Michael Moore’s preferred 95.6 % Income Tax Rate

  I saw Michael Moore on Hannity the other night and maybe some of you did as well, but I decided to put his (Moore’s) demeaning comments to Hannity down on paper mathematically.  If you watched the show you know that he was talking down his nose to Hannity all night suggesting that he didn’t care about the “poor” at all.  When Hannity asked Moore to define what his tax plan would be he said the following below.  Please bear with me as I transcribe his comments into real values.  Also my assumptions are not assumptions at all, but based on “taxing the rich” as Moore prefers.

 

Since we are talking about the rich and both Hannity and Moore could be described as “rich” with each making income in the million’s I am going to make this analysis based on the Maximum tax bracket in both the Federal and State model and I am going to ignore the slight impact of the lower brackets since it is insignificant within the class of the rich.  I am also going to “assume” for the purposes of this analysis that the “rich” in question here are “self employed” people since most of them are such as Moore himself, Hollywood Stars, Rock Stars, etc.  These are the rates effective for 2009.  

 

Mr. Moore said that both he and Hannity could afford to have their tax rate “doubled” and that this should happen and would be disappointed if Obama didn’t do this.  Although Hannity took him to mean doubling ALL their tax rates I believe that there was a disconnect between Hannity and Moore on this point.  I am going to assume the conservative approach and say that Moore was only referring to the Federal Income Tax Rate (if I am wrong and he is suggesting what Hannity thought he heard, watch out, that is a combined tax burden exceeding 100% of income).  Since the maximum Federal Tax Rate (effective on income above $372,200 for Married Filing Joint) is 35% Moore’s “doubling” of the Federal Tax Rate would bring his practical “Federal” tax rate to 70%.  He went on to state that it was a scandal that “high earners” paid Social Security Retirement tax only on the first $106,800 of earnings with the rest being untaxed.  He thought that this was an abuse of the lower earners and a shame on the higher.  (He didn’t mention that through the IRS taxation of Social Security Earnings that by far that most of the Social Security payments are made to the lower income earners.)  So adding this tax to not only the first dollar but the last dollar of earnings as well brings this component of tax up to 15.3% on all income.

 

In addition to this we can assume (though Moore didn’t state) that the State Income Tax is still part of the “overall” tax package as it affects the tax payer.  States vary in such rates, but since most of the noise on the matter is coming from California, I’ll use their tax rate as the example in this model.  That “maximum” tax bracket is 10.3%.

 

Adding this all up you will get a combined 95.6 % (70.0 % Federal Income Tax, 15.3 % Combined Social Security & Medicare Tax, and 10.3 % State Income Tax-CA).  

 

This 95.6% is simply those taxes based on income and do not recognize Real Estate nor Sales Tax.  (Of Course in addition to “income taxes” the Democrats through the voice of Nancy Pelosi are now considering a “National Sales Tax” (VAT) on top of it all.

 

So, lets take a great income of $10,000,000 for these “filthy rich” celebrities, stars, Entrepreneurs, business owners, etc.  So here you have a Gross Income is $10 million and after deducting the taxes that Michael Moore and his ilk have in store for you, your “take home pay” (i.e. after tax income) is $440,000 and you may say “gee that is a good income and so right you may be, but this the amount before further reduction due to sales taxes and Real Estate taxes on those expensive houses, and with that you will probably be in the S300’s take home range.  If you are not so talented and only making $5 million per year you can count on a take home pay before sales and real estate taxes more in the low $200,000 range and this is before putting anything aside for Retirement or children’s education (assuming we ignore the VAT tax on top of this all being considered by the Democrats right now).  I have to believe that the Jet Fuel for this class of liberal is more than $200,000 per year alone.

None of this analysis begins to approach the element of “risk” that the “rich” must confront in order to develop a business that will earn them a profit of $10 million, $5million or even less.  When you take this into consideration you have a situation where nobody would take the risk to develop the jobs that the country needs.  At the 10 million level of pre tax profit you might have a Gross business of $100,000,000 with a 10% pre-tax profit (which would be great) and if you were fortunate enough to obtain a rate of return on your invested capital of the lofty number of 20% this would mean that you had “at risk” capital of $50,000,000 to fund this type of operation.  In short you are risking $50 million with the hopes in a good year of making maybe $300,000 take home pay.  Not me……..and I doubt you would either.  I’ll just keep the $50 million risk free and you can look for your jobs elswhere.

Now this is change you can not only believe in, but that you are going to get………………….

October 10, 2009 | Filed Under Administration, American Left, Economics, Taxes, The Left | 2 Comments 

“Collective” Praise by School Children

  Now back at the Florida Headquarters from Ohio then Nashville (nearly adjacent to the EIB network) J

I wanted to post a personal email I sent to a couple of friends last night that are occasional readers and commenters here at NSL, though not on the flattering side.  I have taken the liberty of nominal editing and redaction of some actual personal numbers in this republished letter, but you can trust that they were just the same significant, at least to me.

I’d hope that while the left is taking a page out of the Mao Tse-Tung songbook of “collective” praise by school children for the leader (mmm, mmm, mmm) that some might read the article (below) about the “real world” and learn something about how finance actually works, but then again that is why they say about SOME teachers: ”those that can do, do …. while those that can’t do, teach.”  New York is worried and perplexed about why the income tax revenues from the recent piled on tax of the “wealthy” this year is not meeting expectations even after adjustment for the recession.  The truth is (and to their future and intensified dismay) because it was enacted just this year the “wealthy” have not yet been able to implement their “end game” economic plans.  This year down 20% but look out for additional exodus from New York that will not only erode some of the planned increase, but take money off the table that previously existed under the prior tax structure.  You might say, “well, that is a state problem,” but they can’t run away from the Federal Government.  This is the naiveté of the left.  These people are the primary employers in the country and just watch them move investment & production offshore because of this type of stuff and cap & trade, etc.  [Just like Obama did in 2008 with the proceeds of his book sales income invested almost entirely in foreign investments.]

 

Though just a small player in the financial world, I am a “tax refugee” from Ohio myself.  I make most of my income from stocks and the stock market.  My margin cost (i.e. investment interest) can run to 50% of my gross proceeds (and has been 80% in the past).  Ohio is one state that does not recognize the legitimate expenses of producing income and wants to tax the gross not the net.  Even the Federal Government allows this type of expense though be it “below the line” as they say and then they also have an “unfair” “run off” of Schedule “A” deductions and of course taxing the gross through AMT outrage.  Any self respecting “progressive” won’t see anything wrong with this at all and others will justify it by accusing and citing what they personally didn’t like about George Bush or some ad hominem comment like that, but the bottom line is this is costing governments “revenues” and they just can’t seem to grasp that.

One example is that I myself now file as a Florida resident (and you can be sure I am dotting the i’s and crossing the t’s religiously on the residency game).  I went ahead and calculated my hypothetical OHIO taxes for 2008 (just for personal humorous entertainment since I became a refugee in 2007).  Well, I laughed when the computer gave me the answer.  Even though the rate is about 30% lower than CA, if I were an Ohio resident in 2008 I would have sent them a check for $XX,XXX.  If they had responded favorably and reasonably to my petitions to have margin or investment interest deductible against investment income, I would have only had to pay around $XX,XXX in taxes.  A couple of Republicans proposed this legislation (which I think I may have influenced) but the “progressives” shot it down.  Their “progressive” ignorance not only cost them the $XX,XXX extra tax they wanted from me but the amount I would have paid if they had allowed investment interest deduction as well.  In short they lost it all.  You say “no big deal” but remember I am not the only one.  I meet “tax refugees” down here all the time.  Ted Turner is one by his own admission. (though I didn’t meet him)

 

If teachers or people want their children to learn something that will be of value apart from some inane mantra about the leader however creepy it may seem, they should teach them the lessons of this article (just think how delicious the response would have been if it were George Bush they were singing about 2001-08).  Since people still have certain freedoms the schemes of the left are doomed to failure, but I think they know this and realize that they will have to deal with what we once thought of “as” our freedoms.  [just for starters take note of the Baucus health care bill requiring the young & healthy to buy health insurance or pay $3,800 +/- “tax” under penalty of fine and imprisonment in the gulag (most likely un-constitutional now ….. pending future vacancies) in order to subsidize health care for the older and other uninsured (which now looks like will include “illegal aliens” by simply declaring them legal).  Just think what a world wide health care magnet that will make us…….we’re so wonderful]

 

About the article below, read it, memorize it and don’t forget it…………. They already tried this with the aviation and marine industries during Clinton and it failed so badly that Teddy Kennedy led the repeal himself. But along the way it cost untold thousands of jobs and was a “net income loss” for the Treasury.  The Democrats bragged about it being a luxury tax on the rich.  No “rich” person paid the tax and none were denied luxury yachts or private jets or non-jet aircraft, yet they (the rich) still created a lot of jobs…….overseas.  What is it they say about what the deffinition of insanity is?  But what the hell, change is coming.  (heard that before too)  http://news.yahoo.com/s/ap/20090927/ap_on_re_us/us_taxing_the_rich

September 28, 2009 | Filed Under Administration, American Left, Economics, Health Care, Political Correctness, Politics, Taxes, The Left | 1 Comment 

Shameless “Mainstream Media” Scandal

  I found with great amusement that Palm Beach Post published yesterday (Wednesday 9/16/2009) for the first time a so called “Breaking News” :) story and detailed the saga of a Florida International coed 20 year old Hanna Giles and 25 year old political activists James O’Keefe video sting on ACORN’s willing assistance in fraudulent house financing, counseling for tax evasion conspiracy, enable and counseling an illegal activity (prostitution) and facilitating the smuggling of illegal under age girls to be used in the sex trade business as prostitutes (sex trafficing) in numerous of their branch offices.  This is a story that is 6 or 7 days old but the mainstream media has been conspicuously absent on the story. 

 

At last the New York Times mentioned the story yesterday without any discussion or explanation of the merits of the story, but used their article as a battering ram against Conservatives ….. unbelievable.  ACORN has now been stung in 5 separate cities and as I understand it there are quite a few more feet to fall on this matter.  The initial response by ACORN was that it was “doctored” and was a vendetta and not based in reality, but today admitted (what else could they do) that this was unacceptable behavior.  I have been calling for Obama to disavow this ACORN group, but like the mainstream he remained silent until AFTER his cover was provided by ACORN itself when they issuing a self-condemnation statement.  A couple of days ago the Senate voted 83-7 to cut off ALL funding by the US Taxpayer to ACORN.  I wonder where those coward 9 other Senators were when the vote was taken?  Let’s see if Nancy follows through in the US House of Representatives and if the President signs it.

 

The thrust of the NY Times article was to complain that the “right” has been trying to draw a non-existent link between Obama and ACORN ever since the primaries.  Since the NY Times has chosen to invoke this line of attack please allow me to set the record straight.  That comment from the NY Times is a cheap attempt to disassociate Obama from ACORN and is itself a cover up such actual association.  Obama’s association with Acorn is long and deep.  Even in this last primary season, the Obama campaign paid ACORN $888,000 for campaign services.  That’s right, Obama paid a “tax exempt organization” (for those of us in the professional tax industry that would be 501-c-3 non profit corporation) in order to assist in his campaign (under the gise of voter registration and we know how fraud laden that little operation was) especially after they came out and announced support for Obama.  ANYWAY…….that is not just a single event, but he has had a long-term association with ACORN.

 

I am enclosing at the end of this post a copy of  page one (Title Page) of the N. District of Illinois Civil Case Docket in an action by ACORN against CitiBank in 1994 with Obama serving as a Page One Lawyer in the 2nd position on the listing of Lawyers representing ACORN after he joined the recently granted “class action” status of the Buycks-Roberson v. CitiBank with his own cases against CitiBank that he filed himself.  [FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000].  There are numerous other examples of continued close contact between Obama and ACORN over the years from training their employees to consulting.  [It doesn’t seem his training of their employees was a very effective endeavor.]  Not to mention that during the campaign Obama addressed ACORN in a speech (available on video for all to see) in which he promised that they (ACORN) would have a seat at the table (if he was elected President) in establishing policy for his administration.

 

For those of you new to Next Stop Lauderdale, Buycks-Roberson v. CitiBank was a landmark case against the banking industry by ACORN resulting in an “out of court” settlement that led to a chain reaction of events where the Democrats in Congress pursuaded Fannie May to re-write their loan standard downward (on the basis of “affordable housing”) and that became the first domino in the current housing crisis resulting in the subsequent current collapse of the banking industry and a national recession.  For a full white paper exposing this story and the fact that Obama is probably the single most responsible politician connected to the current financial crisis and recession go HERE.  (You can forget those protests of Obama  himself as he asserts that he “inherited” this mess from Bush).

 

I would like to conclude by saying that these two brave kids Giles & O’Keefe are indeed the Woodward & Bernstein of this current generation.  They are probably deserving of a Pulitzer Prize award for Investigative Reporting but don’t look forward to that since the vast majority of the 18 Board Members are from Liberal Mainstream Publications or Liberal Academic Institutions and these are the same crowd that selectively has chosen to ignore this story since it didn’t follow their own story line and bias.

__________________________________________________________________________

 

September 17, 2009 | Filed Under American Left, Main Stream Media, Political Correctness, Presidential Politics, The Left, Uncategorized | 3 Comments 

Government Ministry of Thought

  The White House is now asking publicly for ordinary citizens help it rain in what it calls disinformation about the Presidents healthcare program.  They have published an email address flag@whitehouse.gov for people to write to snitch on people expressing their dissatisfaction with the program.  Check out this Public Service Announcement by the White House HERE.  What has come to this country is CHANGE, but I’d prefer to retain my freedoms such as speech, thank you.  It is interesting that from the same people that made sure that George Bush wouldn’t tap the phones of overseas Jihadists calling their operatives in the USA we are getting and executive branch campaign to collect names of dissenters from the Presidents programs.

Anyone that has a bit of common sense can examine statements by the White House and Members of Congress as well as past video comments by Barry and realize that this is indeed designed to move us to a “single payer” Canadian style program ultimately.  Their claims to the contrary about the plan is in fact the real disinformation campaign. They are even lying about the language itself that is contained in that 1,000 page monstrosity.  But that is what a democracy is all about.  People have preferences.  If you are for the Canadian system and all that this may mean like Barry, then so be it.  But they should be honest about it and not so surreptitiously conniving to force something down your throat through the strategy of dying by a thousand small lashes.

This country is founded the principle of freedom of speech and political thought and it is clear that the administration is trying to crush this.  He has ordered his lieutenants to hit back twice as hard.  They were smart, they charged the opponents at the Town Hall meeting preemptively with wearing swastikas and rough house and intimidation in disrupting the meetings even though this was not so according to many police reports around these events.  This was a couple of days before they launched their own Brownshirt activity by loading the Town Halls with SEIU (Service Employees International Union) and ACORN affiliates to intimidate the old people attempting to enter the halls.  Of course those preemptive comments about the opponents would serve to permit the Administration and Democrats in Congress to say the opponents were striking back and making it up.  Too bad this time it is on tape.

Reports are that many opponents at many town meetings were told it was full while SEIU members were ushered to alternate doors for entry.  This is flat out suppression of speech.  This whole thing is becoming rather Orwellian in the manner that Obama is running this thing.  This is much like the “Black Panther” intimidation during the election that the White House got the charges dropped on after they got into office.  Let me tell you there is one hell of a storm brewing folks.

The most interesting and hypocritical thing of it all is that Barry is calling out those voices of protest as noise makers interrupting his work.  These are people that are voicing their objection to his plans.  Here you have the Organizer (scratch that) Agitator and Chief that spent his career organizing protest now using strong arm tactics to stomp it out.  But I don’t mind in the least, because I believe he is making mistakes that will lead to death (of his Administration).  I guess Rush was correct when he hoped for Obama to fail (as to his programs) even though the left media tried to distort the truth of what he actually called for.

Be sure to cancel your subscriptions to all newspapers and periodicals that are supported by the State Controlled Media and be SURE to cancel your memberships to AARP who has sold out their membership in favor of their blind acceptance of this direction.  Send the message.  Now go ahead and report this “fishy” blog post to the Government Ministry of Thought.

August 8, 2009 | Filed Under Administration, American Left, Health Care, Political Correctness, Politics, Presidential Politics, U.S. Constitution | 1 Comment 

Obama is lying about supporting increased energy production.

In order to optimize the number of votes that Obama might get he has at least stated that he is in favor of energy policies that include: Clean Coal Technologies, Safe Nuclear and Offshore Drilling of Oil.  We now see that he won’t expand any of these at all through additional production BECAUSE he plans to tax Clean Coal Technologies into bankruptcy (his words) not for pollutants but for carbon emissions which is not mitigated by Clean Coal Technologies (see my post immediately below).  We know that he will not support Safe Nuclear even though there are decades of proven and improving technology because he is claiming we need alternate technology for “storing” spent fuel first and he gets to define those standards.  Also he is not really for increasing offshore drilling because he will only allow it at the 300 mile limit where first of all there is no oil and if there were it would be prohibitively expensive to retrieve………..but he can say out loud to minimally informed adults and the willing media that he supports coal, nuclear and drilling…….what a guy.  The increase in production of energy by these means will be exactly zero and he will have a good story as to why not.  You’ve already heard his excuse right here, right now.

November 3, 2008 | Filed Under American Left, Presidential Politics | 6 Comments 

Under Our Plan Electricity Prices Will Skyrocket …. Barack Obama

 Obama told the San Francisco Chronicle in January that under his plan that the power industry would be allowed to build a coal generated power plant “if they wanted to” but that “under his plan” his “cap and trade” system would charge for the production of every unit of power for carbon emissions to the point that it would bankrupt them.  He also sated that “under his plan the cost of coal fired electricity would SKYROCKET.”  Listen for yourself HERE.  [No, It is not out of context]

     Under my plan energy cost would skyrocket audio HERE.

     I heard today the Democratic apologists saying that he (Obama) would allow the use of clean coal technology.  This is a spin (lie) that they hope will cover the issue for 2 days.  The truth is that clean coal technology deals with scrubbing the burning of coal to remove sulfur from the emissions (You remember the “acid rain” issue).  This is what clean coal technologies deal with, not Carbon).  Sulfur is a pollutant and Carbon is not.  As he specifically says in the attached tape that his comments are related to Carbon Emissions and that the Carbon Offset penalty is related to these Greenhouse Gasses, not the sulfur.

     The question of “clean coal” technology is in doubt as well.  Biden stated that maybe countries like China and Russia would use clean coal technologies, but it wouldn’t be allowed in America.  Listen to Biden yourself HERE.

     Check this AP article explaining the entire mess planed by Obama/Biden as they state in their own words “under our plan.”  HERE

November 3, 2008 | Filed Under American Left, Presidential Politics | 4 Comments 

Your Daughters in Combat

     I remember when the “Equal Rights Amendment” was first out in the early 1980’s and Alan Alda was running around promoting it by reading its very simple language implying that nothing is wrong with this benign statement.  It basically came down to this one sentence section:

Equality of rights under the law shall not be denied or abridged by the United States or by any State on account of sex.

     This was a time in history just after the discontinuation of the military draft by the United States, which was led by the anti-war (Vietnam) movement. 

     They felt that minorities were unfairly affected by the draft system since fewer of them went to college and enjoyed a college deferment and fewer yet of them had the political influence that the left claimed white America enjoyed to avoid conscription. (although it didn’t seem to help me much)  Anyway it was a political football.

     This was in the political soup soon after the Bakke decision by the Supreme Court of the US (SCOTUS) which bared “quota” systems in college admissions, referred to as “reverse discrimination.”  The case in question was related to the University of California’s policy of accepting Black (the term they used then) students into Medical School with a GPA of less than 2.5 while not accepting white students with averages that were often much higher than the 2.5.

     I realized from the Bakke case that as soon as the “Equal Rights Amendment” passed that the next time we had a shooting war of sufficient size that the “volunteer” don’t ask don’t tell army wouldn’t be adequate and that it would take one lower court level case of one draft resistor to force the conscription of women.  Of course idiots like Alan Alda went around wringing their hands sighing that such concern was ridiculous since there wasn’t a draft for men even, much less women.  What an idiot.  He didn’t have the acumen to project what every level headed person could figure out which was that the next “big one” would expose women to the draft with this amendment.  It will only take that one case to strike down any gender preferences and such strike down would carry equal weight as to job type, meaning combat.

     Do you want you daughters in Combat?  If so you want to vote for Barack Obama.  Obama has come out in favor, skipping the dicey game of the Court System (if there were an equal rights amendment) moving directly to his recommendation that the law be changed to require women to sign up for the stand-by draft like all males must do today upon turning the age 18.  Check out this news article from the Pittsburgh Post Gazette: 

Candidates differ on female draft

     Monday, October 13, 2008By Jerome L. Sherman, Pittsburgh Post-Gazette.     Even as the U.S. confronts two long wars, neither Sen. John McCain nor Sen. Barack Obama believes the country should take the politically perilous step of reviving the military draft.     But the two presidential candidates disagree on a key foundation of any future draft: Mr. Obama supports a requirement for both men and women to register with the Selective Service, while Mr. McCain doesn’t think women should have to register.

     Also, Mr. Obama would consider officially opening combat positions to women. Mr. McCain would not.

     “Women are already serving in combat [in Iraq and Afghanistan] and the current policy should be updated to reflect realities on the ground,” said Wendy Morigi, Mr. Obama’s national security spokeswoman. “Barack Obama would consult with military commanders to review the constraints that remain.”

     According to his campaign, Mr. McCain supports the current Department of Defense restrictions on women in combat units, including armor, field artillery and special forces.

     In 1980, President Jimmy Carter revived the Selective Service system, which compiles a list of nearly all men in the U.S. between 18 and 25 in case a crisis forces the government to undertake a massive expansion of the military.

     Both Congress and the Supreme Court have exempted women from registration because of the combat rules.

     For years, that position has rankled some women’s rights groups and men who face penalties for not registering — including loss of employment with the federal government — at a time when female soldiers regularly find themselves in dangerous situations in Iraq and Afghanistan, both conflicts without defined battlefields.

     Mr. McCain, a decorated former Navy pilot who spent five years as a prisoner of war in Vietnam, speaks often of how his military service has helped prepare him for the role of commander in chief and how his time as a captive in Hanoi reinforced his love of country.

     Yet he doesn’t want to see a return to mandatory service, for men or women, according to his presidential campaign.     “Sen. McCain strongly believes that an all-volunteer force is preferable to a conscripted force,” said Paul Lindsay, a spokesman for the campaign. “The tools available to recruiters have historically enabled the all-volunteer force to attract sufficient numbers of qualified recruits.”     His views are echoed by many high-ranking officers in the military, who prefer a force of motivated volunteers. But some of the same officers have also expressed concerns about the strains of more than six years of sustained combat in Afghanistan and Iraq, especially if the U.S. commitment in both countries doesn’t end in the near future.

     Mr. Obama has said repeatedly that he will draw down the U.S. military presence in Iraq if he becomes president, but he has also said he would increase the number of troops in Afghanistan, where Taliban forces have seen a resurgence in recent years.

     During a CNN/YouTube debate for Democratic presidential candidates last year, he said he doesn’t “agree” with the draft.

     But he did say women should be expected to register with the Selective Service, comparing the role of women to black soldiers and airmen who served during World War II, when the armed forces were still segregated.     “There was a time when African-Americans weren’t allowed to serve in combat,” Mr. Obama said. “And yet, when they did, not only did they perform brilliantly, but what also happened is they helped to change America, and they helped to underscore that we’re equal.     “And I think that if women are registered for service — not necessarily in combat roles, and I don’t agree with the draft — I think it will help to send a message to my two daughters that they’ve got obligations to this great country as well as boys do.”

     Elaine Donnelly, a former member of President Bill Clinton’s Commission on the Assignment of Women in the Armed Forces, dismissed Mr. Obama’s comparison of the roles of women and black soldiers, arguing that males and females, in general, aren’t equal on the battlefield.

     “There are differences between men and women where physical strength is an issue,” said Ms. Donnelly, who heads the nonpartisan Center for Military Readiness. “There are a lot of civilian feminists who are making unreasonable demands on the military.”

     Nancy Duff Campbell, co-president of the National Women’s Law Center, argues that women should have a chance to compete for any position in the armed forces.     “I hope a new president will revisit the restrictions,” she said.

October 13, 2008 | Filed Under American Left, Political Correctness, Presidential Politics | 9 Comments 

Community Reinvestment Act of 1977 (a white paper)

     The Community Reinvestment Act of 1977 (CRA) which was designed to offer mortgage credit though all areas not just wealthy areas was passed during the Carter Administration and subsequently managed by Jack Kemp during the Regan Administration.  It was not designed to insure credit was made available to unqualified borrowers.  It wasn’t until 1994 during the Clinton Administration that this Act of Congress became a useful tool for activist organizations like Acorn (which is facing criminal investigation in many states) and Community Organizer Lawyers like Barack Obama to leverage it to the advantage of their political and activist goals.  Janet Reno staked out the new policy of the Clinton Administration which was to be a policy of rigorous enforcement: 

“No loan is exempt, no bank is immune,” warned then-Attorney General Janet Reno. “For those who thumb their nose at us, I promise vigorous enforcement.”     

     The way the law was implemented was to deny banks the ability to grow or buy out other banks unless they were in deemed to be in “compliance” with the CRA and individual ad hoc groups were authorized and encouraged to bring legal action against the banks to enforce this action.  The lawsuits that were filed against the banks could literally bring all plans to a “standstill” on mergers or expanding their capital base.  The litigious nature of these groups caused many banks to “play ball” with them and approved very questionable loans and to concede to financial contributions in the multi-millions of dollars to organizations like Acorn to keep peace.  It was in reality a sort of a “protection” plan administered by the activist groups (especially Acorn) much like the Jesse’s Jackson’s Operation Push shakedown.  You had to pay up or they would drag you through the coals and label you as a racist.  In short the shoddy loan practices of the banks were forced upon them through this process, not corporate greed as advertised.

     In 1994 a Lawsuit against CitiBank was brought by Acorn (and soon to come association with activist Chicago lawyer named Barack Obama) in: 

Buycks-Roberson v. Citibank Fed. Sav. Bank Fair Housing/Lending/InsuranceDocket / Court 94 C 4094 (N.D. Ill.) FH-IL-0011 State/Territory Illinois,

and in 1995 such suit was granted “class action” status and Barack Obama joined the suit with his own clients in the following three Illinois cases he was personally representing against CitiBank and remained as a page one named attorney in the class action suit representing ACORN, et al.:

FH-IL-0011-7500 | FH-IL-0011-7501 | FH-IL-0011-9000.

     This case was to force CitiBank to abandon their loan policy of not making loans in risky markets and to risky creditors.  The political pejorative for this was Red Lining.

     In 1997 CitiBank “settled” out of court after the Democrats in Congress at the behest of Acorn forced a reduction in mortgage loan standards for banks through coercion on Fannie Mae and Freddie Mac and then began “donating” large sums of money to ACORN and reversing their practice of “red lining” districts and borrowers that were not qualified for loans.  Enter James Johnson.

     James Johnson was the Chairman and CEO of Fannie Mae after previous political activity as serving as the Campaign Chairman of Walter Mondale’s failed 1984 Presidential bid.  It was during his tenure that the goals of Acorn and many activists in Congress such as Maxine Walters, Christopher Dodd and Barney Frank we’re supported by Fannie Mae by providing the ultimate backstop for Citibank’s agreement to issue what were risky loans by agreeing to guarantee those loans and in fact purchase the loans in many circumstances from CitiBank.  (We know now that  those loan guarantee and purchases resulted in the ultimate demise and conservatorship of Fannie Mae and Freddie Mac in 2008.)

     During this time (1991-1998) that Johnson was Chairman and CEO of the quasi Public organization (Fannie) he and Fannie reported that he was paid $6-7 million (wow for a quasi public corporation) but it was discovered by the Office of Federal Housing Enterprise Oversight (OFHEO) in 2004 that Fannie Mae had deferred $200 million in expenses in 1998 through the accounting techniques identical to that of Enron and WorldCom (I can say this being an accountant) to enhance the appearance of profits.  Since the current crowd of operators initiated a “bonus” program that was based on profits, millions of dollars of fraudulent bonuses were made available to Johnson, his successor Franklin Raines and Raines’ ultimate deputy Jamie Gorelick (Both Raines and Gorelick were Clinton appointees).  OFHEO also found that Johnson had misrepresented Johnson’s compensation as $6-7 million after the audit and found that it was actually $21 million (talk about Public Servants).  Johnson (along with Chris Dodd D-CT Chairman of the powerful Senate Banking Committee who originally said he didn’t know Angelo Mozilo, CEO of Countrywide Financial) received special “below market” loan approval on a private personal loan directly from Mozilo of Countrywide who was the first major domino to fall in the Sub-Prime housing market.  It was found that Mozilo had a personal list of people under his direct authority for obtaining special loan approval.  It was called his VIP list.

     It should be noted that Johnson subsequently served as Chairman of the John Kerry Vice President selection committee and was providing similar advice to Barack Obama after he secured the Democratic Presidential nomination.

     When Johnson left Fannie Mae in 1998  Franklin Raines was appointed by Bill Clinton as Chairman and CEO and took the financial scam to new heights.  He appointed as his deputy a loyalist from the Clinton Administration that had not one minute of financial education or experience Jamie Gorelick (the author of the Clinton policy of the “absolute wall of separation” between U.S. intelligence organizations which had substantial impact on the proverbial left hand not knowing what the right had is doing issue leading up to our intelligence gaffs on bin Laden and 911.  The US Government was not allowed to share intelligence information between the CIA, FBI and other intelligence gathers………….think about it and how devastating that result was.)

     With the settlement of the Class Action Lawsuit against CitiBank (the largest in the USA) and Fannie & Freddie taking all the loans you can present, banks like Citi and others based on these precedents wrote zillions in mortgages to unqualified buyers knowing that the Federal Government would “guarantee” re-payment and even purchase the loans.  Purchasing the loans became the game of the day at these quasi federal agencies since Raines had taken his remuneration package to the Board to have it tweaked to the number of loans that were written with the sweetener to obtain agreement by the Board of Directors was an offer of increase in their pay.  As a result during Raines tenure he was able to take out $90 million in bonuses and Jamie Gorelick (deputy) took out and additional $25 million.  Raines later settled out of court on a civil case for “cooking the books” but most of the settlement (about $3 million) was paid for by an insurance policy (paid for by Fannie) and a few hundred thousand dollars of other costs while allowing him to keep nearly all the $90 million.  [It is time for criminal charges to be pursued.]  You should know that Raines is today a financial consultant to the Obama campaign though after initially bragging about it they now deny it.

     The purpose of this “White Paper” is to shed light on what really was the template for the ultimate collapse of the mortgage industry in this country since thousand upon thousands of these unqualified loans were written.

     Barack Obama is still going around blaming Wall Street greed for the financial fiasco while the truth is that Wall Street bought into this program through the pressure of Freddie and Fannie when Freddie and Fannie took packages of these loans and turned them into “securities” that they could market to Wall Street.  This was all the result of a series of events of which Barack Obama played a significant role early on.  Wall Street (i.e. the investment banking community) bought into the commercial banking products because they had been pressured and they were told they were “riskless” by Franklin Raines (I heard the tape where he told the Congressional Banking Committee when asked about the degree of risk they represented he answered “riskless”).  The more they could securitize and push to the investment banking community the more cash they would have to buy more loans from the lenders and increase “bonuses.”  And I should add that Obama was the second largest recipient of campaign contributions from Fannie Mae, only being topped by Christopher Dodd (Democrat-CT) Chairman of the powerful Senate Banking Committee.

      During House Financial Services Committee hearings in 2003 when the BUSH administration was becoming aware through OFHEO there were real problems with Fannie and Freddie and proposed regulatory legislation, a major row occurred in the House Committee by the minority leadership Barney Frank where he read the administration the riot act and as reported at that time by the New York Times (9-11-2003) the following statement:

Bush today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago.  Significant details must still be worked out before Congress can approve a bill.  Among the groups denouncing the proposal today were the National Association of Home Builders (of course) and the Congressional Democrats who fear that tighter regulation of the companies. 

And in the direct quotable words of Barney Frank (ranking Democrat-MA on the Financial Services Committee)

“These two entities—Fannie Mae and Freddie Mac—are not facing any kind of financial crisis,”  “The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing.” 

     Don’t you find it interesting that Barney Frank and his cohorts in the House and the Senate are blaming the Bush administration for “lack of regulation?”  It didn’t start there nor end there.  In January of 2005 the Senate introduced a bill titled “Federal Housing Enterprise Regulatory Reform Act of 2005 S. Bill 190.  This bill could well have brought the practices of Freddie and Fannie into check and regulation.  This bill had 3 Republican sponsors including John McCain and zero Democratic sponsors, but in the Senate you need 60 votes to move legislation and the Democrats made it clear (on party lines) that they would not support this legislation. [But of course the lie being told is that it was Bush, McCain and the Republicans that resisted regulation of the financial industry.  They only need to repeat this lie 29 more days to where it won’t matter so much when the truth finally comes out.     It is time for the Republicans to get with it and start to defend their conduct over the past 10 years on this issue and illustrate that it was nearly a 100% operation of the Democrats to thwart regulation which is directly opposite of what they are saying now.  There are many other instances where the administration attempted to bring these matters under control and were thwarted by the Democrats.

     This financial disaster is the direct and proximate result of the bastardization of the Community Reinvestment Act by the Democrats in the 1990’s in order to extend their “social engineering” to the financial markets.

     Please serve as a counter force to the largest and most sinister scam, in my opinion, that is being thrust on the American public.  Share this narrative about the “bailout” (which I supported) as a direct result of the Democratic meddling in the mortgage community and Congressional Oversight role for the past 10 years.  They would have you believe they are trying to help out Bush after his financial policies failed.  The biggest financial problem we have ever had since the Great Depression is a direct result of socially engineered housing policies of Clinton and Banking Oversight Policies of the Democrats in Congress…………..period.  The Democrats are flat out lying about this every day and it needs correction.  And I’ll tell you that any body that knows what actually went on will not want to debate this issue.

October 5, 2008 | Filed Under American Left, Economics, Fiscal Policy, Politics, Presidential Politics, The Left | 16 Comments 

Above My Pay Grade

  If you watched the Rick Warren interviews of both Obama and McCain you may recall interesting while divergent answers to a legitimate question.  The question was…..”when does life begin?”  This is not a flippant remark but an age old question that has shaped the debate over abortion from its inception. 

 

The original position of the so called “pro choice” crowd was that “viability” constituted when life actually began.  Ok that is an understandable position even though the dating of viability was difficult for us to determine, especially since there have been many instants of preemies living when the “authorities” would have given it no chance, but at least during this early era the pro choice adherents believed that there was a pre-natal time when our concept of “life” (not merely Biological) began and that they didn’t believe it began at conception.

 

This was important to them because to have any other position would have been a moral violation even in their own minds.  Over the years the position of the hard core “pro choicers” migrated to literally being there is no pre birth point where you are committing a moral violation.  For some (and we’ll discuss who some of these are at another time) have degenerated to believe it is appropriate to allow a live birth of a child to die without care if such live birth is the result of a “botched” abortion effort (yes, it happens).  

 

You might find it interesting know that both McCain and Obama gave clear and revealing answers to this question.  In McCain’s response he jumped right out and stated “at birth.”  In Obama’s case he stammered a moment and then stated that such an answer was “above his pay grade.”  If there is anyone that is reading this post that didn’t understand that answer please comment here, but I’ll say that what he said meant that he didn’t know (i.e. only God knows).  

When I was in college at Xavier University in the 1960’s even though I was a Finance & Accounting major, I was introduced to Thomas Aquinas whereas all enrolled students were required to take sufficient courses in Philosophy that it would have constituted as being a “minor” at any other university.  I came to appreciate Thomas Aquinas during that time and he helped shape much of what today I consider to be my moral guidelines.  In this line of Thomistic Philosophy he stated that one could only act on a moral question when he could do so without committing a moral violation.  That is to say that we are required to follow the “morally safer” course in unknown situations.In the above situation Obama clearly states that he doesn’t know when life begins as he implied it as being in the domain of God and not within the realm of his own knowledge (hence he called it “above” his pay grade).  The strikingly shocking aspect of this response is that he is fully prepared to supporting a moral action that would take the life of a (for sake of argument) possible human being under the guise that a woman has a right to do what she will with her own body (as though a fetus is her own body). How on earth can he pretend to have a “moral” position on this major question of our time by asserting that he doesn’t know if life (human life) begins but it is okay with him for us to decide to destroy it for the benefit of another anyway.  It seems that this is the REAL point that is above his “Pay Grade.” 

Mr. Obama has failed the most basic of morality tests, one that has resulted in 48.5 million abortions since 1973 (Roe v Wade), almost as many as WWII’s 55 million.  If Mr. Obama is elected and he appoints judges that affirm this decision it won’t be long at all until there is more blood on his hand than the left likes to charge George W. Bush.   

Sheesh………………If this isn’t a deal breaker for you I’d say you have to reorder your priorities.

 

 

August 19, 2008 | Filed Under Abortion, American Left, Presidential Politics | 7 Comments 

There You Go Again………..

charles-rangel.jpg In borrowing a phrase from Ronald Reagan in the second presidential debate with Jimmy Carter on 10/28/80 (corrected) I will apply it this time to the tired strategy of the Democrats proclivity to raise taxes every time they get in control.  You may also recall that at least partial credit has been given for Reagan’s win during the second presidential campaign to the debate with Walter Mondale where Mondale stated that he would raise taxes on Americans if he won, he lost big time.

Now the Democratic Chairman of the House Ways and Means Committee, Charles Rangel, is planning broad and sweeping changes to the tax system with the centerpiece being a 4% to 4.6% surtax on earning in excess of $150,000-$200,000.  You know the “rich” that they keep talking about that are not paying their “fair” share.  [I am not going to debunk this here again today with that endless stream of statistics that demonstrate that this is a lie.]  This tax increase will also have the impact of raising taxes on investments. Now that is a real smart move and all this is just a test for an additional slew of taxes that they will propose after they win the Presidential Election of 2008.  The scariest thing is that they will probably start spending that post election money now since they are so sure they will win it.

Another thing is that this is being falsely touted as a Surtax (which would be a percentage increase to the normal tax).  What this amounts to is an additional two tax brackets in the existing tax structure.  It also has the negative effect of further increasing the “marriage penalty” built into our tax structure.

But let me say this.  I believe that Economists and Statisticians (at least the honest ones) understand that raising taxes doesn’t always produce more income.  It is a more reliable precursor for provoking a recession.

I want to shout this from the rooftops once again……….You don’t establish income tax policy in order to fund what ever projects you are desirous of.  You establish tax rates to maximize federal revenue without regards to spending preferences.  After you establish the rate that will optimize economic growth and consequently revenues you can turn to the budget side of the matter and debate spending priorities with the income that tax policy will produce, again understanding that not all spending is equal in terms of its simulative effect on the economy.

I really think it is time for the Democrats retreat from this age old political strategy that only serves to insure the “economic cycle” of boom and bust and cause greater deficits in the long run turn to a consistent and simulative tax philosophy.  Even their constituency would be much better off if that were to happen, but the Democrats ace in the hole is that their constituency really doesn’t understand this.  This is all about protecting their incumbency.  Hence they again turn to divisive political rhetoric and wrong headed tax policy.  For a deeper explanation of this overall tax proposal by Rangel go HERE.

October 25, 2007 | Filed Under American Left, Fiscal Policy, Taxes | 8 Comments 

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