Everyone's True Colors Show In the John Edwards Fiasco

By now, it is likely you have heard that some news outlets are reporting that John Edwards may have recently been involved in an affair that may also have produced a child. It is difficult to confirm any of this because details are sketchy and also because the tabloid the National Enquirer has been the one breaking most of the details. Since details are sketchy I can't confirm the rumors for sure, however, if they are, it certainly says a lot about the character of John Edwards. That would mean that while his wife was battling cancer he was off with another woman. To me, whether this is true or not, he's already rather duplicitous. Here is a guy that tried to make his political career as someone battling for the little guy, and all the while, he was living in a 28,000 square foot mansion. It appears helping the little guy was awfully prosperous for Mr. Edwards.

According to this report from Bill O'Reilly, John Edwards barely knew any of the poor neighbors that lived within the vicinity of his giant mansion, let alone helped them out of poverty.

UNIDENTIFIED MALE: He don't know — he really doesn't know what two Americas are.

UNIDENTIFIED MALE: Everybody here is just normal income people. You know, just live day-to-day. And I don't think he knows anything about us.

UNIDENTIFIED MALE: What do you have in common with John Edwards?

UNIDENTIFIED MALE: I can't imagine anything. He don't know anything about the things I know about.

UNIDENTIFIED MALE: I don't know if he knows how to help poor people or lower class people. He doesn't know them. He doesn't — you got to know something about something before you can help the problem. He doesn't know anything about it.

UNIDENTIFIED MALE: When he talks about the two Americas, what do you think he means when he's talking about that?

UNIDENTIFIED FEMALE: I don't know. He says many different things. I just don't pay any attention to what he says any more.

So, if this story is true, it would cement the devious character of John Edwards.

Of course, if all your news comes from the MSM, you would likely not even have heard about this story. That's because there has been a near media black out on the story.

If a former Democratic candidate for vice-president is involved in a possible scandal, and the mainstream media refuses to cover it–does it exist?

A tabloid newspaper, the National Enquirer, has reported that John Edwards was caught at the Beverly Hilton hotel meeting his alleged mistress, Reille Hunter, and visiting his alleged love child. Fox News has confirmed that Edwards was in the hotel and confronted by those same reporters at 2:40 AM Tuesday night. Fox also confirmed that Edwards was not a registered guest at the hotel.

Not one other major media source has reported anything.

The standard excuse? John Edwards is a private citizen and entitled to that privacy.
Hmm. Isn’t pop star Britney Spears a private citizen? How about Yankee Alex Rodriguez? Both of them, and many other “public figures” have been subjected to countless speculative stories regarding their so-called private lives. Apparently the MSM has decided–collectively–that certain public figures are entitled to privacy while others are not.

The reasons for the black out are layered. For one, the roots of this story appear to have started during the campaign and so any enterprising reportor should have had every reason to pursue it in the winter and spring. Often times, the reason for a lack of coverage has been a lack of evidence. For instance, the New York Times has given this almost no coverage at all and their reasoning appears to be that they can't confirm anything. Of course, the same New York Times had no trouble running a story in which anonymous sources insinuated something untoward between John McCain and a female lobbyist.

Of course, one place where you will have no trouble finding this story is in the conservative blogosphere. Many within the Conservative media were more than willing to run with this story even though they were then relying on the tabloid as their lead source.

I want to start by bragging to you about how discreet Pajamas Media is. Over six months ago, we had wind of the John Edwards/Rielle Hunter love affair and love child and did not run with it. Most of this information was hearsay from people here in Hollywood, people who know Rielle. She was a long time hanger on in Hollywood circles before heading East to do political promo videos… and, yes, I had met her myself on a couple of occasions at parties. She was not particularly notable, of the tedious sort that bore you to death about their yoga instructor.

...

Oh, one last thing, for those of you who say it’s The National Enquirer, how do we know it’s true? I suggest you Google the “National Enquirer and OJ Simpson.” They broke most of the important stories on that case. In general, these days they’re vastly more reliable than The New York Times.

What's really unseemly though is that some want to revel in this story. For instance, this is one such reveler.

Ironically enough, he received this award nine months before the birth of his love child.Oh, sorry. Alleged love child.Probably got busy with Rielle right after the ceremony.Of course if the American media is your sole source for information, you haven't heard anything about that.Even some little tyrants on the lefty blogs have banned any mention of it.

In today's Redstate, the title reads as such.

John Edwards Creates Two Americas: One for Legitimate Children and One for Illegitimate Ones

I guess some forget that even though they are political opponents, their families are still human. I don't much care for Edwards and he doesn't deserve sympathy if this is all true. That said, if this story is true, it isn't one to be celebrated and reveled in, but rather one of sadness and disgust. If this is true, a marriage is ruined. A woman has to deal with a life threatening cancer as well as a cheating husband. Several innocent children all have to face the fury of intense media scrutiny and embarrassment. There is nothing to revel in here. This is not a story to be enjoyed.

So far, no one has shown much in the way of class involved in this story, and those reporting on it, or failing to, are only slightly less despicable than the subject.

Off Shore Drilling: Obama's Reversal and the Opening

Barack Obama shifted his stance on off shore drilling a couple days ago.

Sen. Barack Obama on Saturday said a shift in his stance on offshore oil drilling is a necessary compromise with Republicans to gain their support for his broader goals of energy independence.

On Friday, Obama indicated a willingness to support an effort by five Democratic senators and five Republicans to break Congress's energy impasse with legislation that would allow expanded offshore oil exploration and embrace ambitious energy efficiency and efforts to develop alternative fuels.

...

Obama said on Saturday that it is time to compromise. The proposal by the Senate's "Gang of 10" has "some of the very aggressive elements that I've outlined in my plan," he said here, including a goal in 20 years of having 85 percent of cars no longer operating on petroleum-based fuels and to provide $7 billion to help the U.S. auto industry retool to build ultra-efficient vehicles.

"What I don't want is for the best to be the enemy of the good here, and if we can come up with a genuine, bipartisan compromise in which I have to accept some things I don't like, or the Democrats have to accept some things that they don't like, in exchange for moving us in the direction of energy independence, then that's something I'm open to," Obama said. "I wanted to send a strong signal that we can't allow partisan bickering or the desire to score political points to get in the way of providing some genuine relief to people who are struggling."

Now, this presents an opportunity for John McCain and the country. As most know by now, both Nancy Pelosi and Harry Reid have done their best to avoid any votes on drilling. They have rather looked to bring measures to the floor that: punished the oil companies, mandated conservation, spend more money on alternative energy sources, and legislated against speculation.


Ever since comprehensive immigration reform, I have been weary of any policy proposal with the word "comprehensive" in it. That said, energy independence is a complicated policy and it likely needs a comprehensive solution. Furthermore, Republicans aren't necessarily against a comprehensive solution. The problem with everything comprehensive but drilling is that most of those solutions won't be felt for decades. I for one am for anything that will in the short and long term mean less money going to OPEC. Whether that is wind, solar, hydrogen, or domestic drilling, I want to try anything and everything. Any solution that includes in it a way for the Saudis to make less money when we drive is something I favor. If the Congress can truly hammer out a comprehensive solution that includes all sorts of alternative solutions, I along with many Americans would applaud.

That's why Barack Obama's stance that he wants to compromise is an opportunity. John McCain should immediately challenge him to follow through. Both should demand that each party come back from vacation and begin legislating until a compromise is hammered out. There is already a bi partisan group of ten Senators ready to compromise. Imagine if the standard bearers of each party demand that their colleagues come back to the legislature until a real compromise is hammered out. If Barack Obama is serious, then it will mean real energy solutions including drilling. If he isn't, he will be exposed as the empty suit some of us think he is. Either way, his softening stance on drilling presents a real opportunity. I hope that John McCain takes it.

The Israeli Factor

Dick Morris latest column paints an interesting possibility.

The most important primary for our 2008 election may be yet to come - the Kadima Party primary in Israel in mid or late September. It pits liberal-leaning Foreign Minister Tzipi Livni against hardliner and former Army Chief of Staff Shaul Mofaz. (Prime Minister Ehud Olmert is expected to sit out the contest and concentrate on staying out of jail.)

According to polling that Morris has seen, the race between Mofaz and Livni is a near dead heat. Livni is the dove and Mofaz is the hawk. If Mofaz happens to win then Morris sees a set of events that could bring a strike by Israel on the Iranian nuclear facility before our election.



The thinking goes like this. A McCain Presidency would be a lot more sympathetic to a strike by Israel on Iran's nuclear program. Since it is by no means a guarantee that McCain will be President, Mofaz, if elected, may not wait.

Morris even offers some implied politcal machiavellia. Mofaz might strike at Iran right before our own election. This would make national security the top issue in the minds of American voters just before our election. Of course, if national security is the number one issue, this gives McCain the best chance to win.

Morris' hypothesis is filled with many what ifs and as a friend of mine used to say

if if was a fifth we'd all be drunk

and thus it's purely hypothetical at this stage. That said the Israeli election is one to keep an eye on as it may very well have a huge impact on our own.

Countering the Bush Third Term Mantra: How McCain Distances Himself from Bush Properly

The strategy is clear. Everywhere you turn a Democrat is comparing the policies of George Bush and John McCain.



Now, the Democrats are trying to paint McCain's domestic and foreign policy record as the same as Bush's. Yet, it is my supposition that on each Bush's record has one glaring weakness and McCain has been against the President both times.

Domestically, Bush's most glaring weakness has been on spending. On spending, John McCain has been critical of the President's policies from the beginning.


In this video, he vociferously opposes the Bush tax cuts in March of 2003. We were just beginning the war in Iraq. The entire opposition here was budgetary. He spoke of on an already budget that was going deep into the red. We were already spending a great deal in Afghanistan. We didn't know what other trouble spots in the world. We had no idea on what Iraq was going to cost. The President was proposing a series of tax cuts with no cut in spending. How could any good fiscal conservative support such a notion?

On this single, though very important, domestic issue, John McCain has distanced himself properly from the President. For the most part though, there is no reason to run away from the President's record. The Democrats are trying to trash the idea of the tax cuts. What McCain should condemn is the idea of tax cuts without the proper spending cuts. Taxes aren't merely supposed to lower our tax rates. They are also supposed to make government smaller and more efficient. If you can't do these things along with cutting taxes, the tax cuts are meaningless.

Then, on foreign policy, John McCain has also distanced himself from George Bush effectively.


Bush's biggest foreign policy failure was not putting enough troops in Iraq and not realizing that the strategy he had was failing. McCain not only called for putting more troops on the ground and fighting a counter insurgency. That is exactly what is happening now and it is succeeding.

Again, the Democrats try and paint Bush's entire foreign policy vision as failed when what really failed was nearly four years of following the wrong strategy in Iraq. By bogging us down like that it made carrying out proper foreign policy nearly impossible. That doesn't mean the rest of the vision is wrong.
The Democrats think that we should give terrorists rights and if you disagree with him, you are merely carrying out the failed policies of Bush's third term.

These are the same guys who helped to engineer the distraction of the Iraq war at a time when we could have pinned down the people who actually committed 9/11."...This is the same kind of fear mongering that got us into Iraq. It's exactly that failed foreign policy I want to reverse.

Barack Obama wants to talk unconditionally to Mahmoud Ahmadinejad and if you disagree with him, you are merely carrying out Bush's third term. They tie all policies to the failed policies in Iraq.

There’s a reason the problems we face today are so much bigger than they were several years ago A big part of it is that George Bush and John McCain have been so focused on pursuing a flawed and costly war in Iraq that they’ve lost sight of our mounting problems here at home. Instead of working to fix our economy and lift up hardworking families, they’ve fought to extend a war that’s costing thousands of lives and billions of dollars without making us any safer — a war that has strengthened our enemies and distracted us from the real battle with Usama bin Ladin in Afghanistan and Pakistan.”

Of course, the strategy is no longer failing and thus the Democrats pretend as thought the facts on the ground are no different than they were 18 months ago. Here is how Nancy Pelosi summarized it.

President Bush’s troop surge has “not produced the desired effect.”“The purpose of the surge was to create a secure time for the government of Iraq to make the political change to bring reconciliation to Iraq,” Pelosi said on CNN’s “Late
Edition.” “They have not done that.” The speaker hastened to add: “The troops have succeeded, God bless them.”

The Democrats are trying to pull a misdirection. They are pretending as though the entire Bush policy is failing because of two glaring weaknesses. Furthermore they are pretending that McCain hasn't vociferously been against each of these policies from the start. As such, they are able to turn this perception and turn it into reality.



Of course, the Bush tax cuts secure borders, the surge, and free market health care are all good policy. These are policies to get behind and defend stridently. The Republican have in fact chosen the one Republican to criticize Bush's two main failings and the Democrats are trying to point him as Bush's third term. They will be able to turn that perception into reality unless these two very important differences are pointed out each and every time they do it.

Karl Marx and the Democrats: Why I hate Class Warfare

Whatever one thinks of Karl Marx the economist, there is no doubt that he was a marketing and political strategist genius. He took a flawed economic system and was able to sell it to the masses. He did it by taking advantage of two universal truths. The first is strength in numbers, and the second is that the less successful always have a natural envy and resentment of the more successful.

Thus, in the 1800's, he created a populist message that appealed to the proletariat. He told them that they were being exploited by a rigged system that favored the bourgeoise. That system of course was capitalism. In a sense he was right. Capitalism ultimately favors the few at the expense of the many. That's because capitalism forces competition, and in any competition there are mostly losers and only a few winners. It is of course this competition that has lead to most of the innovations that we enjoy today.

None of that really matters in being able to sell a principle. The proletariat may have been weak and powerless but they were plentiful. Most of them had a natural envy and resentment for the bourgeoise. Marx used both and sold a failed economic system that took over much of Europe for years.

Ultimately, what Marx did was practice old school text book class warfare. He pitted the proletariat against bourgeoise. He demonized the bourgeoise and the system that made them successful and he started a revolution. For the most part, his marketing and political strategy worked. His flawed system gained a great deal of popularity for a while. It is for this reason that class warfare is among my biggest political pet peeves. I have seen with Marx the corrossive effect that it has.

Today's Democratic party uses class warfare just as liberally as Marx once did. I see their class warfare used in four different topics: taxes, trade, employment, and health care.

1)Taxes

The phrase tax cuts for the rich is so popular in many circles that it is a part of our lexicon. Ever since they were passed, Democrats have tried to paint the tax cuts as overly favoring the wealthy. This is of course a dubious arguement for several reasons. The first of which is that it is difficult to pin point exactly what the cuts did and didn't do. The second is that the tax cuts cut each tax bracked by three percent. Thus, everyone not only got the same tax cut but the same tax cut as a percentage.

This hasn't stopped any of the Democrats from demonizing the tax cuts as advancing the interests of the wealthy at the expense of the middle class and the poor (very much like Marx once did to capitalism itself). The Democrats have effectively used class warfare to demonize the tax cuts and the wealthy by extension. Furthermore, besides reversing the tax cuts, most of the Democrats want to spend that money in very Marx like socialist ways. Here is how Barack Obama characterized it.

The Bush tax cuts — people didn't need them, and they weren't even asking for
them, and they ought to be relaxed so we can pay for universal health care and
other initiatives."

In fact, this is the mantra of the entire Democratic party. The Democrats have already targeted income taxes, capital gains, and the death tax as taxes they would raise in order to spend on numerous domestic programs for the poor and middle class. By demonizing the most successful, they can put themselves on the side of the little guy and effectively they have updated class warfare that Karl Marx revolutionized.

2)Trade

On trade, the Democrats use class warfare in a different manner. This time they pit American workers against all other workers, and they blame free trade from taking jobs from Americans and giving it to the foreigners. It is a slightly different spin on class warfare but it is no less effective. Here is how Barack Obama characterized NAFTA.

It's a game where trade deals like NAFTA ship jobs overseas and force parents to compete with their teenagers to work for minimum wage at Wal-Mart. That's what happens when the American worker doesn't have a voice at the negotiating table, when leaders change their positions on trade with the politics of the moment, and that's why we need a President who will listen to Main Street – not just Wall Street; a President who will stand with workers not just when it's easy, but when it's hard...

They take this populist message to states like Ohio and they blame the evil free trade deals for all the workers losing their jobs. With taxes, they blamed the rich for the troubles of the poor and middle class. With the issue of trade, they blame the foreigners for the same failings. Either way, it is an effective use of class warfare. (It should be noted that on free trade the Dems even surpass Marx himself who was in favor of free trade)

This arguement is of course just as dubious on a rational level. Free trade has consistently shown to raise everyone's quality of life, and it is dubious at best to link job losses in Ohio to free trade. Still, the correctness of the arguement is not now the issue...the effectiveness is. Whether or not free trade cost anyone their job is not the issue, if you are a struggling manufacturing worker in Ohio, someone preaching protectionism and telling you they will bring back the jobs those dirty foreigners stole is effective.

3)Employer/Employee

Unions have long been a major constituency of the Democratic party. Thus, it is only natural that the Democrats side with the workers against management every chance they can get. No company has faced the wrath more than WalMart. The main reason is Walmart's refusal to unionize. Because Walmart won't unionize, the Dems have made them their enemies. Here is how one group allied with both John Edwards and Barack Obama editorialized it...

The national conference call, entitled a “Call for Change”, will highlight two of the Democratic Party’s brightest stars, Senator John Edwards and Senator Barack Obama, who will be speaking out and calling on Wal-Mart to put families first and become an employer that reflects the best of American values. During the conference call, Senator Obama and Senator Edwards will also encourage the 285,000 supporters of WakeUpWalMart.com, and all Americans, to continue the fight to change Wal-Mart and change America for the better.

WakeUpWalMart.com will also announce the start of its 6-week 2006 Holiday Campaign, entitled “Hope for the Holidays,” The goal of this year’s holiday campaign is to build community pressure on Wal-Mart to put families first and end its anti-family business practices and policies which hurt its 1.39 million workers, their families, and America.

Now, let's never mind that WalMart employees nearly two million Americans and provides splendid savings for millions more. The so called "anti family business practice" actually means that WalMart sells their goods for less than the family businesses can. Furthermore, WalMart is a private company that is trying to maximize profits. Their goals shouldn't be to take care of the American worker or family. They certainly shouldn't be forced to. Only the free market can do that.

None of this actually matters because WalMart offers the Dems another opportunity to practice class warfare. This time it pits management against employee. Because WalMart refuses to unionize and drives out smaller shops by undercutting them, Walmart can effectively be painted as taking advantage of the little guy. That is the hallmark message of class warfare...the powerful take advantage of the weak. Then, the messenger steps in to right a wrong, and in this case the Dems want to force WalMart to unionize.

The second part of the Dems strategy of class warfare in management vs. employee, is the salaries of CEO's. Here is how Barack Obama characterized the issue.

In 2005, the average CEO in the United States earned 262 times the pay of the average worker. Put another way, a CEO earned more in one workday than an average worker earned in a year. In 2005, the average CEO of a Standard & Poor’s 500 company received a 16% increase in CEO pay over 2004.

S.1181 neither caps nor limits CEO pay but merely requires that firms discuss and debate pay packages for CEOs on a case-by-case basis with their shareholders. If a board of directors disagrees with the nonbinding vote of shareholders, the board can still go forward with the pay package. But at the very least, shareholders would have had the opportunity to voice their opinions about whether the pay package is appropriate.

Hillary Clinton sees the issue largely the same.

It is inconsistent with our values to allow CEO pay to skyrocket while workers’ wages and benefits are under threat. There needs to be greater public scrutiny of CEO pay, and more independence of Boards of Directors.

Now, Obama's idea is absurd. There are many times millions of shareholders in publicly traded companies and many don't hold the stock for any significant time. Furthermore, there are already regularly scheduled shareholder meetings where issues like this can be discussed. How in the world are thousands if not millions of shareholders supposed to add their input? Hillary, on the other hand, comes up with vague and undefined solutions.

Again, their solutions are besides the point for this discussion. What is important is that they have identified an easy target, fat cat CEO's, and they have demonized them. This is another classic Marxist technique. This merely updates the proletariat vs. bourgeoise war, and only isolates the CEO to represent all of the bourgeoise. Once again, the Democrats play on the natural envy and resentment that most workers have for their bosses, and they use it effectively to practice class warfare.

4) Health Care

Forty million people are uninsured in this country. This is another nugget that has become a part of th lexicon because it has been said so often. On the issue of health care, the Democrats have again effectively played class warfare pitting the poor against the greedy drug companies, doctors and insurance companies. Here is Barack Obama on the insurance companies.

The insurance business today is dominated by a small group of large companies that has been gobbling up their rivals. There have been over 400 health care mergers in the last 10 years, and just two companies dominate a full third of the national market. These changes were supposed to make the industry more efficient, but instead premiums have skyrocketed by over 87 percent.

Here is the key phrase for me...

There have been over 400 health care mergers in the last 10 years, and just two companies dominate a full third of the national market.

This is classic Marxism. Obama attacks capitalism, using mergers as the representation of capitalism itself. Of course, Obama would have to do that if he is to sell a socialist system.
This sort of imagery is powerful because most stiffs know that mergers involve huge dollars and most have probably never benefitted from one directly.

Hillary Clinton, John Edwards and most of the rest of the Democrats similarly blame the combination of greedy doctors, insurance companies, drug companies, as well as capitalism itself for 40 plus million people not having health insurance.

Their solution is of course universal health care, or socialized medicine. This is classic Marxism. In this case, the drug companies, insurance companies, and doctors represent the bourgeoise and the uninsured are the proletariat. Once again they preach about a system that is rigged to exploit the weak and they will swoop in with a system that is for everyone.

It is classic Marx to preach that under this system everyone will benefit. That is exactly what Marx promised, a system for everyone and not just the fat cats. Here, the Democrats preach naked socialism dressed up by the word, universal health care. It is classic Marxism leading to classic Marxist solutions.

The Florida Primary or Rudy Gets Doped by his Rope a Dope

Florida turned into Rudy's Waterloo rather than his Rope a Dope and John McCain is now the clear front runner in the Republican field. Florida is also the second state, and the two largest so far, to not count for the Dems.

There is really little to add. Rudy's strategy turned out to blow up in his face rather that to be the sort of genius that I surmized a while ago. John Edwards dropped out in the aftermath of the results. The CW is that this will help Obama. CW hasn't been right more than it has been wrong in this election cycle so what it actually will do is to be determined.

It is clear that the entire nominating process should be analyzed after this is over. Rudy was pretty much stuck with an impossible strategy because in the end he had no choice. Florida and Michigan won't have any delegates count toward the Dems even though they will toward the Reps. Iowa and NH continue to play a role way more than they deserve in nominating the President, and no one can explain to me at least how these two states hijacked the process and forced the rest of us to bow down to them.

The race now comes down to Mitt and McCain for the Reps and Obama and Hillary for the Dems. Anything can happen on either side and events remain fluid.

Dems Vs. Ronald Reagan and Walmart

Even a political junkie like myself long ago lost interest in the debates. I will catch one once in a while but certainly it won't be from the other party, the Democrats. That is apparently too bad because as it turns out the last Dem debate in South Carolina was awfully juicy. The two rivals, Barack Obama and Hillary Clinton, traded some serious jabs. Obama went after Hillary and vice versa. For instance, disgraced and indicted former fundraiser, power player, and former business partner of Barack Obama, Tony Rezko was mentioned. Obama countered by mentioning Hillary's connection to Walmart. Hillary nailed Obama with his unusually high number of present votes. From the small snippets that I saw, it sounded as though it was quite the slugfest.

Much of it was no doubt typical heat of the moment primary mudslinging. It is unclear what sort of long term effect it will have however there were two specific lines of attacks that I found interesting. Each used Ronald Reagan and Walmart as an attack vehicle. The Dems have taken the dual positions that both Walmart and Ronald Reagan are collectively bad for America.

This, frankly, appears to me to be political suicide. Ronald Reagan isn't merely a Conservative icon but frankly an American icon. He appealed to conservatives, moderates, and to moderate Democrats (forever known as Reagan Democrats). It all started when Obama said this about Reagan,

I don't want to present myself as some sort of singular figure. I think part of what's different are the times. I do think that for example the 1980 was different. I think Ronald Reagan changed the trajectory of America in a way that Richard Nixon did not and in a way that Bill Clinton did not. He put us on a fundamentally different path because the country was ready for it. I think they felt like with all the excesses of the 1960s and 1970s and government had grown and grown but there wasn't much sense of accountability in terms of how it was operating. I think people, he just tapped into what people were already feeling, which was we want clarity we want optimism, we want a return to that sense of dynamism and entrepreneurship that had been missing.

This didn't sit well with most of the primary voters and it opened an opportunity for Hillary. Their surrogate, Barney Frank, said this...

I would like to know what Republican ideas he thinks are great ideas,” Brown said of Obama, before ticking off GOP-led plans to privatize Social Security and abolish the National Education Association as well as provide “tax breaks to the rich.”

It was on and now each Democrat took their turns getting as far away from Reagan as they could and attacking him as much as possible. Here is how he characterized it.

what I said was is that Ronald Reagan was a transformative political figure because he was able to get Democrats to vote against their economic interests to form a majority to push through their agenda, an agenda that I objected to. Because while I was working on those streets watching those folks see their jobs shift overseas, you were a corporate lawyer sitting on the board at Wal-Mart.

It appears that in Primary Democrat circles Ronald Reagan ranks right up there with Satan. This is quite a world view, and unfortunately it is quite different from that of the nation at large. Reagan was among the most popular Presidents ever and he ages much like a fine wine. Attacking Reagan maybe an effective primary tactic, but that will haunt the nominee come the general election. Furthermore, turning the Reagan issue into yet another attempt at class warfare by characterizing his tax cuts as "for the rich" is even more foolish. It is this sort of class warfare arguement that Paul Krugman attempted to make, and in my opinion not very effectively. People know Reagan and they remember Reagan and overwhelmingly they like the man, the President, and the time he served as President.

This sort of class warfare arguement can be exploited. By linking Reagan, an icon, to their more broad class warfare arguement, the Dems open themselves up to finally be called on it. Much of their entire domestic policy arguement is nothing more than an attempt at class warfare. Everything the Republicans do it seems, in the mind of Democrats, is an attempt to line the pockets of the rich at the expense of the poor. That may work when you attack George Bush, who is unpopular, or Congress the same, but when it is used at Reagan, I don't see it being nearly as effective. I think it is better political strategy to attack Santa Clause than it is Ronald Reagan. It appears to me to be even worse when that attack is linked to a broader class warfare attack.

Their attacks on Walmart have many of the same political problems. The Democrats have made an enemy of Walmart because it refuses to unionize. It refuses to unionize because Walmart's business model relies on economies of scale, which relies on minimizing costs. Well, unions and cost minimization don't mix. Of course, none of that is important to this debate. The Democrats have to pay homage to their union backers and thus each one needs to attack WalMart. Here is what Obama and John Edwards said late in 2006...

Unlike the manufacturers who are under enormous competitive pressure from global low-cost producers, Wal-Mart is making enormous profits and yet it has chosen to go with low wages and diminished benefits," he said. "The battle to engage Wal-Mart and force them to examine their corporate values and policies is absolutely vital to America today."

Here is how a group of Democrats portrayed Wal Mart.

"We're all together today in wanting to wake up Wal-Mart and say, 'Treat your workers fairly,'" Lieberman told several hundred people gathered outside in stifling heat. He later added, "It is time for the American people to get together to support Democrats who support working people."

...

"This is about waking up Wal-Mart and this is also about waking up corporate America," Lamont said. He did take one jab at Lieberman, a three-term incumbent, saying, "It won't take me 18 years to go down to Washington, D.C., to get that done."

The Democrats even support a group called Wake Up Wal Mart, whose primary goal is to unionize it. Let's set aside for a second the idea that it takes a lot of hubris for a politician to tell a public company how to run its business. Let's look at what is important. Wal Mart employs nearly two million people world wide. More than half of those are in the United States. That means Wal Mart has created more than a million American jobs MORE than any of the politicians currently criticizing it. By offering every product imaginable cheaper than anyone else, Wal Mart also saves millions of people billions if not trillions of dollars yearly as well. The bottom line is that attacking Wal Mart is, much like the Reagan strategy, but will backfire in the general election as this poll from early 2007 indicates.

The unions and the Democratic primary voters may despise Wal Mart but that is opposite of the general feeling from most of the population. The Wal Mart attack is another form of class warfare this time pitting the fat cat employer, Wal Mart, against its workers. It is another attack that would work if the target was disliked. That isn't the case with Wal Mart.

Attacking Reagan and Wal Mart as viciously and clearly as the Democrats have leaves them open to be attacked come the general election. Here we have a clear opening for any astute politician to take advantage of. The Democrats have left themselves wide open to be in the tiny minority come general election time on two important issues, and it is up to their opponent to use it to their advantage. We will see if anyone heeds my advice.

Hillary's Theme Problem

You really gotta love politics. A couple months back the whole entire punditry was wondering just exactly how inevitable Hillary's candidacy really was. Now, Drudge is reporting that Hillary's campaign maybe through. Four years ago, Barack Obama was struggling to get the Democratic nomination for U.S. Senate (I believe it was Blair Hull that was leading for a while before scandalous information was revealed about his divorce, and ironically Jack Ryan's campaign in the general election against Obama suffered a similar fate), and now he is on the verge of the Democratic nomination for President.

Now, I certainly don't believe the reports from Drudge. I don't think that even if Hillary loses in New Hampshire she is through, and I certainly believe that she will only go down with a political scorched earth strategy. Thus, this nomination is anything but wrapped up by anyone, however while the numbers in New Hampshire should concern Hillary there should be something much more concerning. Why is she running for President?

If you look at any of the major candidates, they all have themes to their candidacy. For a while, the theme the media helped construct was inevitability. The problem is that being the inevitabl candidate is not a reason to vote for someone. Obama has the politics of hope. He is hoping to ride a positive, uplifting and inclusive message to the White House.

John Edwards has his two Americas. He is looking to ride a populist message to the White House. Rudy Giuliani wants to ride effectiveness and leadership to the White House. Huckabee has a similar positive and uplifting message to Obama's. Fred Thompson is trying to be the only true conservative in the race. Mitt Romney is trying to ride a similar experience and effectiveness theme to the White House. John McCain is running as the principled, courageous leader who was not only was out front on criticizing the failed Rumsfeld strategy, but was the only one standing up and supporting the new policy that now has many backers.

What is Hillary's theme? She tried to ride a theme of experience, however I believe that didn't work well because she isn't all that experienced. Most of her experience comes as the wife of another individual that was governing. She has little to show for her own experience. She tried to ride a theme of being the toughest in the campaign, however this was no less silly since her husband went on the attack everytime she was challenged.

She has most recently tried to be the agent of change, however her opponents have quickly and accurately painted her as all too much part of the establishment. She isn't calling for the immediate withdrawal of forces from Iraq, and she isn't saying she wants to win in Iraq. Her foreign policy amounts to bashing the current policy. That isn't going to do much since every Democrat's foreign policy will center around bashing the current one. Her domestic policy is standard liberal and its differences between that of her rivals amounts to trivial nuance that most voters don't understand or get.

She tried a charm offensive only the main problem is she has no charm. I believe the real problem is that Hillary doesn't know why she is running for President besides her own lust for power. She has some standard liberal things that she wants to accomplish, however they are substantively no different than any of her primary opponents. Besides that, she doesn't have a theme like her opponents. Someone needs to know why they are supporting a candidate. I look at Rudy and see an accomplished and effective leader and that is the reason I support him. A Fred Thompson supporter sees the only true conservative in the race. Even Ron Paul supporters see someone that is beholden to the Constitution. Obama supporters see a fresh face that brings hope back to politics. All those themes I get, I don't see a theme there for Hillary.

Quick Post Iowa Thoughts

Here is the latest GOP Presidential Futures data. The futures market saw the big winner as John McCain. He is now the favorite in the market. McCain continues to be all in in NH. He must win and that is still no easy task given that Romney is essentially a favorite son. Keep in mind that a third of folks in New Hampshire watch Massachusetts television. Despite coming in a very distant sixth, Rudy also had a good night last night. His proxy, Mike Huckabee, took the victory and foiled Romney's momentum strategy. I continue to believe that Romney was the biggest threat to Rudy because only Romney had the resources to challenge Rudy nationwide. Huckabee might get the sort of funding he needs as a result of this victory however that is not likely. He is unlikely to finish better than third in NH and so some momentum will be stalled.

Even with victory in NH, McCain faces a similar national problem to Huckabee: organization and cash. Rudy is of course likely rooting for McCain in NH, and would pull off the trifecta if say Fred Thompson won in South Carolina. This is Rudy's dream scenario and it would turn his campaign into an oracle even if it was likely by accident as i suspect.

Fred Thompson finished third in Iowa, tied with McCain. The blogosphere was jubilant. They treated it as a victory and continued to throw venom on a report by the Politico that he would drop out. I am of the opinion that most of the right blogosphere is totally out of their minds and cheer leading rather than analyzing. Thompson is likely to not finish better than third anywhere and is fourth nationally. If there is a winning strategy there, I am missing it.

Ron Paul got double digits which will no doubt send his supporters screaming revolution all over the internet.

The situation remains fluid and the nomination is still up in the air. I believe Romney is through whether he wins NH or not. McCain must win NH or he is through, though a victory could give him the sort of momentum necessary to make a national run. Huckabee needs to ride this momentum into cash or organization or soon enough folks will realize that Iowa doesn't have many delegates. He will likely not do as well in more moderate and independent NH, but will be on more friendly turf in South Carolina. Rudy must simply sit back and hope no one gains any momentum and hope his lead in Florida maintains till the 29th. If he wins Florida, he will win the nomination because that is a victory with real momentume, however as a friend of mine liked to say,

if if was a fifth we'd all be drunk

The Democratic race is now a serious two horse race. Hillary maintains a national lead, with money and organization. Still, her performance in Iowa must bear the question: what is the purpose of her campaign. Obama is running on the politics of hope and he has charm, charisma and likeability. I, myself, don't buy the act at all however I am his political opponent. At least, I get the point of his campaign. Edwards has his two America's shtick. I don't buy it either but at least he has a shtick. What is the purpose of Hillary's campaign? I think the folks in Iowa were asking that question.

While Edwards beat Hillary, he was all in in Iowa. He has little presence outside Iowa and less cash, and worse than that Hillary and Obama are drowning in cash. His campaign continues but it is in the beginning of a slow and painful death.

Obama could take control of this race with a victory in NH. He would ride that momentum to a likely victory in South Carolina and winning each of the first three states would make him difficult to beat regardless of his position nationally.

Hillary is not through by a long shot, however I see her campaign as weak. While a loss in Iowa is not the end, I don't see how she will re gain momentum. She tried a charm offensive except she isn't charming. She has equivocated on Iraq and driver's licenses for illegals. She frankly has equivocated on everything. She touts experience even though it seems even the Dems get that it isn't really her experience. She has no messag, purpose, or theme to her campaign. That is a problem.

The AMT and the Lessons of Taxation and Class Warfare

In 1969, in order to make sure that about 100 fat cats paid their fair share Congress created the Alternative Minimum Tax...

In August 1969 as he was preparing the next year's budget Barr warned that the country faced a taxpayers' revolt. He explained, according to the Washington Post, that in 1967 there were a total of 155 individuals with incomes over $200,000 who did not pay any federal income taxes; twenty of them were millionaires. These individuals successfully used all tax loopholes available to legally evade paying taxes. The revelation attracted wide media attention and led to public shock. As he presented the next annual budget, published in the final weeks of his administration, President Johnson indicated that the problem needed to be addressed...

Unfortunately what started as a tax against fat cats has now begun to affect a large majority of Americans.

For more than three decades, the individual income tax has consisted of two parallel tax systems: the regular tax and an alternative tax that was originally intended to impose taxes on high-income individuals who have no liability under the regular income tax. The stated purpose of the alternative minimum tax (AMT) is to keep taxpayers with high incomes from paying little or no income tax by taking advantage of various preferences in the tax code. The AMT does so by requiring people to recalculate their taxes under alternative rules that include certain forms of income exempt from regular tax and that do not allow specific exemptions, deductions, and other preferences. For most of its existence, the AMT has affected few taxpayers, less than 1 percent in any year before 2000, but its impact is expected to grow rapidly in coming years and affect about one-fifth of all taxpayers in 2010.

In her 2003 report to the Congress, the Internal Revenue Service's National Taxpayer Advocate, Nina Olson, labeled the AMT "the most serious problem faced
by taxpayers."(1)The evolution of the AMT from going after 155 fat cats to one that will hit ten million people if it isn't dealt with is a great example how taxes often morph into something totally from its initial purpose and should be a lesson to all politicians about the dangers of using taxes as a means of fighting class warfare.

Unfortunately, many politicians continue to use taxes as a means of fighting class warfare in hopes of finding themselves on the same side of the table with the majority of Americans against the wealthy. For instance, here is how Hillary Clinton feels about the estate or death tax.“

I am more focused on preventing the repeal of the estate tax and returning to what I think are fairer, more effective tax rates for the wealthiest. There may be an argument to be made, which I would be open to but I think you need to look at the entire tax picture. There isn’t any credible argument that the taxes under the Bush administration have gone down disproportionately on high-income investors and earners.”

So what is the so called death tax and why should everyone be concerned when a politician uses it as a means of class warfare?

The estate tax is technically a tax on the transfer of property to others, generally to children of a decedent. It was envisioned to prevent families from passing on huge fortunes and developing a type of royalty in America.

Once again, we have a tax created to make sure that we punish the fat cats. This time they are actually taxed in death. Unfortunately, while the tax death does punish the fat cats it also punishes another class: the savers. Here is a chart of the bottom line levels of an estate's value before it is taxed. For instance, in 2002, any estate worth one million dollars and more would have been taxed. Keep in mind that an estate is everything you own including your home. It is also any retirement that you may have saved up. Let's suppose you saved $100 per month for 40 years and earned an average of 12% on that money. That savings would grow to just over one million dollars after forty years. Someone saving 100 dollars a month is no fat cat and yet they would likely be affected by the estate tax.

Let's look at another tax used by many politicians as a tool in class warfare: the capital gains tax.

A capital gains tax (abbreviated: CGT) is a tax charged on capital gains, the profit realized on the sale of an asset that was purchased at a lower price. The most common capital gains are realized from the sale of stocks, bonds, precious metals and property. Not all countries implement a capital gains tax and most have different rates of taxation for individuals and corporations

.Here is what Barack Obama would like to do to the capital gains tax.

As part of his "Tax Fairness for the Middle Class" plan, Barack Obama is in favor of nearly doubling the capital-gains tax rate from 15 percent to 28 percent. Leaving the fairness issue aside for a moment—as well as the impact of higher taxes on economic growth—the Obama plan could also be called a "Ways in Which Government Can Collect More Taxes to Pay for New Spending" plan, since Democratic candidates are all scrambling to figure out ways to plausibly pay for new healthcare, education, and infrastructure spending if elected.

Keep in mind that the capital gains tax taxes an gain in any long term investment including stocks and real estate. So, what percentage of American households currently own stocks?

Dramatically more Americans own financial assets now than in the recent past. As recently as 1980, only 4.6 million U.S. households owned mutual funds; by 2003 the number was 53.3 million.More than half of American families currently own stocks, bonds or real estate. Nearly half of all U.S. households own stocks or stock mutual funds.

So, when Barack Obama promises to raise the capital gains tax to make the tax system more fair he is actually promising to raise taxes on more than half of American households and growing.Another way in which politicians use taxes as class warfare is through the nebulous word: loophole.
Whether its John Edwards, Barack Obama, orHillary Clinton, the word loophole is used as another tool in fighting class warfare.

Every day, millions of working Americans go to their jobs, play by the rules and hope to make a decent living for themselves and their families. These workers strengthen our middle class and keep oureconomy going. In turn, the vast majority of American employers holdup their end of the bargain by treating their employees fairly.But sadly, many working men and women are not being treated fairly because some businesses are using a little-known tax loophole to avoid paying their fair share. It's workers and American taxpayers who paythe price.

...New York Sen. Hillary Clinton, the front-running Democratic presidential candidate, on Friday urged closing a tax loophole that she said unfairly benefits a few top Wall Street financiers.Clinton called the loophole a "glaring inequity" and joined other lawmakers in a push to raise the tax rate on "carried interest" gains made by senior partners in the booming private equity and hedge fund businesses.

...Sen. John Edwards, D-N.C., told crowds Thursday in Des Moines, Iowa, that he would pay for new programs to benefit the middle class by closing loopholes and tax breaks now benefiting the wealthiest Americans.Remember, the Alternative Minimum Tax itself was created to supposedly close a tax loophole that was also supposed to affect only the wealthiest Americans.

A tax increase speaks for itself. (res ipsa loquitur) The problem is that many a politician have used tax increases as some sort of tool to appeal to emotions. We have a country of nearly half a billion people and at any given time there are millions who are less successful than they would like to be. Those millions can almost always be quantified by someone and put into percentages. The unsuccessful almost always have a resentment toward those at the top. Politicians see opportunities in appealing to such emotions. By increasing taxes that they see as primarily applying to the successful, they seek to score points with the masses who are largely less successful. Unfortunately, the reality of tax policy is almost never in line with the perception that is created by politicians.

Whether it is the AMT, the capital gains tax, the estate tax, or the nebulous tax loopholes, these, like most taxes, almost always end working the same: by affecting the majority of people.

The Tortured Logic of Matt Yglesias

UPDATE: This debate may have been the turning point on the Democratic primary. Thus, while this was first written about a month ago, it is relevant today.

It was only a matter of time before those that support Hillary tried to prop her up by demeaning Tim Russert. There are probably lots of examples of this however I found this piece by Matt Yglesias. He seems to believe that it wasn't that Russert wasn't asking tough questions, he was, but that he was asking them about the wrong topics. Apparently, illegal immigration is not a topic worthy of tough questions. Yglesias thinks that tough questions should inform as well.

But while I wouldn't want to say that "tough questioning" is a bad thing, making toughness the goal is perverse. The goal should be to inform the audience. Climate change, for example, is a hugely important question. As a result, candidates ought to be subjected to questions about their climate change plans. And as it happens, the plans released by Hillary Clinton, Barack Obama, and John Edwards are all based on good science and good economics. So asking them questions aimed at elucidating their plans shouldn't lead to any embarrassing incidents. Shouldn't, that is, unless the candidates are unprepared to discuss their own plans in an intelligent manner which really would be worth knowing about.

Now, I think that climate change is a worthy topic and there should be tough questions asked about it along with every topic a politician should deal with. Frankly, I wish some moderateor actually knew something about my business, mortgages, and could undress some of the ridiculous plans being offered. That is not the point. Just because Yglesias thinks that climate change is a more worthy topic doesn't mean it is not. It also doesn't mean that asking questions about illegal immigration isn't worthy or enlightening. I think everyone was enlightened by Hillary's non stance.

There are even more problems with Yglesias' analysis. Just because he clearly agrees with Edwards, Obama et al, doesn't mean they are right and based on good science. This is third grade debate tactics. If they are based on good science, we wouldn't need to merely take his word for it. He says they are based on good science and then says nothing beyond that. I don't know what background Yglesias has, but I doubt it is science. Thus, he is really in no position to say such a thing.

Frankly, what it appears to me is that Yglesias thinks that there should only be tough questions on things he and other people like him think is important. Any other topics beyond that are in his words, "sadistic". If you believe Yglesias, questions about climate change and alternative fuels are informative and worthwhile, while questions about illegal immigration are "sadistic".
The fact is that tough questions on any policy are informative and worthwhile. It is not up to Yglesias to figure out what topic is worthwhile and what topics aren't important.
Furthermore, he leaps and pretends as though he knows how a Republican candidate would or wouldn't handle a question.

John McCain, by contrast, might or might not end up embarrassed by serious questions about his plan, which moves in the right direction but on a schedule that's too slow and in a way that's too inefficient. Serious questions would give him the opportunity to make the case for half-measures and whether or not he winds up embarrassing himself would turn on whether or not he can give a convincing rationale for what he's doing -- which is at it should be. His Republican counterparts, by contrast, would almost certainly wind up embarrassed by serious questions about their views of climate change since their policies are badly at odds with reality.

I have no doubt that Yglesias would perceive McCain as embarrassed by a question regarding climate change, but that doesn't mean everyone will. The problem is that Hillary was nearly universally perceived as stumbling on that question. Thus, there is no defending her. Yglesias is left to attack the messenger and work on tortured logic to excuse what is frankly the definition of a gaffe.

Instead of merely admitting that she screwed up, as all politicians do at some point, he tries to deflect the issue with laughable and ultimately illogical reasoning.

Yes, Mr. Yglesias, it is possible in theory that McCain could fumble a question on climate change. He may even be wrong on the science, however I live here in reality. In reality, McCain did nothing wrong recently. In reality, it was Hillary Clinton that actually fumbled something. All your hypotheticals and tortured theories aren't going to change that. You can pretend as though the question wasn't important because YOU don't think it was, however that won't actually change reality.

The Ironies of H.R. 3915

Upon reflection, I was just slightly in error in my analysis of the mortgage crisis and the subsequent political opportunism currently being displayed by the politicians. While I believed banks provided easy targets, I also expected that politicians would never attack them because banks have two resources that make attacking them risky and unwise: money and power. For this reason, I thought banks would remain largely unscathed with responsibility and most of the punitive action would fall on the easier target: the mortgage broker.

I was only about 90% correct in my prediction. In fact, the politicians have figured out how to attack banks without necessarily picking a fight that might get messy. They have chosen the sub prime market. In layman's terms sub prime loans are those give to people with poor or mediocre credit profiles. Sub prime lending has revolutionized not only how we lend but who we lend to. The sub prime concept has also been one of the fall guys in the mortgage crisis. (Once again I recommend the book, Liar's Poker, which details how the market for these sub prime loans was created)

As I have already pointed out in previous posts, the market makers of sub prime loans created a market for so many ridiculous loans that just about anyone with a pulse could get qualified. Since merely having a pulse doesn't guarantee that you can pay your loan back, we are finding that many of these loans aren't being paid back. Since foreclosure is the ultimate punishment for non payment, and the borrowers aren't much of a target politically, the concept of sub prime has become the target of politicians everywhere.

There were layer and layers of irony in John Edwards being being attacked for his links to a sub prime mortgage provider. First, Edwards wouldn't know the difference between sub prime and a submarine ship. Second, the reason he was attacked was because this lender had the "audacity" to try and foreclose on borrowers that didn't pay. Again, it seems no one had one problem with sub prime lenders when they were creating markets for all sorts of poor and middle class folks to buy properties that never even dreamed of owning homes before.

It was only when we all realized that everyone was acting irresponsibly, and ultimately lending to irresponsible people, that everyone decided to turn certain groups into villains. Since it makes no political sense to blame the poor folks, the politicians needed an easier target. They chose the sub prime lending concept.

Thus, while I didn't initially predict the draconian ways in which Congress, lead by Barney Frank, plans on dealing with sub prime, they should have been altogether easy to predict. Make no mistake, if the remedies currently in H.R. 3915 are passed then sub prime will be eliminated.
There are four different things that H.R. 3915 does that deals with sub prime.
1) It eliminates Yield Spread Premium on sub prime loans. The great fear for all mortgage brokers is that YSP will be eliminated, however if I read the bill correctly, it is only on sub prime that it will be eliminated.

Since Congress knows very little about my industry and even less about what created this crisis, they think that YSP is what has caused the widespread delinquency on sub prime loans. The reality is that banks and their partners on Wall Street created loans for irresponsible borrowers and we, sociopathic mortgage broker, had absolutely no problem putting the three of them together. The problem is not and never has been YSP, but rather 620, stated, stated, to 100%, a loan in which a borrower with the marginal credit score of 620 could state their income, their assets, and still buy a property with no money down. YSP had absolutely nothing to do with this concept or the fact that Wall Street decided to make this concept into a market. Yet, it is YSP that is being blamed for the excesses of the mortgage dynamics.

By eliminating YSP on sub prime but not on prime, Congress merely makes even more incentive for someone like me to focus on good borrowers. If I know that I can make money on good borrowers without necessarily charging extra fees but not on marginal borrowers, guess which borrowers I will focus on. Furthermore, sub prime was never meant to be a long term loan. It was meant to be taken on while the borrower's credit was being turned into that of someone that would qualify for a prime loan. That being the case, why would it ever make sense for that borrower to pay anymore costs than they absolutely have to. By eliminating YSP, I am forced to make all my money in up front fees. Thus, borrowers with loans intended for short periods are now forced to take on extra fees.

2) Fees and points can no longer be financed. I have already explained that all new sub prime loans will be hit with even more up front fees than normal. Now, Congress is forcing that the borrower rather than the loan pay for these extra costs. Keep in mind that sub prime tailors to the poor. It is ludicrous to believe that poor folks be forced to take on extra fees, pay for those fees up front, and not have any unintended consequences. Financing of points and fees is an old trick that scummy brokers use to hide those fees. If someone isn't paying for something out of their pocket, they simply usually don't realize that they are still paying for it. By simply rolling fees and points within any new loan, brokers are able to use slight of hand so to speak to make people believe they aren't paying costs or merely not paying that much.

It is used much more often, though, by scrupulous brokers to make sure that borrowers that have little or no funds are able to get loans without going broker. What the politicians have never figured out is that despite our reputation the overwhelming majority of loans that are done are done with the borrower's best interest in mind. Thus, while there were plenty of brokers that abused rolling points and other costs into loans, the majority did it with the borrower's interest in mind. By throwing the baby out with the bathwater so to speak, all the politicians will really do is make it that much more difficult to do loans. Since most poor folks, the overwhelming majority of sub prime's target market, don't have thousands lying around, it is going to be very hard to do a loan for them that involves coming to closing with thousands of dollars. That is ultimately the practical effect of no longer allowing rolling in closing costs into the loan. Poor folks will just have to bring the closing costs and points to each closing they have.

3)Anti Steering. Here is another vague and very important part of the current bill.

steering any consumer from a prime loan to a subprime loan,

Now, what this means, I assume, is that anyone who qualifies for a prime loan has to go into a prime loan. While this may sound good and well to a politician, there are times when a non prime loan makes more sense for the borrower. For instance, Fannie Mae loans actually have three levels, called expanded approval 1,2, and 3, besides their standard approval. These are much like the minor leagues of Fannie Mae loans (with EA 3 being like single A). Anyone that only qualifies for EA3 would most likely be better off getting a sub prime loan especially those where the loan to value is high thus making their mortgage insurance expensive as well. Again, it is unclear if EA3, for instance, is considered prime. Thus, it is unclear if someone could be sued for steering a borrower away from it in favor of a sub prime loan.

Whenever it is unclear or murky, either new disclosures are created, or banks and brokers simply stay away from such borrowers. Either thing is ultimately not good for the fate of poorer borrowers as well as sub prime altogether.

4) This bill introduces loan counseling for borrowers in sub prime loans.
This was tried here in Illinois with HB 4050. Here are the real estate sales in the zip codes it was tried in.

Compared to August 2006, sales were down 45% in the target zip codes. The
breakdown by zip code:
60620 experienced a 43% drop in sales

60621 experienced a 25% drop in sales

60623 experienced a 57% drop in sales

60628 experienced a 15% drop in sales

60629 experienced a 63% drop in sales

60632 experienced a 34% drop in sales

60636 experienced a 41% drop in sales

60638 experienced a 54% drop in sales

60643 experienced a 49% drop in sales

60652 experienced a 43% drop in sales
Compared to September 2005, one year ago,

sales were also down 45% in the target zip codes.

So, we can say with near certainty that the plummet is not
strictly seasonal. The breakdown by zip code:
60620 experienced a 28% drop in
sales60621 experienced a 37% drop in sales60623 experienced a 61% drop in
sales60628 experienced a 17% drop in sales60629 experienced a 70% drop in
sales60632 experienced a 54% drop in sales60636 experienced a 1% drop in
sales60638 experienced a 65% drop in sales60643 experienced a 49% drop in
sales60652 experienced a 41% drop in sales

Counseling brings with it extra fees and extra paperwork and most of all it brings with it a lot of confusion. Some thirty lender decided to pull out of zip codes in which HB 4050 applied. Many lenders will simply pull out of doing loans wherever this sort of counseling is done.
Everyone needs to keep in mind that if sub prime was a boxer it would be taking a standing eight count after taking a huge upper cut. Now, Congress is coming in reigning haymakers with H.R. 3915. If this bill gets passed in a form even close to what it is now, it WILL end the area of sub prime. This WILL hurt the poor the most, and ultimately Congress WILL blame someone else for it.

E.N.D.A. To Move Through the Legislature?

A hat tip goes to Right March for bringing this story to my attention. The Employment Non Discrimination Act may find its way through the Congress soon. ENDA seeks to make gays, bisexuals, and transgenders a minority and treat their discrimination in the work place in the same manner that we currently treat age, sex, and skin color.Now, according to this gay publication here is what Nancy Pelosi promised their lobby.

House Speaker Nancy Pelosi agreed Friday to fast-track a transgender-inclusive Employment Non-Discrimination Act once there are enough votes to pass it.

Although a version of the bill that protects only sexual orientation will be marked up by committee and move to a floor vote next week, the San Francisco Democrat has promised to hold a floor vote on a fully inclusive ENDA without delay as soon as the political support is there.

According to Right March, the bill is making its way through House Education and Labor Comittees. The problems with such a bill are plentiful. For instance, while it protects religious organizations, it does not protect groups like the Boy Scouts. If this bill passes the Scouts may very well be force to hire openly gay scouts or face sanctions. It also violates people's freedom of religion and freedom of speech. Finally, and most importantly, homosexuality is a behavior which is totally different from someone else's skin color, age, or sex.

Let's put aside the wisdom or lack thereof of this bill. I think most people that read this page will agree with me on my position.

Instead, I want to focus on two things related to this bill. First there is the political tone deafness and utter lack of competence that the Democratic leadership continues to show. This bill is another in a long line of bills that has either been handled poorly or is simply a total political loser for them. Whatever your beliefs on this particular bill, most Americans will reject it. In fact, short of SCHIP, I can't remember the last thing the Democrats did that works for them politically.

Let's look at some examples. The Democrats tried to pass a NON BINDING resolution that condemned an act from almost one hundred years ago. As a result, our ally, the Turks, took great offense and threatened all sorts of diplomatic retaliation. Fortunately, critical mass was reached when this story saw the light of day and the bill was withdrawn. Also, A high school student wanted to include the word God in a message to his grandfather that accompanied a flag that he wanted flown over the Capitol. Initially, Nancy Pelosi resisted allowing the word God accompany the flag, however once again critical mass was reached. Finally, the leadership backed down and they let the word God stay in the message that accompanied the flag.

In August, the Senate tried to play chicken with the President on the terrorist surveillance program (known as warrantless wiretaps to most of you). Again, the leadership backed down at the last minute and extended the program for six more months. Just this past week, a bill that would outlaw sanctuary cities, something that is popular overwhelmingly with Americans, was voted down 52-42 in the Senate. All but one Democrat voted against it. Even on Iraq, the Democrats have been totally politically tone deaf and incompetent.

Which brings me back to the ENDA bill. This is another in a long line of political disasters for the Democrats. Once critical mass reaches on this bill, they will be forced to back down the way they have on everything else.

This brings me to my second point. It is now nothing less than shocking just how much the Democrat's agenda mirrors that of George Soros. This ENDA bill is right down his gay friendly secular progressive agenda, and it follows a long line of bills and maneuvers that are very friendly to his agenda.

Several months ago, The Supreme Court ruled to uphold a ban on partial birth abortion. All the Democratic candidates came out against this ruling and some even swore to impose a litmus test of only pro abortion Supreme Court Justices.

At their last debate, the Democratic candidates agreed that teaching second graders a story about a gay couple was perfectly acceptable. Half the candidates refused to even acknowledge that the war on terror is really a war. Here is what Soros said vis a vis the GWOT.

Unfortunately, the "war on terror" metaphor was uncritically accepted by the American public as the obvious response to 9/11. It is now widely admitted that the invasion of Iraq was a blunder. But the war on terror remains the frame into which American policy has to fit. Most Democratic politicians subscribe to it for fear of being tagged as weak on defense.

In fact, this statement is eerily similar to one made by John Edwards who called the war on terror...

"bumper sticker slogan" used to justify the war in Iraq and "bludgeon political opponents."

The two leading Presidential said they'd each negotiate with Iran with no conditions. What did Soros say about such matters?

The two leading Presidential candidates said they'd each negotiate with Iran with no conditions. What did Soros say about such matters?

President Bush's global war on terror prevents us from differentiating between them and dealing with them accordingly. It inhibits much-needed negotiations with Iran and Syria because they are states that support terrorist groups.

In fact, when Senator Clinton voted to designate the Iranian Revolutionary Guards( responsible for among other things hijacking British sailors in international water) a terrorist organization, the rest of the Democratic Presidential contender pounced on her.

Even on the economy, the Democrats are marching in lock step with Soros. We are all well aware of the plethora of big government, quasi socialist, government giveaways. Including the granddaddy of them all, universal health care. How does this jive with Soros' view of the world? He believes in a "mixed economy". That is defined as such.

A mixed economy is an economic system that incorporates the characteristics of several different economic systems. This usually means an economy that contains both private-owned and state-owned enterprises[1] or that combines elements of capitalism and socialism, or a mix of market economy and planned economy characteristics.

Of course, it should be pointed out which part of the mixed economy he fears.

Most of all, George believed even then in a mixed economy, one with a strong central international government to correct for the excesses of self-interest.

Thus, anything that takes the decisions away from the market and puts it into the government's hands is something that Soros approves of.

Finally, as I mentioned earlier, in unison with Soros open borders policy, the Democrats just this week killed a bill that would have outlawed so called sanctuary cities. Now, we have the Democrats, through ENDA, pandering to another of Soros' favorite groups, the homosexuals. The overlapping agendas of the Democrats and George Soros can be found just about anywhere you look.