Posts

Race Relations Plummeted While Joe Biden Was Vice President Under Barack Obama

  • Polling on racial relations turned historically negative during President Barack Obama’s final year in office due in part to the blossoming of the Black Lives Matter movement after the police shootings of two black men. Now, Obama’s vice president, Joe Biden, is running for president as a unifier on race. 
  • Americans’ view on race during President Donald Trump’s first three years in office were good relative to Obama’s final year in office, with polls showing public satisfaction on race issues increasing dramatically in 2018. 
  • Views on race relations turned overwhelmingly negative during the final year of Trump’s first term after the death of George Floyd, a black man who died in May after a white police officer kneeled on his neck for nearly 9 minutes. 

Former Vice President Joe Biden is billing himself as the person who can ease race relations and unify the nation as part of his 2020 presidential bid. But race relations plummeted while the presumptive Democratic nominee served under President Barack Obama, the first black U.S. president in history.

Biden supported demonstrations in May and June against the death of George Floyd, a black man who died after a white police officer knelt on his neck for nearly 9 minutes, video of the incident shows. He met with Floyd’s family after the tragedy and wrote in a June 10 tweet that he’s ready to get to work on “day one” to tackle racism.

The former vice president stayed on message that month and promised to “heal the racial wounds that have long plagued our country.”

“This is a battle for the soul of America,” Biden said at an economic roundtable in June. “Who are we? What do we want to be? How do we see ourselves? What do we think we should be? Character is on the ballot here.”

But last time Biden was in the White House, when he was serving as vice president, race relations in the U.S. took a nose dive.

Race Relations During The Obama Era

Americans held a positive view on race relations during the first half of Obama’s administration, with more than 52% of voters telling pollsters in 2008 that the former president’s victory would lead to better race relations, a Pew Research poll published in November 2008 showed. Only 9% thought race relations would get worse.

But polling on racial relations turned overwhelmingly negative during the last half of Obama’s administration. Nearly 70% of Americans said in July 2016 that race relations were bad, a level not seen since the 1992 riots in Los Angeles during the Rodney King case, a New York Times/CBS News poll published that month and year show.

The poll found that six in 10 American voters said race relations were growing worse, up from 2015, when 38% 0f people expressed a similar view.

The downward trajectory coincided with the blossoming of the Black Lives Matter movement, which began in 2013 after videos were made public showing the deaths of Alton Sterling and Philando Castile at the hands of the police. They were killed over the course of two days that year.

Five police officers were shot and killed in Dallas by a black Army veteran the day after the Sterling and Castile deaths.

Obama told audience members at the police officers’ memorial service on July 11, 2016 that, “we are not as divided as we seem,”

“We cannot simply turn away and dismiss those in peaceful protest as troublemakers or paranoid,” Obama said.

He added: “We can’t simply dismiss it as a symptom of political correctness or reverse racism. To have your experience denied like that, dismissed by those in authority, dismissed perhaps even by your white friends and co-workers and fellow church members again and again and again — it hurts.”

Obama’s pleas didn’t do much to change perceptions.

The July 2016 NYT poll showed a stark difference in how white and black people see race. Three-quarters of black people said police are more likely to use deadly force on an African American over a white person, the poll showed. Only 18% of black people argued that the color of the person made no difference.

Race Relations During Trump’s Term

Satisfaction with race relations jumped during Trump’s first three years in office.

A Gallup survey conducted in January 2020, for instance, recorded a double-digit increase (14 percentage points) in public satisfaction with the state of race relations in the country. Only 22% of people held a satisfactory view on race at the end of the Obama-era, with that number jumping to 36% in January, Gallop’s survey showed.

Satisfaction also increased between six and nine points regarding the position of black people and other racial minorities in January, according to the Gallup poll. Trump and White House officials cited the historic low black unemployment rate for reasons why attitudes on race were in positive territory at that time.

Black unemployment reached a record low during the first two years of the Trump administration, with only 5.9% claiming unemployment in May 2018. Yet the biggest drop came under Obama, when the unemployment rate for black people fell from 16.8% in March 2010 to just 7.8% in January 2017, AP reported in 2019.

Poll numbers on race relations plummeted shortly after Floyd’s death, which sparked nationwide demonstrations and calls for city and state officials to defund the police. Biden does not endorse an outright campaign to defund the police but does support a move to redirect police funding to address mental health.

Following Floyd’s death, most Americans now argue that race relations in the U.S. are bad, including a majority of both black and white people, according to a CBS poll conducted in June. Roughly 61% of Americans believe that the state of race relations in the U.S. today are generally bad compared to 35% who say they are good, the poll notes.

Trump’s poll numbers are similarly dropping.

More than 67% of voters disapprove of the president’s “oversight” on the coronavirus pandemic, according to a July 11 poll conducted by The Guardian. The same percentage said they disapproved of the president’s response to recent racial unrest.

COLUMN BY

CHRIS WHITE

Tech reporter.

RELATED ARTICLES:

Yet Another Poll Shows Biden Leading Over Trump By Double Digits

‘They’re Not Concerned About The General Public’: NY, LA Police Unions Blast Massive Budget Cuts

Two Texas Police Officers Ambushed, Shot Dead Investigating Routine Call

Here Are Examples Of The Media Claiming The Protests Are Peaceful

EDITORS NOTE: This Daily Caller column is republished with permission. ©All rights reserved. Content created by The Daily Caller News Foundation is available without charge to any eligible news publisher that can provide a large audience. For licensing opportunities of our original content, please contact licensing@dailycallernewsfoundation.org.

The Plot Thickens: Grassley-Graham Letter Sheds New Light on Steele Dossier, Nunes Memo

While politicians, pundits, and the people continue to react to (and spin) the contents of the Nunes memo that was released last Friday, and await the release of the Democrats’ rebuttal, a new document has been released that contains tidbits of illuminating information.

On Jan. 4, Republican Sens. Chuck Grassley, chairman of the Senate Judiciary Committee, and Lindsey Graham, chairman of the Judiciary Committee’s subcommittee on crime and terrorism, submitted a letter to Deputy Attorney General Rod Rosenstein and FBI Director Chris Wray requesting that they consider investigating Christopher Steele for lying to the FBI, which is a federal crime.

Steele is the former British spy who was hired and paid $160,000 by Fusion GPS, a research company working on behalf of the Clinton campaign and the Democratic National Committee to do opposition research on Donald Trump. Steele is also the individual who produced a dossier that was used to support an application for a warrant to engage in electronic surveillance of Carter Page, a suspected foreign agent (wittingly or unwittingly) of the Russian government who was also working as an unpaid foreign policy adviser for the Trump campaign.

And it is Steele’s credibility, as well as allegations of political bias at senior levels of the FBI, that are the center of this dispute.

Grassley-Graham Memo Informs Our Understanding of Nunes Memo

Attached to that referral letter was an eight-page classified memorandum (“Grassley/Graham memo”) setting forth the basis for the referral. Wray, very much to his credit, has declassified much (but not all) of the information in that memorandum, which has now been released.

The initial application (which was subsequently renewed three times) was filed on October 21, 2016, pursuant to the Foreign Intelligence Surveillance Act and was signed by a judge on the secretive Foreign Intelligence Surveillance Court.

As I wrote in a previous article, Former FBI Director James Comey has testified that the information in the Steele dossier was “unverified” at the time the initial FISA application was submitted, and, according to the Nunes memo, former Deputy Director Andrew McCabe testified before the House intelligence committee that “no surveillance warrant would have been sought from the [Foreign Intelligence Surveillance Court] with the Steele dossier information,” suggesting the FBI did not believe probable cause existed based on the information it gathered on its own.

Several Democrats have charged that the Nunes memo mischaracterized McCabe’s testimony and have implied that there was more than enough information in the FISA application to support issuing the warrant without information from the Steele dossier.

In their referral memorandum, Grassley and Graham, who have reviewed all four FISA applications in their entirety, “as well as numerous other FBI documents relating to Steele,” make statements which, assuming they are true, tend to support what is contained in the Nunes memo.

Specifically, the Grassley/Graham memo states that the Steele dossier “formed a significant portion of the FBI’s warrant application,” that the application “relied more heavily on Steele’s credibility than on any independent verification or corroboration for his claims,” and that the basis for the warrant “rests largely” on Steele’s credibility.

The Steele dossier contains explosive allegations that the Russian government, acting under orders from Russian President Vladimir Putin, was carrying out an operation to tilt the election in Trump’s favor and that the Russian government had compromising information of a financial and sexual nature against Trump that could be used to blackmail him at some point in the future.

Why the FBI Trusted Steele

The FBI, it seems, trusted Steele and relied on this information because of his background as a spy and because he had provided the bureau with reliable information on several occasions in the past.

According to the Grassley/Graham memo, the FBI stated in its initial FISA application that, “based on [Steele’s] previous reporting history with the FBI, whereby [Steele] provided reliable information to the FBI, the FBI believes [Steele’s] reporting to be credible.”

While that may have been so in the past, there was plenty of reason to distrust Steele in this case.

In addition to the fact that he was working on behalf of the DNC and Trump’s opponent in the presidential election, Steele detested Trump. A month before the government filed its first FISA application, Steele told Bruce Ohr, a senior Justice Department official whose wife worked for Fusion GPS, that he was “desperate” to see that Trump not win the election.

Moreover, the Steele dossier itself is replete with statement allegedly provided to Steele by various unnamed sources whom Steele claims are or were senior Russian officials or people who were close to them. In other words, the validity of the dossier depended not only on the credibility of the man preparing the dossier (whose credibility was subject to doubt in this case), but also his assessment of the credibility of other unidentified sources who were feeding him information.

Did Clinton Sources Contribute to Steele Dossier?

As disturbing as that is, another revelation in the Grassley/Graham memo is even more concerning.

The memo suggests that some of the information being fed to Steele and included in his dossier did not come from highly-placed Russian sources, but from people associated with the Clintons.

There has been some speculation that this individual may have been Sidney Blumenthal, a former senior adviser to President Bill Clinton and employee of the Clinton Foundation and a long-time close confidant of Hillary Clinton.

As the memo states, “[i]t is troubling enough that the Clinton Campaign funded Mr. Steele’s work, but that these Clinton associates were contemporaneously feeding Mr. Steele allegations raises additional concerns about his credibility.”

Steele’s Relationship With FBI

The nature of the lies that Steele may have told the FBI are also significant.

Given the fact that the information in the Steele dossier was “unverified” and was central to the FISA application, the FBI was looking for some, any, information that might be deemed corroborative. According to the Grassley/Graham memo, at the time of the initial FISA application, Steele had told the FBI that he had not disclosed the contents of his dossier to anyone other than the bureau and Fusion GPS.

Roughly one month beforehand, Yahoo News, presumably doing its own investigative work, published an article that, as the FISA application stated, “generally match[ed] the information about [Carter] Page that [Steele] discovered doing [his] own research … .”

According to the Grassley/Graham memo, the FBI affirmatively stated in the FISA application that it did not believe Steele was the source of the information that appeared in the Yahoo News article, which attributed the source of its information to “a well-placed Western intelligence source … .”

If the Yahoo News source was indeed an independent source, this would be significant, but it wasn’t. Contrary to what he told the FBI, Steele had, in fact, provided information in his dossier to others. The source of the information in the Yahoo News article was Steele himself.

Steele, no doubt anxious to get his revelations into the public domain before the election, was leaking like a sieve. In addition to speaking to Yahoo News, Steele provided background briefings to CNN, The New York Times, The Washington Post, The New Yorker, and possibly other media outlets.

Shortly after the initial FISA warrant was obtained, Mother Jones published its own article in which Steele outed himself as an FBI confidential source, which prompted the FBI to formally terminate Steele’s designation as a trusted source.

Friends of Steele’s have stated that Steele was deeply troubled by what he learned during his investigation of Trump and that he felt like he was “sitting on a nuclear weapon.” Perhaps that was so.

But given the explosive nature of charges, the relationship of the target (Page) to the Trump campaign in the heat of a close election battle, the fact that Steele was paid by (and possibly given unsourced information by) the Clinton campaign, it was incumbent on the FBI to verify as much of this information as it could or, at the very least, to reveal to the Foreign Intelligence Surveillance Court every bit of information it had that might cast doubt on Steele’s credibility.

In summary, the initial FISA application and, most likely, the renewal applications, relied extensively on the credibility of Steele. Yet in addition to the fact that it failed to disclose the full extent of Steele’s known or potential bias in the initial application, when the FBI learned that Steele had not been truthful during the process, it did not, it seems, tell that to the FISA court.

As Graham has stated: “You can be an FBI informant. You can be a political operative. But you can’t be both, particularly at the same time.”

All attorneys before a court have a duty of candor, which means they must disclose “all material facts known to the lawyer that will enable the tribunal to make an informed decision, whether or not the facts are adverse.” Would the Foreign Intelligence Surveillance Court judge have signed the warrant if this information had been disclosed? We will never know.

This is, of course, a developing story, and more information will likely be revealed once the memo from Rep. Adam Schiff, D-Calif., is disclosed, assuming that it is disclosed.

Speaking of the Schiff memo, some Democrats have expressed the fear that the president, who must approve the memo’s release, will make “political redactions” to the memo to prevent the disclosure of information that will be unfavorable to him.  And some Republican sources have expressed the fear that the Democrats may have intentionally included highly sensitive information in their memo so that, if redacted by Trump, it would enable them to argue that the president is hiding something.

Let’s hope neither of these is true.

It is, of course, vital that the president protect against the disclosure of sensitive “sources and methods” that could imperil the integrity of current or future national security investigations. That having been said, it is also important that the public get to the bottom of what happened here. As I have previously stated, this “matter should be thoroughly and dispassionately (to the extent that is possible in Washington, D.C.) investigated. The matter is too important to do otherwise.”

COMMENTARY BY

Portrait of John G. Malcolm

John G. Malcolm oversees The Heritage Foundation’s work to increase understanding of the Constitution and the rule of law as director of the think tank’s Edwin Meese III Center for Legal and Judicial Studies. Read his research. Twitter: .

RELATED ARTICLES:

7 Anti-Trump Politicians and Institutions Who Colluded with the Russians

Poll: Americans ‘Overwhelmingly’ Believe Obama ‘Improperly Surveilled’ Trump Campaign

A Note for our Readers:

Trust in the mainstream media is at a historic low—and rightfully so given the behavior of many journalists in Washington, D.C.

Ever since Donald Trump was elected president, it is painfully clear that the mainstream media covers liberals glowingly and conservatives critically.

Now journalists spread false, negative rumors about President Trump before any evidence is even produced.

Americans need an alternative to the mainstream media. That’s why The Daily Signal exists.

The Daily Signal’s mission is to give Americans the real, unvarnished truth about what is happening in Washington and what must be done to save our country.

Our dedicated team of more than 100 journalists and policy experts rely on the financial support of patriots like you.

Your donation helps us fight for access to our nation’s leaders and report the facts.

You deserve the truth about what’s going on in Washington.

Please make a gift to support The Daily Signal.

SUPPORT THE DAILY SIGNAL

Remembering the 1979 Russian Invasion of Afghanistan: How Democrats created radical Islamic terrorism

Don Hank in an email titled “This is how the terror started (in 1979)” provided this quote:

In his 1993 memoirs [“From the Shadows“], ex-Director of Central Intelligence (DCI) Robert Gates revealed that direct CIA involvement in Afghanistan had commenced almost six months before the Soviet invasion. Jimmy Carter signed a presidential decree in July 1979 to covertly aid the Mujahideen insurgents.

Hank then wrote, “And then came Al-Qaeda and the 9-11 attack, and then ISIS and the invasion of Europe. It all seems to have started with the CIA. If you want a war on terror, you have to start with the people who spawned the terror. A true war on terror would include a war on the CIA. It starts with education.”

Hank provided a link to a Daryl Morini, paper dated January 3rd, 2010 titled “Why Did the Soviet Union Invade Afghanistan?.” Morini wrote:

The Soviet intervention in Afghanistan was a costly and, ultimately, pointless war. Historical hindsight has made this evident. However, exactly why the Red Army wound up in direct military conflict, embroiled in a bitter and complicated civil war—some 3,000 kilometres away from Moscow—is a point of historiographical uncertainty. The evidence available suggests that geopolitical calculations were at the top of the Kremlin’s goals. These were arguably to deter US interference in the USSR’s ‘backyard’, to gain a highly strategic foothold in Southwest Asia and, not least of all, to attempt to contain the radical Islamic revolution emanating from Iran. The subsidiary goal of the invasion was to secure an ideologically-friendly régime in the region.

[ … ]

Following the 1970s period of détente between the United States (US) and the Soviet Union, the latter seemed to be in an advantageous strategic position, compared to the post-Vietnam paralysis which plagued its main opponent. Scott McMichael, a military historian, argued that this “turned out largely to be an illusion,” although there is substance to the claim that the Soviet Union was ahead of the game in the lead u p to 1979. This is exemplified by Moscow’s increasing assertiveness in foreign affairs during this period. As a direct result of the so-called ‘Brezhnev doctrine’, the USSR asserted its “right and duty” to go to war in foreign countries “if and when an existing socialist regime was threatened.” [Emphasis added]

Read more…

Is Russia, under Putin, making the same mistake that his predecessors in the Former Soviet Union made by exerting Russia’s “right and duty” to go to war in foreign countries “if an when an existing socialist regime [like Assad’s Syria] was threatened.” According to Wikipedia:

The Ba’ath Party, and indirectly the Syrian Regional Branch, was established on 7 April 1947 by Michel Aflaq (a Christian), Salah al-Din al-Bitar (a Sunni Muslim) and Zaki al-Arsuzi (an Alawite). According to the congress, the party was “nationalist, populist, socialist, and revolutionary” and believed in the “unity and freedom of the Arab nation within its homeland.” 

[ … ]

The party merged with the Arab Socialist Party (ASP), led by Akram al-Hawrani, to establish the Arab Socialist Ba’ath Party in Lebanon following Adib Shishakli‘s rise to power. [Emphasis added]

Read more…

Has President Obama made the same mistake as Jimmy Carter did in 1979 by arming the anti-Assad Mujahideen insurgents? Is the CIA complicit, once again, in doing the wrong thing for what it believes is in America’s national interests?

President-elect Donald J. Trump has expressed his doubts about the CIA and other U.S. national intelligence agencies, especially when it comes to Russia, Iran, North Korea, China and Syria.

On January 20th, 2017 Donald J. Trump will be sworn into the Office of the President of these United States. Will a President Trump learn from the failures of both Democratic President’s Carter and Obama? Me thinks so.

RELATED ARTICLE: Secretary of State Kerry’s Speech on the Israeli-Palestinian Conflict

Foreign Student Visas: Educating America’s Adversaries

Guess who Obama’s State Department issues hundreds of thousands of student visas to?

It has been said that if you give a man a fish you will feed him for a day, but if you teach him how to fish, you will feed him for a lifetime.  This simple saying illustrates how important training/education is.

Incredibly, the United States’ immigration policies formulated by the Obama administration welcome hundreds of thousands of Chinese STEM (Science, Technology, Engineering and Mathematics) students into our nation’s premier universities while it is clear that China demonstrates hostility to the United States acting not as a partner, but rather as an adversary.

Chinese computer hackers attack computers in the United States as a matter of routine. The obvious question is how many of those Chinese computer hackers may have been trained and educated in the United States.

China’s recent theft of a U.S. Navy drone in the South China Sea underscores this hostility as do the arrest of numerous spies operating on behalf of China to steal America’s military and industrial secrets.

Not surprisingly, China has offered to return the drone while President-Elect Donald Trump has been quoted as saying that China can keep that drone.

China may have had two reasons for its illegal action.  It is clearly attempting to demonstrate that it has unilateral control over the strategically important South China Sea although this claim is not based on law or fact.  Additionally, China has an obvious interest in America’s military technology.  By now China’s engineers have had ample opportunity to study the design of the drone and, perhaps, has managed to embed technology within the drone that would continue to provide intelligence about the use of that drone.

The U.S. Navy’s underwater drones seem to have drawn particular interest by China’s military.  In fact, on April 22, 2016 Newsweek reported, “Chines Spy In Florida Sent Drone Parts To China For Military.”

On April 14, 2016 Newsweek published a report about a naturalized United States citizen, Edward Lin, who had joined the U.S. Navy only, allegedly, to be able to spy on the Navy.  I cannot help but wonder if his application for citizenship had been more effectively scrutinized if his alleged disloyalty to the United States could have been uncovered sooner.

That report, “Accused Navy Spy Edward Lin Had Friends In Sensitive Places” began with the following:

Edward Lin, the U.S. Navy officer suspected of spying for China and Taiwan, had scores of friends in sensitive places, if the number of contacts who “endorsed” him for military and security “skills” on LinkedIn, the professional networking site, is any guide.

Among those who endorsed Lin, a Taiwan-born officer assigned to a highly classified naval air reconnaissance unit in Hawaii until his secret arrest last year, are senior Taiwanese military officers and a Beijing-based venture capitalist specializing in “mobile internet applications and mobile games,” according to their LinkedIn bios. His American endorsers on the site include the second in command at the U.S. Naval Air Station, Guantanamo; the U.S. Pacific Fleet’s senior political-military analyst on Southeast Asia; a Navy congressional liaison officer; and fellow former aviators in his reconnaissance squad, including one now working at the Northrop Grumman Electromagnetic Systems Laboratory in Sacramento, California.

Lin also served as a congressional liaison for the assistant secretary of the Navy for finance management and comptroller from 2012 to 2014, a position that presumably gave him access to highly classified strategic weapons planning and put him in regular contact with senior members of the House and Senate armed services and military appropriations committees.

Lin’s assignments and the relationships that he developed positioned him perfectly to have access to extremely sensitive information.

Chinese citizens are not only allegedly spying on our military.  On May 19, 2016 Reuters reported, “U.S. charges six Chinese nationals with economic espionage.”

On December 8, 2016 ICE (Immigration and Customs Enforcement) released a press release that provided the latest statistics concerning foreign students who are present in the United States.

This press release began by noting that there are currently 1.23 million foreign students who have been admitted with F (academic visas) or M (vocational visas) studying at 8,697 schools scattered across the United States.

Consider this excerpt from that press release:

Nearly 42 percent of all F and M students pursued studies in science, technology, engineering and mathematics (STEM) fields. This marks a 10.1 percent increase in international students pursuing STEM studies compared to November 2015.

Out of the nearly 514,000 international students pursuing STEM studies, almost 450,000 were from Asia, with the majority of all STEM students from India and China.

Concerns about foreign students with malevolent goals is not limited to students from China.

On February 24, 1998, two days short of the fifth anniversary of the first World Trade Center bombing, the Senate Judiciary Committee, Subcommittee on Technology, Terrorism and Government Information conducted a hearing on the topic, “

The full text of that hearing, “Foreign terrorists in America : five years after the World Trade Center” includes Senator Dianne Feinstein’s prepared testimony.

Here are a few excerpts from her testimony well worth considering:

There are also a number of glaring loopholes in our immigration laws. As I serve on the Immigration Subcommittee, I just wanted to spend my time touching on some of them.

I have some reservation regarding the practice of issuing visas to terrorist-supporting countries and INS’ inability to track those who come into the country either using a student visa or using fraudulent documents, as you pointed out, through the Visa Waiver Pilot Program.

The Richmond Times recently reported that the mastermind of Saddam Hussein’s germ warfare arsenal, Rihab Taha, studied in England on a student visa. And England is one of the participating countries in the Visa Waiver Pilot Program, which means, if she could have gotten a fraudulent passport, she could have come and gone without a visa in the United States.

The article also says that Rihab Taha, also known as “Dr. Germ,” that her professors at the University of East Anglia in Norwich, England, speculate that she may have been sent to the West specifically to gain knowledge on biological weaponry.

What is even more disturbing is that this is happening in our own backyard.

The Washington Post reported on October 31, 1991, that U.N. weapons inspectors in Iraq discovered documents detailing an Iraqi Government strategy to send students to the United States and other countries to specifically study nuclear-related subjects to develop their own program. Samir AJ-Araji was one of the students who received his doctorate in nuclear engineering from Michigan State University, and then returned to Iraq to head its nuclear weapons program.

The Washington Institute for Near Eastern Policy found in September 1997 that many terrorist-supporting states are sending their students to the United States to get training in chemistry, physics, and engineering which could potentially contribute to their home country’s missile and nuclear, biological, and chemical weapons programs.

[ … ]

The defendants of the World Trade Center bombing are also an example of those coming in through non-immigrant or employment-based visas or abusing our political asylum process and then committing crimes.

For instance, Nidal Ayyad, one of the defendants in this case, used his position as a chemical engineer for Allied Signal to obtain the chemicals used in the World Trade Center bombing.

There is Gazi Abu Mezer, who was arrested in a suspected terrorist plot to detonate bombs in Brooklyn last year. He came in illegally across the Canadian border to Washington State and attempted to seek asylum, but withdrew his application and agreed to leave the country. Once he was released on voluntary departure, he fled Washington to Brooklyn, NY, where he was arrested for plotting suicide-bomb attacks in Brooklyn.

Back then Senator Feinstein’s testimony made perfect sense and asked the right questions.

Inexplicably, even after the terror attacks of 9/11, the attacks at the Boston Marathon and at San Bernardino, today Feinstein’s commonsense approach would be the source of derision by her colleagues of the Democratic party.

Meanwhile, as I discussed in a recent article, so-called, “Sanctuary campuses” shield and harbor illegal aliens from detection by ICE agents.

Finally, increasing numbers of American high-tech professionals are being fired and replaced by foreign H-1B workers, often from India.  The obvious question is how many of those aliens with H-1B visas who have gone on to replace Americans were educated in the United States?

“Knowledge is power.”  The time has come for Americans to be empowered to be successful.  Educating foreign students who may, in one way or another, use their training against America or Americans must end.

January 20, 2017 cannot come fast enough.

EDITORS NOTE: This column first appeared on FrontPage Magazine.

76% of Republicans and 38% of Democrats want to ‘Admit Fewer Refugees’

I was surprised to see that this large number—38%—of Democrats think our refugee admissions are too high!

Obama and Clinton 3

Readers you have to wade through a lot of column inches before you get to what I consider the meat of this story by AP.  It sure looks like Americans generally are not in agreement with Barack Obama and Hillary Clinton on admitting tens of thousands of refugees from mostly Muslim countries, especially Syrians.

Associated Press at WHIO (12 paragraphs into the story).  Emphasis below is mine:

Americans are slightly more likely to oppose than favor a temporary ban on Muslims who are not U.S. citizens from entering the United States, by a 52 percent to 45 percent margin that has been strikingly consistent in AP-GfK polls conducted this year.

Sixty-nine percent of Republicans say they favor the temporary ban on Muslim immigration, while 68 percent of Democrats are opposed. Half of whites and just a third of non-whites say they favor the ban. Seventy-six percent of Trump supporters are in favor.

On a trip to Scotland last month, Trump shifted his rhetoric, saying he would instead “want terrorists out” of the U.S., and to do so, he would limit people’s entry from “specific terrorist countries and we know who those terrorist countries are.”

The poll indicates that rhetorical shift could win support. Among those asked more broadly about a temporary ban on immigrants from areas of the world where there is a history of terrorism against the U.S. or its allies, 63 percent are in favor and 34 percent opposed. Ninety-four percent of Trump supporters say they favor this proposal, as do 45 percent of Clinton supporters.

“That’s a necessity for creating stability,” said Ryan Williams, 40, a health care provider from Jacksonville, North Carolina.

Most Americans — 53 percent — think the United States is currently letting in too many refugees from Syria, engulfed in civil war since 2011 and the Islamic State militant group’s de facto center. President Barack Obama has pledged to admit some 10,000 Syrian refugees this year.

Remember Hillary is on record saying she wants to admit 65,000 Syrians immediately (only 11 percent of Americans agree with her!):

Another 33 percent think the current level is about right, while just 11 percent want to let in more. About 4 in 10 think there’s a very or somewhat high risk of refugees committing acts of religious or political violence in the United States, 34 percent think the risk moderate, and 24 percent consider it very or somewhat low.

Seventy-six percent of Republicans think the U.S. should allow fewer refugees. Among Democrats, 43 percent think the current level is about right, 38 percent think the U.S. should allow fewer, and 18 percent want to allow more.

This tells me that Trump has to continue to pound the issue of refugees!  (And, that the propagandists at The Hive have their work cut out for them).

BTW, if every American could see what I’ve seen over the last two days on my road trip, these numbers would be even higher!

One more thing…I’ve heard several times lately that some Americans think that the U.S. refugee program is a temporary one for the refugees, that they only come here until things calm down in their home countries.  That is NOT the case! Refugees who come to the U.S. come here permanently and ultimately become citizens.

RELATED ARTICLES:

After Nice, France Grapples With How to Combat Terrorism

The Attempted Coup Reveals Turkey’s Instability. That’s Bad News for the U.S.

These Are the Tools We Need to Win the Long War Against Islamist Terrorism

Retired DHS Intelligence Officer Blows Whistle on Federal Government’s role in Islamic terror threat

WASHINGTON, D.C. — One day after a prominent U.S. Muslim leader reacted to the November 2015 Paris attacks with a declaration that the Islamic State, also known as ISIS, has nothing to do with Islam, President Obama made the same assertion.

Who exactly is the enemy we face, not only in the Middle East but also within our borders? Is it “murderers without a coherent creed” or “nihilistic killers who want to tear things down,” as some described ISIS after 130 people were brutally slain and another 368 injured in a coordinated attack on Western soil that authorities say was organized with help from inside France’s Muslim communities.

After the Paris attacks, Obama, himself, described ISIS as “simply a network of killers who are brutalizing local populations.”

But how much do words and definitions really matter? According to the legendary military strategist Sun Tzu, if “you do not know your enemies but do know yourself, you will win one (battle) and lose one; if you do not know your enemies nor yourself, you will be imperiled in every single battle.”

When the Department of Homeland Security was founded in 2003, its stated purpose was “preventing terrorist attacks within the United States and reducing America’s vulnerability to terrorism.” The Bush administration’s definition of the enemy as a tactic, terrorism, rather than a specific movement, proved consequential amid a culture of political correctness. By the time President Obama took office, Muslim Brotherhood-linked leaders in the United States were forcing changes to national security policy and even being invited into the highest chambers of influence. A policy known as Countering Violent Extremism emerged, downplaying the threat of supremacist Islam as unrelated to the religion and just one among many violent ideological movements.

When recently retired DHS front-line officer and intelligence expert Philip Haney bravely tried to say something about the people and organizations that threatened the nation, his intelligence information was eliminated, and he was investigated by the very agency assigned to protect the country. The national campaign by the DHS to raise public awareness of terrorism and terrorism-related crime known as If You See Something, Say Something effectively has become If You See Something, Say Nothing.

To be released by WND Books on May 24, 2016, in See Something, Say Nothing: A Homeland Security Officer Exposes the Government’s Submission to Jihad, Haney – a charter member of DHS with previous experience in the Middle East – and co-author Art Moore expose just how deeply the submission, denial and deception run. Haney’s insider, eyewitness account, supported by internal memos and documents, exposes a federal government capitulating to an enemy within and punishing those who reject its narrative.

Haney discloses:

  • How the Bush administration stripped him and other front-line officers of their ability to define the threat;
  • How much the Obama administration knew in advance of the Boston Marathon bombing and how it launched an ongoing cover-up on behalf of a major ally;
  • The administration’s stealth policy to protect Islamic leaders with supremacist beliefs and violent-jihadist ties, allowing them to freely travel between the U.S. and the Middle East;
  • The scope of access to the White House and the classified information the Obama administration gave to members of Muslim Brotherhood front groups;
  • The damning intelligence on Muslim Brotherhood-linked leaders invited to sit at the table and help form national-security policy;
  • The “words matter” memo imposing the demands of radical U.S. Muslim leaders on the DHS, including stripping intelligence and official communications of any mention of Islam in association with terrorism;
  • The purging of training material that casts Islam in a negative light;
  • The erasing and altering of vital intelligence on terrorists and terror threats;
  • The fear-based tactics imposed by the Muslim Brotherhood front groups in the U.S. and their accomplices that paralyze officials, members of Congress and any Department of Homeland Security employee who dares to expose or resist their agenda; and

Much more …

In this well-documented, first-person account of his unique service with DHS, Haney shows why it’s imperative that Americans demand that when they see something and say something, the servants under their charge do something to prevent a cunning, relentless enemy from carrying out its stated aim to “destroy Western Civilization from within.”

ABOUT PHILIP B. HANEY

Philip Haney studied Arabic culture and language while working as a scientist in the Middle East before he was hired as a founding member of the Department of Homeland Security in 2003. After becoming an armed Customs and Border Protection officer, he served several tours of duty at the National Targeting Center near Washington, DC, where he quickly was promoted to its Advanced Targeting Team, an unprecedented accomplishment for an agent on temporary duty assignment. Officer Haney won numerous awards and commendations from his superiors for meticulously compiling information and producing actionable reports that led to the identification of hundreds of terrorists. He has specialized in Islamic theology and the strategy and tactics of the global Islamic movement. He retired honorably in July 2015.

ABOUT ART MOORE

Art Moore is an editor for online news giant WND. He entered the media world as a public relations assistant for the Seattle Mariners and a sports correspondent for Associated Press Radio. Moore served for ten years in Eastern Europe with a Christian organization and earned a master’s degree in communications from Wheaton College. Before joining WND shortly after 9/11, he was an editor for the news service Worldwide Newsroom and senior news writer for Christianity Today magazine.

See Something, Say Nothing will be in bookstores nationwide on May 24, 2016

RELATED ARTICLES:

Guide to the George Soros Network

The Peace & Security Funders Group: Funding the War Against the War-On-Terror

Socialist Lies: From Stalin to the Clintons, Obamas, and Sanders

social lies book cover simona pimpkoIn my new book I explain that the Soviets are alive and well and to survive the young people have to know our enemy and the rest of the world should know it too. The young people are our future and the vast majority of them are not aware that our foremost enemy is constantly attacking us. Moreover, the absence of truth has allowed political crooks and intellectually dishonest educators to deceive and seduce our youth.

We live in a world driven by a hideous ideology: if you do not know this you are blind, deaf, and defenseless and need to open your eyes to what is happening.

chronicles the last seven years of catastrophic world events during the Obama administration and points out its secret collaboration with socialism worldwide and Russia in particular. Socialist Lies is a quick read that’s hard to put down, showing the aggressive role Russia plays in its war against Western civilization and how the Democratic Party is destroying its free enterprise legacy and adopting socialism. Meanwhile, the Republican establishment is being shaken to its core by member anger at its inaction on critical issues.

This nonfiction work chronicles the last seven years of catastrophic world events during the Obama administration and points out its secret collaboration with socialism worldwide and Russia in particular. Socialist Lies is a quick read that’s hard to put down, showing the aggressive role Russia plays in its war against Western civilization and how the Democratic Party is destroying its free enterprise legacy and adopting socialism.

Meanwhile, the Republican establishment is being shaken to its core by member anger at its inaction on critical issues.

I set the stage with the prologue, a firsthand narrative from her unique childhood under socialism in Russia. I then demonstrate how Marxist theory, which opened a Pandora’s Box in the nineteenth century, marched across the globe to the twentieth century. I call Marxism a combination of fraud with a Utopian concept, which has been used by adventurers, charlatans, and criminals to acquire power. The leader who exemplified all these characteristics was Joseph Stalin.

A dogmatic Marxist, brought up within the Islamic culture, Stalin invented the marriage of communism and Islam—the reason we have been dragged into war today; it is the ideology I called Soviet Fascism.

Stalin laid out the agenda for a One World Government under the Kremlin auspices—the agenda of WWIII against Western civilization.

To purchase Socialist Lies: From Stalin to the Clintons, Obamas and Sanders click here.

Are Ted Cruz and Hillary Clinton now co-chairs of the #DumpTrump campaign?

On Tuesday, March 15th, Donald Trump won Florida, Missouri, Illinois and North Carolina. He lost to Governor Kasich in Ohio. Ted Cruz won no states outright.

florda primary votes by countyNo candidate for the GOP presidential nomination has ever failed to win the sunshine state. The same holds true in the general election.

The GOP must win Florida early in order to put a Republican in the White House on November 8th.

Click here for the 2016 Delegate Count & Primary Results

I received an email titled “One-on-one race” from the Ted Cruz campaign stating:

Tonight, there is no ambiguity.

I’m the only candidate that has defeated Trump outside my home state, that can unify all conservatives, and who has a pathway to win the delegates necessary to earn the nomination.

It appears that Ted Cruz has, along with Hillary Clinton, joined with those behind the #DumpTrump campaign. Among those groups that have made it their mission to dump Trump are Moveon.org, Black Lives Matter, La Raza, George Soros, the Republican establishment, the main stream media and the elite politicians inside the Washington D.C. beltway.

But can they dump Trump?

Neil Munro, from Breitbart in his column Three-Quarters of GOP Voters Back Donald Trump Nomination, if He Gets Most Delegates”  writes:

Three out of four Republicans believe the party establishment should support Donald Trump if he gets the nomination, whose voter support also has broken through the 50 percent mark, up from 44 percent in late February, according to a new poll from YouGov.

Only 13 percent of the party supporters — or just one in eight voters — say the establishment should oppose Trump if he is nominated, says the March 10 to 12 survey.

“If Trump should win … Republican voters, including those supporting other candidates, want the establishment to support him,” YouGov reported.

I have written in my column “Donald Trump is a ‘Christian Nationalist'”:

Donald Trump went from running a campaign, to heading a movement and is now leading an insurgency. Until today I could not define what was driving this insurgency. I may now have the answer.

Karl Marx wrote: “Religion is the sigh of the oppressed creature, the heart of a heartless world, and the soul of soulless conditions. It is the opium of the people“.

Donald Trump is viewed by his followers as the heart of a heartless world, the soul fighting a soulless government and he understands that it is morals that drives him and the American dream. It is religion that is inextricably linked to politics in America. It is something citizens have not seen since the American Revolution.

Senator Ted Cruz does not have the momentum of Donald Trump. If Senator Cruz’s goal is to have just enough delegates to force a brokered convention then he may do more harm to the Republican Party, than good.

Hillary Clinton, the Democrat establishment candidate, has effectively stopped the Bernie insurgency. Should Senator Cruz continue to try to stop the growing Trump insurgency? By doing so will he alienate those who have voted in large numbers for Trump and cause the GOP to split?

It appears the GOP establishment, Hillary Clinton and Senator Cruz want a Republican house divided. Is that a winning political strategy for Republicans November? It certainly is for Democrats.

Time will tell if Donald Trump achieves the needed delegates to win the nomination outright. He is over half way there. As some have said, nothing can seem to stop the Trump Train.

RELATED VIDEOS:

Donald Trump Super Tuesday Press Conference After Winning FL, IL, NC (3-15-16)

Curly Haugland, an unbound GOP delegate from North Dakota, on CNBC’s “Squawk Box” questioned why primaries and caucuses are even held. Haugland states, “We choose the nominee, not the voters“:

RELATED ARTICLES:

We choose the nominee, not the voters: Senior GOP official

The GOP Sellout Continues

Why Washington’s Political Class Is Losing Control

ICE: 124 illegal immigrants released from jail later charged in 138 murder cases

BEYOND DISTRUST: How Americans View Their Government – PEW Research

The ‘Compassionate’ Bullying of the Left

EDITORS NOTE: The featured image is of Republican presidential candidate Donald Trump © Mike Stone / Reuters.

Obama to Visit U.S. Mosque Tied to Extremism

On February 3, President Barack Obama will visit a U.S. mosque for the first time during his presidency. Curiously, the president chose a mosque to visit that is deeply tied to Islamist extremism and terror funding.

The Islamic Society of Baltimore, the mosque Obama will visit, is part of a network of mosques of the Islamic Society of North America (ISNA). In 1991, a U.S. Muslim Brotherhood memo placed ISNA at the top of a secret list of “our organizations and the organizations of our friends.” The document said the organization’s “work in America is a kind of grand jihad in eliminating and destroying the Western civilization from within…”

In 2007, federal prosecutors named ISNA an unindicted co-conspirator in the terrorism-financing trial of the Holy Land Foundation, another U.S. Muslim Brotherhood entity housed in the ISNA building.

See Clarion Project’s profile of ISNA

The U.S. government’s identification of ISNA as a U.S. Muslim Brotherhood entity was upheld in 2009 due to “ample” evidence linking ISNA to Hamas.

As if the Islamic Society of Baltimore’s association with ISNA wasn’t bad enough, the mosque’s imam for 15 year, Mohammad Adam el-Sheikh, also has deep ties to the Muslim Brotherhood. In addition, el-Sheikh served as the regional director of the Islamic American Relief Agency, a group which, according to the U.S. Treasury, funneled funds to Osama Bin Laden, al-Qaeda and Hamas, among other terrorist organizations.

El-Seikh is on record as defending and justifying Palestinian suicide bombing against Israelis.

This is not the first time Obama endorsed and supported the Brotherhood-linked ISNA. In 2013, Obama addressed the 50th annual ISNA convention via videotape, praising ISNA for its partnership with his administration.

To the conference participants, Obama said, “Over the last half-century, you’ve upheld the proud legacy of American-Muslims’ contributions to our national fabric and this gathering is a testament to that tradition.”

Yet, the gathering was anything but a testament to American tradition. A Clarion Project report showed the convention’s roster of speakers included many known extremists, including Zaid Shakir and Siraj Wahhaj.

Shakir has preached that the U.S. Constitution is flawed because it grants equality to Muslims and non-Muslims and Wahhaj, a main speaker at the conference, has a history of anti-American preaching and envisions the day when sharia law will control America. As a current strategy, he advises Muslims to avoid discussion of Sharia because “we are not there yet.”

Ironically, the White House said one of the purposes of Obama’s visit to the Baltimore mosque is to “reaffirm the importance of religious freedom to our way of life.”

Religious freedom is hardly a concept promoted by the Muslim Brotherhood and those associated with it.

In fact, Muslims who are genuinely interested in religious freedom for all people have found Obama’s visit to the Islamic Society of Baltimore highly offensive.

Dr. Zuhdi Jasser, president of the American Islamic Forum for Democracy and vice chairman of the U.S. Commission on International Religious Freedom, called the visit was “insulting.”

“It’s disgraceful that this is the mosque he’s picked to be the first to visit,” Jasser said on “Fox & Friends” Sunday. “This mosque is very concerning…Historically, they are basically a radical, extreme mosque and not representative of the modern Muslims in America.”

Jasser is right. According to a 2011 Gallup poll, only 4% of Muslim-American males and 7% of females chose ISNA as the organization that most represents their interests.

If one of the purposes of visiting a U.S. mosque is to “celebrate the contributions Muslim Americans,” as stated by the Obama administration, he could have started by choosing a mosque and its congregants that are have truly done so.

Meira Svirsky is the editor of ClarionProject.org

RELATED VIDEO: Truth About Shariah: Gay Oppression

RELATED ARTICLES:

Kent State Fires Prof for ‘Road Rage;’ Keeps Jihad-Tied Prof

Iran Tests Upgraded Cruise Surface-to-Surface Missiles

20 Threats a Day Leading Up to Super Bowl Sunday

Kent State Prof Violates Faculty Rules by Supporting Terror

EDITORS NOTE: The featured image is of the Obamas with the grand imam of the Istiqlal Mosque in in Jakarta, Indonesia (Photo: © Reuters)

The House That Uncle Sam Built by Peter J. Boettke & Steven Horwitz

The Great Recession (or the Great Hangover) that began in 2008 did not have to happen. Its causes and consequences are not mysterious. Indeed, this particular and very painful episode affirms what the best nonpartisan economists have tried to tell our politicians and policy-makers for decades, namely, that the more they try to inflate and direct the economy, the more damage the rest of us will suffer sooner or later. Hindsight is always 20-20, but in this instance, good old-fashioned common sense would have provided all the foresight needed to avoid the mess we’re in.

In this essay, originally published December 2009, we trace the path of the recession from its origins in the housing market bubble to the policies offered to cure the aftermath.

Download the PDF.

Listen to the audio file (MP3).


Introduction

The theme of “The House that Uncle Sam Built: The Untold Story of the Great Recession of 2008” is that government policy, not a failure of free markets, caused the economic trauma we have been experiencing. We do not live in a free market. We live in a mixed economy. The mixture varies by industry. Technology is primarily free. Financial Services is primarily government. It is not surprising that the most government regulated and controlled segment of the economy, financial services, experienced the biggest problems. These problems were created by actions by the Federal Reserve combined with government housing policy (especially the government- sponsored enterprises – Freddie Mac and Fannie Mae). Misguided government interference in the market is the real culprit in laying the foundation for the Great Recession.

This paper provides a “common sense” and understandable outline of fundamental causes and cures. The analysis is based on long proven economic laws. Despite the wishes and hopes of politicians, economic laws are just as immutable as the laws of physics. If you jump off a ten story building, hitting the ground will not be pleasant. If the Federal Reserve holds interest rates below the natural market rate by rapidly expanding the money supply (“printing” money) as Alan Greenspan did, individuals and businesses will make bad investment decisions and there will be negative consequences to our long term economic well-being. There are no free lunches.

When a doctor misdiagnoses a disease, his treatment will likely make the patient sicker. If we misdiagnose the causes of the Great Recession, our treatment will reduce our long term standard of living. While the U.S. economic system is highly resilient, and we will likely have some form of economic recovery, almost every significant government policy action taken in response to the Great Recession will reduce the quality of life in the long term. Understanding that failed government policies, not market failure, caused our economic challenges is critical to defining the appropriate cures. Since government created the problem, i.e. caused the disaster, it is irrational to believe that more government is the cure. We owe it to ourselves and to our children and grandchildren to take these issues very seriously.

John Allison, Chairman, BB&T

The House That Uncle Sam Built

The man who parties like there is no tomorrow puts his body through an “up” and a “down” course that looks a lot like the business cycle. At the party, the man freely imbibes. He has a great time before stumbling home at 2:00 a.m., where he crashes on the sofa. A few hours later, he awakens in the grip of the dreaded hang- over. He then has a choice to make: get a short-term lift from another drink or sober up. If he chooses the latter and endures a few hours of discomfort, he can recover. In any event, no one would say the hangover is when the harm is done; the harm was done the night before and the hangover is the evidence.

The Great Recession (or the Great Hangover) that began in 2008 did not have to happen. Its causes and consequences are not mysterious. Indeed, this particular and very painful episode affirms what the best nonpartisan economists have tried to tell our politicians and policy-makers for decades, namely, that the more they try to inflate and direct the economy, the more damage the rest of us will suffer sooner or later. Hindsight is always 20-20, but in this instance, good old-fashioned common sense would have provided all the foresight needed to avoid the mess we’re in.

In this essay, we trace the path of the recession from its origins in the housing market bubble to the policies offered to cure the aftermath.

There is no better way to understand a crisis that began in the housing sector than to begin by thinking about a house.

A house must be built on a firm, sustainable foundation. If it’s slapped together with good intentions but lousy materials and workmanship, it will collapse prematurely. If too much lumber and too many bricks are piled on top of a weak support structure, or if housing material is misallocated throughout the house, then an apparently solid structure can crumble like sand once its weaknesses are exposed. Americans built and bought a lot of houses in the past decade not, it turns out, for sound reasons or with solid financing. Why this occurred must be part of any good explanation of the Great Recession.

But isn’t home ownership a great thing, the very essence of the vaunted “American Dream”? In the wealthiest country in the world, shouldn’t everyone be able to own their own home? What could be wrong with any policy that aims to make housing more affordable? Well, we may wish it were not so, but good intentions cannot insulate us from the consequences of bad policies.

Politicians became so enthralled with home ownership and affordable housing – and the points they could score by claiming to be their champions – that they pushed and shoved the economy down an artificial path that invited an inevitable (and painful) correction. Congress created massive, government-sponsored enterprises and then encouraged them to degrade lending standards. Congress bent tax law to favor real estate over other investments. Through its reckless easy money policies, another creation of Congress, the Federal Reserve, flooded the economy with liquidity and drove interest rates down. Each of these policies encouraged too many of the economy’s resources to be drawn into the housing sector. For a substantial part of this decade, our policy-makers in Washington were laying a very poor foundation for economic growth.

Was Free Enterprise the Villain?

Call it free enterprise, capitalism or laissez faire – blaming supposedly unfettered markets for every economic shock has been the monotonous refrain of conventional wisdom for a hundred years. Among those making such claims are politicians who posture as our rescuers, bureaucrats who are needed to implement the rescue plans and special interests who get rescued. Then there are our fellow academics – the ones who add a veneer of respectability – trumpeting the “stimulus” the rest of us get from being rescued.

Rarely does it occur to these folks that government intervention might be the cause of the problem. Yet, we have the Federal Reserve System’s track record, thousands of pages of financial regulations, and thousands more pages of government housing policy that demonstrate the utter absence of “laissez faire” in areas of the economy central to the current recession.

Understanding recessions requires knowing why lots of people make the same kinds of mistakes at the same time. In the last few years, those mistakes were centered in the housing market, as many people overestimated the value of their houses or imagined that their value would continue to rise. Why did everyone believe that at the same time? Did some mysterious hysteria descend upon us out of nowhere? Did people suddenly become irrational? The truth is this: People were reacting to signals produced in the economy. Those signals were erroneous. But it was the signals and not the people themselves that were irrational.

Imagine we see an enormous rise in the number of traffic accidents in a major city. Cars keep colliding at intersections as drivers all seem to make the same sorts of mistakes at once. Is the most likely explanation that drivers have irrationally stopped paying attention to the road, or would we suspect that something might be wrong with the traffic lights? Even with completely rational drivers, malfunctioning traffic signals will lead to lots of accidents and appear to be massive irrationality.

Market prices are much like traffic signals. Interest rates are a key traffic signal. They reconcile some people’s desire to save – delay consumption until a future date – with others’ desire to invest in ideas, materials or equipment that will make them and their businesses more productive. In a market economy, interest rates change as tastes and conditions change. For instance, if people become more interested in future consumption relative to current consumption, they will increase the amount they save. This, in turn, will lower interest rates, allowing other people to borrow more money to invest in their businesses. Greater investment means more sophisticated production processes, which means more goods will be available in the future. In a normally functioning market economy, the process ensures that savings equal investment, and both are consistent with other conditions and with the public’s underlying preferences.

As was made all too obvious in 2008, ours is not a normally functioning market economy. Government has inserted itself into almost every transaction, manipulating and distorting price signals along the way. Few interventions are as momentous as those associated with monetary policy implemented by the Federal Reserve. Money’s essence is that it is a generally accepted medium of exchange, which means that it is half of every act of buying and selling in the economy. Like blood circulating in the body, it touches everything. When the Fed tinkers with the money supply, it affects not just one or two specific markets, like housing policy does, but every single market in the entire economy. The Fed’s powers give it an enormous scope for creating economic chaos.

When central banks like the Federal Reserve inflate, they provide banks with more money to lend, even though the public has not provided any more savings. Banks respond by lowering interest rates to draw in new borrowers. The borrowers see the lower interest rate and believe that it signals that consumers are more interested in delayed consumption relative to immediate consumption. Borrowers then begin to invest in those longer-term projects, which are now relatively more desirable given the lower interest rate. The problem, however, is that the demand for those longer-term projects is not really there. The public is not more interested in future consumption, even though the interest rate signals suggest otherwise. Like our malfunctioning traffic signals, an inflation-distorted interest rate is going to cause lots of “accidents.” Those accidents are the mistaken investments in longer-term production processes.

“I want to roll the dice a little bit more in this situation toward subsidized housing.” – Barney Frank, 2003

Eventually those producers engaged in the longer processes find the cost of acquiring their raw materials to be too high, particularly as it becomes clear that the public’s willingness to defer consumption until the future is not what the interest rate suggested would be forthcoming. These longer-term processes are then abandoned, resulting in falling asset prices (both capital goods and financial assets, such as the stock prices of the relevant companies) and unemployed labor in sectors associated with the capital goods industries.

So begins the bust phase of a monetary policy-induced cycle; as stock prices fall, asset prices “deflate,” overall economic activity slows and unemployment rises. The bust is the economy going through a refitting and reshuffling of capital and labor as it eliminates mistakes made during the boom. The important points here are that the artificial boom is when the mistakes were made, and it is during the bust that those mistakes are corrected.

From 2001 to about 2006, the Federal Reserve pursued the most expansionary monetary policy since at least the 1970s, pushing interest rates far below their natural rate. In January of 2001 the federal funds rate, the major interest rate that the Fed targets, stood at 6.5%. Just 23 months later, after 12 successive cuts, the rate stood at a mere 1.25% – more than 80% below its previous level. It stayed below 2% for two years then the Fed finally began raising rates in June of 2004. The rate was so low during this period that the real Federal Funds rate – the nominal rate minus the rate of inflation – was negative for two and a half years. This meant that, in effect, banks were being paid to borrow money! Rapidly climbing after mid-2004, the rate was back up to the 5% mark by May of 2006, just about the time that housing prices started their collapse. In order to maintain that low Fed Funds rate for that five year period, the Fed had to increase the money supply significantly. One common measure of the money supply grew by 32.5%. A lot of economically irrational investments were made during this time, but it was not because of “irrational exuberance brought on by a laissez-faire economy,” as some suggested. It is unlikely that lots of very similar bad investments are the resut of mass irrationality, just as large traffic accidents are more likely the result of malfunctioning traffic signals than lots of people forgetting how to drive overnight. They resulted from malfunctioning market price signals due to the Fed’s manipulation of money and credit. Poor monetary policy by an agency of government is hardly “laissez faire”.

What About Housing?

With such an expansionary monetary policy, the housing market was sent contradictory and incorrect signals. On one hand, housing and housing-related industries were given a giant green light to expand. It is as if the Fed supplied them with an abundance of lumber, and encouraged them to build their economic house as big as they pleased.

This would have made sense if the increased supply of lumber (capital) had been supported by the public’s desire to increase future consumption relative to immediate consumption – in other words, if the public had truly wanted to save for the bigger house. But the public did not. Interest rates were not low because the public was in the mood to save; they were low because the Fed had made them so by fiat. Worse, Fed policy gave the would-be suppliers of capital – those who might have been tempted to save – a giant red light. With rates so low, they had no incentive to put their money in the bank for others to borrow.

So the economic house was slapped together with what appeared to be an unlimited supply of lumber. It was built higher and higher, drawing resources from the rest of the economy. But it had no foundation. Because the capital did not reflect underlying consumer preferences, there was no support for such a large house. The weaknesses in the foundation were eventually exposed and the 70-story skyscraper, built on a foundation made for a single-family home, began to teeter. It eventually fell in the autumn of 2008.

But why did the Fed’s credit all flow into housing? It is true that easy credit financed a consumer-borrowing binge, a mergers-and-acquisitions binge and an auto binge. But the bulk of the credit went to housing. Why? The answer lies in government’s efforts to increase the affordability of housing.

Government intervention in the housing market dates back to at least the Great Depression. The more recent government initiatives relevant to the current recession began in the Clinton administration. Since then, the federal government has adopted a variety of policies intended to make housing more affordable for lower and middle income groups and various minorities. Among the government actions, those dealing with government-sponsored enterprises active in mortgage markets were central. Fannie Mae (the Federal National Mortgage Association) and Freddie Mac (Federal Home Loan Mortgage Corporation) are the key players here. Neither Fannie nor Freddie are “free-market” firms. They were chartered by the federal government, and although nominally privately owned until the onset of the bust in 2008, they were granted a number of government privileges in addition to carrying an implicit promise of government support should they ever get into trouble.

Fannie and Freddie did not actually originate most of the bad loans that comprised the housing crisis. Loans were made by banks and mortgage companies that knew they could sell those loans in the secondary mortgage market where Fannie and Freddie would buy and repackage them to sell to other investors. Fannie and Freddie also invented a number of the low down-payment and other creative, high-risk types of loans that came into use during the housing boom. The loan originators were willing to offer these kinds of loans because they knew that Fannie and Freddie stood ready to buy them up. With the implicit promise of government support behind them, the risk was being passed on from the originators to the taxpayers. If homeowners defaulted, the buyers of the mortgages would be harmed, not the originators. The presence of Fannie and Freddie in the mortgage market dramatically distorted the incentives for private actors such as the banks.

The Fed’s low interest rates, combined with Fannie and Freddie’s government-sponsored purchases of mortgages, made it highly and artificially profitable to lend to anyone and everyone. The banks and mortgage companies didn’t need to be any greedier than they already were. When banks saw that Fannie and Freddie were willing to buy virtually any loan made to under-qualified borrowers, they made a lot more of them. Greed is no more to blame for these bad mortgages than gravity is to blame for plane crashes. Gravity is always present, just like greed. Only the Federal Reserve’s easy money policy and Congress’ housing policy can explain why the bubble happened when it did, where it did.

Of further significance is the fact that Fannie and Freddie were under great political pressure to keep housing increasingly affordable (while at the same time promoting instruments that depended on the constantly rising price of housing) and to extend opportunities to historically “under-served” groups. Many of the new mortgages with low or even zero-down payments were designed in response to this pressure. Not only were lots of funds available to lend, and not only was government implicitly subsidizing the purchase of mortgages, but it was also encouraging lenders to find more borrowers who previously were thought unable to afford a mortgage.

Partnerships among Fannie and Freddie, mortgage companies, community action groups and legislators combined to make mortgages available to many people who should never have had them, based on their income and assets. Throw in the effects of the Community Reinvestment Act, which required lenders to serve under-served groups, and zoning and land-use laws that pushed housing into limited space in the suburbs and exurbs (driving up prices in the process) and you have the ingredients of a credit-fueled and regulatory-directed housing boom and bust.

All told, huge amounts of wealth and capital poured into producing houses as a result of these political machinations. The Case-Shiller Index clearly shows unprecedented increases in home prices prior to the bust in 2008. From 1946-1996, there had been no significant growth in the price of residential real estate. In contrast, the decade that followed saw skyrocketing prices.

It’s worth noting that even tax policy has been biased toward fostering investments in housing. Real estate investments are taxed at a much lower rate than other investments. Changes in the 1990s made it possible for families to pocket any capital gains (income from price appreciation) on their primary residences up to $500,000 every two years. That translates into an effective rate of 0% versus the ordinary income tax rates that apply to capital gains on other forms of investment. The differential tax treatment of capital gains made housing a relatively better investment than the alternatives. Although tax cuts are desirable for promoting economic growth, when politicians tinker with the tax code to favor the sorts of investments they think people should make, we should not be surprised if market distortions result.

Former Fed chair Alan Greenspan had made it clear that the Fed would not stand idly by whenever a crisis threatened to cause a major devaluation of financial assets. Instead, it would respond by providing liquidity to stem the fall. Greenspan declared there was little the Fed could do to prevent asset bubbles but that it could always cushion the fall when those bubbles burst. By 1998, the idea that the Fed would always bail out investors after a burst bubble had become known as the “Greenspan Put.” (A “put” is a financial arrangement where a buyer acquires the right to re-sell the asset at a pre-set price.) Having seen the Fed bailout investors this way in a series of events starting as early as the 1987 stock market crash and extending through 9/11, players in the housing market had every reason to expect that if the value of houses and other instruments they were creating should fall, the Fed would bail them out, too. The Greenspan Put became yet another government “green light,” signaling investors to take risks they might not otherwise take.

As housing prices began to rise, and in some areas rise enormously, investors saw opportunities to create new financial instruments based on those rising housing prices. These instruments constituted the next stage of the boom in this boom-bust cycle, and their eventual failure became the major focus of the bust.

Fancy Financial Instruments – Cause or Symptom?

Banks and other players in the financial markets capitalized on the housing boom to create a variety of new instruments. These new instruments would enrich many but eventually lose their value, bringing down several major companies with them. They were all premised on the belief that housing prices would continue to rise, which would enable people who had taken out the new mortgages to continue to be able to pay.

Mortgages with low or even nonexistent down payments appeared. The ownership stake the borrower had in the house was largely the equity that came from the house increasing in value. With little to no equity at the start, the amount borrowed and therefore the monthly payments were fairly high, meaning that should the house fall in value, the owner could end up owing more on the house than it was worth.

“If it ain’t broke, why do you want to fix it? Have the GSEs ever missed their housing goals?” – Maxine Waters, 2003

The large flow of mortgage payments resulting from the inflation-generated housing bubble was then converted into a variety of new investment vehicles. In the simplest terms, financial institutions such as Fannie and Freddie began to buy up these mortgages from the originating banks or mortgage companies, package them together and sell the flow of payments from that package as a bond-like instrument to other investors. At the time of their nationalization in the fall of 2008, Fannie and Freddie owned or controlled half of the entire mortgage market. Investors could buy so-called “mortgage-backed securities” and earn income ultimately derived from the mortgage payments of the homeowners. The sellers of the securities, of course, took a cut for being the intermediary. They also divided up the securities into “tranches” or levels of risk. The lowest risk tranches paid off first, as they were representative of the less risky of the mortgages backing the security. The high risk ones paid off with the leftover funds, as they reflected the riskier mortgages.

Buyers snapped up these instruments for a variety of reasons. First, as housing prices continued to rise, these securities looked like a steady source of ever-increasing income. The risk was perceived to be low, given the boom in the housing market. Of course that boom was an illusion that eventually revealed itself.

Second, most of these mortgage- backed securities had been rated AAA, the highest rating, by the three ratings agencies: Moody’s, Standard and Poor’s, and Fitch. This led investors to believe these securities were very safe. It has also led many to charge that markets were irrational. How could these securities, which were soon to be revealed as terribly problematic, have been rated so highly? The answer is that those three ratings agencies are a government-created cartel not subject to meaningful competition.

In 1975, the Securities and Exchange Commission decided only the ratings of three “Nationally Recognized Statistical Rating Organizations” would satisfy the ratings requirements of a number of government regulations.Their activities since then have been geared toward satisfying the demands of regulators rather than true competition. If they made an error in their ratings, there was no possibility of a new entrant coming in with a more accurate technique. The result was that many instruments were rated AAA that never should have been, not because markets somehow failed due to greed or irrationality, but because government had cut short the learning process of true market competition.

Third, changes in the international regulations covering the capital ratios of commercial banks made mortgage-backed securities look artificially attractive as investment vehicles for many banks. Specifically, the Basel accord of 1988 stipulated that if banks held securities issued by government-sponsored entities, they could hold less capital than if they held other securities, including the very mortgages they might originate. Banks could originate a mortgage and then sell it to Fannie Mae. Fannie would then package it with other mortgages into a mortgage-backed security. If the very same bank bought that security (which relied on income from the mortgage it originated), it would be required to hold only 40 percent of the capital it would have had to hold if it had just kept the original mortgage.

These rules provided a powerful incentive for banks to originate mortgages they knew Fannie or Freddie would buy and securitize. The mortgages would then be available to buy back as part of a fancier instrument. The regulatory structure’s attempt at traffic signals was a flop. Markets themselves would not have produced such persistently bad signals or such a horrendous outcome. Once these securities became popular investment vehicles for banks and other institutions (thanks mostly to the regulatory interventions that created and sustained them) still other instruments were built on top of them. This is where “credit default swaps” and other even more complex innovations come into the story. Credit default swaps were a form of insurance against the mortgage-backed securities failing to pay out. Such arrangements would normally be a perfectly legitimate form of risk reduction for investors but given the house of cards that the underlying securities rested on, they likely accentuated the false “traffic signals” the system was creating.

“I set an ambitious goal. It’s one that I believe we can achieve. It’s a clear goal, that by the end of this decade we’ll increase the number of minority homeowners by at least 5.5 million families. Some may think that’s a stretch. I don’t think it is. I think it is realistic. I know we’re going to have to work together to achieve it. But when we do, our communities will be stronger and so will our economy. Achieving the goal is going to require some good policies out of Washington. And it’s going to require a strong commitment from those of you involved in the housing industry.” – President George W. Bush, 2002

By 2006, the Federal Reserve saw the housing bubble it had been so instrumental in creating and moved to prick it by reversing monetary policy. Money and credit were constricted and interest rates were dramatically raised. It would be only a matter of time before the bubble burst.

Deregulation, a False Culprit

It is patently incorrect to say that “deregulation” produced the current crisis [See Appendix A]. While it is true that new instruments such as credit default swaps were not subject to a great deal of regulation, this was mostly because they were new. Moreover, their very existence was an unintended consequence of all the other regulations and interventions in the housing and financial markets that had taken place in prior decades. The most notable “deregulation” of financial markets that took place in the 10 years prior to the crash of 2008 was the passing during the Clinton administration of the Gramm-Leach-Bliley Act in 1999, which allowed commercial banks, investment banks and securities firms to merge in whatever manner they wished, eliminating regulations dating from the New Deal era that prevented such activity. The effects of this Act on the housing bubble itself were minimal. Yet, its passage turned out to be helpful, not harmful, during the 2008 crisis because failing investment banks were able to merge with commercial banks and avoid bankruptcy.

The housing bubble ultimately had to come to an end, and with it came the collapse of the instruments built on top of it. Inflation-financed booms end when the industries being artificially stimulated by the inflation find it increasingly difficult to buy the inputs they need at prices that are profitable and also find it increasingly difficult to find buyers for their outputs. In late 2006, housing prices topped out and began to fall as glutted markets and higher input prices due to the previous years’ race to build began to take their toll.

Falling housing prices had two major consequences for the economy. First, many homeowners found themselves in trouble with their mortgages. The low- or no-equity mortgages that had enabled so many to buy homes on the premise that prices would keep rising now came back to bite them. The falling value of their homes meant they owed more than the homes were worth. This problem was compounded in some cases by adjustable rate mortgages with low “teaser” rates for the first few years that then jumped back to market rates. Many of these mortgages were on houses that people hoped to “flip” for an investment profit, rather than on primary residences. Borrowers could afford the lower teaser payments because they believed they could recoup those costs on the gain in value. But with the collapse of housing prices underway, these homes could not be sold for a profit and when the rates adjusted, many owners could no longer afford the payments. Foreclosures soared.

Second, with housing prices falling and foreclosures rising, the stream of payments coming into those mortgage-backed securities began to dry up. Investors began to re-evaluate the quality of those securities. As it became clear that many of those securities were built upon mortgages with a rising rate of default and homes with falling values, the market value of those securities began to fall. The investment banks that held large quantities of securities were forced to take significant paper losses. The losses on the securities meant huge losses for those that sold credit default swaps, especially AIG. With major investment banks writing down so many assets and so much uncertainty about the future of these firms and their industry, the flow of credit in these specific markets did indeed dry up. But these markets are only a small share of the whole commercial banking and finance sector. It remains a matter of much debate just how dire the crisis was come September. Even if it was real, however, the proper course of action was to allow those firms to fail and use standard bankruptcy procedures to restructure their balance sheets.

“I think this is a case where Fannie and Freddie are fundamentally sound, that they are not in danger of going under.” – Barney Frank, 2008

The Recession is the Recovery

The onset of the recession and its visible manifestations in rising unemployment and failing firms led many to call for a “recovery plan.” But it was a misguided attempt to “plan” the monetary system and the housing market that got us into trouble initially. Furthermore, recession is the process by which markets recover. When one builds a 70-story skyscraper on a foundation made for a small cottage, the building should come down. There is no use in erecting an elaborate system of struts and supports to keep the unsafe structure aloft. Unfortunately, once the weaknesses in the U.S. economic structure were exposed, that is exactly what the Federal government set about doing.

One of the major problems with the government’s response to the crisis has been the failure to understand that the bust phase is actually the correction of previous errors. When firms fail and workers are laid off, when banks reconsider the standards by which they make loans, when firms start (accurately) recording bad investments as losses, the economy is actually correcting for previous mistakes. It may be tempting to try to keep workers in the boom industries or to maintain investment positions, but the economy needs to shift its focus. Corrections must be permitted to take their course. Otherwise, we set ourselves up for more painful downturns down the road. (Remember, the 2008 crisis came about because the Federal Reserve did not want the economy to go through the painful process of reordering itself following the collapse of the dot.com bubble.) Capital and labor must be reallocated, expectations must adjust, and the economic system must accommodate the existing preferences of consumers and the real resource constraints that producers face. These adjustments are not pleasant; they are in fact often extremely painful to the individuals who must make them, but they are also essential to getting the system back on track.

When government takes steps to prevent the adjustment, it only prolongs and retards the correction process. Government policies of easy credit produce the boom. Government policies designed to prevent the bust have the potential to transform a market correction into a full-blown economic crisis.

No one wants to see the family business fail, or neighbors lose their jobs, or charitable groups stretched beyond capacity. But in a market economy, bankruptcy and liquidation are two of the primary mechanisms by which resources are reallocated to correct for previous errors in decision-making. As Lionel Robbins wrote in The Great Depression, “If bankruptcy and liquidation can be avoided by sound financing nobody would be against such measures. All that is contended is that when the extent of mal- investment and over indebtedness has passed a certain limit, measures which postpone liquidation only tend to make matters worse.”

Seeing the recession as a recovery process also implies that what looks like bad news is often necessary medicine. For example, news of slackening home sales, or falling new housing starts, or losses of jobs in the financial sector are reported as bad news. In fact, this is a necessary part of recovery, as these data are evidence of the market correcting the mistakes of the boom. We built too many houses and we had too many resources devoted to financial instruments that resulted from that housing boom. Getting the economy right again requires that resources move away from those industries and into new areas. Politicians often claim they know where resources should be allocated, but the Great Recession of 2008 is only the latest proof they really don’t.

The Bush administration made matters worse by bailing out Bear Sterns in the spring of 2008. This sent a clear signal to financial firms that they might not have to pay the price for their mistakes. Then after that zig, the administration zagged when it let Lehman Brothers fail. There are those who argue that allowing Lehman to fail precipitated the crisis. We would argue that the Lehman failure was a symptom of the real problems that we have already outlined. Having set up the expectations that failing firms would get bailed out, the federal government’s refusal to bail out Lehman confused and surprised investors, leading many to withdraw from the market. Their reaction is not the necessary consequence of letting large firms fail, rather it was the result of confusing and conflicting government policies. The tremendous uncertainty created by the Administration’s arbitrary and unpredictable shifts – most notably Bernanke and Paulson’s September 23, 2008 unconvincing testimony on the details of the Troubled Asset Relief program – was the proximate cause of the investor withdrawals that prompted the massive bailouts that came in the fall, including those of Fannie Mae and Freddie Mac.

The Bush bailout program was problematic in at least two ways. First, the rationale for such aggressive government action, including the Fed’s injection of billions of dollars in new reserves, was that credit markets had frozen up and no lending was taking place. Several observers at the time called this claim into question, pointing out that aggregate new lending numbers, while growing much more slowly than in the months prior, had not dropped to zero.

Markets in which the major investment banks operated had indeed slowed to a crawl, both because many of their housing-related holdings were being revealed as mal-investments and because the inconsistent political reactions were creating much uncertainty. The regular commercial banking sector, however, was by and large continuing to lend at prior levels.

More important is this fact: the various bailout programs prolonged the persistence of the very errors that were in the process of being corrected! Bailing out firms that are suffering major losses because of errant investments simply prolongs the mal-investments and prevents the necessary reallocation of resources.

The Obama administration’s nearly $800 billion stimulus package in February of 2009 was also predicated on false premises about the nature of recession and recovery. In fact, these were the same false premises which informed the much-maligned Bush Administration approach to the crisis. The official justification for the stimulus was that only a “jolt” of government spending could revive the economy.

The fallacy of job creation by government was first exposed by the French economist Bastiat in the 19th century with his story of the broken window. Imagine a young boy throws a rock through a window, breaking it. The townspeople gather and bemoan the loss to the store owner. But eventually one notes that it means more business for the glazier. And another observes that the glazier will then have money to spend on new shoes. And then the shoe seller will have money to spend on a new suit. Soon, the crowd convinces them-selves that the broken window is actually quite a good thing.

The fallacy, of course, is that if the window was never broken, the store owner would still have a functioning window and could spend the money on something else, such as new stock for his store. All the breaking of the window does is force the store owner to spend money he wouldn’t have had to spend if the window had been left intact. There is no net gain in wealth here. If there was, why wouldn’t we recommend urban riots as an economic recovery program?

When government attempts to “create” a job, it is not unlike a vandal who “creates” work for a glazier. There are only three ways for a government to acquire resources: it can tax, it can borrow or it can print money (inflate). No matter what method is used to acquire the resources, the money that government spends on any stimulus must come out of the private sector. If it is through taxes, it is obvious that the private sector has less to spend, leading to losses that at least cancel out any jobs created by government. If it is through borrowing, that lowers the savings available to the private sector (and raises interest rates in the process), reducing the amount the sector can borrow and the jobs it can create. If it is through printing money, it reduces the purchasing power of private sector incomes and savings. When we add to this the general inefficiency of the heavily politicized public sector, it is quite probable that government spending programs will cost more jobs in the private sector than they create.

“This [Government Sponsored Housing] is one of the great success stories of all time…” Chris Dodd, 2004

The Japanese experience during the 1990s is telling. Following the collapse of their own real estate bubble, Japan’s government launched an aggressive effort to prop up the economy. Between 1992 and 1995, Japan passed six separate spending programs totaling 65.5 trillion yen. But they kept increasing the ante. In April of 1998, they passed a 16.7 trillion yen stimulus package. In November of that year, it was an additional 23.9 trillion. Then there was an 18 trillion yen package in 1999 and an 11 trillion yen package in 2000. In all, the Japanese government passed 10 (!) different fiscal “stimulus” packages, totaling more than 100 trillion yen. Despite all of these efforts, the Japanese economy still languishes. Today, Japan’s debt-to-GDP ratio is one of the highest in the industrialized world, with nothing to show for it. This is not a model we should want to imitate.

It is also the same mistake the United States made in the Great Depression, when both the Hoover and Roosevelt Administrations attempted to fight the deepening recession by making extensive use of the federal government and only made matters worse. In addition to the errors made by the Federal Reserve System that exacerbated the downturn that it created with inflationary policies in the 1920s, Hoover himself tried to prevent a necessary fall in wages by convincing major industrialists to not cut wages, as well as proposing significant increases in public works and, eventually, a tax increase. All of these worsened the depression.

Roosevelt’s New Deal continued this set of policy errors. Despite claims during the current recession that the New Deal saved us from economic disaster, recent scholarship has solidly affirmed that the New Deal didn’t save the economy. Policies such as the Agricultural Adjustment Act and the National Industrial Recovery Act only interfered with the market’s attempts to adjust and recover, prolonging the crisis. Later policies scared off private investors as they were uncertain about how much and in what ways government would step in next. The result was that six years into the New Deal, unemployment rates were still above 17% and GDP per capita was still well below its long-run trend.

In more recent years, President Nixon’s attempt to fight the stagflation of the early 1970s with wage and price controls was abandoned quickly when they did nothing to help reduce inflation or unemployment. Most telling for our case was the fact that the Fed’s expansionary policies earlier this decade were intended to “soften the blow” of the dot.com bust in 2001. Of course those policies gave us the inflationary boom that produced the crisis that began in 2008. If the current recession lingers or becomes a second Great Depression, it will not be because of problems inherent in markets, but because the political response to a politically generated boom and bust has prevented the error-correction process from doing its job. The belief that large-scale government intervention is the key to getting us out of a recession is a myth disproven by both history and recent events.

The Future That Awaits Our Children

Commentators have had a field day adding up the trillions of dollars that have been committed in the Bush bailout, the Obama stimulus, and the administration’s proposed budget for 2010. The explosion of spending and debt, whatever the final tab, is unprecedented by any measure. It will “crowd out” a significant portion of private investment, reducing growth rates and wages in the future. We are, in effect, reducing the income of our children tomorrow to pay for the bills of today and yesterday. Large government debt is also a temptation for inflation. In order for governments to borrow, someone must be willing to buy their bonds. Should confidence in a government fall enough (China, notably, has expressed some reluctance to continue buying our debt), it is possible that buyers will be hard to come by. That puts pressure on the government’s monetary authorities to “lubricate” the system by creating new money and credit from thin air.

So, even if the economy gets a lift in the near-term from either its own corrective mechanisms or from the government’s reinflation of money and credit, we have not recovered from the hangover. More of what caused the Great Recession of 2008 – easy money, regulatory interventions to direct capital in unsustainable directions, politicians and policy-makers rigging financial markets – is not likely to produce anything but the same outcome; asset price inflation and an eventual “adjustment” we call a recession or depression. Along the way, we will accumulate monumental debts which accentuate the future downturn and saddle us with new burdens.

Unless we can begin to undo the mistakes of the last decade or more, the future that awaits our children will be one that is poorer and less free than it should have been. With politicians mortgaging future generations to the tune of trillions, running and subsidizing auto and insurance companies, spending blindly and printing money hand- over-fist – all while blaming free enterprise for their own errors, we have a great deal to learn.

As Albert Einstein famously said, doing the same thing over and over again and expecting different results is the definition of insanity. The best we can hope for is that we learn the right lessons from this crisis. We cannot afford to repeat the wrong ones.

“The basic point is that the recession of 2001 wasn’t a typical postwar slump…. To fight this recession the Fed needs more than a snapback… Alan Greenspan needs to create a housing bubble to replace the Nasdaq bubble.” Paul Krugman, 2002

Appendix A: The Myth of Deregulation

Appendix B: Government Interventions During Crisis Create Uncertainty

Appendix C: Suggested Readings

Cole, Harold and Lee E. Ohanian. 2004 New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis, Journal of Political Economy 112: 779-816.

Friedman, Jeffrey. 2009. A Crisis of Politics, Not Economics: Complexity, Ignorance, and Policy Failure, Critical Review 21: 127-183.

Higgs, Robert. 2008. Credit Is Flowing, Sky Is Not Falling, Don’t Panic, The Beacon, available at http://www.independent.org/blog/?p=201.

Marenzi, Octavio. 2008. Flawed Assumptions about the Credit Crisis: A Critical Examination of US Policymakers, Celent Research, available at http://www.celent.com/124_347.htm

Prescott, Edward and Timothy J. Kehoe (Editors). 2007. Great Depressions of the Twentieth Century, Minneapolis. Federal Reserve Bank of Minneapolis.

Taylor, John. 2009. Getting Off Track: How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis, Stanford, CA: Hoover Institution Press.

Woods, Thomas. 2009. Meltdown: A Free-Market Look at Why the Stock Market Collapsed, the Economy Tanked, and Government Bailouts Will Make Things Worse, Washington, DC: Regnery.

Biographies

Lawrence W. Reed is president of the Foundation for Economic Education – www.fee.org – and president emeritus of the Mackinac Center for Public Policy.

Steven Horwitz is the Charles A. Dana Professor of Economics at St. Lawrence University in Canton, NY. He has been a visiting scholar at Bowling Green State University and the Mercatus Center at George Mason University.

Peter J. Boettke is the Deputy Director of the James M. Buchanan Center for Political Economy, a Senior Research Fellow at the Mercatus Center, and a professor in the economics department at George Mason University.

John Allison served as the Chief Executive Officer of BB&T Corp. until December 2008. Mr Allison has been the Chairman of BB&T Corp., since July 1989. He serves as a Member of American Bankers Association and The Financial Services Roundtable.

pdf file: HouseUncleSamBuiltBooklet (1085597 bytes)

Peter J. BoettkePeter J. Boettke

Peter Boettke is a Professor of Economics and Philosophy at George Mason University and director of the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center. He is a member of the FEE Faculty Network.

RELATED ARTICLE: Housing Policies That Led to 2008 Collapse Still in Place, Says Freddie Mac Economist – PJ Meda June, 2017

VIDEO: Benghazi and the Clinton-Obama Gun Running Operation Exposed

13 hours posteerClare Lopez of the Center for Security Policy, a member of the Benghazi Citizen’s Commission and former CIA intelligence officer, exposes Benghazi as a complete national security disaster resulting from the lack of leadership from President Barack Obama and former Secretary of State Hillary Clinton.

In part one, Lopez explains in simple detail exactly how the United States,  led by Clinton, aligned itself with the Muslim Brotherhood in a way that defies common sense and basic principles of foreign policy.

The United West presents this three-part series as a national security context to better understand the blockbuster Hollywood movie, 13 Hours, the Secret Soldiers of Benghazi.

EDITORS NOTE: Reader may f ollow The United West on Twitter @TheUnitedWest

‘Le Grand Guignol’ Comes to Town – Political Corruption

By Wallace Bruschweiler and William Palumbo

Grand_Guignol_poster

Promotional poster for a Grand Guignol performance. Courtesy of Wikipedia.com.

Over the last several years, the American people have witnessed one perplexing political shenanigan after another – a never-ending story.  Instead of standing up for principles, for democracy itself, our elected leaders routinely sell-out the same country to which they swore an oath to protect.

The most recent enormous sell-out was the passage of a budget that served only the government, not the country.  It began with the election of a new Speaker, whom many hoped would serve the country better than his predecessor.  Instead of a political savior, we got yet another total political loser.

Once in power, the Speaker raised the curtain on a most appalling political horror, a true grand guignol: a budget that funds a government which is already standing on financial quicksand, and that has an abysmal, out-proportion debt.  So much for “we won’t get fooled again.”

Indeed, many of the men and women whom we once considered true patriots have, in recent years, months, and weeks, shown that their own personal agenda and banks accounts take priority over the safeguarding and destiny of our nation.  Their treachery – their betrayal­ – of the American people is forcing a major geopolitical realignment.  Under rule of the current political establishment, the United States is a leading contender in whatever Oscar equivalent is awarded to banana republics.

How and why did all this happen?  Without access to personal records, such as bank accounts domestically and on an international level, including tax shelters, it is impossible to say with certainty.  But, if past is prologue, then bribery facilitated by a government-entrenched mafia is what greases this political machinery.

Welcome to Our Real World: Today’s Ugly Reality

It is not pleasant at all to think that a mafia-type government runs Washington, D.C.   Yet it exactly explains why, despite widespread disapproval of Barack Hussein Obama and Congress, both parties continue working shamelessly against the interests and well-being of the American electorate.

Take, for example, the so-called Iranian nuclear deal.  By legitimizing Iran, the world’s preeminent sponsor of terrorism, Obama has opened the Iranian markets (especially oil and natural gas) to the western world.  In the long run, this deal has the potential to generate trillions of dollars in international trade.  Companies represented by extremely well-financed and influential lobbyists see Iran as the mother-of-all potential markets.

Despite the overwhelming dangers that emanate from enriching a brutal regime with not-so-veiled nuclear ambitions and a proven worldwide terrorist network, the Republican-led Congress refused to try anything which would have effectively postponed and/or killed the deal.

Again, how and why could this have happened?  The answer is unfortunately obvious: money (and, in the case of the Iranian nuclear deal, close family connections between the negotiating members from both sides).

There are other examples that come to mind: a multi-trillion dollar “stimulus” package, a $700 billion dollar bank bailout, countless “green” energy loans that have ended in bankruptcy, etc.

How likely is it that some of this money has been used to line pockets for political favors on both sides of the aisle?  All of this was paid and financed by the people’s tax dollars.

“A government of the mafia, by the mafia, and for the mafia” – that seems to be today’s motto

Mafia is non-ideological: it does not embrace political ideals.  It cynically espouses ideals from time to time, but ultimately it will not uphold virtues that interfere with the strict pursuit of money and power.  So, when (not if) necessary, ideals and decency are conveniently forgotten.

The public at large calls this process “a bipartisan compromise.”  However, in reality, there is only one party.  It is a political animal which puts your God-given rights on the auction block, to be sold to the highest willing and able bidder.

It’s also indisputably true that politicians, on both sides of the aisle, are taking bribes.  Wherever power accumulates, corruption immediately follows. Widespread corruption is the defining trait of Washington’s establishment today.  There is no principled leader among them.

Politicians, like everyone else, have a price.

Impeachment Resolution Introduced at the RNC

Seven long and disastrous years into the criminal reign over the nation by America’s first dictator, Barack Hussein Obama, five years after Republicans gained control of the House and a year after Republicans seized control of the US Senate, Obama remains in power, on track to destroy the USA and unaccountable for his many crimes…

The GOP touts a beautiful set of principles and values that they never live up to… The Michigan GOP has even posted those principles in Arabic, as Michigan is fast becoming the Mecca of America under Republican leadership.

The GOP web site asks all GOP voters to sign a petition, to “take the oath to defend the Constitution” by signing a pledge posted on the GOP site… an oath that every Republican member of Congress has taken upon entering office… That GOP call to action reads as follows:

“When Members of Congress are sworn into office, they take an oath to “support and defend the Constitution of the United States against all enemies, foreign and domestic.

Stand up and take the oath:

I do solemnly swear (or affirm) that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion . . . So help me God.”

Yet as of today, not one Republican in Congress has stood up to keep their oath.

Since 2009, millions of American conservatives have been actively working in Tea Party and Patriot groups to force federal government back towards conservative constitutional foundations, based on the same principles and values espoused by the do-nothing GOP. But no matter how many Republicans they elect and send to DC, nothing changes, Obama’s crimes continue unabated.

The people have had enough at this point… and they are finally ready to take matters into their own hands and force their elected servants to keep their oath, to hold Obama accountable and turn this country around, or be held accountable themselves for failing to do so.

In July of 2014, The North American Law Center (TNALC.org) made public their proposed Articles of Impeachment against Barack Hussein Obama, a combined 48 criminal charges under three Articles…

  • ARTICLE I – Usurpation of the Oval Office via criminal identity fraud
  • ARTICLE II – Malfeasance, misconduct and abuse of the Oval Office
  • ARTICLE III – Aiding and Abetting known enemies of the United States

Since then, House Republicans who have publicly stated their support for Impeachment, and even some who have directly committed to advance TNALC Articles of Impeachment, like Rep. Louie Gohmert of Texas and Rep. Scott DesJarlais of Tennessee, have done absolutely nothing to hold Obama accountable for the many impeachable crimes of his administration.

The Constitutional Accountability Coalition (CAC) in 29 states, focused entirely upon advancing the TNALC Articles, has been hosting a weekly BTR event to muster support for the Impeachment of Obama.

Now, Republican National Committee member David Agema from Michigan has introduced the linked  Resolution in Support of Proper Articles of Impeachment at the national level, similar to a GOP Resolution currently traveling at the county and district level through CAC groups in 29 states.

Agema, a former Air Force fighter pilot, has become as fed up with do-nothing Republicans in a party he has supported all his life, just like millions of Americans in mass exodus from their beloved GOP after the past six years of incompetence and cowardice demonstrated by every Congressional Republican in office today.

The first response from fellow RNC members came from an Arizona RNC Member who immediately advised Agema that he will not support any action to hold Obama accountable without marching orders from Reince Priebus and Speaker Paul Ryan. He would not keep his oath unless ordered to do so by Priebus and Ryan, who have long demonstrated a lack of constitutional decency and courage themselves… and then, “he might…”

This is exactly the type of cowardice that has allowed Obama & Co. to destroy America unchallenged for the past seven years, no matter how many Republicans are elected to stop it. It is also a prime example of why millions of Americans are defecting from a feckless GOP… including Rev. Franklin Graham who recently announced he was leaving a party that no longer represents Republican voters, principles or values.

Agema’s Resolution in Support of Impeachment will be a center point of the next RNC meeting on January 13, 2016. The people cannot sit back and allow this true patriot to fight this battle alone in the RNC, facing stiff opposition from both Priebus and Ryan, who remain committed to the path of Boehner and McConnell…. As the party is in free fall.

It isn’t any Democrat who is blocking the proper impeachment of the most impeachable administration in US history…. IT IS REPUBLICANS, ALL OF THEM!

People who want to support the Agema Resolution need to contact their own State GOP RNC Representatives between now and January 13 to make certain that Agema is not left standing alone in the ongoing battle for constitutional accountability.

Nothing good is going to happen in this country until “the people” take action and make it happen. Left to their own devices, Congressional Republicans are going to do the same as they have done for the past seven years, NOTHING THAT MATTERS, while they beg for your money and votes in yet another worthless election cycle.

Until we hold someone accountable, no one is accountable for anything! Until we uphold and enforce the US Constitution, we don’t have a Constitution worthy of mention…

A Biblical Solution to the Omnibus-Muslim Problem

The Omnibus Budget Bill to be voted Friday, Dec 11, will provide $1.2 Billion for “nearly 700,000 green cards – or lifetime residency cards – to migrants from Muslim nations over the next five years (as we did over the last five years),” said Senator Sessions of AL, re Friday’s vote. Readers should email congressman.

The Muslim problem is about militancy as taught in the Koran. Christ said, “Blessed are the peace-makers.” The Bible covenant with Abraham provided the Middle East for his descendants. That includes Arabic Muslims from Ishmael. Islam’s push into Europe and America is foreseen in Daniel 8, but it ends badly for a militant Muslim ram.

First the Problem from a 2002 UN Report: “More books are translated into Spanish in a single year than have been translated into Arabic in the last thousand, suggesting at the very minimum an extraordinarily closed world.” Mark Steyn.

The PROBLEM is complex; leaders and media can’t seem to identify it. Maybe we could help them?

The Shoe Bomber. the Beltway Snipers, the Boston Marathon Bombers were Muslim. The Fort Hood Shooter was a Muslim. The Underwear Bomber, the U.S.S. Cole Bombers, the 9-11 Hijackers and now the San Bernardino Terrorists–ALL OF THESE (and many edited from this list) WERE MUSLIMS!

More innocent people died on 9-11 than died in Pearl Harbor. We declared war then, but not now; not on Muslims, but we need to declare war on militancy as taught by numerous quotes in the Koran such as, “Make war on the infidels living in your neighborhood.” Koran 9:123.

For hundreds of years, it has been no problem for Hindus to live with Buddhists, Jews or Christians.

Atheists have lived with Buddhists, Jews or Confucians, Christians have lived with Jews, Hindus and Shintos—these religions don’t have a problem being neighbors.

But Muslims have a problem living with Hindus, Buddhists, Christians, Jews, Atheists, and worst of all, MUSLIMS LIVING WITH MUSLIMS IS A BIG PROBLEM!

MUSLIMS don’t want to live in Muslim countries of Gaza, Egypt, Libya, Morocco, Iran, Iraq, Yemen, Syria, Lebanon, Pakistan, Afghanistan, Nigeria, Kenya or Sudan.

They want to be in Australia, England, Belgium, France, Italy, Germany, Sweden, Norway, India, Canada, USA—any country that is not Islamic; why is that if it’s a “religion of peace?

When trouble comes, who do they blame? Not their leader. Not themselves, they blame the country and want to change it to be like the countries they left!

Islam likes organizations: Islamic Jihad: an ISLAMIC terror organization, ISIS/ISIL an ISLAMIC TERROR ORGANIZATION; Al-Qaeda, Taliban, Hamas, Hezbollah, Boko Haram, Muslim Brotherhood, Palestine Liberation Front. ALL of these and many more are ISLAMIC TERROR ORGANIZATIONS.

Are we so stupid that we can’t figure out how to deal with the problem? At least President Obama and now Attorney General Lynch know it’s not the Muslims and to speak against them may soon be a CRIME! This isn’t “hate speech.” We shouldn’t hate anyone; Christ died for all. We should end our “Stupid problems” with Free Speech while we still have it.

Obama admitted being Muslim and he wants to flood US with Muslim “refugees” Now we come to the biblical solution:

God promised to give Abraham the land between Egypt and the Euphrates River for his descendants in the 15th chapter of Genesis. Five verses later, Abraham agrees with Sarah to have a son by Hagar. The Arab nations are descendants of Ishmael, and they should occupy the area in the covenant for Abraham’s “seed.”

Any other plan, like the pope’s encouragement for Germany to take a million refugees while the Vatican takes two families, [isn’t that interesting?] is against the provision that God made for Abraham’s descendants. When leaders become part of a stupid problem, we need to go back to basics. Dan88

The Bible shows the problem of Muslim militancy will soon be solved “at the time of the end.” A militant Muslim ram gets stomped by a GOAT [Global Organization Against Terror] that flies from the west in Daniel 8 (the book Christ recommended when asked about end-times.)

Leaders should consider the Bible solution, rather than “wait and see”–hoping for an answer in the election next November. Congress has proven they go along to get along with hidden forces and rewards while voting against the Constitution that made us great.

The answer for everyone reading this is to Google their congressman and send him an email SAYING “I WILL CAMPAIGN AGAINST YOU IF YOU DON’T SAY NO TO OMNIBUS DEC 11.” Leaving a message by phone doesn’t work–“mailbox is full.”

IF WE DON’T ACT, WE GET WHAT WE DESERVE, AS PRESIDENT OBAMA PROMISED ON HIS ELECTION NIGHT: “CHANGE HAS COME TO AMERICA!”

 

Catholic University locked down after “Middle Eastern” man makes “terroristic threats”

The “shelter in place” order has been lifted now, and D.C. police have “located the suspicious person.” Now no doubt there is a long line of Catholic priests lining up to engage in “dialogue” with the poor dear, hoping to explain to him how Islam, at its core, is a religion of peace that has been tragically misunderstood. They will fix this problem up tout suite.

“D.C. police locate a ‘suspicious person’ at Catholic University,” by Martin Weil, Washington Post, December 8, 2015:

Catholic University students were advised Tuesday night for the second time in less than 24 hours to shelter in place while authorities investigated a report of a possible armed person on campus.

Just before 9 p.m., the D.C. police said they had “located the suspicious person.” About an hour later, the university said it had lifted the shelter in place order. It also said that the person who prompted Tuesday night’s alert was not the same person who was sought during the alert that began early Tuesday.

The Tuesday night alert was sent about 8:30 p.m. and advised members of the university community to shelter in place while D.C. police and the university’s public safety department investigated a report of a possible armed man.

A similar alert was issued about 1 a.m. Tuesday. Authorities said that they searched but that no one was found.

The university said the earlier alert was initiated after a custodial worker reported being approached Monday night by a man with a weapon.

The man reportedly approached the worker at Pangborn Hall about 10:30 p.m. Monday, and asked directions to the administration building.

In a message posted Tuesday on the university’s Facebook site, the university’s president, John Garvey, offered an explanation of the overnight response. He said the person had “made claims that sounded to our custodian like terroristic threats.”

A description provided on a university social media site said the individual had a Middle Eastern appearance….

RELATED ARTICLES:

Both San Bernardino jihad murderers pledged allegiance to the Islamic State

BuzzFeed’s Andrew Kaczynski and Christopher Massie, desperate to defame Trump, libel Pamela Geller and Robert Spencer