Let the Record Show...

So a recent poll reported on CNN suggests that Americans 2/1 believe the current banking crisis is the fault of Republicans. What most Americans don't do is actually research the historical record. I must admit, when I look at eight years of the Bush Adminstration, I don't see that he personally took very much issue with the lending practices of these greedy corporations. Had I receieved a telephone survey, I probably would have laid blame on both parties.

But the record doesn't lean that way. Not at all. In fact, one candidate actually co-signed a bill for regulatory reform in our lending companies. That candidate? John McCain. The creator and additional cosigners? All Republicans. The bill, and three others just like it? Killed on the floor of the Senate, led by Democrats. Democrats who actually were taking kick-backs for their re-elections.

Here's an excerpt from an address given by John McCain on the Senate floor. Read it. Read it. Read it. Read it. Read it. Read it. Read it. Read it and learn something.

The United States Senate
May 25, 2006

Section 16

Mr. President, this week Fannie Mae's regulator reported that the company's quarterly reports of profit growth over the past few years were "illusions deliberately and systematically created" by the company's senior management, which resulted in a $10.6 billion accounting scandal.

The Office of Federal Housing Enterprise Oversight's report goes on to say that Fannie Mae employees deliberately and intentionally manipulated financial reports to hit earnings targets in order to trigger bonuses for senior executives. In the case of Franklin Raines, Fannie Mae's former chief executive officer, OFHEO's report shows that over half of Mr. Raines' compensation for the 6 years through 2003 was directly tied to meeting earnings targets. The report of financial misconduct at Fannie Mae echoes the deeply troubling $5 billion profit restatement at Freddie Mac.

The OFHEO report also states that Fannie Mae used its political power to lobby Congress in an effort to interfere with the regulator's examination of the company's accounting problems. This report comes some weeks after Freddie Mac paid a record $3.8 million fine in a settlement with the Federal Election Commission and restated lobbying disclosure reports from 2004 to 2005. These are entities that have demonstrated over and over again that they are deeply in need of reform.

For years I have been concerned about the regulatory structure that governs Fannie Mae and Freddie Mac--known as Government-sponsored entities or GSEs--and the sheer magnitude of these companies and the role they play in the housing market. OFHEO's report this week does nothing to ease these concerns. In fact, the report does quite the contrary. OFHEO's report solidifies my view that the GSEs need to be reformed without delay.

Friends, I'm not asking you to vote for John McCain. For the record, I might not even be voting for him myself. I'll decide after the debates. But in the meantime, at least become an informed voter. Here's information on the other bills led by Republican Chuck Hagel, NE:

GovTrack.us. H.R. 1461--109th Congress (2005): Federal Housing Finance Reform Act of 2005, GovTrack.us (database of federal legislation) (accessed Sep 22, 2008)

GovTrack.us. S. 190--109th Congress (2005): Federal Housing Enterprise Regulatory Reform Act of 2005, GovTrack.us (database of federal legislation) (accessed Sep 22, 2008)

GovTrack.us. S. 1100--110th Congress (2007): Federal Housing Enterprise Regulatory Reform Act of 2007, GovTrack.us (database of federal legislation) (accessed Sep 22, 2008)

Too in Debt to Care as American Freedom Falls?

Welcome to your first days of socialism, ladies and gentlemen. The move by the Feds to transfer our national wealth under simple strokes of their pens is the beginning of the end. The sad thing is, most Americans are too in debt to care.

The $700 billion dollar proposed bailout marks the biggest redistribution of wealth this country has ever seen. The sad thing is that when it's all said and done, your money and mine becomes all the more imaginary. With the Federal Government in charge of brand new banking budget that doubles the Pentagon's annual budget, they can write as many checks as they want to just about whomever they want. Like sickly cows walking under the teat of American innovation and progress, the Federal Government now owns your money and mine.

The latest bailout proposal is massive and not just in dollars. It's massive in what freedoms we give up. It defaults responsibility and rewards greed. Expect things to get bigger and uglier, all this from an adminstration that promised "smaller government." Defaulted properties will quickly become property of the Feds. Do you understand that? This move puts the government over a massive number of private properties across the nation. One of the fundamental doctrines of the Constitution has been overturned by the stroke of pen. The idea of America, the idea that if you work hard you can own something for yourself and for your family, the idea that we are fighting for across the oceans, is the very idea that has crumbled on our own shores.

The enemy of capitalism at the highest levels of our nation is greed. No one, not our President and not our elected officials in Congress, took on the challenge of eliminating greed through regulation seriously-- until it was too late (amend that statement with the above blog). At the same time all this was happening, the enemy of capitalism at the grassroot level (stupidity and insecurity) ripped us apart from the inside out. We're too busy acquiring more and more and more "stuff" to successfully manage our own freedom. 43% of Americans spend more than they make every year. Is it any wonder we have a banking crisis? Hello? Anyone out there?

Perhaps the most telling thing is that this $700 billion dollars will be spent on banking corporations, not on average Americans trying to make ends meet. The bailouts average out to almost $5,000 per man, woman, and child in America. Think about it, for my family of four, that would equal somewhere between $16,000 and $20,000. Talk about a 'stimulus' package.

But what else were they going to do? The public has already demonstrated the inability to manage that kind of money. The sad thing is, the banks have already demonstrated the inability to manage that kind of money too. Now we had a third set of fingers into the American pie by allowing the Feds to manage it. Do we really expect them to do any better? Last time I checked, their debt was running in the trillions.

Game over people. We lose. Freedom loses. Our future loses. It's the beginning of the end and our forefathers are all rolling over in their graves.

Thomas Jefferson:

"Banking establishments are more dangerous than standing armies."

"Merchants have no country. The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gain."

"Never spend money you haven't earned."

"Paper money will invariably operate in the body of politics as spirit liquors on the human body. They prey on the vitals and ultimately destroy them. Paper money has had the effect in your state that it will ever have, to ruin commerce, oppress the honest, and open the door to every species of fraud and injustice."

-- George Washington

"A great industrial nation is controlled by it's system of credit. Our system of credit is concentrated in the hands of a few men. We have come to be one of the worst ruled, one of the most completely controlled and dominated governments in the world--no longer a government of free opinion, no longer a government by conviction and vote of the majority, but a government by the opinion and duress of small groups of dominant men."

-- Woodrow Wilson

Fixing Our Financial Crisis with Common Sense...

Let's take a quick look at what's happening. Lending companies are going in the tank and that's effecting Wall Street, the housing markets, and the value of the dollar. People are quick to point fingers at Federal policy... maybe that's part of it. But the majority of the story and the blame, really belongs elsewhere. Let's look briefly at the foolish new American past time known as "Subprime Lending."

Subprime loans can be helpful, especially when coupled with a loan at prime for qualified buyers who are relatively stable in employment, and who are purchasing a home in which they plan to stay. But truthfully, even in those circumstances, they aren't a wise way to go. People end up leaving a lot to chance and can quickly get themselves into a heap of debt for which they have no income to escape from...

Even at that, there are far too few of these kinds of "rational" subprime loans being administered by these failing companies. Instead, there are many other types of "whacky" loans being granted to people who do not qualify for regular prime loans.

From wiki, some of these include loaning money to people who are in credit trouble. For example, they have issues because they have:

• Two or more loan payments paid past 30 days due in the last 12 months, or one or more loan payments paid past 90 days due the last 36 months;
• Judgment, foreclosure, repossession, or non-payment of a loan in the past;
• Bankruptcy in the last 7 years;
• Relatively high default probability as evidenced by, for example, a credit score of less than 620 (depending on the product/collateral), or other bureau or proprietary scores with an equivalent default probability likelihood.

Now I'm no genius, but here's a simple newsflash: stupid is as stupid does. What on earth do lenders think is going to happen when you loan money to people with a shaky track-record of paying back past debts? How would an increased interest rate, or an interest-only loan, lead people with demonstrated deficiencies in managing money to financial independence?

Again, I'm no genius, but here's a possible solution -- don't lend money to people who won't pay it back. Unless bankruptcy is something you desire, this probably isn't the way to do business. Is it any wonder you're short on capital when you just spent your hours roping in loans from people that can't get them anywhere else? These guys should be removed from the economic market, not bailed out by the Feds. That part, Obama has right. They should be held accountable for making stupid decisions.

And here's another tidbit of advice: Don't borrow money you won't pay back. I know we have to keep up with the Jones' and all, but come on. Pay off your debt before you go gobbling up more. Live simply and with a meager humility. Pay what you owe. Build your net worth, when you've demonstrated you can do that, maybe you're ready to borrow some big cash. Until you can be faithful in the small things -- like your credit card debt -- don't even think about jumping into the big leagues. Turn off your cell phone. Cancel your cable. Eat hotdogs and spaghetti for a year. Frame a photograph and make that your Christmas gift until you can afford those pretty pearl earrings for mom. Hello? Is anybody out there listening?

Our financial woes have very little to do with "policy." They've got everything to do with the average American Joe out living large, writing checks his account can't cash, and getting himself in a pickle. Stand-up against ignorance people. Don't buy into the hype. Take accountability for your own life and make our American history proud. My grandfather is rolling over in his grave about now.

Let me summarize it again, for any who might have missed it:

1. Don't lend money to people who won't pay it back.

2. Don't borrow money you won't pay back.

OK, are we all clear on this? If we can spend the next ten years living the way we were intended to live the last ten years, then our financial institutions will be just fine. I give you back to your regularly scheduled absurdity.

Vultures and Corpses...

So... I was perplexed this morning during my quiet time. I was reading from the Gospel of Luke and found something Jesus said:

"Where the corpses are, there the vultures will gather."

It seemed like a really odd thing for him to say. I read a bit of the context and the disciples were asking Him about the end times. He basically gave them a few details, but they pressed him further -- They asked, "Where is all this going to happen?"

Jesus said, "Where the corpses are, there the vultures will gather."

It is engimatic question. The references and study guides were of no help at all. They all pointed to the end times jargon that fills way too many pages of books, and consumes way to many of our best minds in meaningless speculation.

So I got a revelation in the shower -- God mostly speaks to me in the shower. If you've read this blog at all, you've heard me say this. The revelation was simple: Jesus was basically insulting them for even asking the question. Think about it, they're bugging him about details and he quips about gathering around dead bodies.

A modern translation would read something like this: "Hey Jesus, you say all this bad stuff is going to happen, tell us where." Jesus pondered a moment and said, "Stop rubber-necking the trainwreck."

In other words, quit being so dang consumed about who's going down, when it's going down, and where it's going to be. Do you want to be a vulture? Is death all you care about? Focus on life, cause that's what I am about.

You ever meet those kind of people that seem to only want to give you the bad news? I mean as soon as you walk in the door, they are full of information about who has cancer, who just died, whose wife just left them... you know the kind, glass half-empty people feasting off everyone else's disasters.

I think it kind of grates of Jesus' nerves after a while. He'd heard enough. He spouted off... "You're like a bunch of vultures, circling around my every word looking for doom and gloom." In so many words, I think he told the disciples to shut up and get on with living.

Maybe that's what we should say when the folks around us are so concerned with the misfortune of others that they can't even live their own lives with grace and dignity. I'd like to say, that's just a thought. But it's not. It's a Word. Take it how you will.