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Everyday We Learn More About The Community Reinvestment Act of 1977 (Updated 11/20/10) (Please Scroll Down For New Articles As This Article Always Stays On The First Page) September 29, 2008

In August of 2008 my cousin sent me this video. Like most Utube videos I didn’t give it much thought to really watch it. But for some reason I sat through the whole 11 minutes and began to think. I said this can’t be true. This has to be someone’s mean spirited video against Bill Clinton and the Democrats. But at almost the end the frame kept coming up saying “If you don’t believe it Google it yourself.” I took that to task and did about a months research to see if this could have happened. Did Monica Lewinsky really upstage the the biggest travesty in the economic history of the United States? What you are about to read will make you think. My goal here is not to change anyone’s mind. It is rather to get people to think and perform their due diligence to research the past track record and core beliefs of the party and candidate that they are going to vote for.

Please read, enjoy and just do some research instead of listening to popularity polls and who your friend is going to vote for.

Here is an updated version (With a much better sound track).

Slowly Bill Clinton’s 1997 Expansion of the CRA started to create financial discrepancies in Fannie Mae and Freddy Mac.  Later on I will go into detail about the original Community Reinvestment Act of 1977 that was created by Jimmy Carter. The Democrats have been lying to us since 2004 stating there are no problems with Fannie Mae or Freddy Mac.  The Democrats blocked Republicans that saw a future melt down of the United States economy and wanted to regulate or at least oversee these financial institutions.  The Democrats said no.  You don’t believe me? Watch this video of real conversations in the United States Congress, not a commercial or program that was created to change the minds of the public.

In this video we see Maxine Waters stating that Fannie Mae and Freddi Mac are not broken.   As of today 3/15/09 we are discovering why the Democrats especially Maxine Waters did not want to interfere with the lending practices that was eventually going to cause Fannie Mae and Freddie Mac to collapse. Here is a news story that is developing today 3/15/09

http://www.knx1070.com/play_window.php?audioType=Episode&audioId=3566977

As this story unfolds I have been doing the research to understand the connection from when Maxine Waters stated to Congress in early 2004 that Fannie Mae and Freddie Mac did not have to be fixed and “there is not crisis at Fannie Mae and Freddie Mac.” The reason that Ms. Waters did not want any regulation for Fannie Mae and Freddie Mac was that Ms Waters and her husband Sidney Williams were investors in OneUnited Bank in Massachusetts.  In fact, Sidney Williams joined the Board of Directors of the minority owned OneUnited Bank in early 2004. The video above from the congressional hearings were conducted in late 2004 after Sidney Williams joined the Board of Directors for the minority owned OneUnited Bank.

Here is an article written by Susan Schmidt at the Wall Street Journal going into detail on what I just discussed in the previous paragraph.

http://online.wsj.com/article/SB123705585093130641.html

Maxine Waters released this statement on 3/15/09

http://www.house.gov/apps/list/press/ca35_waters/PR090313_fallout.html

Ms. Waters states the following:

“My husband Ambassador Sidney Williams, who has represented the United States as an Ambassador and has been a respected and active member of the Los Angeles community for many years, was asked to sit on the board of OneUnited Bank. This bank services our community and was the successor to the bank of which we had been customers at for many years.  He accepted the position and did not accept any director’s compensation for his work on behalf of the bank and the community it serves.”

“Despite suggestions to the contrary, I have fully disclosed all of my financial interests in official filings.  These filings included the stock my husband purchased upon joining OneUnited’s board (it is required under Massachusetts law, where OneUnited is headquartered, that individuals hold stock in a bank before joining its board).  Furthermore, Ambassador Williams is proud to be invested in a minority owned community bank that was given an “outstanding” lending rating from its regulator for its lending activity in underserved communities in Los Angeles, where traditional banks have refused to lend. I even took additional steps beyond what is required of Members of Congress when I voluntarily and publicly disclosed my husband’s relationship with OneUnited during an October 30, 2007 Financial Services Committee hearing entitled “Preserving and Expanding Minority Banks.”(3) Both the Federal Deposit Insurance Corporation and the Office of Thrift Supervision were present at this hearing.”

However Ms. Waters doesn’t mention anything about the dollar amount in investment positions that Ms Waters and her husband had in OneUnited Bank.

This is from Ms Schmidt’s Wall Street Journal article:

“Ms. Waters and her husband, Sidney Williams, were investors in two African-American owned California banks that merged with other lenders in 2002 to form OneUnited. Congressional financial-disclosure forms show Ms. Waters acquired OneUnited stock worth between $250,000 and $500,000 in March 2004, as did Mr. Williams. Mr. Williams joined the board of OneUnited that year. Each sold shares in September 2004–including Ms. Waters’s entire stake–but Mr. Williams continued to hold varying amounts of the company’s stock. On the lawmaker’s most recent financial-disclosure form, dated May 2008 and covering the prior year, Ms. Waters reported that her husband held between $250,000 and $500,000 worth of the bank’s stock.”

OK so how does this all get connected?

It appears that Ms. Waters and her husband Sidney Williams were financially involved with a minority owned lending institution called OneUnited Bank. During the course of Ms. Waters and Mr Williams involvement with OneUnited Bank, sub-prime loans were being made to minorities that could not afford to pay back the loans that were being made. This of course was a derivative of William Clinton’s mandated 1997 expansion of the Community Reinvestment Act of 1977.  Ms. Waters did not want any regulation against Freddie Mac and Fannie Mae because Ms. Waters and Mr. Williams were making a lot of money off of their investments in OneUnited Bank. In turn I would imagine that OneUnited Bank sold these loans maybe to Fannie Mae or Freddie Mac or both and did not service or carry the loan debt of the sub-prime loans.  So why would Maxine Waters want any kind of regulation for Fannie Mae or Freddie Mac as the Republicans asked for in the the above video that I have re-linked here.

Here is were this gets real interesting.

Austin Tighe who represents the NAACP has filed a lawsuit on March 13th, 2009 against HSBC and Wells Fargo banks for discrimination and predatory lending practices towards minorities in particular Afro Americans. Mr. Tighe states that the two aforementioned banks “Discriminated” against poor Afro Americans for writing bad loans to that group of people. How strange that Mr. Tighe would never bring these charges against OneUnited Bank that I’m sure did the same thing for years.

http://news.yahoo.com/s/ap/20090313/ap_on_re_us/naacp_mortgage_discrimination

And even more interesting:

Barack Obama was an associate attorney from 1993 to 1996  at the following law firm:

http://www.lawmbg.com/

While Barack Obama was employed buy Minor, Barnhill & Galland, Barack Obama represented ACORN in a lawsuit against CitiBank for not writting enough Sub-Prime Loans to Afro-Americans.

http://www.allbusiness.com/finance/529735-1.html

So now let’s look at the origins of the Community Reinvestment Act of 1977

The CRA was devised by Jimmy Carter (D) in 1977 when he was in office. I have to admit that President Carter’s intention was very good. Lending Institutions were practicing something called “Redlining.” Lending Institutions were refusing to write loans in any way or form in predetermined zip codes usually in inner cities or blighted areas of a city like for instance Brooklyn, NY.

Here is an article in the NY Times dated December 25, 1989

http://www.nytimes.com/1989/12/25/nyregion/bank-redlining-still-prevalent-loan-critics-say.html?n=Top/Reference/Times%20Topics/Subjects/B/Black%20Culture%20and%20History

Jimmy Carter’s goal in mandating the CRA in 1977 was a good thing because as you know there were people in those zip codes that could easily qualify for a traditional 30 year loan.  In addition there were landlords that wanted to do improvements to their properties but they couldn’t get a loan to do that.

http://www.answers.com/topic/community-reinvestment-act-of-1977

This all went horribly and tragically wrong when in 1997 Bill Clinton went beyond the original intention of Jimmy Carter’s 1977 CRA and mandated that banks should make loans to people that could not qualify for a traditional 30 year loan. If Bill Clinton hadn’t created this mandate. Then bank’s and third party lending institutions would have not ventured into creative lending practices like the 5/25, 2/28, No Down Payment and Interest Only loans. When the banks and lending institutions created these creative lending practices they created an artificially high number of home buyers that would have not qualified for a traditional, secured 30 year loan. The result of the number of people that could now qualify for a mortgage loan created a “Sellers Market.” Buy the nature of “Supply and Demand” and “What the market will bear”, sellers of both new and pre-owned houses were allowed to inflate the prices in the housing market otherwise know as the “Housing Bubble.” This was exacerbated by the fact that a person that could have qualified for a $150,000.00 traditional 30 year loan could now qualify for a $250,000.00 home with creative financing like a 5/25, 2/ 28, No Down Payment, or interest only loan. This led to people qualifying, borrowing and buying a house way beyond their fiscal capabilities. Eventually these new homeowners could not support the bubble payment that was in their mortgage contract and the housing bubble collapsed. This in turn eventually affected the people that had good 30 year loans and were able to pay the mortgage back. This phenomena proceeded to fester like a cancer throughout the financial markets all over the world for one simple reason:  The Devaluation of the American Dollar. Now we fear that China will not buy our debt as they have in the past. I’m sure there is a lot more that I don’t know pertaining to how far this line of falling dominos goes.

“Clinton Administration Changes of 1995″

In early 1993 President Bill Clinton ordered new regulations for the CRA which would increase access to mortgage credit for inner city and distressed rural communities.[6] The new rules January 31, 1995 and featured: requiring strictly numerical assessments to get a satisfactory CRA rating; using federal home-loan data broken down by neighborhood, income group, and race; encouraging community groups to complain when banks were not loaning enough to specified neighborhood, income group, and race; allowing community groups that marketed loans to target to groups to collect a fee from the banks.[4][7] The new rules, during a time when many banks were merging and needed to pass the CRA review process to do so, substantially increased the number and aggregate amount of loans to low- and moderate-income borrowers for home loans, some of which were “risky mortgages.” Banks set up CRA departments, a CRA consultant industry was created and new financial-services firms helped banks invest in packaged portfolios of CRA loans to ensure compliance. Established and new community groups began marketing such mortgages. The Senate Banking Committee estimated that as of 2000, as a result of CRA, such groups had received $9.5 billion in services and salaries. As of that time such groups also had received tens of billions of dollars in multi-year commitments from banks, including ACORN Housing $760 million; Boston-based Neighborhood Assistance Corporation of America $3 billion; a New Jersey Citizen Action-led coalition $13 billion; the Massachusetts Affordable Housing Alliance $220 million.[4] The number of CRA mortgage loans increased by 39 percent between 1993 and 1998, while other loans increased by only 17 percent.[8][9] Related rule changes gave Fannie and Freddie extraordinary leverage, allowing them to hold just 2.5% of capital to back their investments, vs. 10% for banks. By 2007, Fannie and Freddie owned or guaranteed nearly half of the $12 trillion U.S. mortgage market.[5] Due to massive financial losses, on September 7, 2008 the Federal Housing Finance Agency (FHFA) put Fannie Mae and Freddie Mac under the conservatorship of the FHFA.[10]“

Here is a detailed description of 1995 CRA Rule 60 FR 22156 (May 4, 1995) (1995 Rule) from the Federal Register.

http://edocket.access.gpo.gov/2005/pdf/05-4016.pdf

Please read Sections C & D on page 10024

“C. Experience With the 1978 Rule The experience with the 1978 rule was summarized in the http://edocket.access.gpo.gov/2005/pdf/05-4016.pdf to the Agencies’ 1995 CRA rule. 60 FR 22156 (May 4, 1995) (1995 rule).

It stated: The CRA has come to play an increasingly important role in improving access to credit in communities—both rural and urban— across the country. Under the impetus of the CRA, many banks and thrifts opened new branches, provided expanded services, and made substantial commitments to increase lending to all segments of society. Despite these successes, the CRA examination system has been criticized. Financial institutions have indicated that policy guidance from the agencies on the CRA is unclear and that examination standards are applied inconsistently. Financial institutions have also stated that the CRA examination process encourages them to generate excessive paperwork at the expense of providing loans, services, and investments to their communities. Community, consumer, and other groups have agreed with the industry that there are inconsistencies in CRA evaluations and that current examinations overemphasize process and underemphasize performance. Community and consumer groups also have criticized the agencies for failing aggressively to penalize banks and thrifts for poor performance. Noting that the CRA examination process could be improved, President Clinton requested in July 1993 that the Federal financial supervisory agencies reform the CRA regulatory system. The President asked the agencies to consult with the banking and thrift industries, Congressional leaders, and leaders of community-based organizations across the country to develop new CRA regulations and examination procedures that ‘‘replace paperwork and uncertainty with greater performance, clarity, and objectivity.’’ Specifically, the President asked the agencies to refocus the CRA examination system on more objective, performance-based assessment standards that minimize compliance burden while stimulating improved performance. He also asked the agencies to develop a well-trained corps of examiners who would specialize in CRA examinations. The President requested that the agencies promote consistency and evenhandedness, improve CRA performance evaluations, and institute more effective sanctions against institutions with consistently poor performance.

D. The 1995 Rule and Subsequent Guidance

The experience with the 1978 rule led the Agencies to replace it in 1995 with a rule designed to emphasize performance (Quantity of loans) rather than process (Quality of Loans), promote consistency in evaluations, and eliminate unnecessary burden. 60 FR 22156. Among other things, it established a large retail institution test comprised of three tests: one for lending, one for investment, and one for service.”

If you notice that this mandate created a “TEST” for the banks.  Does this sound familiar to what Timothy Geitner is doing right now.

And then came the unregulated start up third party lenders (Countrywide, New Century Mortgage) that thrived under the auspices of the CRA and started issuing loans to people with no income or little income and no money down.  For the most part these third party lenders had no intention of servicing these loans. These third party lenders had the intentions of making a lot of money on the sales commissions then they would sell the loans to Ginnie Mae to be issued as “MBS’s that in turn were issued to various investment groups as an investment vehicle. The next thing to happen is that as these very bad mortgage loans started to sour so did the Mortgage Backed Securities that were in 401 Ks, IRAs an any other type of investment portfolios became worthless. Banks, Brokerage firms, pension plans, and anyone or any company that had bought and sold these worthless MBSs began to fail.  And now the picture is a little clearer as to how we got to where we are today June 15, 2009

http://www.sec.gov/answers/mortgagesecurities.htm

All of this was done by third party lenders with the mandated Bill Clinton’s 1997 expansion of the CRA as its mantra.

This is from Wikipedia Community Reinvestment Act

“Congressman and 2008 Republican presidential candidate Ron Paul has partially attributed the ongoing subprime mortgage crisis to legislation such as the CRA.[16] Economist Stan Liebowitz has also expressed his opinion that banks were forced to loan to un-credit worthy consumers with “no verification of income or assets; little consideration of the applicant’s ability to make payments; no down payment.” However, the chief executive of Countrywide Financial, the nation’s largest mortgage lender, is said to have “bragged” that to approve minority applications “lenders have had to stretch the rules a bit”, suggesting that Countrywide was responsible for relaxing its standards rather than the other way around.[17]“

Yes, they were unregulated but the democrats blocked any reform as they were on the take like old business as usual. And so wealth and prosperity of bankers and third party loan companies grew through the both of the Bush administrations.  But there was danger ahead and during the years there were various people including John Mc Cain that saw a problem in the works.  He was defeated by democratic stonewalling as any change would not allow poor people to continue to get loans under the CRA that they could not afford . These third party lenders were not regulated and would not be regulated or the Democrats would be defeating themselves in the quest to take from the rich and give to the poor.  The poor did not have a way to pay for the bad loans that could not be paid by the people that took out these loans that they were “Entitled” to by the CRA. Now that being said there were a lot of things that the Bush Administration could have done but those pesky Democrats that were on the take from “Wealthy Banks” would not allow their (Democrats) cash cow to die.  Finally now all those bad loans that were mandated by the CRA came to a head.

Now again the Democrats want to protect all the irresponsible people that took out these loans that the government said they were “Entitled” to according to Jimmy Carter’s CRA.  As it may happen shrewd businessmen both Republican and Democrat capitalized on an extremely flawed mandate called the CRA. No matter what they did, the federal law said that now people who didn’t have the resources to pay back the loans should be given an easier way to qualify for a loan. Enter the Clinton administration that created a mandate that led to the birth of sub-prime loans.  The third party lenders (unregulated, non banks) then exploded over the years.  These third party lenders then packaged these very bad, risky loans as an investment that the likes of Freddie and Fannie who bought them without qualifying their credibility.  Housing prices exploded. Why, Because of sub-prime loan, people that could not only not afford homes but they could afford more expensive homes.   But guess what? They qualified for risky no down payment, interest only loans to pay for inflated housing prices.  Enter the person who takes the 2/28 loan because he or she is going to “FLIP” the house and make a lot of money by artificially pumping up the price of that some poor person can qualify for a loan for.  Thank you CRA. What makes it worse it that now the Democrats are turning like rabid dogs on all the CEOs that made big profits off of the CRA.  The democrats provided a vehicle for CEOs to make a lot of money off of the CRA and like all people both democrat and republican who are in the business to make money did exactly that.  Now The Democrats call them “RICH BASTARDS” and do not want to reward them for making good on a law (CRA) that they (Democrats) passed.

I do not see good things with Obama as he profited from this situation also.  More than likely if Obama gets into office he will go back on his word and with the power of the Democratic Majority will seek to raise taxes to payback up to 700 Billion dollars. For the next 4 years Obama and the Democratic Party will blame this on the Bush Administration who were only partial responsible for the sub-prime debacle. I think Obama has a hidden agenda that no one knows about, not even Joe Biden.  It scares the manure out of me. Yes, he wants change……..but change to what is what no one really knows.  Billy Carter wanted change too and he got his change 31 years later with the change of a destroyed American economy. He wanted all poor people to own a home. But how were those poor people going to pay for the loans?  Fast forward to 1995 Bill Clinton mandates that it should be even easier to for poor people to get mortgages and the sub-prime era begins. Fast forward to 2008.  700 Billion tax dollars to pay for the bad loans that were written in the past under the command of Bill Clinton, Jimmy Carter and the CRA. That is how poor people were able to buy and then loose their houses.  And yes, I realize that Obama has sold a lot of uneducated people bill of goods, but we all pay the price if he gets elected. Far worse than what we have now.

Ultimately this has come full circle now that the tax payers are now paying for bad debt that was started in 1977 and built up over the years.  The mantra of the Democratic party is Tax and Spend. Taxpayers are now buying houses for poor people. Sounds a little like Social Communism.  The more and more I look at what is going on I am coming to this decision: If Barack Obama and Nancy Pelosi get control of this government they could destroy Wall Street and the RICH BASTARDS.  If this happens and everyone’s savings and investments are lost and have to rely on the Government then this will be the beginning of Marxist Socialism in the United States.  The Democrats are constantly complaining about the deficit. Why is that? Again the Democrats mantra is TAX & SPEND. Well, it is obvious. The Democrats want a huge surplus of money in the coffers to be a socialist government. The Democrats want the US Government to have all the money and power to do what ever they want to do.

Remember, if the Democrats can keep people poor, uneducated, unemployed and desperate they will always have a voter base.

I am not sold on Mc Cain and I will now probably vote third party (undecided as of this time) for the first time in my life. There will be no change as long as we keep re-electing a Democrat or a Republican.

1/4/2010

Fast Forward to September 16, 2009. Barney Franks still lives in a state of denial and authors H.R. 1479.

I found this new revelation when I read this article in the Washington Examiner online.

CRA 2009

“This morning House Financial Services Committee chairman Rep. Barney Frank held a hearing on H.R. 1479, the “Community Reinvestment Modernization Act of 2009.” The bill’s purpose is “to close the wealth gap in the United States” by increasing “home ownership and small business ownership for low- and moderate-income borrowers and persons of color.” It would extend CRA’s strict lending requirements to non-bank institutions like credit unions, insurance companies, and mortgage lenders. It would also make CRA more explicitly race-based by requiring CRA standards to be applied to minorities, regardless of income, going beyond earlier requirements that applied solely to low- and moderate-income areas.”

This my friends is the same thing all over again that Bill Clinton did in 1997 mandating that banks continue to issue Home Mortgage loans to people  that cannot afford to qualify or make the payments. This again put the banks and lending institutions in a perilous situation that will cause the further collapse of our US Economy.  Barney Franks and the Pelosians keep coming up with Marxist Socialist Entitlement programs that are unsustainable with the available tax dollars given the high unemployment and the lack of income that allows an individual to sustain mortgage loan payments.  If this H.R. 1479 becomes law it will mean more banks will close, More people will lose their jobs as the real estate market disintegrates due to an ever increasing number of foreclosed home loans.

OK so now you ask yourself what else could possible go wrong.  Who would provide the Mortgage Back Securities comprised of bad loans that were bought from the banks?

Fannie Mae and Freddie Mac Receive Unlimited Future Funds To Stay Afloat.

While you were enjoying your Christmas Eve Dinner (1/24/09), The US mortgage security entities became “nationalized” with US Tax Dollars. This simply means that for years to come the US taxpayer will pay for all the bad loans that Jimmy Carter, Bill Clinton and Barack Obama mandated with the creator being Barney Franks.

“The government has handed its ATM card to beleaguered mortgage giants Fannie Mae and Freddie Mac.

The Treasury Department said Thursday it removed the US$400-billion financial cap on the money it will provide to keep the companies afloat. Already, taxpayers have shelled out $111 billion to the pair, and a senior Treasury official said losses are not expected to exceed the government’s estimate this summer of $170 billion over 10 years.

Treasury Department officials said it will now use a flexible formula to ensure the two agencies can stand behind the billions of dollars in mortgage-backed securities they sell to investors. Under the formula, financial support would increase according to how much each firm loses in a quarter. The cap in place at the end of 2012 would apply thereafter.

By making the change before year-end, Treasury sidestepped the need for an OK from a bailout-weary Congress.”

OK do you see what this Marxist Socialist Democratic Party is doing so far?  There is no change. This is a repeat of Jimmy Carter (D) (1977 to 1981), Bill Clinton (D) (1993 to 2001) and now Barack Obama (D) (2008-2012).

ST Marie

 

11/8/12 Another Day and another train wreck in California. Proposition 30 Governor Jerry Brown uses California Citizens as his personal ATM machine. November 8, 2012

Looking back at the political spots that Governor Moonbeam where he used children as mules to get his tax increase passed, he promised that the schools would benefit from the passage of California Proposition 30.

Governor Jerry “Moonbeam” Brown Uses Children as mules to get proposition 30 passed.

When Jerry Brown used this tactic, he led people to believe that the state would have to close schools if Proposition 30 was not passed.  That was far from the truth.

California parks department finds $54-million surplus

So what did Jerry Brown do exactly?

He partially funded a train to nowhere.

Calif. Governor Signs Bill for High-speed Train on July 18, 2012

Now keep in mind this train will use California funds AND Federal taxpayer funds to build.

So what is the problem?

First, this is a train to nowhere.

California high-speed rail to nowhere.

Second, The monies collected from Proposition 30 go to the general fund.

This means that only a very small amount of the money will go to education and all the rest will go to pork barrel projects like the Train to Nowhere.

Third, What happened to this?

CALIFORNIA LOTTERY CONTRIBUTION TO EDUCATION.

Local education administrators, elected school boards and the administrators of higher education make the decisions regarding how Lottery funds are spent in their schools and we are not involved in this decision-making process. According to the Lottery Act, Lottery contributions can be used only for instructional purposes and it bans use for the acquisition of property, the construction of facilities or the funding of research. Approximately 80-90% of Lottery funds are used in California’s public schools to attract and retain teachers. Some districts, especially the smaller school districts and higher education, have used funds for computer labs, teacher workshops, science programs, as well as art and music programs.

So what does this mean? The monies from the Lottery cannot be used to build new instructional facilities. Do you think that the money from Proposition 30 will be used for new schools or will the moneys be used to pay union teacher benefits. Let me be clear in my statement. I agree that most instructors are underpaid and that is a problem. However, when a teacher or instructor is not performing where the student is learning anything, that teach should be allowed to be fired and the teachers or instructors that are successful in the classroom should be paid more money. If all teachers are paid the same union scale, then he or she as a teacher or instructor does not have any incentive to keep performing better and better as they cannot earn a higher income rewarded by higher performance.

So in conclusion Governor Jerry “Moonbeam” Brown has just falsely told the citizens of California that they were doing the right thing buy letting him (Jerry Brown) use them as his personal ATM machine/Money Printing press. The money will be squandered to special interest groups, mostly the Unions. This is the way of the Democratic party that pretends to “Fight For The Middle Class”…..unless the middles class does not pay the ransom that the Democratic party demands.

 

11/6/12 A Sad Day in the History of the United States. November 7, 2012

Today we look at Washington DC and we discover that the people of the United States have decided on taking the easy path of having government controlling their lives. Again for the second time Barack Obama has promised an easy life for everyone where he (Barack Obama) will provide everything one needs to “Survive.” What we we have witnessed in this election is “Social Masturbation” 15 Minutes of pleasure, 15 Minutes wasted, 15 Minutes of getting absolutely nothing constructive done. A radical liberal president, a radical liberal Senate and a strong conservative House of Represenatives. So as in the past two years, virtually nothing will get done as far as improving the economy.  Even if the United States does not go into a full blown recession, it will never recover to the levels of success that we enjoyed in the Reagan Era. What does it say about a country that witnesses the turmoil in Greece, France and Germany and still elects a radical socialist president back into office?  Why can’t the voting public look at those European countries and take a cue an not become that. Why did the public elect a president that support the Occupy Movement? Barack Obamas core is seeded in community organizing and social discourse.  It was widely known that if Barack Obama lost this election cities through out the country would burn. Why is that? Very simple. If the voting public would have dislodged the person that promised free living elements to the public, then the community expecting those free entitlements would have reacted very violently.  So now this presents the issue that this has now set a precedent in what people are going to expect out of future leaders of this country. Does this finally fulfill  Barack Obama’s promise to “Fundamentally Change” the United States of America? The Fundamental  cornerstone of this country is the Constitution of the United States.  “Fundamentally Change” means radically alter the Constitution of the United States of America.  We witnessed how hard Barack Obama worked to get re-elected.  Do you or anyone think he will just give up after a second term. Think about this for a moment. Barack Obama passed Obama Care without the blessing of a Republican Controlled House of Representatives. Subsequently a Liberal Supreme Court made the decision to instead of declaring Obama Care unconstitutional, it declared the revenue collecting part of Obama Care to be a “Tax.”  According to the Constitution:

Article 1 Section 7.3

7.3 Every order, resolution, or vote to which the concurrence of the Senate and House of Representatives may be necessary (except on a question of adjournment) shall be presented to the President of the United States; and before the same shall take effect, shall be approved by him, or being disapproved by him, shall be repassed by two thirds of the Senate and House of Representatives, according to the rules and limitations prescribed in the case of a bill.

And Article 1 Section 8.1

8.1 The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States;

The Congress is both the Senate and the House of Representatives.

Barack Obama and the Democratic controlled Senate passed the Obama Care “Tax” without the consent of the Republican controlled House of Representatives.
That being said, what would prevent Barack Obama from “Fundamentally Changing America” buy fundamentally changing the constitution so that he can run for a third term. Keep in mind when a person accrues that much power over a country, do you think that person would just walk away from that power just because some piece of paper that he or she does not agree with says that he or she cannot continue that control of power?

The Unions have wielded an enormous amount of power under the promise that they (The Unions) represent the middle class workers (of which 16% are unemployed) and will bring them “Social Justice” which is a fancy word for Socialism where all are in an a government or organizationally planned society.

Modern socialism originated from an 18th-century intellectual and working class political movement that criticised the effects of industrialisation and private property on society. In the early 19th-century, “socialism” referred to any concern for the social problems of capitalism irrespective of the solutions to those problems. However, by the late 19th-century, “socialism” had come to signify opposition to capitalism and advocacy for an alternative system based on some form of social ownership.[8] Orthodox Marxists later considered scientific assessment and democratic planning to be critical elements of socialism. In the late 20th century, the term “socialist” has also been used by Third way social democrats to refer to an ethical political doctrine focusing on a common set of values emphasizing social cooperation, universal welfare, and equality.[9] It is used in this way by Third Way proponent Anthony Giddens, who rejects conventional definitions and implementations of socialism.[10]

Here is a peek into the future : Vegas Employer: Obama Won – So I Fired 22 Employees script

Will unemployment go to 10% or 12%. Will Obama impose further excessive taxes to make up for the diminished tax base of the unemployed?  This is what Governor Moonbeam of California choose to do. Instead of encouraging business in the state of California to increase tax flow and the tax base, he choose to increase taxes on those that can afford it the least through higher sales taxes. In the end this will force businesses to close and entrepreneurs to take a harder look at Texas to start their businesses if they decide to even start a business.

God help us in the future.

StMarie.

 

An Open Letter to Gov. Jerry Brown (D-CA) January 13, 2011

I hope you all enjoy this.

Gov Brown.

First things first.
1. I did not vote for you

2. What you allowed the Nurses Union to do to Meg Whitman was the the iconic show of how low a politician will go to get a vote.

OK now on to the the budget.  Read this sentence over and over again.

Gov. Jerry Brown wants to spend millions of tax payer dollars on a special vote to ask taxpayers for millions of dollars.

Let me repeat that.

Gov. Jerry Brown wants to spend millions of tax payer dollars on a special vote to ask taxpayers for millions of dollars.

That my friend is absolutely the dumbest thing I ever heard of. Especially when the taxpayers already told Sacramento NO in 2009.
The Tax and Spend Liberal Marxist Socialists in power in Sacramento now have all but destroyed the business climate in California.

I’ll save you the millions of dollars on a special election for a tax extension.  THE ANSWER IS NO TO THE TAX EXTENSION.

OK then what should you do? A lot of people always complain about what the politicians are doing wrong but never offer a solution as to what they should be doing.
Eliminating Cell Phones and getting rid of unnecessary state vehicles…….Nice bandages. But the those motions are only short term and will be over and done by the next fiscal budget expiration date.
Here are my suggestions:

1. There are going to be thousands of California State Workers that are in line to get huge golden parachutes in the form of pension payments for the rest of their lives and free or heavily subsidized health care for the retirees and their families for the rest of their lives. These entitlement programs are unsustainable as by shear statics of there not being enough taxpayers in the future to fund this future financial train wreck.
What should be done in the future?  Simple. All new Employees of the state starting July 1 will not get a pension, instead they will get a matching fund 401K just like any other company.  When a state employee not longer works for the state either by early choice or retirement, they get their 401K at the end of employment and the state owes the ex employees no more money after termination date.
So now you are saying But what about all the pensions that are intact now.  This is easy, well sort of. The state Comptroller will have to figure out a formula for what each pension is worth today for every state employee.  That is the hard part…or maybe not.
Then by let’s say January 1 2013 all employees will have their pension rolled into a 401K. Again the long term fix is elimination the legacy costs for ex state employees or retirees. This is the long term fix. Not a bandaid like cell phones or state vehicles.

2. SEIU cannot hold a gun to the State Government for future entitlement programs. The same solution above applies to all State Union Workers.

The problem with Government entitlement programs is that it give a false sense of hope to the employees by eliminating the responsibility for the employee to be responsible and save for their own future retirement.
In addition to a Government matching 401K the government should also promote that the employees contribute to a personal IRA in addition to the 401K. No they cannot take the IRA contributions as a tax deduction as long as they are contributing to a 401K, But in the end they will have a comfortable savings so they they will not have to depend on tax payer dollars for the rest of their lives to live on.
The same condition with baby boomers will also apply to Social Security and Medicare. There simply will not be enough people to subsidize those entitlement programs in future years with payroll taxes.
Keep in mind when FDR came up with the entitlement program of Social Security People were only living to maybe 65 or 70. So FDR was betting that after a life time of contributions to Social Security an individual would not live long enough to drain the Social Security System. Social Security turned into a Huge Ponzi Scheme that now when people want to get paid for their investments there will not be the money there to pay back the people that are part of it when they live to 80 or 90 years old.

3. Illegal immigrants.  I know the unions and illegal immigrants voted you in.  What do you think that not one illegal immigrant voted for you?  LOL they either did with false documents or highly influence legal voters to vote for you. The State of California has to stop funding people that enter this country from all over the world illegally.
The state of California has to discourage more people from entering the US Illegally. The State of California can no longer be safe harbor for people that disregard the laws of the United States.  You really need to follow in the foot steps of AZ Gov. Jan Brewer.

4. Lower sales tax to 5% so people can start to spend money again on goods and service. More jobs will be created in the PRIVATE SECTOR.

5. Lower Corporate taxes by at least 20% to entice companies to expand or even start in California to create jobs.

6. Lower the maximum personal income tax bracket to 6%.  Again if more people spend then more jobs will be created.

7. Here is the most important role you can play to get California financially stable again.   You have to become California’s Business Ambassador to the world. Your job it to entice companies to start or expand businesses here in California to create jobs with generous, permanent tax break incentives.

Jerry, if you want to fix the financial condition of California you have to get the unemployment rate down to 5% or less.  If you continue the bad business attitude that Sacramento has had over the years then everything you do, all the bandaids that you put on the wound will not help the wound heal.

8. Finally it is sad that the majority of people that voted you in either were not born yet or did not even live in this country during your last time wrecking the economy in the State Of California.

If you don’t do the things mentioned above then you will be as ineffective as Arnold, Gray and Pete were.  I hope you do not want that reputation to follow you.

I wish you the best in these hard decisions.
RJ
PS incase you are wondering.
I am a Libertarian and I follow the small government, personal freedom, and the opportunity to be everything good that I can be without big government intervention creed.
RJ

 

Socialism: A Failed Social Economic Business Model. January 11, 2011

December 11, 2011

It is now time to pay the piper as they say.  California and Illinois have the worst credit ratings than any other state in the Union.

Both of these states have been dominated by Liberal/Socialist/Democrats for years that are pro union and anti-business.

Gov. Jerry Brown (D. CA) has announced draconian cuts to welfare related entitlement programs through out the state (I. E. Greece and Ireland).

This will affect the poorest of the poorest in the state that the  Liberal/Socialist/Democrats proudly tout in campaign speeches to represent and protect so that these economically challenged people will vote them back into office year after year.

Even though Jerry Brown is proposing these draconian cuts he is not planning on cutting the HUGE Government/SEIU entitlement/retirement costs that at least California suffers from.

Here is a hardcore fact. There are thousands and thousands of “Baby Boomers” that work for the State of California as well as other states.  Starting this year (2011) Baby Boomers turn 65 and are starting to retire.  When they retire they are going to collect sometimes up to 80% of their salary for the rest of their lives along with health coverage that is 100% funded by tax payer dollars.

This is unsustainable going into the future. Simple math. A growing number of “Baby Boomers” retiring and a dwindling number of people paying taxes compared to people collection pension money and healthcare from the state.  Keep in mind this same scenario that exists at the federal level.


This employee pension time bomb. is going to force two things.

1. California declares bankruptcy that will make all government and Government Union contracts Null and Void.

2. The Fed starts to print money (Inflation that will not lead to new jobs subsequently not generating a new tax base.) to prop up California’s economy.

This will put California’s financial burden on the US tax payer.  That means that someone in Vermont,
Massachusetts etc. are paying to bail out California and maybe Illinois.

The poor get massive cuts and the government employees and government unions are allowed to be paid the crippling entitlement programs that are the biggest costs in running California Government.

Here is Jerry Brown’s Plan, Ready for this?: Jerry Brown wants to spend millions of dollars for a special vote in June to ask taxpayers for millions of dollars in tax increases.

Does that make sense to you?

Jerry Brown has been Governor before for two terms.  The majority people that re-elected him were not even born then or did not even live in this country during his last term of Governor.

So they have no idea of the damage that he did the last time.

Here in California we have a very unusual proposition that was passed on June 6, 1978.  Proposition 13 helps home owners to able to afford and keep their homes.

Jerry Brown states that he has no intention of dismantling Prop 13, however he wants to attack the subsequent affects of Prop 13 to allow local counties and cities to collect additional taxes to shift the tax burden from the state to county and local municipalities. What exactly does that mean?

People are losing their homes and could be subject to additional property taxes that will further exacerbate the rate of home foreclosures in the state of California.

So instead of being an ambassador to business and courting businesses to start and expand businesses with tax incentives in California creating jobs to increase the tax base,

Jerry Brown has decided to punish poor people with entitlement cuts and even worse punish the responsible working class with tax hikes to pay the unions and fund the state pension train wreck.


The bond rating for California has dropped significantly,  Reason? You need taxpayer dollars to payback municipal bonds. When a municipal bond is issued it has to be backed by tax payer dollars to repay the bond when it is due. If the state is broke it can either raise taxes, issue municipal bonds or cut government spending. Those are the choices. There are only bandaids in the interim  to temporarily patch the fiscal budgets of the state of California.

Stay tuned to what happens in California. As they say “As California goes, so goes the rest of the country.”

ST Marie.

 

American Recovery and Reinvestment Act of 2009 August 19, 2010

I want to talk about the American Recovery and Investment Act of 2009.

In my travels I came across this project in Pismo Beach, California

Ok so let me start by saying that I am all for improvements for local municipalities. It is really nice to see improvements that are about safety and are visually and ergonomically pleasing.

However I do not want these improvements to be paid for by federal tax payer dollars.  This project being built is using money from a tax payer in Detroit, Michigan or Beloit, Wis or what ever other town or city that federal tax payer dollars come from. I want local projects to come from either local county, city tax payer dollars or local bond measures.

Ok so why federal tax payer dollars and not local taxes or bonds?  Well as you know California just like so many other states is broke. We have a liberal government that has run this state for years that believes in high taxes, and very strict EPA restrictions. In other words California is not necessarily business friendly. As our economy fails in California so does the tax base from which projects like this are funded locally. To make matters worse the state of California’s credit rating is very very poor.

http://latimesblogs.latimes.com/money_co/2009/02/california-cred.html

So what does this mean?  Well if California’s credit rating is bad then investing in any local or municipal bonds would be a very bad investment.  Why? There is not enough tax revenue to pay back the bond to the bond holders.

Why is there not enough tax revenue? Because there is high unemployment, upwards of 12.3%

http://www.edd.ca.gov/About_EDD/pdf/urate201007.pdf

OK so you read this and say, Well the EDD says the number of unemployed is down, Isn’t that good?  Well no.  The problem is that the EDD can only count the people that are actively collecting unemployment. The EDD cannot count the people that have dropped from the EDD system and have given up on looking for a job. So the real unemployment rate is more like 15-18%. If you count those that have dropped out from the system.

Ok so where am I going with this?

Did this grant money from the ARRA create jobs.  Yes it did. It created temporary union construction jobs that will end when this project is done.

Did the grant money create any full time sustainable jobs?  Sort of.

Notice in the plans above there are no provisions for any private owned businesses on the  pier.  Bait Shop, Restaurant, Souvenir Shop etc. Something that will employ people and generate sales tax income for the city of  Pismo Beach.

So what jobs did this create?  Well someone has to maintain this facility, paint, bathroom cleaning etc.  So maybe it will create a few CITY GOVERNMENT jobs to be paid with either state, county or city taxes to maintain this facility.  But where is that money going to come from?  Another hand out from the federal government?

There is always the possibility that the City of Pismo Beach could hire an outside contractor to maintain this facility.  That would create jobs in the private sector……but that maintenance contractor would still have to be paid with local or state taxpayer dollars.

If there was an outside contractor hired to do the maintenance on this new facility, how would they get the contract?  How much would they charge and who is the contractor? Will this be another SEIU involved organization that will continue to rape and pillage the local and state governments? Is there any Nepotism involved here?

Why would I even think of Nepotism?  LOL I was born and raised in Chicago and I have been surrounded by corrupt, usually Democratic politics my who life and now we have it running rampant in Washington DC.

Again I love the idea of new and improved public facilities funded by local tax dollars.  I just have to ask the person that is reading this that lives in Bridgeport, Connecticut how are they going to enjoy the fruits of their federal tax payer dollars being spent in Pismo Beach, CA?

ST Marie

 

The Big Picture. August 17, 2010

It is very obvious that Barack Obama and his lame crew do not have any vision for the future and if they do it is a very damaged understanding of what is really going to happen.  This video has the vision of what will really happen in the future.

Please watch and comment. I will accept reasonable, intelligent comments either in favor or not in favor. I will consider “flames” as junk and will not accept those comments.

Enjoy,

STMarie

 

Barack Obama’s Destructive Business Agenda July 13, 2010

So today I went to go to my favorite Sabarro Pizza at

1731 N VICTORY PLACE

BUILDING R9

BURBANK, CA 91506

This is what I found.

So what happened here? To be honest I really don’t know.

I do know that Sabarro is a franchise organization.

So why did it close?

1. Land lord raised the rent beyond what the restaurant could sustain.

2. Franchisee was a bad business person and did not run the store properly.

3. Business was just down and could not survive.

4. Local business taxes were to high.

4. All of the above.

Here are the things that I do know that happened.

1. A franchisee lost his/her livelihood and business dream.

2. A given number of people lost their jobs.

3. A great number of future jobs were lost. (Unless the landlord is lucky enough to lease the space to another business.)

4. Loss of future jobs for High School Students or potential future Sabarro franchisees that would have been working there.

5. Loss of sales tax revenue for the City of Burbank, CA

6. Loss of sales tax revenue for the County of Los Angeles.

7. Loss of sales tax revenue for the State of California.

8. Loss of revenue for the food purveyors that supplied the food products that were served.

9. Loss of federal income tax collected from the owner and employees.

10. Loss of Medicare tax collected from the owner and employees.

11. Loss of California State Income tax from the owner and employees.

Ok so here is my point. Barack Obama wants people to think that everything is getting better. Tell that to all the people and their families that lost their job at this Sabarro and all the other business that continue to close everyday. Are new businesses opening up? Of course, But it is safe to say that more businesses are closing than opening.

In the meantime Barack Obama focuses on pissing away tax payer dollars for things like lawsuits against Arizona SB 1070 instead of concentrating  on bolstering small business and creating new jobs.

ST Marie

 

 
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