Right Wing News: ACORN & the subprime crisis

Right Wing News

ACORN & the subprime crisis

Investigative reporter Matthew Vadum reveals ACORN’s role in causing the subprime mortgage debacle:

In a circa 1999 document, “To Each Their Home: Success Stories from the ACORN Housing Corporation,” the ACORN affiliate called the American Dream a sham and bragged about undermining banks’ underwriting standards. . . .
ACORN Housing took credit for developing “several innovative strategies” to get around pesky traditional lending guidelines, which were unfair because they “were geared to middle class borrowers.”
Instead of using passe measures of creditworthiness such as, say, credit history and having an adequate income, ACORN convinced lenders to adopt “more flexible underwriting criteria that take into account the realities of lower income communities.” Henceforth, some banks serving inner cities would accept “less traditional income sources such as food stamps.”

You read that right: ACORN pushed banks to count food stamps as income in determining mortgage eligibility. Think about that when you get your next 401(k) statement. Your investments are in the toilet and the world’s financial system is teetering on the verge of meltdown because of these left-wing poverty pimps. They’re promoting “equality” only in the sense that all Americans are getting equally screwed.

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Washington Independent: The Maestro Speaks — and He’s Not Blaming the CRA

Washington Independent

The Maestro Speaks — and He’s Not Blaming the CRA

Friend of the site Charles Morris points out something many people might have missed in former Federal Reserve Chairman Alan Greenspan’s testimony Thursday before Congress.

Headlines noted that Greenspan acknowledged his misplaced faith in the ability of free markets to correct themselves. But he also did something else — he didn’t point to the Community Reinvestment Act as the cause of the foreclosure crisis, a belief widely embraced by many conservatives.

According to the New York Times, Greenspan told Congress that “excess demand from securitizers” fueled the subprime bubble. He didn’t contend that civil- rights activists had overrun the administrations of Bill Clinton and George W. Bush to force the government to make loans to poor borrowers.

So now it’s all on the record.  Let’s put the whole blame-the-CRA thing to rest. Greenspan’s credibility might not be what it once was, but he’s hardly a bleeding heart, either. And even he’s not blaming low-income borrowers.

Or, as Morris put it:

“The Maestro has spoken. As the sportscasters say, ‘Put it in the books.’”

Right Wing News: If Obama’s Administration Takes Your 401K, Can We Call Him A Socialist The

Right Wing News

If Obama’s Administration Takes Your 401K, Can We Call Him A Socialist The 

A dear reader wrote yesterday that using the term “socialist” is a code word:

Martin Luther King Jr, W.E.B. Du Bois, Paul Robeson, A. Philip Randolph, etc were all denounced as “socialists”. Just as with Obama, the term is employed as a euphamism for something else entirely.Righties have simply reached back in history to use an old code word for black. It set whites apart from those deemed unAmerican and those who could not be trusted during the communism scare. It’s funny, McCain wants to buy your house – and Obama’s the socialist.

 

Well, I don’t know about whether the aforementioned men were socialist or not. What I know is this: socialism is soothing ideology in troubled times and for people who are afraid about their survival. And socialism never turns out the way people hope or plan.

WSJ: Obama Wants Social Security to Be a Welfare Plan

WSJ

Obama Wants Social Security to Be a Welfare Plan

Imagine this: Barack Obama proposes a Social Security payroll tax cut for low earners. Workers earning up to $8,000 per year would receive back the full 6.2% employee share of the 12.4% total payroll tax, up to $500 per year. Workers earning over $8,000 would receive $500 each, with this credit phasing out for individuals earning between $75,000 and $85,000.

While Social Security has always been progressive, many would say this plan goes too far and risks turning Social Security into a “welfare program.” Low earners receive more in benefits than they pay in taxes — meaning their “net tax” is already negative — and Mr. Obama’s plan would increase net subsidies from the program.

Moreover, this payroll tax cut plan would reduce Social Security’s tax revenues by around $710 billion over the next 10 years. If made permanent, the Obama tax cut would increase Social Security’s long-term deficit by almost 60% and push the program into insolvency in 2034, versus 2041 under current projections.

To fill the hole in Social Security’s finances, Mr. Obama would increase income taxes on high earners and pour that money into Social Security. This would be the first time that income tax revenues have been used to finance Social Security, which has always relied on its own dedicated payroll tax to differentiate itself from other government programs. Filling the gap with higher taxes on high earners would further increase Social Security’s progressivity, pushing it closer toward a welfare-program approach.

So Mr. Obama has in essence proposed cutting Social Security taxes for low earners, which would shift the system toward a “welfare” approach and sharply increase its long-term deficit. To fill the funding gap, he will raise taxes on high earners and funnel the money into Social Security, making the system even more progressive and breaking a long tradition against funding Social Security with income taxes.

Mr. Biggs is a resident scholar at the American Enterprise Institute in Washington, D.C. He blogs on Social Security policy at www.andrewgbiggs.blogspot.com.

National Review Online: Obama’s New Tax Welfare

National Review Online

Obama’s New Tax Welfare

Barack Obama says he plans to cut taxes for 95 percent of American workers. That sounds terrific, but there are three problems. One, it is meant to draw attention from the real core of the Obama tax plan: proposed increases in every major federal tax. Two, the structure of the cuts will create perverse incentives. And three, many of the people receiving “tax cuts” don’t pay taxes to begin with, meaning they’ll be in effect getting welfare.

The first point requires but a simple list. Obama proposes to raise the top two individual income tax rates by 25 percent or more, through both explicit rate increases and the phaseout of personal exemptions and all itemized deductions for upper-income earners. He’ll increase the capital-gains tax rate by 33 percent, the tax rate on dividends by 33 percent, and the top payroll-tax rate by 16 to 32 percent. He’ll create a new payroll tax for national health insurance, estimated at 7 percent. He’ll reinstate the death/inheritance tax, which is being phased out under current law, with a new top marginal rate of 45 percent. He’ll increase the corporate tax burden by 25 percent “by closing corporate loopholes and tax havens.” He’ll even increase tariffs through his protectionist trade policies.

Besides the $500-per-worker credit, Obama proposes a slew of income-tax credits targeted toward low- and moderate-income people, also refundable. Obama proposes such tax credits for child care, education, housing, retirement, health care, welfare, etc.

Though the people receiving these credits will spend the money, the programs will probably hurt the economy on net, because the credits will be phased out at higher income levels. This, in effect, constitutes yet another marginal tax on high-income earners, and thus another blow to their incentives to be productive. 

These programs alone would cost $1.3 trillion over ten years. I call it The New Tax Welfare.

LA Times: McCain says Obama wants socialism

LA Times

McCain says Obama wants socialism

The Republican says his rival would turn the IRS into a giant ‘welfare agency.’ The Democrat calls McCain out of touch and says his middle-class tax cut would benefit only working people.Obama has said that his plan would cut taxes for 95% of working Americans, including Wurzelbacher. McCain has said 40% of Americans don’t pay income taxes, either because they are elderly or don’t make enough money.

“In other words, Barack Obama’s tax plan would convert the IRS into a giant welfare agency, redistributing massive amounts of wealth at the direction of politicians in Washington,” McCain said in his radio remarks.

Strategists for the Arizona Republican see Obama’s spread-the-wealth comment as a major gaffe — providing an opening on an issue that has worked to the benefit of the Democratic nominee amid the nation’s financial crisis.

Socialist theory calls for collective ownership of most private enterprise and for an egalitarian society. Karl Marx argued that socialism was a transitional phase between capitalism and communism.

Colorado Spring Gazette: OPINION: Frank, who’s white, plays the race card

Colorado Spring Gazette: OPINION

Frank, who’s white, plays the race card

The CRA was formed during the Carter era, expanded under President Clinton and even championed by President George W. Bush. Politicians saw this act – which rated and rewarded banks based on their efforts to hand out loans in poor and minority neighborhoods – as a means to expand the dream of home ownership. That’s a worthy goal, but the end result was the obliteration of the market rules that assured that loans were given only to those who could afford to pay them.

These loosened standards benefited the real estate industry for a short period. Every Ponzi scheme needs new buyers to keep the system going. And so the housing bubble got inflated to absurd levels. When the bubble burst, lenders lost huge piles of cash.

“Banks have been placed in a Catch-22 situation by the CRA: If they comply, they know they will have to suffer from more loan defaults,” explained Tom DiLorenzo, a Loyola College of Maryland economics professor writing on lewrockwell.com. “If they don’t comply, they face financial penalties, and, worse yet, their business plans for mergers, branch expansions, etc. can be blocked by CRA protesters, which can cost a large corporation like Bank of America billions of dollars. Like most businesses, they have largely buckled under and have surrendered to their bureaucratic masters.”

Making these obvious points is not racist. Mr. Frank should be ashamed of himself. The nation needs a wide-ranging debate, not efforts to shut down discussion.