Tag Archive for: Barack Obama

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

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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….

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Congress must press Obama Administration on Muslim Syrian refugee policy

Update:  It appears the last time either Judiciary Committee held required hearings on the annual refugee consultation was in 1999 (here).  If anyone can find a more recent hearing record, please send it. Why haven’t they been doing their jobs?

We’ve been aware for several years that the Administration each September must consult with the House and Senate Judiciary Committees on the President’s refugee resettlement plan for the upcoming year which must lay out how many refugees we will take, from where they will come, and why this is in our national interest.

(Last year’s Presidential Determination is here and an accompanying report can be found here.)

Reports I’ve received over the years are that the Committees responsible for “consulting” don’t change anything the President requests.  I could be wrong, but at least in the 8 years I’ve followed the Refugee Admissions Program, the consultation and the required delivery of a lengthy report amounted to no more than State Department reps dropping off the report with committee staff.  (I want to be corrected if there has been much more than that over the last decade!).

kerry richard

Asst. Secretary of State Anne Richard and Secretary of State John Kerry

On Wednesday, Sec. of State John Kerry and Asst. Secretary of State Anne Richard made a trip to the Hill to meet with Senators Grassley and Sessions (others?) where they discussed the 10,000 (some reports say 5,000) Syrians for FY2016 proposal.

They are calling that meeting a “consultation.”  Were Members of the House Judiciary Committee present as the law requires?

Opening the floodgates?

This is what the Office of Senate Judiciary Chairman Charles Grassley said after the meeting with Kerry.  It appears that Kerry left the door open for a much larger number of Syrians than the 10,000 being mentioned by the Administration so far.

Senate Judiciary Committee Chairman Chuck Grassley made the following statement after a meeting with Secretary of State John Kerry and Anne Richard, Assistant Secretary for Population, Refugees and Migration. The consultation regarding the number of refugees that the United States will admit into the country is required by law. In the event of an “emergency refugee situation” the administration may admit an additional number of refugees, but only after additional consultation with Congress.

“Secretary Kerry initially said that the Obama administration is seeking a reasonable increase in refugees allowed into the United States in the upcoming fiscal year. But when pressed, the administration indicated that they were considering opening the floodgates and using emergency authority to go above what they proposed to Congress in today’s consultation. The administration also has not ruled out potentially paroling thousands of Syrians into the United States.

Where is the hearing?

Below is a section of the Refugee Act of 1980 which lays out the process which should be happening right now regarding the “consultation” and subsequent final determination.

Calling any lawyers out there to help decipher it!  But, as I see it, both House and Senate Judiciary Committees are required to hold hearings!

((It can be confusing because the text intermingles two processes.  One is for the annual determination (where we are right now in mid-September) and the other is for an emergency situation that might come up during the year.))

Below are the sections I’ve selected for your consideration.  I doubt most of this ever happens! This is the statute: STATUTE-94-Pg102

“SEC. 207. (a)(1) Except as provided in subsection Q)), the number of
refugees who may be admitted under this section in fiscal year 1980,
1981, or 1982, may not exceed fifty thousand unless the President
determines, before the beginning of the fiscal year and after appropriate
consultation (as defined in subsection (e)), that admission of a
specific number of refugees in excess of such number is justified by
humanitarian concerns or is otherwise in the national interest.

“(2) Except as provided in subsection (b), the number of refugees
who may be admitted under this section in any fiscal year after fiscal
year 1982 shall be such number as the President determines, before
the beginning of the fiscal year and after appropriate consultation, is
justified by humanitarian concerns or is otherwise in the national
interest.

“(3) Admissions under this subsection shall be allocated among
refugees of special humanitarian concern to the United States in
accordance with a determination made by the President after appropriate
consultation.

[….]

“(d)(1) Before the start of each fiscal year the President shall report
to the Committees on the Judiciary of the House of Representatives
and of the Senate regarding the foreseeable number of refugees who
will be in need of resettlement during the fiscal year and the
anticipated allocation of refugee admissions during the fiscal year.

The President shall provide for periodic discussions between designated
representatives of the President and members of such committees
regarding changes in the worldwide refugee situation, the
progress of refugee admissions, and the possible need for adjustments
in the allocation of admissions among refugees.

“(2) As soon as possible after representatives of the President
initiate appropriate consultation with respect to the number of
refugee admissions under subsection (a) or with respect to the
admission of refugees in response to an emergency refugee situation
under subsection (b), the (Committees on the Judiciary of the House of
Representatives and of the Senate shall cause to have printed in the
Congressional Record the substance of such consultation.

“(3)(A) After the President initiates appropriate consultation prior
to making a determination under subsection (a), a hearing to review
the proposed determination shall be held unless public disclosure of
the details of the proposal would jeopardize the lives or safety of individuals.

[….]

“(e) For purposes of this section, the term ‘appropriate consultation*
means, with respect to the admission of refugees and allocation
of refugee admissions, discussions in person by designated
Cabinet-level representatives of the President with members of the
Committees on the Judiciary of the Senate and of the House of
Representatives to review the refugee situation or emergency refugee
situation, to project the extent of possible participation of the United
States therein, to discuss the reasons for believing that the proposed
admission of refugees is justified by humanitarian concerns or grave
humanitarian concerns or is otherwise in the national interest, and
to provide such members with the following information:

“(1) A description of the nature of the refugee situation.

“(2) A description of the number and allocation of the refugees
to be admitted and an analysis of conditions within the countries
from which they came.

“(3) A description of the proposed plans for their movement
and resettlement and the estimated cost of their movement and
resettlement.

“(4) An analysis of the anticipated social, economic, and
demographic impact of their admission to the United States.

“(5) A description of the extent to which other countries will
admit and assist in the resettlement of such refugees.

“(6) An analysis of the impact of the participation of the United
States in the resettlement of such refugees on the foreign policy
interests of the United States.

“(7) Such additional information as may be appropriate or
requested by such members.

To the extent possible, information described in this subsection shall
be provided at least two weeks in advance of discussions in person by
designated representatives of the President with such members.

Where is the report?  Was it delivered two weeks ago?

What you can do!

Contact members of the House and Senate Judiciary Committees (listed here) and tell them to hold PUBLIC hearings on the President’s plan!

It would be preferable to hold field hearings around the country in some of the largest resettlement locations in the country so that citizens who will be most affected by large numbers of Middle Eastern and African refugees could be heard.  If those hearings hold up the official beginning of the resettlement year—October 1—so be it!

Note to Presidential candidates, this may be the most important issue America ever faces!

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Liberalism Created the WDBJ Killer

Barack Obama won’t be saying, “If I had a psycho son, he’d look like Vester Lee.” But he might as well. Because Vester Lee Flanagan II, the bigoted maniac who murdered the WDBJ reporter and cameraman Wednesday on live TV, was a philosophical offspring of the Left.

It’s well known now that Flanagan was a professional victim, nurturing grudges against all and sundry based on his “status” as a homosexual black man. He had an axe to grind with white women because they supposedly made racial statements to him, and against black men because they supposedly directed anti-homosexual remarks his way. And it didn’t seem as if he liked anyone very much.

Of course, most of the bigotry he perceived from others was in his head, a function of his own prejudice, inculcated via decades of liberal indoctrination. When you dislike others, you view them through tinted lenses and ascribe negative motivations to everything they do. Where a fair-minded individual might interpret a comment as innocuous, simply a misunderstanding or an example of the issuer merely having a bad day, you see malice. “Of course it was racial! That’s the way white people are.” And, “That had to be ‘homophobic’ in this society, which macro and microaggresses against everything that I am!” (of course, certain things are supposed to be stigmatized). These notions, again, were put in Flanagan’s mixed-up head by liberals and liberals alone. They disgorge hateful, pure and utter nonsense such as microaggression theory, “white privilege,” critical-race theory and 1000 other things designed to divide with lies. It is evil.

Flanagan had described himself as “human powder keg,” but what was he so angry about? He lived in the most prosperous nation in the most prosperous time in man’s history; he could walk into any supermarket and avail himself of thousands of delicious foods from the world over at reasonable prices, a luxury that would have made the jaws of people existing in former ages drop. He was living, as we all do, in Shangri-la. But his attitude was hardly inexplicable.

To paraphrase G.K. Chesterton, “Goods look a lot better when they come wrapped as gifts.” Everything is a gift, but the Left teaches just the opposite: to have a sense of entitlement, to believe you’re owed, to ever and always view our very large glass as half empty. Some have asked, quite naively, how it is that despite Flanagan’s pathetic performance as a reporter, he was hired by more than one media outlet and given chance after chance to right the ship. Well, golly gee, Cletus, it’s a mystery.

Flanagan was clearly an affirmative-action hire, enjoying the daily-double victim status of being black and homosexual. And that was part of the problem: too much was given to him on a silver platter — because of liberalism.

There have been many articles in recent years about how college graduates today enter the workforce with unrealistic expectations about their economic self-worth and starting salary. We hear about how so many of them can’t tolerate criticism and rejection; act as if their own feelings are inordinately important and should command respect; and how they lack a sense of propriety, a grasp of their place in a workplace’s hierarchy. As a consequence, they may barge into an office to vent their feelings, even if it’s neither the time nor the place.

This is all the result of liberal parenting, of the psychobabble disgorged by the likes of Dr. Benjamin Spock. It’s no wonder many young people today have little sense of just hierarchies — their permissive liberal parents didn’t establish a just hierarchy in the home. Instead, they acted as if their family was a dysfunctional democracy and junior a special-interest group that political correctness dictated must be coddled and catered to. Junior seldom heard the word “No!” uttered in exclamatory fashion; junior seldom had to delay gratification; junior got participation trophies just for showing up. He was treated as a little prince around whom the world revolved. He was marinated in “self-esteem” pap in schools, telling him how great and special he was. The result? Junior and many of his peers (not that he imagined he had any peers) grew up to be narcissists.

As for Flanagan, it has been reported that his refrigerator was covered with pictures of himself. We know what this means. A mother may display numerous pictures of her children because she loves her children. And a man would display numerous pictures of himself because…?

It all reminds me of the Satan character’s line in the film The Devil’s Advocate: “Vanity is my favorite sin.” “Pride” is probably even more accurate. But it all gets at the matter’s heart. We don’t need some hard and fast psychological diagnosis here. Whether Flanagan was most correctly characterized as a “narcissist” or just a self-centered, entitled jerk, the bottom line is that his state was attributable to a philosophical disease, a disordered way of thinking that masquerades under an ideological banner:

Liberalism.

Of course, liberals will blame guns. This is partially because, unlike with Dylann Roof, they can’t blame Confederate flags or 19th-century statues. But it’s also because they’re incapable of putting the blame where it really belongs: the man in the mirror.

Guns don’t kill people. Liberalism does.

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EDITORS NOTE: You mAY contact Selwyn Duke, follow him on Twitter or log on to SelwynDuke.com

Poll: Trump leads Republican field and Clinton in West Virginia

CHARLESTON, W.Va. /PRNewswire/ — If the 2016 General Election were held today, 26 percent of West Virginians would vote for Democrat Hillary Clinton, while 58 percent would vote for an unspecified Republican candidate, according to a survey conducted by Orion Strategies, a strategic communications firm with offices in Charleston and Buckhannon.

Donald Trump holds a commanding lead among Republican presidential candidates, according to the Orion Strategies poll. Twenty-nine percent of respondents said they would vote for Trump, compared to eight percent for his closest challenger, Marco Rubio – who is statistically tied with Jeb Bush, Mike Huckabee, Ben Carsonand Ted Cruz.  Still, a plurality of Republican and Independents are undecided.

Orion Strategies today released the first results of a new, wide-ranging statewide poll that measured voter attitudes toward next year’s election and significant national issues – including questions about Obamacare, Planned Parenthood, the use of body cameras by police and the treaty with Iran.

“Every year or two, Orion Strategies compiles a list of all the questions we ourselves want to ask,” said Curtis Wilkerson, president and CEO of Orion Strategies.  “We poll often, but almost all of the polling we do on a regular basis remains proprietary. So this is always a fun and enlightening project.”

Orion Strategies also asked a number of questions regarding West Virginia-based state issues. The results of the state-oriented poll questions will be released tomorrow.

The live-interview telephone survey was conducted among historic, likely voters in West Virginia.   A total of 406 respondents completed the entire survey – giving the poll a 4.9 +/- margin of error with a 95 percent confidence rate.  The sample was proportionate to each of the three congressional districts in the state. All 55 counties were called, and results were collected from 54 of those counties.  Partisan registration among respondents was 52 percent Democratic, 34 percent Republican and 14 percent Independent.

Orion Strategies conducts polling and research surveys on behalf of various clients, including trade associations, law firms, universities, media outlets and political campaigns.  The firm also conducts surveys for change of venue requests on prominent court cases. Curtis Wilkerson, Principal of Orion Strategies, is a member of the American Association of Public Opinion Research.  Learn more about Orion Strategies at www.orion-strategies.com

Key Findings of the Survey

In the 2016 General Election for President, would you likely vote for a Democratic or Republican Candidate?

28%

Democratic

52%

Republican

If in the 2016 General Election for President, your choices were Hillary Clinton and a Republican candidate, for whom would you vote?

26%

Clinton

58%

Republican Candidate

If the 2016 Republican Presidential Primary in West Virginia were held today, for which candidate would you vote? (Republicans and Independents only)

29%

Trump

8%

Rubio

7%

Bush

7%

Huckabee

7%

Carson

5%

Cruz

2%

Walker

2%

Fiorina

1%

Kasich

1%

Paul

32%

Other/Undecided

If the 2016 Democratic Presidential Primary in West Virginia were held today, for which candidate would you vote? (Democrats and Independents only)

23%

Clinton

12%

Sanders

16%

Biden

49%

Other/Undecided

If in the 2016 General Election for President, your choices were Hillary Clinton and Donald Trump, for whom would you vote?

30%

Clinton

53%

Trump

17%

Undecided

Other key findings:

  • 61% believe that things in West Virginia are not headed in the right direction
  • 36% believe that Planned Parenthood should receive state and federal funding, while 54% do not
  • 77% oppose paying college athletes salaries in addition to athletic scholarships, with 17% in support
  • 91% of respondents support the use of body cameras by all law enforcement officers
  • 63% believe that the death penalty should be reinstated while 23% are opposed and 13% undecided
  • 19% believe Congress should ratify the current proposed treaty with Iran, with 62% against and 18% undecided
  • 29% of respondents agree with the recent Supreme Court ruling upholding the ability for same sex couples to marry, while 66% were opposed

Respondents were asked two similar questions with altered names at very different points in the poll:

–Do you believe that Obamacare is effective in providing more healthcare to residents in West Virginia?

35%

Yes

50%

No

–Do you believe that the Affordable Care Act is effective in providing more healthcare to residents of West Virginia

40%

Yes

46%

No

In regards to United States President Barack Obama, how would you rate his job performance?

8%

Excellent

16%

Good

13%

Fair

64%

Poor

SOURCE Orion Strategies

The Unpolished Politician is what will ‘Make America Great Again’

Today I learned that Barack Obama has proposed an Amendment to the Constitution that would limit the 1st Amendment.  It would seem that President Obama doesn’t like the fact that we have freedom of expression, freedom of speech, and freedom of the press. We also have a repeat of the 2008 Democratic Presidential Nomination race because Hillary is back and she is touting her 40 plus years of public service.  She does this in spite of the fact that she could possibly have committed major crimes while serving as Secretary of State under President Obama. Let that sink in for a moment.  The Secretary of State under the most spiteful president in our nation’s history now wants to be our president.

Now, Hillary claims still, that she is a ‘champion of the people’ and only wants to take care of the lot of us.  The problem with taking care of us is that Democrats and RINO Republicans have to pounce on and trounce the Constitution. The Democrats are very familiar with the thrashing of the Constitution.  They like doing it in fact they love doing it and they support anyone who says they will continue to do it. For example, look at the rising support for Senator Bernie Sanders of Vermont.  This is the main reason that candidates like Donald Trump, Ted Cruz, Dr. Ben Carson, and Carly Fiorina are on the rise because they talk about preserving the Constitution and reducing government in our daily lives.  While RINO types of candidates like Jeb Bush, Chris Christie, and Lindsey Graham are on the decline in support.

One of the best slogans we have seen in years comes from Donald Trump.  It’s simple and to the point.  ‘Make America Great Again’. He is the only candidate I have heard actually say that and of course some would argue that America is still great and that Mr. Trump has it wrong.  I would agree that America is still great but we are not as great as we once were and that is what Trump is talking about.  He wants to take us back to when the Constitution was still the rule of law , freedom was the rule of the market, and personal responsibility was the rule of the people.  That is the kind of greatness Trump is talking about.

Let me be clear on this.  You cannot be for the Constitution and personal responsibility if you are for laws that subject the American People to government over regulation and laws that dictate how you act and think not only in public but in the privacy of your own home.  And if you are not for the Constitution you cannot be a lover and supporter of the United States of America.

We have more laws, rules and regulations on the books than ever before. We now have less freedom to protect ourselves, our family and loved ones, and our hard earned property yet we still have more crime. The Democrats and the RINOs  to this day continue to add more laws, rules and regulations to “protect” us.

It would seem that Americans are eager to elect officials that simply want to rule over us, instead of govern us.  We see this in the growing crowds that an admitted socialist is garnering on his quest to garner the Democratic Nomination for President. To me those large crowds are a little troublesome because when you break down what he is saying one has to ask the question how are we going to pay for all of this new spending and government takeover that Senator Bernie Sanders is proposing? If someone dares to ask him that question he and his supporters look at you like you are crazy.

When you force them to face the facts that even if you confiscate all the wealth from the top 50% of this country, it would not even begin to cover the new spending let alone the huge debt we already have they look at you like you are crazy.  When you explain that even if you take the entire private economy and confiscate a full year of value and production, it is still LESS than what the national debt currently is they look at you like you are crazy.  And that debt is only going to continue to grow.

When you point out that taking money out of the private sector actually takes money out of their own back pocket and you prove it via facts, figures, and numbers as stated by the government itself, they continue with that glassy eyed look. And when you finally tell them that what made this country great was freedom and opportunity and freedom from government over regulation they will look at you like you are really crazy.  And when you prove it to them historically, many of them continue to look at you with those same big, glassy eyes.

The sad part is they get it.  Don’t let them fool you they really do get it.  Now you will have some that will capitulate and convert to a more conservative point of view and you will have others who will ignore you because they are all about class warfare, jealousy, and not about what is doing what is best for the nation but in the end it is all about high taxation and regulation. This class warfare, this high taxation, this over regulation is not American.  It is not America.  It is not what makes America great.

What makes America great is the people doing what they do best without the interference of the government.  That is what made America great in the first place and that is what Donald Trump says will make us even greater in the future.

For liberals who don’t get that, well maybe we can get you some government issued sunglasses.

Who Is Doing More for Affordable Education: Politicians or Innovators? by Bryan Jinks

With a current outstanding student loan debt of $1.3 trillion, debt-free education is poised to be a major issue leading up to the 2016 presidential election.

Presidential candidate Bernie Sanders has come forth with his plan for tuition-free higher education.

Senator Elizabeth Warren supports debt-free education, which goes even further by guaranteeing that students don’t take on debt to pay other expenses incurred while receiving an education.

Democratic Party front-runner Hillary Clinton is expected to propose a plan to reduce student loan debt at some point. And don’t forget President Obama’s proposal to provide two years of community college to all students tuition-free.

While all of these plans would certainly increase access to higher education, they would also be expensive. President Obama’s relatively modest community college plan would cost $60 billion over the next decade. What makes this an even worse idea is that all of that taxpayer money wouldn’t solve the most important problems currently facing higher education.

Shifting the costs completely to taxpayers doesn’t actually reduce the costs. It also doesn’t increase the quality of education in a system that has high drop-out rates and where a lot of graduates end up in low-paying jobs that don’t use their degree. Among first-time college students who enrolled in a community college in the fall of 2008, fewer than 40% earned a credential from either a two-year or four-year institution within six years.

Whatever the other social or spiritual benefits of attending college are, they don’t justify wasting that so much time and money without seeing much improvement in wages or job prospects.

Proponents of debt-free college argue that these programs are worth the cost because a more educated workforce will boost the economy. But these programs would push more marginal students into college without any regard for how prepared they are, how likely they are to graduate, or how interested they are in getting a degree. If even more of these students enter college, keeping the low completion rates from falling even further would be a challenge.

All of these plans would just make sure that everyone would have access to the mediocre product that higher education currently is. Just as the purpose of Obamacare was to make sure that every American had a health insurance card in their wallet, the purpose of debt-free education is to make sure that every American has a student ID card too — whether it means anything or not.

But there are changes coming in higher education that can actually solve some of these problems.

The Internet is making education much cheaper. While Open Online Courses have existed for more than a decade, there are a growing number of places to find educational materials online. Udemy is an online marketplace that allows anyone to create their own course and sell it or give it away. Saylor Academy and University of the People both have online models that offer college credit with free tuition and relatively low examination fees.

Udacity offers nanodegrees that can be completed in 6-12 months. The online curriculum is made in partnership with technology companies to give students exactly the skills that hiring managers are looking for. And there are many more businesses and non-profits offering new ways to learn that are cheaper, faster, and more able to keep up with the ever-changing economy than traditional universities.

All of these innovations are happening in response the rising costs and poor outcomes that have become typical of formal education. New educational models will keep developing that offer solutions that policy makers can’t provide.

Some of these options are free, some aren’t. Each has their own curriculum and some provide more tangible credentials than others. There isn’t one definitive answer as to how someone should go about receiving an education. But each of these innovations provides a small part of the answer to the current problems with higher education.

Change for the better is coming to higher education. Just don’t expect it to come from Washington.

Bryan Jinks

Bryan Jinks is a ?freelance writer based out of Cleveland, Ohio.

Biden’s Big Moment

On Friday evening, July 24, the Fox News Network interrupted regular programming for a short news-break.  In one of the news briefs, the Fox reporter announced that Barack Obama had arrived in Kenya, “his ancestral home,” where he would be reunited with family relatives… uncles, aunts, cousins, etc.

In that brief announcement, the Fox news division… and I assume every other major network… overlooked what was potentially one of the biggest news stories of the year.  For the first time since March 30, 1981, when John Hinckley, Jr. attempted to assassinate Ronald Reagan outside the Washington Hilton Hotel, the reliance on Section 3 of the 25th Amendment was an absolute necessity.

Section 3 of the 25th Amendment reads as follows:

“Whenever the President transmits to the President pro tempore of the Senate and the Speaker of the House of Representatives his written declaration that he is unable to discharge the powers and duties of his office, and until he transmits to them a written declaration to the contrary, such powers and duties shall be discharged by the Vice President as Acting President.”

The basis for the applicability of the 25th Amendment during Obama’s recent visit to Kenya is contained in official regulations of the Consular Affairs Division of the U.S. Department of State, which read as follows:

“The concept of dual nationality means that a person is a citizen of two countries at the same time.   Each country has its own citizenship laws based on its own policy.  Persons may have dual nationality by automatic operation of different laws rather than by choice…

 “The U.S. Government recognizes that dual nationality exists but does not encourage it… because of the problems it may cause.  Claims of other countries on dual national U.S. citizens may conflict with U.S. law…  However, dual nationals owe allegiance to both the United States and the foreign country.  They are required to obey the laws of both countries (emphasis added).”  

Chapter VI, Section 87(3), Subsection 1 of the 1963 Kenyan Constitution provided as follows:

“Every person who, having been born in Kenya, is on 11th December, 1963 a citizen of the United Kingdom and Colonies (Barack Obama, Sr,)… shall become a citizen of Kenya on 12th December 1963.  Provided that a person shall not become a citizen of Kenya by virtue of this subsection if neither of his parents was born in Kenya.  (Both of Obama’s paternal grandparents were born in Kenya.)

Subsection 2 of Chapter VI, Section 87(3) provided as follows:

“Every person who, having been born outside Kenya, is on 11th December, 1963, a citizen of the United Kingdom and Colonies shall, if his father becomes, or would but for his death have become, a citizen of Kenya by virtue of subsection (1), become a citizen of Kenya on 12th December, 1963.”

In other words, on December 12, 1963, through automatic operation of Kenyan law, Barack Obama acquired dual US-Kenyan citizenship.  Obama did not actively seek dual US-Kenyan citizenship; it was his by “automatic operation” of Kenyan law and “by descent” from his Kenyan father and his American mother.  And since there is no known evidence that Obama ever took steps to renounce his American citizenship in favor of Kenyan citizenship, he automatically lost his Kenyan citizenship under provisions of Chapter VI, Section 97(1) of the Kenyan constitution on August 4, 1984, his twenty-third birthday.

However, that was not the end of Obama’s official ties with Kenya, the country of his father’s birth.  During fiscal year 2010, the Obama administration spent some $24 million in USAID funds in Kenya in support of a “yes” vote on a new Kenyan Constitution.  Chapter 3, Section 14 of the 2010 constitution provides as follows: A person is a citizen (of Kenya) by birth if on the day of the person’s birth, whether or not the person is born in Kenya, either the mother or father of the person is a citizen (of Kenya).  That constitution, adopted on August 4, 2010 (Obama’s 49th birthday) reinstates him as a citizen of Kenya “by birth.”  It also puts to rest forever the question of whether or not Obama currently holds dual US-Kenyan citizenship.

What interest Obama may have had in the outcome of the Kenyan constitutional referendum… a level of interest that would cause him to spend some $24 million of U.S. taxpayer funds in support of a “yes” vote… remains to be seen.  He has chosen not to enlighten us on that subject.  However, given the fact that he became a “citizen of Kenya by birth” upon ratification of the 2010 constitution, and given the fact that the rules of the U.S. State Department require him to obey the laws of Kenya anytime he visits that country, we are faced with the rather knotty question of whether or not he can serve as president of the United States while on Kenyan soil.  Further, is it even possible to simultaneously obey the laws of two countries?

I would suggest that Obama’s ability to serve as president of the United States while on Kenyan soil is highly problematic and could have been resolved by invoking Section 3 of the 25th Amendment, making Joe Biden Acting President during the two days of Obama’s stay in Kenya.  It is a question that should keep legal scholars awake at night.

Biden may on occasion slip into the Oval Office when Obama is on the golf course, just to sit in the big leather chair behind the Resolute Desk.  Regardless, Obama’s trip to Kenya was Biden’s big chance to go down in history as one of only two men, along with George H.W. Bush, who have served as Acting President of the United States.  Unfortunately, Obama’s desire not to contribute to the question of his own constitutional eligibility blew Biden’s big moment.

The mainstream media and Washington politicians may not think it’s anything to worry about, but I disagree.  To quote Biden, himself, “This is a big f _ _ _ ing deal.”

Obama’s Iran Nuke Deal: It’s Déjà vu All Over Again

Democratic Party leader Barack Obama is doing in 2015 with the Iran Nuclear Deal what another Democrat Party leader did with a nuclear deal with North Korea in 1994. That Democrat is Bill Clinton, whose wife Hillary is running for the White House in 2016.

Perhaps it is time to read excerpts from what President Clinton said on October 18th, 1994:

Good afternoon. I am pleased that the United States and North Korea yesterday reached agreement on the text of a framework document on North Korea‘s nuclear program. This agreement will help to achieve a longstanding and vital American objective: an end to the threat of nuclear proliferation on the Korean Peninsula.

This agreement is good for the United States, good for our allies, and good for the safety of the entire world. It reduces the danger of the threat of nuclear spreading in the region. It’s a crucial step toward drawing North Korea into the global community.

[ … ]

Today, after 16 months of intense and difficult negotiations with North Korea, we have completed an agreement that will make the United States, the Korean Peninsula, and the world safer. Under the agreement, North Korea has agreed to freeze its existing nuclear program and to accept international inspection of all existing facilities.

This agreement represents the first step on the road to a nuclear-free Korean Peninsula. It does not rely on trust. Compliance will be certified by the International Atomic Energy Agency. The United States and North Korea have also agreed to ease trade restrictions and to move toward establishing liaison offices in each other’s capitals. These offices will ease North Korea‘s isolation.

[ … ]

Throughout this administration, the fight against the spread of nuclear weapons has been among our most important international priorities, and we’ve made great progress toward removing nuclear weapons from Ukraine, Kazakhstan, and from Belarus. Nuclear weapons in Russia are no longer targeted on our citizens. Today all Americans should know that as a result of this achievement on Korea, our Nation will be safer and the future of our people more secure…

Read the full text of President Clinton’s announcement of a nuclear deal with North Korea click here.

Sound familiar? Here are the comments by President Obama on the Iran nuclear deal:

History shows us what happened with the North Korean nuclear arms deal. Today North Korea is exporting its nuclear and missile technology to other nations, such as Iran, with impunity.

As Yogi Berra once said this is Déjà vu All Over Again.

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Barack Obama and John Kerry: Traitors!

President Barack Obama and John Kerry are traitors to this nation and must be brought to justice!