get That Black man out of the WH!
We Didn't Start The Fire Lyrics
Artist(Band):Billy Joel
Harry Truman, Doris Day, Red China, Johnnie Ray
South Pacific, Walter Winchell, Joe DiMaggio
Joe McCarthy, Richard Nixon, Studebaker, television
North Korea, South Korea, Marilyn Monroe
Rosenbergs, H-Bomb, Sugar Ray, Panmunjom
Brando, "The King and I", and "The Catcher in the Rye"
Eisenhower, vaccine, England's got a new queen
Marciano, Liberace, Santayana goodbye
CHORUS
We didn't start the fire
It was always burning
Since the world's been turning
We didn't start the fire
No we didn't light it
But we tried to fight it
Josef Stalin, Malenkov, Nasser and Prokofiev
Rockefeller, Campanella, Communist Bloc
Roy Cohn, Juan Peron, Toscanini, Dacron
Dien Bien Phu Falls, Rock Around the Clock
Einstein, James Dean, Brooklyn's got a winning team
Davy Crockett, Peter Pan, Elvis Presley, Disneyland
Bardot, Budapest, Alabama, Khrushchev
Princess Grace, Peyton Place, Trouble in the Suez
We didn't start the fire
It was always burning
Since the world's been turning
We didn't start the fire
No we didn't light it
But we tried to fight it
Little Rock, Pasternak, Mickey Mantle, Kerouac
Sputnik, Zhou Enlai, Bridge On The River Kwai
Lebanon, Charles de Gaulle, California Baseball,
Starkweather homicide, Children of Thalidomide
Buddy Holly, Ben Hur, Space Monkey, Mafia
Hula Hoops, Castro, Edsel is a no-go
U2, Syngman Rhee, payola and Kennedy
Chubby Checker, Psycho, Belgians in the Congo
We didn't start the fire
It was always burning
Since the world's been turning
We didn't start the fire
No we didn't light it
But we tried to fight it
Hemingway, Eichmann, Stranger in a Strange Land,
Dylan, Berlin, Bay of Pigs invasion
Lawrence of Arabia, British Beatlemania
Ole Miss, John Glenn, Liston beats Patterson
Pope Paul, Malcolm X, British Politician sex
J.F.K. blown away, what else do I have to say
We didn't start the fire
It was always burning
Since the world's been turning
We didn't start the fire
No we didn't light it
But we tried to fight it
Birth control, Ho Chi Minh, Richard Nixon back again
Moonshot, Woodstock, Watergate, punk rock
Begin, Reagan, Palestine, Terror on the airline
Ayatollah's in Iran, Russians in Afghanistan
Wheel of Fortune, Sally Ride, heavy metal suicide
Foreign debts, homeless Vets, AIDS, Crack, Bernie Goetz
Hypodermics on the shores, China's under martial law
Rock and Roller cola wars, I can't take it anymore
We didn't start the fire
It was always burning since the world's been turning.
We didn't start the fire
But when we are gone
It will still burn on, and on, and on, and on...
We didn't start the fire
It was always burning
Since the world's been turning
We didn't start the fire
No we didn't light it
But we tried to fight it
We didn't start the fire
It was always burning
Since the world's been turning
We didn't start the fire
No we didn't light it
But we tried to fight it
We didn't start the fire
It was always burning
Since the world's been turning
We didn't start the fire...
Greetings and Salutations,
That's the battle cry out here even tho we've been living under corporate welfare for ages, Obama is leading us to socialism. I hear this and I realize people don't know the difference between socialism and communism. Every country practically the us deals with are socialist countries, canada, switzerland, germany, france, the UK, norway..tic them off. They were smart enough to Not let their governments get tied down by 2 parties. No, they get the bums out if they foul up. We are stuck for 4 years! So why is that better, even isreal has a socialistic system. Gonna call them commies? That great liberal, FDR, gave the europeans a frame work after ww2, and that's what they went with. Study some history and quit having knee jerk reactions to things just because rupert murdoch news(fox) tells you something and his business partner is who? An arab. Money is just money, only politics give it color.
Junior got the chance to take credit for these programs, but he stuck with Daddy's agenda at camp david with sarkozy. Obama gets elected and the first thing that got his attention was the cia, dropping the bomb on him about what he was facing and who did what. The second thing that happened before he even got in the wh was, a dvd was sent to him to see the audit that was done in the philipines of all the us gold that had been cached away in the mountains by the us gov way back...I saw the pictures, everything stamped, property of the US. Big gold bars and and gold certificates. Now wouldn't you want to know why the country was broke if you saw all that? He got the answer because shortly the dragons came foreword and let him know. Now old man bush was the man, who didn't have grasp of what Obama received and found out and proceeded to set accounts up in the vatican to try to get control of him. Not just him but Michelle and the 2 children. Just like countless other senators and congressmen, with their wives and children. The dragons sent the owner of the vatican bank in their to do an audit. The bank does not belong to the church. They already knew there was 'weird stuff' happening with that bank and also Knew the old man's finger prints were all over those accounts...can't hide anything banking, from the 'system'. That's why you need not be concerned about someone running off somewhere with your money, they can see it, track it and return it to you. Scared?..don't be, these are the good guys. There is much more with us than against us. There is enough evidence to bury these guys forever, including '911'.
Things have reached the last stage before they hit your door, stuff that has been waiting and battled over since 1984 in chicago. My folks tell me, this is going to be messy for a minute and take 3-5 yrs to clean it up after the programs are dropped. I will tell you the master and owner of all this stuff name is Michael and his patience has worn thin, he doesn't care about the political stuff in dc. The children and the elderly will be taken care of, despite the plutocracy the media refuses to identify. Like it or not Obama has listened and done things accordingly, so argue your point out with who his master is, see how far that gets you. You're getting your money so who cares?
I'm going to the beach and sitting the hell down, the rest of this crap is for people who can't escape the constant bickering in their own minds. Freedom is what is afoot and the greatest manifestation of fear the people who've been in control have to face. The dragons aren't taking any prisoners, the bad guys had their chance so I guess a lot of folks are going to be tripping as everything happens and they witness people like boehner crying again in public. Little poopy babies who need their diapers changed. The tea party has no idea what constitution they hold up...read folks read. The corp is thru and that will be apparent to all americans shortly. Tho folks won't like the idea some black man is telling them that, get over yourselves, you've been lied to for so long it's ridiculous. Sorry, had to sand bag you all in order to finish this. There's a big difference between white hats and white knights, just like the real templars had nothing to do with what happened in Norway.
Ok, I'm thru, don't stray to far from home, this is no time for extended vacations. Email me if you need to for a consultation but don't be surprised if there is no response.
Love and Kisses,
Poofness
ORGANIZED CRIME, RACKETEERING, GUN RUNNING, MONEY LAUNDERING "HOLDING THE NATION & ALLIES HOSTAGE"
The Rumor Mill News Reading Room
ORGANIZED CRIME, RACKETEERING, GUN RUNNING, MONEY LAUNDERING "HOLDING THE NATION & ALLIES HOSTAGE"
Posted By: watcher51445Date: Sunday, 31-Jul-2011 07:47:26
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Message from Montague Keen July 31, 2011
Rumor Mill News Agents Forum
Message from Montague Keen July 31, 2011
Posted By: Mr.Ed [Send E-Mail]
Date: Sunday, 31-Jul-2011 15:28:30
Message from Montague Keen July 31, 2011
The Big Shift is happening, my dear. Some are able to connect to their inner light. They are using this Love to connect with Spirit. You must help those who are willing to listen and face the facts of what is actually happening. Fear will be used to try to keep you under control. Do not buy into this. Know that you are part of the New Beginning. You are the co-creators, chosen to reclaim your planet and return it to the Light. You will know instinctively what you must do to help those who are still hooked into the illusion they believe to be real. As your consciousness expands, you will connect with higher frequencies. Your understanding of the Universe and the importance of Earth reconnecting with it, will become clear. Illness will become a thing of the past - a distant memory. Your bodies will recover from all the man-made attacks from which they have suffered. You will experience a healing period when both Man and Earth recover and move forward into the light. Love and peace will prevail. It will not be an easy time for any of you, as the shadows of the past have - from one generation to another - endeavored to thwart the call of Spirit to create and unify Creation. This is our promise. We will succeed. The voice of truth will not be silenced.
Now you fully understand the importance of the action taken by the Prime Minister of Ireland, in speaking up regarding the abuse of children by the Vatican. This was the first step that needed to be taken in order that the world learns that it is the Vatican which controls your world and every person in it. The evidence is there, but was kept secret. They preached love, but controlled by fear. They are now under scrutiny. The facts emerging are shocking and upsetting for those who had trusted them. Truth has to be faced before the next steps can be taken. The Vatican is the umbrella organization that is in control of everything. It will not survive once the truth emerges. The defiling of helpless, innocent children, will never again be tolerated anywhere in the world. The Vatican needs to step up to the plate and admit that it condoned and facilitated such crimes against humanity.
We are preparing the portals through which we will re-enter your world to guide you forward into the Light. The new reality will alter how you see the planet and all human life, plus your fellow beings from other planets who will be happy to reconnect with you and assist you through this great Transition. You are making history. Keep records of everything as it happens, so that future generations will learn and understand what had to happen so that they could live in peace and love.
You will notice that some may "disappear". Some may be replaced by Spirits who may resemble them. Many will be exposed as evil: they will be dealt with as seen fit. Expect much change and ask for guidance from those you trust.
My wife is finding it difficult to stay awake and concentrate. She has been very ill for a few weeks. She is on strong medication and she needs to rest and recover. Please understand that it is not possible for her to reply to all the emails as she works alone. We are doing all that we can to aid her recovery. I remain her devoted husband, Monty.
Website: The Montague Keen Foundation
JUST SOMETHING NICE TO KNOW
-----------
NY POST -It didn’t get a lot of notice, but the government of French President Nicolas Sarkozy issued a statement last week that could have a profound effect on the prospects for Middle East negotiations.
That’s been a significant Israeli condition for years — that the Palestinians must recognize Israel’s existence as a Jewish state, thereby ending their claims on the entirety of Israel. Just as significantly, that’s something the Palestinians adamantly refuse to do. Juppe’s* statement makes France the first European nation to state publicly that any agreement must recognize Israel’s Jewish character.
That position has been opposed by Britain, Spain, Belgium and Ireland, among others — as well as by the EU’s foreign policy chief, Catherine Ashton. And there is discord within the so-called Quartet — the US, the EU, the UN and Russia — over this condition.
Yet as Evelyn Gordon writes on Commentary’s blog, Sarkozy has “finally grasped that no agreement is possible without satisfying Israel’s minimum requirements” — which means demanding a concession from the Palestinians.
Clearly, the continued failure to recognize Israel’s Jewish character — the basis of its creation — is an open invitation to the dismantlement of Israel and its incorporation into an Arab state of Palestine. It’s long past time that someone in Europe injected reality into genuine Middle East peacemaking. Kudos to Sarkozy and Juppe for doing so.
Lately, there’s been a little surge in stories coming out of France that indicate a definite shift away from the extreme left. Could it be increasing pressure from the growing popularity of Marine Le Pen’s Right Wing anti-muslim immigrant party?
* Alain Juppé, Ministre d’Etat, Minister of Foreign and European Affairs
Speaking on behalf of French President Nicolas Sarkozy, FM Alain Juppe said, “There will be no solution to the conflict in the Middle East without recognition of two nation-states for two people, including the nation-state of Israel for the Jewish people.”
Social Security Checks Aug. 3rd.
Just heard Mark Levine on WGST talk radio. He is a Constitutional lawyer. He quoted from a U.S. House committee investigative session where it was discovered that the U. S. Treasury will have sufficient funds to pay Social Security and Veterans benefits for the month of August 2011.
So the head of the Social Security Administration was questioned as to how these benefits would not be paid (Obama had threatened to stop Social Security payments on 3 Aug.).
The committee found that Social Security does not have the authority to issue checks.
The Social Security checks are issued by the Treasury Department headed by Timothy Geithner.
Even Geithner does not have the authority to not issue Social Security unless he is directed by President Obama to not issue the checks.
Pres.Obama alone will be responsible if Social Security checks are not issued starting on August 3, 2011.
Every senior citizen and every American should work to remove this tyrant from the White House in 2012.
YOU ARE NOT GOING TO LIKE THIS
YOU ARE NOT GOING TO LIKE THIS
YOU ARE NOT GOING TO LIKE THIS...PLEASE READ IT AND PASS IT ON!
At age 76 when you most need it, you are not eligible for cancer treatment
What Nancy Pelosi didn't want us to know until after the healthcare bill was
passed. Remember she said, "pass it and then read it!!." Here it is!
______________________________
Health Care Highlighted by Page Number
THE CARE BILL HB 3200
THIS IS THE 2ND OFFICIAL WHO HAS OUTLINED THESE PARTS OF THE CARE BILL.
Judge Kithil of Marble Falls, TX - highlighted the most egregiouspages of HB3200
Please read this........ especially the reference to pages 58 & 59
JUDGE KITHIL wrote:
** Page 50/section 152: The bill will provide insurance to all non-U.S.
residents, even if they are here illegally.
** Page 58 and 59: The government will have real-time access to an individual's
bank account and will have the authority to make electronic fund transfers from
those accounts.
** Page 65/section 164: The plan will be subsidized (by the government) for all
union members, union retirees and for community organizations (such as the
Association of Community Organizations for Reform Now- ACORN).
** Page 203/line 14-15: The tax imposed under this section will not be treated
as a tax. (How could anybody in their right mind come up with that?)
** Page 241 and 253: Doctors will all be paid the same regardless of specialty,
and the government will set all doctors' fees.
** Page 272. section 1145: Cancer hospital will ration care according to the
patient's age.
** Page 317 and 321: The government will impose a prohibition on hospital
expansion; however, communities may petition for an exception.
** Page 425, line 4-12: The government mandates advance-care planning
consultations. Those on Social Security will be required to attend an
"end-of-life planning" seminar every five years. (Death counseling..)
** Page 429, line 13-25: The government will specify which doctors can write an
end-of-life order.
HAD ENOUGH???? Judge Kithil then goes on to identify:
"Finally, it is specifically stated that this bill will not apply to members of
Congress. Members of Congress are already exempt from the Social Security
system, and have a well-funded private plan that covers their retirement needs.
If they were on our Social Security plan, I believe they would find a very quick
'fix' to make the plan financially sound for their future."
- Honorable David Kithil of Marble Falls, Texas
All of the above should give you the point blank ammo you need to support your
opposition to Obamacare. Please send this information on to all of your email
contacts.
More Obama truth coming out!
If you are an American citizen born in Jerusalem, the United States Government (under Barack Obama) will NOT include Israel as the place of birth on your passport.
(STILL THINK HE IS A CHRISTIAN ?)
The US Supreme Court has agreed to hear a case brought by an American citizen born in Jerusalem. US citizen Menachem Zivotofsky was born in Jerusalem in 2002. The US State Department has refused to list “Jerusalem, Israel” as his place of birth on his passport and would only write “Jerusalem” instead. This is despite the fact that in 2002 Congress instructed the State Department to “record the place of birth as Israel” in passports of American children born in Jerusalem if their parents request it.
The Obama administration urged the Supreme Court not to hear the case. The Supreme Court justices instead not only agreed to hear the case, but also directed the two sides to address the broad question of whether the law “impermissibly infringes the president’s power to recognize foreign sovereigns.”
This case is especially important at a time when the US President has effectively endorsed the division of Jerusalem in calling for a return to the 1967 lines, while an overwhelming majority of Congress supports defensible borders and a united Jerusalem.
You can help in several ways:
Send a Letter to your Congressman and ask him to support an amicus brief that must be filed by August 5. SAMPLE LETTER and relevant information can be found here. Join other citizens born in Jerusalem, who also want ‘Israel’ listed on their passports. Join the Born In Jerusalem website HERE
Sincerely,
Allen Roth & David Goder
One Jerusalem
US SC Reinstates Sovereignty Video
The Rumor Mill News Reading Room
VIDEO: June 16, 2011 - GROUNDBREAKING - 9 to 0 - US SUPREME COURT RULING REINSTATES INDIVIDUAL SOVEREIGNTY!!
Posted By: Lion [Send E-Mail]Date: Sunday, 31-Jul-2011 10:12:31
|
Can we really trust the white hats from darkcabal blogspot?
The Rumor Mill News Reading Room
Can we really trust the white hats from darkcabal blogspot?
Posted By: Revel [Send E-Mail]Date: Saturday, 30-Jul-2011 23:20:21
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Eric Holder's Newest Witch Hunt
This may result in Mortgage Bubble II. Do you need more proof
that the Obama Administration is trying to destroy the US.
Sunday, July 31, 2011's Business News & Expert Advice
TownHall Finance (highlights added)
Bob Beauprez:
Eric Holder's Newest Witch Hunt
The Department of Justice is executing a "Witch Hunt" against banks. Through the DOJ's Civil Rights Division, Attorney General Eric Holder is forcing banks to "relax their mortgage underwriting standards and approve loans for minorities with poor credit as part of a new crackdown on alleged discrimination," according to a published report by Investor's Business Daily after reviewing court documents.
The DOJ has already extorted $20 million for weak and poor credit loans from banks that "settled out of court rather than battle the federal government and risk being branded racist." The DOJ admits another 60 banks are already under "investigation." Holder's demanding the banks sign "non-disclosure" settlement agreements barring them from talking while allowing the DOJ to operate behind a curtain of secrecy.
The settlements already extracted from banks force them to make "prime-rate mortgages to low income blacks and Hispanics" with credit problems, even if they are living on welfare. According to IBD, the DOJ has ordered banks to advertise that minorities cannot be turned down for a loan "because they receive public aid, such as unemployment benefits, welfare payments or food stamps." No job; no problem!
In other words, the DOJ is forcing banks to make loans to people that they know don't qualify for them and likely won't be able to afford to repay them, which is precisely the kind of failed public policy that precipitated the financial collapse and recession in 2008.
The DOJ ordered Midwest BankCentre to provide "special financing" in the predominantly black areas of St. Louis for fixed prime rate conventional home loan financing for borrowers "who would ordinarily not qualify for such rates for reasons including the lack of required credit quality, income or down payment."
Eric Holder and the head of his Civil Rights Division, Tom Perez were both protégés of Janet Reno who launched a similar attack on banks in the early years of the Clinton Administration. That led to an expansion of the Community Reinvestment Act, CRA, and an explosion of forced lending to low-income, poor credit risk borrowers and the sub-prime mortgage industry that collapsed in 2008. Under the weight of massive guarantees of poor quality and defaulted mortgages, the federal government was forced to seize Fannie Mae and Freddie Mac. To date about $150 billion has been required to bailout the two agencies to keep them solvent.
Like Reno, Holder and Perez are pushing their own social agenda, and ramifications to the financial sector and total economy are meaningless to them. They willingly pervert the law and leverage the full weight of the Justice Department to intimidate banks to accomplish their objectives.
Credit analysis and repayment ability of the borrower matter none to Holder and Perez. To them, if a minority is turned down for a loan, it must surely be evidence of racial discrimination. Perez has gone so far as to compare bankers to the Ku Klux Klan. The only difference between bankers and the KKK, he says, is that bankers discriminate "with a smile" and "fine print," but they are "every bit as destructive as the cross burned in a neighborhood."
Holder and Perez appointed another Janet Reno alumnus, Eric Halperin, as Special Counsel for Fair Lending. Previously, Halperin was a lobbyist for the leftist Center for Responsible Lending (CRL) where he pressed congress and the various agencies for continued relaxing of lending standards. Just how objective do you suppose this "special lending cop" is in applying the law?
CRL's website reveals their leftist perspective and agenda; "lenders have strong incentives to engage in unfair, deceptive practices and to aggressively market loans designed to fail." That's pure hooey, of course. Banks make a profit if loans are paid back. They sustain losses when loans fail. But, this phony theory of "disparate impact" or "red-lining" has been used by the left for decades to convince politicians and bureaucrats to force unsound, unsafe lending practices, the consequences of which have been manifested in the current economic mess.
The forced settlements have gone well beyond lending. The concessions that DOJ has imposed have even required banks to fund inner-city "community organizers." According to IBD, "lenders are being forced to bankroll Acorn clones that often exist just to shake them down for risky loans."
As DOJ strong arms banks to relax lending standards to satisfy the Obama Administration's racialist social agenda, other federal agencies are telling banks to do just the opposite. "Banks are damned if they do, damned if they don't," according to Ernest Istook, a Heritage Foundation fellow and former Member of Congress who is critical of DOJ for forcing "affirmative action lending."
The current economic crisis has stressed even the strongest of banks. Bank safety and soundness examiners from the Federal Reserve, the OCC, FDIC, OTS, and NCUA have put the fear of God into banks all across the nation demanding tightened credit standards. They have forced banks to increase capital, add to reserves for losses, mark down asset value of existing credit assets, and questioned virtually every loan the banks make. The CEO of one historically successful community bank told me a regulator demanded, "You will not make another commercial real estate loan." How that bank was supposed to meet the needs of the small businesses in the community while not making loans on commercial real estate was of no concern to the regulator.
The newspapers are full of reports that the government has seized and closed banks, removed management and boards of directors, placed banks on written agreements so tightly drafted that the government has essentially assumed management of the bank while the shareholders, directors and management are still stuck with full risk and liability.
Banks are selling, consolidating, and closing all across America, and going with them is the access to capital and importantly the personal relationship that historically has been vitally important to the success of our entrepreneurial free-market economy. Over 1400 bank offices have closed in the last two years, and many more are expected in 2011. In the wake are exasperated small businessmen wondering what to do next.
If you're confused by the mixed signals and heavy-handedness of government, how would you like to be a banker? Little wonder that banks are afraid to lend and many are almost in lock down. Politicians can talk all they want about getting capital and the economy moving again, but the uncertainty and mixed signals coming from Washington are big reasons why both lenders and borrowers are hiding out in their bunkers.
Thomas Lifson, writing in American Thinker about the DOJ's witch hunt, notes that bankers tend to be "a cowardly lot when confronted by the power of the State." Who can blame them when the government has the power to lock their doors and seize their assets?
Lipson goes on, "Nobody in a highly regulated business wants the government publicly charging racism. A comparatively small group within the Civil Rights Division at the Justice Department has assumed the role of national bank regulators with the intent of favoring groups they support. It's a corruption of the legitimate role of government." Corruption may be an overly polite description.
Added to the bi-polar treatment from the DOJ and other regulators is the fact the very government that controls their every move is now a larger source of consumer credit that all of the private sector banks combined. Recently released Federal Reserve Bank data documents a remarkably rapid and substantial shift to the government as the new credit goliath.
As recently as 2006, the private banking sector provided $2 in outstanding home mortgages and consumer credit for every $1 of government financed loans. The data from the Fed, however indicates that government loans and guarantees now total $6.32 trillion, up from just $4.40 trillion at the end of 2006. For the same period, the private sector market share shrunk to $6.58 trillion from $8.48 trillion.
Curiously, the Fed doesn't count the half-trillion dollars worth of guaranteed student loans as part of the government's total. Historically, local banks originated and financed the Federal Family Education Loan program and the government insured the loans against any loss. But, in 2009 as part of the ObamaCare legislation, the private sector was completely eliminated and beginning in 2010 the government took total control of the entire program. When student loans are added, the government surpasses the entire private sector totals. Even without student loans, with the current trend the government is poised to eclipse the private lenders likely within the current quarter.
The almost overnight collapse of the market for mortgage backed securities as a result of the sub-prime lending debacle – largely precipitated by misguided federal policy forced on lenders – evaporated the private mortgage market, and left Fannie Mae and Freddie Mac – that had been seized by the government – as the only game in town for home mortgages.
In the blink of an eye, the federal government went from the small player facilitator to the dominant force in the financial industry dwarfing the combined efforts of the entire private sector competitors. Additionally, the Top Dog in the credit market place is also the all-powerful regulator over the little dogs in the private sector wielding absolute and largely unaccountable authority over their every move. Through the Federal Reserve, that same government controls the price, the access, the circulation, and amount of the currency on which the rest of the market must be dependent. With a national debt of $14.5 trillion and growing, the largest supplier of loans in the world also has the world's greatest demand for credit sucking up massive amounts of available investment capital to finance the growing national debt before the rest of the market gets a chance.
In reality, the federal government during the last two years has essentially seized the banking industry. What the government doesn't do directly, it controls by regulation, intimidation, and by sheer force and power. Obama got in the car business, the health care business, the energy business, and he's got the government holding most of the cards in banking, too. That's the change; the hope is that he gets fired by the voters in 2012.
True-believing progressives like to flaunt their "transformed" definition of a Free-Market Economy: "The freedom of the government to compete with the private sector." They find a little humor in it, but it's far from funny. What has happened in barely two years has seriously altered the rules of the road, the natural order of things, even what it means to be American. Time will tell if these are permanent changes or just a significant deviation in our long-term course. The outcome rests with us: "We the People."
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Bob Beauprez is a former Member of Congress and is currently the editor-in-chief of A Line of Sight, an online policy resource. Prior to serving in Congress, Mr. Beauprez was a dairy farmer and community banker. He and his wife Claudia reside in Lafayette, Colorado. You may contact him at: http://bobbeauprez.com/