Prickly City by Scott Stantis for February 09, 2009

Government spending is money taken away from something else, whether by taxes, borrowing, or the insidious theft of your purchasing power by inflation. It can have no net effect in improving the economy compared to what else the money could have been used for.

At most the “stimulus” will give a temporary but highly publicized boost to particular individuals, organizations, or industries, but at the expense of all the more productive things that now will not happen.

So what should the government do? Don’t pass more laws, because that’s how we got into this mess to begin with. Start repealing them.

Begin with the Community Reinvestment Act which precipitated the mess by FORCING banks to make bad loans. Then work backwards, undoing the tangle of rules and regs that hogtie what was and should again be the strongest economy in history.

Opportunities to accumulate wealth create jobs as evidenced by the economic powerhouse our country became as a free enterprise economy. The Great Oz erred when he stated that only government can cure the present financial dilemma, which was caused by the congress overreaching its authority. A six-month tax holiday will cure the malaise before the year end.

Once again I will state if this “Payoff to the Liberal Support Groups and Unions” bill is so good then why is there an insistence for the Republicans to hop on? The Dems don’t need their support to pass the bill. This is simular to the “pushy” salesman handing over the contract and a pen saying: “Don’t bother reading the contract, just sign right here.”

ANandy, Economists were warning about the collapse back in 2004 and 2005, when the congress, senate, and white house were republican and free market fanatics. How is this the cause of over regulation? I have to ask, are you this stupid and uninformed or will you just say anything to support the republicans? The duty of a citizen is to inform themselves about the situation, Think about what should be done, and THEN decide what politician will best do what they think is right. You seem to have forgotten the inform and think steps.

RussellNash says: ANandy, Economists were warning about the collapse back in 2004 and 2005, when the congress, senate, and white house were republican and free market fanatics. How is this the cause of over regulation? I have to ask, are you this stupid and uninformed or will you just say anything to support the republicans? The duty of a citizen is to inform themselves about the situation, Think about what should be done, and THEN decide what politician will best do what they think is right. You seem to have forgotten the inform and think steps

ANandy replies: Where do you find me defending Republicans and free-market fanatics? I made no mention of over regulation. You might better take your own advise and inform yourself about the situation. The congress exceeded its authority granted in Article 1 of the constitution in the 1980’s when it removed the usury laws from the states. That set the stage for higher interest. Higher interest allows for higher risk. We all know that high-risk loans were promoted by the Clinton administration. Several years ago President Bush warned that problems were looming in the mortgage markets, but the chairmen of the House and Senate banking committees, Frank and Dodd, blew off the warnings. Now we are at crunch time.

A question for you; which of us is the stupid one here?

How does the accumulation of wealth create jobs? Please be specific.

If a small-business owner suddenly got a very large tax cut, but could not draw the customers, how long would he be in business?

ANandy: You’re lying again. Frank and Dodd did NOT blow off the warnings. The Act you’re alluding to did NOT come up for a vote until AFTER the bubble burst. Frank and Dodd could NOT vote for or against it, but expressed concern over the LACK of regulation in the Regulation Bill. The Act in question would set up an independent regulatory agency. They were against the independent agency, NOT the regulation.

C’mon. Pull the other one.

ANandy, It was the high-risk low-interes loans that started the problem.

You say in one post that free enterprise will straighten everything out, but then in response to me you say the problem came from a reduction of government oversight.

A search of W’s preferred news outlet, FoxNews, shows no articles for “bush, warns mortgage”. If you can point me to a news story, more than two years old, that mentions his warning; I’ll believe you.

Which part of Article 1? Section 7 is your best bet, but since businesses loan money across state lines, that falls to pieces.

danielsangeo says: ANandy:You’re lying again. Frank and Dodd did NOT blow off the warnings. The Act you’re alluding to did NOT come up for a vote until AFTER the bubble burst. Frank and Dodd could NOT vote for or against it, but expressed concern over the LACK of regulation in the Regulation Bill. The Act in question would set up an independent regulatory agency. They were against the independent agency, NOT the regulation.C’mon. Pull the other one

ANandy replies: The acts I’m referring to are the Depository Institutions Deregulation and Monetary Control Act of 1980 (DIDMCA) and the Alternative Mortgage Transactions Parity Act of 1982 (AMTPA). These two are at the root of the mortgage crisis. The idiot congress was told of the problem in 2003, but Frank and Dodd blew it off. Allegations have been made that they were in bed with the fat cat lenders. I recommend a special prosecutor to investigate conflicts of interest and graft. How does your foot taste?

RussellNash, please refer me to my statement that over regulation played a role.

ADandy, I said,”You say in one post that free enterprise will straighten everything out, but then in response to me you say the problem came from a reduction of government oversight.” Your response was, “please refer me to my statement that over regulation played a role.”

Note I said “Reduction of government” not “over regulation”. The reduction of government is your famed, “congress exceeded its authority granted in Article 1 of the constitution in the 1980’s when it removed the usury laws from the states.”

Could you please just argue one side of the discussion.

RussellNash says: ANandy, It was the high-risk low-interest loans that started the problem. You say in one post that free enterprise will straighten everything out, but then in response to me you say the problem came from a reduction of government oversight. A search of W’s preferred news outlet, FoxNews, shows no articles for “bush, warns mortgage”. If you can point me to a news story, more than two years old, that mentions his warning; I’ll believe you. Which part of Article 1? Section 7 is your best bet, but since businesses loan money accross state lines, that falls to pieces. ANandy replies: DIDMCA (1980) and AMTPA (1981) were major factors in the present crisis. Article 1, Section 8 and the 10th Amendment of the Constitution enumerates the powers, or authority of the Congress to specified powers. This authority does not give an excuse to inject the Congress into the authority of the sovereign states. Interstate Commerce deals with conflicting laws between sovereign states, such as a duty imposed by a state on the goods produced by another state. A mortgage lender with an office in a state financing loans against property in the same state should be subject only to the laws of that sovereign state. I recommend you to an article written by Stephen Labaton, published Sept 11, 2003 by the New York Times. The first paragraph begins “The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry…” Welcome to the ranks of the Enlightened Few.

Once again, ANandy, you’re lying.

Dodd and Frank did NOT blow off the suggestion that Fannie and Freddie be regulated.

Oh, and DIDMCA did not REQUIRE lending institutions to loan money to high-risk people. Neither did AMTPA.

At best, they were enablers, but they didn’t FORCE lenders to do wrong. In fact, these two bills allowed lenders to do MORE, not less.

And here I thought that Republicans were against the government intrusion into the free market. But, then again, they controlled Congress since 1996 and had control of both the legislative and executive branches from 2000 to 2006, so I’m glad that they were able to find time in that 10 years to for regulate Fannie and Freddie. Oh…wait…

Oh, and one more thing. That regulation that Bush was proposing? Yeah, the Republicans sat on it until it was too late to do anything about it. Nice going.

danielsangeo says: ANandy: You’re lying again. Frank and Dodd did NOT blow off the warnings. The Act you’re alluding to did NOT come up for a vote until AFTER the bubble burst. Frank and Dodd could NOT vote for or against it, but expressed concern over the LACK of regulation in the Regulation Bill. The Act in question would set up an independent regulatory agency. They were against the independent agency, NOT the regulation.

ANandy replies: You presume I am alluding to a bill that I am not, which leaves you a fool, a liar, or a foolish liar. It is dangerous to presume from a position of ignorance.

“You presume I am alluding to a bill that I am not”

My apologies. Whenever someone mentions Frank and Dodd “blew off” the warnings, they’re talking about the “Housing Enterprise Regulatory Act of 2005”. My apologies about assuming that you were talking about that. I had no idea that you were talking about something that happened back in the 80s.

Still, let’s say that you’re 100% correct and that the 1980 and 1982 acts were responsible (they weren’t, but let’s say they were). Why didn’t the Republicans do anything about it when they got into power? Why didn’t Reagan block the bill?

danielsangeo, accepted. The Idiot Congress has been with us for more years than I recall. The erosion of our constitutional protections began with the Wilson administration.

So, why blast those that seek to put us on a path to restoring those protections?

danielsangeo you fail to understand their true intent. To guarantee their own position, power and intent. All things being relative, they have theirs. Deny others their potential protects their position. Dazzle the “great unwashed” with Bull #2.

Wow. Have you been dazzled! And you probably don’t even realize it…. Sorry, but I’m not that cynical.

There are those on both sides of the political spectrum that seek only to hold their position and remain in power (mostly those with an R next to their name), but the great majority truly and honestly believe that they’re working for their constituents.

It is viewpoints such as yours, ANandy, that inadvertantly CAUSE the very thing you’re blasting against.

danielsangeo,kindly inform me who stands to benefit from all this pork? Those who guarantee their reelection because they sent all this pork to their districts, or because they have a genuine interest in the best interest of their district. If their interest is in creating jobs, they will promote the businesses in their districts that provide the most jobs, small business. A Tax holiday will give successful businesses the opportunity to expand their business and create more jobs.

You know who will benefit from “all this pork” (even though there is very little in it)?

You. Me. Humphries. Pschearer. Doctortoon. Pupwithoutfear. Harleyquinn. Russellnash. And every other American.

How, exactly, does promoting business help if there are no customers to shop? You can promote any business to the hilt and give them any tax holiday you want, but, if no one’s buying, they’ll still go out of business. So, how does it help? Please explain it to me.

danielsangeo says: You know who will benefit from “all this pork” (even though there is very little in it)?You. Me. Humphries. Pschearer. Doctortoon. Pupwithoutfear. Harleyquinn. Russellnash. And every other American. ANandy replies: Anyone who will vote to continue their special interest. In other words, the taxpayers (those who pay taxes)will guarantee your special interest. The solution is to encourage job creation. A tax holiday gives the public sector the opportunity to expand their business by investing rather than supporting big government, create jobs, and hire qualified employees. Is this hard to understand?

Why would a business, in a market with virtually no demand, hire more people? To do what?

danielsangeo: That is a failing business, one that should not be propped up by taxpayers. The key is to provide the opportunity for successful businesses to succeed and create jobs.

“Successful businesses to succeed”? What kind of redundant doublespeak is that? What makes you think that successful businesses are unable to create jobs?

Aside: The “prop up by taxpayers” is exactly what Obama is trying to stop and he’s being called a socialist for doing so.

danielsangeo: given the environment created by the Idiot Congress and the Great Oz, it’s questionable that many businesses will succeed. Our objective should be to persuade those who will create the anti-free enterprise environment to see the error of their ways at the risk of losing in the next election. By the way, look up the defination of fascist economy, and compare that to what we have now.

Okay, since you seem totally incapable of abandoning your schoolyard antics, I have relegated you to the lunatic fringe.

Don’t worry, I won’t speak to you again.

ADandy- I finally get it. You’re just against anybody that does anything. You just want to sit and point and say, “that will never work and you’re all idiots.” But then you shout out, “cut taxes” which is something that has been tried and has never worked. It most likely assisted in creating this mess to begin with. Not to mention the National debt that it increased.

I read your article. It says nothing about the mortgage market. It is about Freddie Mac and Fannie Mae. Bush didn’t warn that the market was unstable. He said the agency needed better oversight. I’ll grant you that. It needed better oversight.

Bush’s plan was to put it totally under the administration’s control by making it part of the treasury department. It was simply another power play on his part.

I’ll ask again: do you have an articles from before 2006 where Bush warns about the MORTGAGE MARKET. Or were you mistaken.

Maybe one day you can join the “enlightened few” instead of just taking this one thing that you know a little about and trying to make it fit every argument.

RussellBash: Every time tax cuts were applied as an economic stimulus, the economy rebounded. I refer you to the Eisenhower Administration, whose tax cuts ended the Great Depression. This following the failure of FDR to spend the US out of depression. Tax cuts worked for the Kennedy Administration and also for the Reagan Administration, which ended the recession presided over by Carter, one worse that our present recession. I can’t understand you read the referenced article and missed the last sentance of the second paragraph, “Fannie Mac and Freddie Mac,…the two largest players in the mortgage lending industry.” Had the Idiot Congress heeded the recommendation by the Bush Administration, will you agree the present crisis might have been even slightly mitigated?

ADandy- 1) The ARTICLE NEVER SAYS ANYTHING ABOUT BUSH THINKING THE MORTGAGE MARKET WAS IN TROUBLE! 2) Great Depression (1925-1939) Eisenhower administration (1953-1961) Absolutely amazing how an administration, that begin 14 years after the depression ended, was able to issue tax cuts that ended the Depression. World War II ended the Great Depression. In case you forgot about it, that started during FDR’s time. Bush tried starting a war, but even that didn’t help the economy. 3) You can not link to an article written in the last four months that says the Carter era recession was worse than our current situation. Maybe Rush Limbaugh will say it, but no economist would. 4) Reagan increased the national debt 190%. Bush I increased it to a total of 345%. That was in 12 years. (Source: US Treasury Historical Debt http://www.treasurydirect.gov/govt/reports/pd/histdebt/histdebt_histo4.htm) 5)Yes if better oversight had been given to Fannie and Freddie our current situation might be 3% better. However if the administration hadn’t cut taxes and had allowed a small recession in 2002, we would never have entered this situation at all. Telling America, “our country has been attacked. Go shopping!” was the one of the worst presidential moments in history.

RussellNash: So Bush proposed changes because there were no problems with the two major players? WWII simply took those from soup lines to chow lines. The jobs that did not exist before the war did not exist after the war. The GI bill substituted as a welfare device, Korea detracted some attention from the economy, but the real health did not recover until Eisenhower.

ADandy - Give a link to anything that supports that statement about the Great Depression.

You’re changing your argument, because you know you are so very wrong. My original challenge to you was to find anything from before 2006 where Bush said the mortgage market was in trouble. You have come up with one thing that shows him showing concern in FM&FM, but being totally oblivious to the market in general. There were many chances to put the brakes on this before it went over the cliff and Bush missed them all.

RussellNash: You’re not paying much attention, are you? What prompted Barney F. to state that there was nothing amis with Fannie and Freddie, while at the same time Dodd was a friend of Angelo? Both were on the take, and killed any further inquiry. WAKE UP! You impress me as the missing link.