Have nothing to do with the [evil] things that people do, things that belong to the darkness. Instead, bring them out to the light... [For] when all things are brought out into the light, then their true nature is clearly revealed...

-Ephesians 5:11-13

Tag Archives: Washington

Predictable War Hawks Urge Military Intervention in Syria

Following the ghastly chemical attacks on civilians in the Ghouta region just east of Damascus early in the morning of Wednesday, August 21st, preparations for intervention by the US military have begun, urged on by predictable war hawks in Congress and the media.

Estimates of casualties from Doctors without Borders to the Free Syria Army (FSA) range from a few hundred to

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Chances Are Improving for a Republican Take back of the Senate in 2014

This article was first published at The McAlvany Intelligence Advisor on Monday, August 19th, 2013:

 

President Obama’s continuing and accelerating slide in the polls bodes well for 2014, especially as Republicans are focusing on taking back the Senate. The president’s slide is breath-taking: In early August, Fox News reported that his approval ratings were

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Turning the Clinton Foundation into Hillary’s Presidential Launching Pad

When consulting firm Simpson Thacher & Bartlett, better known simply as Simpson Thacher, completed its corporate review of the Clinton Foundation earlier this month, their conclusions were picked up by the New York Times. Authors Nicholas Confessore and Amy Chozick gently chided the Clintons for running a money machine allegedly designed to “strengthen the capacity of people throughout the world to meet the challenges of global interdependence” but which suffers instead from

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The President’s Approval Ratings Continue to Drop

On Wednesday, August 7th, Fox News reported that President Obama’s approval rating was “in a summer swoon,” with just 42 percent of Americans approving of his performance. This was down 4 percentage points from July and 7 points from his 2013 high. In addition more than half of those polled

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Uphill Battle for Republican Challenger in New Jersey Senate Race

With substantial primary wins over their opponents, the Republican and Democrat candidates in the special election to be held on October 16th to fill New Jersey Senator Frank Lautenberg’s final 15 months following his death in June, the polls show that the Democrat, Cory Booker, should win in a walk.

But to hear Republican candidate Steve Lonegan tell about it, the race could be close. Lonegan is

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Is Bezos Buying at the Bottom?

This article first appeared at The McAlvany Intelligence Advisor on Friday, August 9th, 2013:

It was suggested here on Wednesday that Jeff Bezos and John Henry might have overpaid for their recent purchases of the Washington Post and the Boston Globe. Newspaper revenues have been declining for years, and more precipitously in recent years. The best minds in the business have been unable to halt that decline. Pay walls have offended readers who have the freedom to go elsewhere for their news. Package deals and bundling haven’t worked. The Drudge Report continues to gain ground at their expense and is now worth more (with just two or three employees) than

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Bezos and Henry May Have Overpaid for the Post and the Globe

This article was first published by The McAlvany Intelligence Advisor on Wednesday, August 7th, 2013:

With the announcements of the sale of the Boston Globe to Boston billionaire John Henry for a paltry $70 million and the sale of the Washington Post to Amazon’s Jeff Bezos for $250 million, some are asking if they might have overpaid.

The Globe sale was called, appropriately, a

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Declines in Trust and Revenues Force Sales and Spinoffs of Formerly Prominent Newspapers

The back-to-back announcements of the sale of the Boston Globe to Boston billionaire John Henry and the sale of the Washington Post o Amazon founder Jeff Bezos earlier this week continue to track the shrinkage of the newspaper business that has been going on for more than a decade. Henry bought the Globe from the New York Times for just $70 million, a fraction of the

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Unhappy with Rubio

This article first appeared at The McAlvany Intelligence Advisor on Monday, August 5th, 2013:

 

When the Public Policy Polling results for 2016 were announced on July 25th, suffering the biggest drop was Marco Rubio, falling from a commanding lead of 21 and 22 in January and March all the way to a dismal

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Home Ownership Rates Continue to Fall; New Plans to Reflate Underway

When the Census Bureau announced on Tuesday that the rate of homeownership in the US continued its nearly 9-year decline, pundits were quick to lay the blame on higher lending requirements, bankers reluctant to make loans, increasing interest rates and a weak economy with slow job growth. In addition, young people are living at home longer due to student loan debt and poor job prospects. As a result, according to the Census Bureau, rental rates are climbing as families needing a place to live have few other options.

Having fallen from the peak of 69 percent reached in 2004, current home ownership has dropped to 65 percent, back to where it was in 1995. Robert Schiller, economics professor at Yale, thinks the rate will continue to fall further.

Home prices are increasing not because of demand by new buyers but because of investors seeing the opportunities in buying distressed properties and turning them into rentals. In some places in the country one out of every two home purchases are paid for in cash.

But something else is afoot: fewer citizens are buying into the notion that home ownership makes economic sense and is equivalent to a savings plan that can be turned into income in later years. As Emily Badger noted at The Atlantic Cities, “We have traditionally considered homeownership to be a sign of the health of the economy. But some of these people who would have been homeowners 10 years ago … have concluded that they would rather rent [today]…”

Some have no doubt been so badly mauled financially in the recession that they have few options. Others have long memories and remember the pain and suffering they endured as a result of deliberate government policies instituted to make homeownership possible to millions of unqualified buyers.

One of those with long memories is Henry Cisneros, a key player in developing the “National Homeownership Strategy” while he was Secretary of Housing and Urban Development (HUD) under Bill Clinton. Unanimously confirmed by the Senate, Cisneros took over at HUD in January, 1993 and by 1997 had boosted the US homeownership rate from 63.7 percent to 65.7 percent. Even after leaving office, his strategies continued blowing up the real estate bubble so that by the time Clinton left office in 2001 home ownership was at 67.5 percent on its way to peaking during the summer and fall of 2004.

In a remarkably candid and forthright article about Cisneros’ role in creating the real estate bubble, The New York Times told the story of a compassionate government bureaucrat with big dreams of providing home ownership to people who couldn’t afford them under current rules. So he changed the rules and invited bankers, realtors and homebuilders to participate in the party guaranteed by taxpayers. In 2008 as he contemplated the damage he had wrought while head of HUD, Cisneros claimed that his intentions were honorable, at least in the beginning, but that his plans to provide low-interest loans and much weaker underwriting requirements through Fannie Mae and Freddie Mac were hijacked by “unscrupulous participants – bankers, brokers, secondary market people. The country is paying for that, and families are hurt because we … did not draw line.” He expressed regret that his efforts had not only lured people into homes they couldn’t afford, but that his policies ultimately ejected them from those homes as a result. He said, “I’ve been waiting for someone to put all the blame on my doorstep.”

His strategy was to lower underwriting standards by allowing Fannie Mae and Freddie Mac to require less documentation and approve higher debt to income levels than normal. He reduced down payment requirements from 20 percent to 10 percent, and then to 5 percent, then down to 3 percent and ultimately to 0 percent. His strategy allowed these unqualified buyers to cover their closing costs with another loan, putting them into a home with truly nothing out of the own pockets. Lenders were happy with the new rules as the US taxpayer stood behind the loans bought by Fannie Mae and Freddie Mac.

Cisneros created a monster.

Once the ball got rolling, it was impossible to stop or even slow down. Said Cisneros:

You think you have a finely tuned instrument that you can use to say: Stop! We’re at 69 percent homeownership. We should go no further. There are people who should remain renters.

But you really are given a sledgehammer and an ax. They are blunt tools.

I’m not sure you can regulate when we’re talking about an entire nation of 300 million people and this behavior becomes viral.

Cisneros drank his own Kool-Aid. He joined with a major homebuilder to develop a housing project in San Antonio, Texas which made him wealthy but which turned sour during the collapse.

Those lessons are about to be learned again as there are new efforts to reflate the ownership bubble. Under the Dodd-Frank Act there’s something called the Qualified Mortgage Rule (QMR) which requires lenders to keep part of the loans they make in their own portfolios – they must have “skin in the game” to reduce the chances of another bubble. But more than 50 organizations tied to the real estate industry are advocating a softening of that rule, putting more government money into the market, with less risk to the lenders. One of those supporting such softening is Sarah Rosen Wartell, president of the Urban Institute, who sounds an awful lot like Cisneros:

I’m not suggesting indiscriminate access to home ownership, but there are many borrowers who are capable of demonstrating the capacity to pay…

[They include] those who had a job loss or foreclosure, in many cases through no fault of their own [and a result are] being shut out of a rising market.

Gary Thomas, the president of the National Association of Homebuilders, expressed his delight at the softening of the rules:

If what we’re heard about the [weakening of] the proposed QMR rule is true, the we are very pleased that the agencies are moving towards a broad definition that will benefit the American people by ensuring access to safe, affordable options for buying a home.

And then of course there’s the inevitable college professor who hasn’t learned from history, or from Cisneros. Christopher Mayer, professor of real estate at Columbia Business School, exulted:

Having a path that people can become a homeowner is an important path. And it’s really important for middle to lower-income folks who have a hard time saving…

At present efforts to reflate the real estate bubble through relaxing underwriting requirements and low-interest loans don’t appear to be working very well. But Washington has a mission where past experience and lessons and pain and hardship don’t matter. The Cisneros mentality remains alive and well in Foggy Bottom.

 

 

 

President’s Speeches on the Economy Draw Attention Away from His Scandals and Falling Poll Numbers

From the New York Times to Politico.com the president’s speech to students at Knox College in Galesburg, Illinois on Wednesday was headline news. More than an hour long, it contained enough platitudes, sound bites and falsehoods to keep pundits busy and away from more about the Benghazi, IRS, NSA surveillance scandals and Obamacare fallout which have caused the president’s poll numbers to plummet. It was time to get out of Dodge and take

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Obama and Senate Democrats Win Huge Victory, GOP Emasculated

This article first appeared at McAlvany Intelligence Advisor on Friday, July 19th, 2013:

 

After months of stalling and threats of a filibuster against Obama’s radical nominees to various agency posts, Senate Republicans have given up and are letting President Obama nominate the devil himself, if he chooses.

In a surprisingly underreported event, Senate Majority Leader Harry Reid won a major victory in the Senate by threatening to

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Wal-Mart Shrugs: Pulls Plans to Build Stores in Washington, DC

Writing in the Washington Post on Tuesday, Wal-Mart’s regional general manager Alex Barron told Washington DC’s city council that if they voted to pass the Large Retailer Accountability Act (LRAA) his company would “not pursue [building] stores at Skyland, Capitol Gateway or New York Avenue” shopping centers and they would

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Welcome to Washington, DC: Pay $50 Fine, Have a Nice Day, Go Home

This article was first published at The McAlvany Intelligence Advisor on June 26th, 2013:

 

When Joe Carr, along with five of his baseball buddies from Eden Prairie, Minnesota, decided to fly to Washington to watch their Twins take on the Washington Nationals in June, he had no idea he’d leave the city with a criminal record and $50 poorer.

In a sarcastic jest he decided to write about his experience in a letter to the editor of the Washington Post, and they printed it. He explains what happened:

The Friday, June 7, night tilt between the Nationals and my Mighty Fighting Minnesota Twins was rained out by Tropical Storm Andrea. I was hosting five of my buddies on our annual baseball weekend, and, having lived in the D.C. area in the ’90s, I had booked the hotel, purchased the game tickets and planned the requisite Mall and monument tours. We were going to drop some serious cash (well, by Midwestern standards, anyway) into the local economy.

The rainout resulted in my possessing six tickets — worth $360 — to the second game of a Sunday doubleheader scheduled to be played when my friends and I would be somewhere over Chicago. However, as any baseball fan knows, there is always a market for club-level seats. So I proceeded to “market” the seats as I walked up to Nationals Park prior to Saturday’s 4:05 p.m. game.

Bad move.

Fast forward: after offering his tickets (he was willing to let them go for less than the $60 he had invested in each of them) to several people who turned him down, he was accosted by a uniformed member of the local constabulary, along with a trainee who was about to get a lesson in how to shake down a visitor. Here’s the conversation:

Officer: What are you asking? [Note: this is a solicitation.]

Carr: I’d love to get face value.

Officer: You’re under arrest for solicitation.

Trainee: You’re going to do this?

Officer:   Absolutely.

Carr:  You’ve got to be kidding.

Officer:  Does it look like I’m kidding? [Is this intimidation?]

The OIC (officer large and in charge) called for backup, put Carr into the back seat of the cruiser when it arrived, sans belt and shoes but wearing handcuffs, took him “downtown” for a mug shot, fingerprinting, and cool-off time in a jail cell for 2½ hours. The judge showed up, fined him $50, and let him go, leaving behind a criminal record.

As Mark Perry noted, Joe never actually sold his tickets. He ate the $360. There wasn’t even a transaction. There was no victim. He wasn’t charged with scalping either, just solicitation.

Carr described his experience into Washington’s welcome chamber of “downtown” as “Kafka-esque” where everything is upside down and inside out:

I broke a law. Guilty. But what purpose was served by my arrest? It didn’t make any financial sense. I am certain that the costs of my arrest, transport and processing had to be many multiples of the $50 I paid. Does the District have a massive budget surplus it needs to spend down?

What Carr ran into was the war on the free market, in a microscopic moment. Carr bought his tickets. He owned them. He paid for them. They were his property. Under free market principles he would be free to use them (or not), give them away, will them to his heirs, or sell them (at any price that a willing fully informed buyer would pay). But not in Washington, DC. Their definition of “solicitation” is different.

In the United States, there are three parts to the crime of solicitation:

  1. The encouraging, bribing, requesting or commanding a person
  2. To commit a substantive crime
  3. With the intent that the person solicited actually commit the crime.

You can see where this is going. Apparently, in Washington, DC, attending a baseball game with tickets purchased from another person is a “substantive crime.” Looking at the Washington National’s record to date, attending any of their games is a crime – of boredom.

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Sources:

Joe Carr: Welcome, baseball fan. Go directly to jail.

Definition of Kafka-esque

Definition of Scalping

Definition of Solicitation

Current Washington Nationals standings

Mark Perry: Great moments in government prosecution of innocent baseball fans for victimless crimes that didn’t even take place

 

 

Many of the articles on Light from the Right first appeared on either The New American or the McAlvany Intelligence Advisor.
Copyright © 2020 Bob Adelmann