11/9/09
Abstract: The left
continues to chase failed social policies in education and ‘affordable housing’
despite eternal failures. They continue to push the silly nostrum of ‘equality’
when this is impossible and has been shown to be a joke throughtout history.
They really don’t believe in this notion, but employ it a method of maintaining
power. The current phony plan is to lease back homes from owners in foreclosure
or potential foreclosure and that will sustain the property values and keep the
looters from selling the plumbing and rugs. This process has a 70% failure rate
as it is. All this is being financed by printing money and that is the fastest
way to trash our currency and our society. Several other governments, who,
presumably, are educated and open eyed are also elevating their debt to GDP ratios to astronomical heights and inviting
financial default. The debased dollar is currently fueling the stock markets
and gold prices and will eventually produce a bigger bubble than the 2008 mess.
Many people cannot handle debt or finances and our tax monies derived from
borrowing and printing money pay for these follies. We face a second bubble
soon if we continue on like this. But, this may be a grand opportunity for the
Democrats who can celebrate the collapse of capitalism with party and song.
We
can always make rough approximations and slice some pie in various ways to
illustrate some new analytical view on any subject. Today, we can carve up the
housing pie to show that there are really only two kinds of people in the world:
those who can cope with capitalism and those who cannot. The government,
despite its sticky array of erudite folk from Ivy League who draw high salaries
and cushy benefits on the government dole cannot manage to understand basic
economic principles, or they don’t wish to. Their political path forward depends on
failure and poverty—not success.
Consider,
for the joke of the day, the current status of government structured home
foreclosure prevention. To say that this operation is run much differently from
some freak side show at Coney Island opens the
sayer to criticisms about the knowledge of even basic economics or finance. Most
of this nostrum is infected with the salient quest for ‘equality’ for the
‘masses’ that we inherited from a swarm of losers from the past two
centuries. In 1920, the thrust of ‘equality’
was to redistribute the wealth through violent means if necessary and Winston
Churchill responded to this quest in this way:
On equality:
"....But
my hatred of Bolshevism and Bolsheviks is not founded on their silly system of economics, or their absurd doctrine of an impossible equality. It arises
from the bloody and devastating
terrorism which they practise in every land into which
they have broken, and my which alone their criminal regime can be maintained...."— Text of Winston Churchill's
July 8th, 1920, British House of Commons, Amritsar Massacre Speech By Winston
Churchill given July 8th, 1920[1][2] [Emphasis is mine in
all quotes.]
For
the simple, the notion of equality rings loud and sweet as many see free money
falling from the skies and decorating their hovels mandated by the historical
theorem that this is some kind of payback for stolen wealth by the bourgeois. The
supporters for reparations sing this song; this is ‘social justice’ in the
parlance of the rabid left. But, not based on sound economics or even
believable social theories we always find the persistent residual tenet of this
theme that still survives the anvil of reason and persists like some metastatic
disease throughout the world. There is no such
thing as equality in any
social or cognitive vector selected at random or extracted from lengthy
thinking. This phony attribute that synthetically defines of all mankind
persists for two reasons: [1] that politicians can gain power and prestige and
wealth by promising
the impossible to the low classes and [2] that the low classes want to spend money and
enjoy this process as much as those who can work the levers of capitalism and
make it work. These two factors always result in opposition and failure. The
system that does work is for the entrepreneurs to create wealth and employ the
rest of us in some kind of cooperative adventure where everybody gains wealth
although not equally. This is not acceptable to the left.
There are two major
diametrically opposing mechanisms operating here:
Capitalism
is self-adjusting and rewards the successful with profits while destroying
implausible or inopportune business adventures with stark business failures and
unavoidable bankruptcies, but the Political Classes never self-adjust unless
there is famine, war or inflation and tend to merely accumulate more and more
unsuccessful people in their ranks. One trendy facet of this is to ignore drug
addiction and crimes in inner cities but to ensure that they will vote properly
at the proper times. This is a phenomenal political success for the liberal
Democrats. Thus, one system constantly improves and the other remains stagnant
and an increasing burden upon the other in the form of parasitism. This notion
that ‘education’ can eventually ‘level the playing fields’ is absurd and
a topic for another blog. Education is not the word that must be used here—the proper
word is propaganda. [3]
“Silly
economics” is currently being showcased with the tinsel, hokum and curious circus
acts all shouting “affordable housing.” This is a proxymoron[4]
from the old socialist days where current ‘scholars’ and their appreciative political
hacks sort through the histrionic rubble of Marxism and its aftermath for
hidden truths by the liberal swarms and then stodgily recap the old stale
precepts recast in new habits. This process works because most humans cannot
compete equally in capitalist societies
[e.g. The Bell Curve[5][6][7]
shows this clearly] thus there are always a large group of disadvantaged, poor
and restless persons for whom this offering is their best hope of getting at
least something in this world. Thus the divide between those who can produce
goods and services and those who can only burden such process is maintained
like the Great Wall of China . It is always of
interest to note that programs by the left are not successful thus prompting us
to think that many are predestined to fail to maintain the political power of
Democrats and their allies.
There
have been numerous ‘programs’ to help out the ‘poor’ and most of these
circulate like vultures around the concept of ‘land reform’ or some other form
of ‘redistribution of wealth.’[8]
Much of the ‘theoretical’ basis of such a concept was provided by Keynes thus
lending license to governments to print money and ‘share’ in the wealth of
others. The United Kingdom is running an expensive [and maybe terminal] experiment
what will probably topple their society via the debt mechanism, a process that
would have destroyed any corporation who emulated this folly, but since the
government of Gordon Brown and Alistair Darling is socialist the process may happily
run the U.K. into the financial latrines:
“So terrible was Gordon Brown's economic stewardship during
his decade as Chancellor from 1997, and so huge has been his "fiscal
stimulus" since, that the UK UK 8:49PM GMT 07 Nov 2009
Our own government’s futile attempts to make suitable
homeowners out of uncreditworthy citizens and non citizens by offering to
‘restructure’ their loans failed miserably:
““HSA
is showing high redefault rates on the early offerings,” FHFA director James
Lockhart noted in a Congressional report this week. “Performance on the
February through April offerings shows a redefault [or recidivism] rate of
almost 70%, which calls
into question the program’s assumptions that borrowers have the capacity to
make payments going forward.””[10]-- Fannie Program Sees 70% Recidivism By Diana Golobay May 22, 2009 .
A
desperate attempt to preserve some value in government-owned real estate now
unfolds where mortgage defaulters can essentially rent their properties so they
won’t be trashed and the plumbing cut up and sold before foreclosures. If the
rents are too low then we have more social engineering adventures to pay for:
“Mortgage giant Fannie Mae said Thursday that it would throw
a lifeline to some people losing their homes to foreclosure by allowing them to
lease
those properties back for up to a year at
market rental rates”[11]—
Fannie Mae to allow borrowers in foreclosure to lease back homes
All
of these socialist government actions
surge forward in song and theatre and
then bounce off the Wall of Reality and summarily revert back to the penalties
for violating basic supply and demand theory and practice and the ability to
purchase and maintain property or capital or both. Capitalists can manage capital
and when they fail their unit plan disintegrates into pieces and the pieces are
sold off and recombined elsewhere with a new and hopefully successful plan.
Thus Capitalism is a self-sharpening economic tool while government, using the
reverse technique of eternal necrosis is just a dead chicken tied around the
necks of the business community.
Here,
some collective of socialists schemed to get ‘affordable housing’ for the poor
using federal law CRA [Community Reinvestment Act][12][13] and
political harassment machines like Greenlining[14] and the
criminals at ACORN[15] and thus perpetuate this failure.
Freddie Mac [that just lost 5 billion more
dollars[16]]
and the intellectually and financially bankrupt Fannie Mae are both convenient socialist
financial dumpsters[17]
provided to toss away phony mortgage deals that will obviously end in failure
and the taxpayer will pay for the mess. This is a classic redistribution of
wealth foray where the ‘poor’ are subsidized by the rest of society as if high
progressive income taxes were not enough.
From a
previous blog:
The French Revolution[18]
was such a plan as the title of this blog suggests. Here, the lawyers and
intellectuals and peasants brewed up a grim solution to the ever-popular notion
of redistribution of wealth. Louis XVI and his peers were rounded up like
cattle and their heads severed to baskets in a shower of blood as the crowds
chanted about new notions of liberté, égalité and fraternité.[19]
Louis had fought many wars, food was scarce and also much of this revolution was
precipitated by a financial crisis, high debt, and inflation in food
prices--all similar to the one we are experiencing now except inflation. The
spending and debt levels are so high that hyperinflation is a surety. [20]
We should be watching
our trading partners and how they handle debt and deflation:
“The IMF expects Japan GDP ) this year, 227pc next year, and 246pc by 2014.”[21]-- It is Japan
We are
at 12/14 or about 85% Debt to GDP
ratio now and quickly copying the failed Japanese Model.
We should be watching
our government was well:
““If
the fiscal path is deemed unsustainable, it may be preferable to create limited
inflation early on -- to nip the debt problem in the bud - rather than to allow
a mounting debt burden. We think the risk cannot quite be dismissed out of
hand,” said the bank”[22]-- Morgan Stanley fears global central
banks will 'monetise' public debts By Ambrose Evans-Pritchard. Morgan Stanley has warned clients that central
banks in high-debt countries may try to stoke inflation as a deliberate policy
to rescue governments and tackle the legacy of the crisis
We are
wasting our growth potential—the only thing that can bring us back from the
abyss and the leftists know this and persist in the destruction of our economy
for political reasons. They are now trying to amalgamate a silly but
economically lethal fusion[23] between classic Marxism[24] and Fascism[25] whereby they can dictate business
and tax policies to industry and banks and finance this with printed money.
This debt will bury us and the left will be pleased:
“Harvard economics professor Ken Rogoff[26]
said that the level of debt major governments have taken on to tackle the
financial crisis is of considerable concern must not go unnoticed.
In a series of recent comments, Prof Rogoff cautions that
countries like the US
"There's no question that the most significant vulnerability as we
emerge from recession is the soaring government debt," Prof Rogoff told
Bloomberg. "It's very likely that it will
trigger the next crisis as governments have been stretched so wide."[27]--
'Debt levels risk another crisis' High levels of
government debt around the world remain the most likely trigger of the next economic
downturn, the former chief economist of the International Monetary Fund has
warned. By James Quinn 24
Sep 2009
This is
not going to work. But, then, why should the left want economic success? The
most valiant and successful examples of the left getting what they wanted were
the French Revolution, The Russian and Cuban and Chinese Revolutions and some brushfire
stuff in Africa. Did they suffer from a collapsed economy in any case? No--not
the political leadership.
The destruction of your wealth and private property is their
first priority. Watch it happen in California
rycK [a 5th generation
Californian in exile]
Comments
to: ryckki@gmail.com
[2] Copulating
with Coprolites: The Unveiled Mechanism of Governance by Progressive Liberalism
in California
[3] Propaganda Lesson:
Economics and Recessions from The NYT :
A Long [Sad] Story and Stern Tutorial on Tax Cuts. Friday, February 08, 2008 10:16 AM
[5] The Bell
by
Herrnstein, Richard J. and Murray,
Charles Free Press of Glencoe , Inc, Old
Tappan , New
Jersey , U.S.A.
[6] Echoes from the
Babbling Brooks Envision a New Conservatism. The New York Times Advises Us on
Society, as Usual: Higher Taxes
Posted
by rycK on Saturday,
February 16, 2008 10:37:49
AM
[8] A Leftist Plan Exists
to Rob and Euthanize Old White Folk in America
[9] This
financial mess isn't even the end of the beginning for UK 8:49PM
GMT 07 Nov 2009 http://www.telegraph.co.uk/finance/comment/liamhalligan/6521350/This-financial-mess-isnt-even-the-end-of-the-beginning-for-UK-wealth.html
[10] Fannie
Program Sees 70% Recidivism By Diana Golobay May 22, 2009 . http://www.latimes.com/business/la-fi-fannie6-2009nov06,0,4259740.story?track=rss
[11] Fannie Mae to allow borrowers in
foreclosure to lease back homes http://www.latimes.com/business/la-fi-fannie6-2009nov06,0,4259740.story?track=rss
[12] “Bear Stearns made the first public securitization of Community
Reinvestment Act (CRA ) loans
started in 1997.[6] Editorialists in some American
newspapers[7][8] and US Congressman Ron Paul[9] say the CRA
loans were lent to otherwise un-credit-worthy consumers in the name of ending
discrimination, although an analysis of actual lending patterns does not
generally support this conclusion.[10][11][12]
On June 22, 2007,
Bear Stearns pledged a collateralized loan of up to $3.2 billion to "bail
out" one of its funds, the Bear Stearns High-Grade Structured Credit Fund,
while negotiating with other banks to loan money against collateral to another
fund, the Bear Stearns High-Grade Structured Credit Enhanced Leveraged Fund.[13] The funds were invested in thinly
traded collateralized
debt obligations (CDOs)
found to be worth less than their mark-to-market value. Merrill Lynch seized $850 million worth of the
underlying collateral but only was able to auction $100 million of them. The
incident sparked concern of contagion as Bear Stearns might be forced to
liquidate its CDOs, prompting a mark-down of similar assets in other
portfolios.[14][15] Richard
A. Marin, a senior executive at Bear Stearns Asset Management
responsible for the two hedge funds, was replaced on June 29 by Jeffrey
B. Lane, a former Vice Chairman of rival investment bank, Lehman Brothers.[16]
During
the week of July 16, 2007,
Bear Stearns disclosed that the two subprime hedge funds had lost nearly all of
their value amid a rapid decline in the market for subprime mortgages.
[17] “dollarloos”
[19] “Liberté,
égalité, fraternité, French for "Liberty
[20] Krugman Scares Us with
His Big Inflation Scare Screed. We Will Rapidly Inflate and He Knows This.
[21] It
is Japan
[22] Morgan
Stanley fears global central banks will 'monetise' public debts By Ambrose
Evans-Pritchard Morgan Stanley has warned clients that central banks in
high-debt countries may try to stoke inflation as a deliberate policy to rescue
governments and tackle the legacy of the crisis http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/6400157/Morgan-Stanley-fears-global-central-banks-will-monetise-public-debts.html
[23] Our Economy is
Collapsing. The Liberals will Now Institute Some Kind of Neo- Fascism or
Socialism or Some New Blend to Maintain Power.
[24] The Apollo Alliance
[25] The New York Times
Wants More Control Over Private Equity Firms. More Fascism on Order
[26] A chess opponent of mine at Yale when he
was an undergrad and I was a researcher at the Yale Med School
[27] 'Debt levels risk another crisis'
High levels of government debt around the world remain the most likely trigger
of the next economic downturn, the former chief economist of the International
Monetary Fund has warned. By James Quinn Published: 8:43PM BST 24 Sep 2009 http://www.telegraph.co.uk/finance/financetopics/g20-summit/6228450/Debt-levels-risk-another-crisis.html
[28] The Road to Social
Success, Peace and Justice: California
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