Pickerington Area Taxpayers Alliance

False markets

Posted in: PATA
Building our economy from the bottom up

As this presidential campaign has worn on we hear more and more that Barack Obama wants to build the economy from the bottom up. Clearly to take tax dollars from the wealthy (earning over $250,000) and give those dollars to the lower income people in our system some who don?‘t even pay federal income taxes. His theory is that these people will create a new market for future businesses in this country.

Maybe we should all look at the recent history of this economic theory and Mr. Obama?’s participation in that theory. In all of the photographs I have seen of Mr. Obama while he was a community organizer in Chicago and during the time he was alleged to be working closely with ACORN he always seems to stand in the back ground.

Now I am no expert on ACORN and I am just beginning to see how they flew in under the radar and just prior to this election they are having a huge impact on the trust and final outcome of this election. They clearly have received money from the Obama campaign and he was involved in their operations. The extent of that involvement will not be known until after the election when it will be too late.

One of the functions of the ACORN operation was to pressure banks and other lenders to loan money to people that had no down payment, no verifiable work record, no record or experience of owning and taking care of a home, and in many cases these loans were made on homes that were in declining neighborhoods thus making any appraisal for the lender suspect. Acorn has been known that they formed a group and it protested in front of and in lending institutions for more loans into these declining neighborhoods. They pointed to the community reinvestment act of 1977 as their basis for protest. I am sure there was resistance initially by the banks and lenders only to be reassured by congress (Barney Frank and Chris Dodd) that Freddie Mac and Fannie Mae would buy these sub-prime loans once they were made. Once these lenders had an outlet and a place to get rid of these bad loans the flood gates opened wide and everyone joined in. By the middle of this decade we saw middle class families buying homes with ARM mortgages, new home builders not escrowing the taxes for the full value of the new home, they accepted a down payment (loop hole) from a charity and all of these costs and high risks were rolled over into the price of the new home. As the word spread more and more people joint in to get their piece of the gravy train coming down the track. Clearly the vast majority of these people had no business buying let alone applying for the loans that in many cases I believe they knew they couldn?’t pay back. However by now the snow ball was rolling down the hill with buyers starting to default in middle of this decade. Seeing the red light at the end of the tunnel the builders past along every house they could sell and then it hit. They were exposed and the lenders started to pull back on the housing throttle but by then we were heading over the cliff that had no tracks.
False markets continued

Now what have we all learned here? We started with a law that was aimed at forcing the local banks and lenders to reinvest in the local community of where they operated and groups like ACORN exploited that law and found its weaknesses. I know for years now that the local BIA has talked about affordable housing. We now know exactly what they were talking about. Many of these builders had links to Wall Street and they had pressure to perform and pay big dividends to their stock holders. Many of these builders formed their own lending and where do you think they got their money to lend from?

So what happened? Clearly from the federal reserve to the White House (both Bush and Clinton) the pressure to accept and allow no document loans and ignore other established good lending underwriting practices in the name of affordable housing. Greenspan refused to regulate the banks under him and the SEC didn?’t have the funding and the regulators to enforce its mandates.

Mr. Obama wants us to believe this was a failure of the free market process. It wasn?’t. It was clearly the interference of big government into the normal and accepted processes on the banking industry and the same government looking the other way (at the insistence of powerful people in congress) when it came down to making sure that assets held by corporations were what they said they were the system took their word for it.

Clearly creating a false housing market by qualifying people for loans they were not really qualified to pay. This spread the wealth around. Now these same people being forced from their homes by foreclosure are once again asking that the government intervene and save their home. Number one they never read and understood the loan documents they signed at closing they probably don?’t have the income to make the loan payments and this is all written off as predatory lending.

This took thirty years to come to a head. The spread the wealth of the LBJ years took thirty years to come to a head. Clearly ACORN started planting the seeds in the 80s and today we can see the trees and the fruit it bares.

Creating false markets will surly fail. People become rich because they work hard and in some cases are very lucky. Forcing those people that do find success to give to those that struggle will only encourage their dependence.
An update

Just saw an Obama commercial where he said you won't be taxed if you make over $200,000!!! He'd been saying $250K for months and it's ALREADY been cut $50K!!! And he repeated that 95% of Americans will get a tax cut!! This is patently false as it is impossible. These two sentences contradict each other!!

Clinton promised tax cuts and once in office he said he tried, but couldn't get Congress to approve the tax cuts. Folks, you are watching a modern day Hitler say anything to get into office.

I am not saying Obama will commit genocide, but Hitler told everybody what they wanted to hear to get elected. I see no difference here.

By Watch out for more changes
just plain wrong

it is shameful to compare anyone, let alone a presidiential candidate, in any way to one of the most evil men of all time.

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