On Jan 14, 2011, at 8:39 PM, Howard Johnson wrote and sent the following email:
Dear family and friends:
In October of 2004 I emailed the following warning to most of you.
“Is a national mortgage collapse imminent? I am certainly no financial wizard and few people pay attention to my predictions, but I very accurately predicted the collapse of the PC market that led to the dot com debacle. I made some very accurate observations that were as plain as the nose on my face to me. Few people paid me any attention.
“Well, here I am again with a new prediction that to me is just as obvious. Some time ago, liberals Democrats in our government managed to remove all reasonable controls on mortgages in order to “make home ownership easier for all people.” As a result, the government’s Fannie Mae and Freddie Mac mortgage banks began providing mortgage money to finance increasingly risky mortgages. In addition, they started bringing pressures to bear on other banks to engage in the same practices. This has resulted in a substantial run up in the price of housing and many new mortgage gimmicks like sub-prime and adjustable rate mortgages. Many of these home buyers hoped to “flip” these homes in a rising market and make a profit. A rather large percentage of these buyers will not be able to pay their mortgages, especially when the second tier rates kick in in a year or so. It’s a risky process with the certainty of dire consequences in the near future.
“I believe that because of these practices, housing prices will eventually stop rising and start going down. This will begin accelerating as people begin defaulting on their high risk loans. When this happens, prices of homes will begin dropping precipitously. The mortgage market will very quickly begin to collapse as home owners suddenly find their mortgages are much larger than the new, declining value of their houses, and buyers will be few, even at lower prices..This will then cause the economy to begin shrinking as construction will almost stop. The resulting job losses will then expand, the stock market will crash, and we will be in a major recession. It could even be worse than the great depression that began with the crash of 1929. Consider yourselves forewarned.”
I doubt that many people paid attention to my warning because, who am I to have the audacity to predict such things. I have no string of letters after my name to verify my predictions. Despite this, I am now warning you of another financial disaster I see in our future—our very near future. Once more, the media, the pundits, politicians, and especially the government are not talking about it. I think this is a deliberate deception for reasons only known to those who refuse to tell the truth of the situation. More than 100 cities in the US are now bankrupt. Six states are in even worse condition and 27 others may be bankrupt this year. The federal government cannot bail them out because the federal government is virtually bankrupt as well. The government is printing money as fast as the presses will run. All that does is dilute the value of the existing dollars and scare hell out of our creditors.
I’m certain you all notice the rapidly rising cost of food and fuel, the lifeblood of our economy. With deficits in the trillions, we will soon reach the place where if all of us were taxed at 100% of income it would not be enough to balance our budget. The US has become the world’s largest debtor.
The Chinese and the Arabs are about to pull the plug. Both have slowed their buying of US treasury notes and are talking of switching to another currency. When, not if, that happens, it will yank the rug out from under our economy as the cost of imports will skyrocket. This collapse has already started as evidenced by the accelerating rises in the prices of precious metals and oil. Today oil passed $91 per barrel and will soon reach $100. The price of gasoline at the pump flew by $3 per gallon several weeks ago and will probably reach $4 by the end of the coming summer. It was about $1.65 just a year ago so it almost doubled in just one year. Food prices are following a similar accelerating pace.. Look for cereal to cost $5 a box in six to eight months. Everything else will do much the same.
It is interesting to note that Bill Clinton, aided by his first liberal Democrat Congress, removed food and fuel prices from the federal COLA (cost of living allowance) used to calculate Social Security payments. Had this been left as it was, most Social Security payments would today be almost 25% more than they are now. Don’t tell me Democrats didn’t reduce Social Security while warning the elderly that “Republicans are planning to reduce your Social Security checks.”
Also in recent years, unemployment has been estimated by counting those receiving unemployment checks. Real unemployment, the way it was counted before 1970 is the number who can work, but don’t have a job. Today this is about double the number the government reports. 18% would be a far more accurate number than what we get from Washington. To me it verges on criminal that the main stream media does not inform the public of these facts.
I suggest you try to find ways to protect yourself from the mayhem that will follow the economic collapse of our federal government. There could be food riots in many major cities as merchants begin refusing food stamps and credit cards, knowing they will never be paid. As the government runs out of money and the value of the dollar plummets, it will make the “great depression” look like a cake walk. These things are already happening in Europe. Greece. Ireland, and Iceland have already collapsed and six other European nations will soon follow. .All of these things are the direct result of the growth of liberal socialist policies foisted on us by the left.
Be prepared for your government to take over your retirement account. Some members of Congress are already considering this. Then there are your bank accounts, your investments, your home. If they can take your IRA (in exchange for soon to be worthless government notes) they can also take anything else you own. They are even now writing the laws and the regulations that will give them the right to do so. Who says might doesn’t make right? They continue to try to abrogate our “right to bear arms” while they have the guns and handcuffs to enforce their laws. As Robert Heinlin said, “When only the police have guns it’s called a police state.”
I am sure that many of you will say, “That can’t happen here.” How many of you thought that when I accurately predicted the dot com bust? Or how about the mortgage meltdown? Did my predictions even register with you? I’d really like to hear from you regarding my predictions. Don’t say it won’t happen simply because it hasn’t happened before. If you don’t like my prediction and choose a rebuttal, please do not use platitudes and euphemisms, use facts and figures, real figures. While you are at it, look at the lessons of history. You might also tell me how the Greeks are going to solve their economic problems, or the Icelanders, or Californians.
I have the answer, but I doubt the short-sighted among our voters will ever let it happen here.
Ho
- - - - - - - -
On Fri, Jan 14, 2011 at 11:40 PM, One of my very dear friends responded:
Ho,
You are so interesting. Below is not the person I have in my mind. Doom and gloom. What's your point? Does this help? Liberals versus conservatives. If there were no liberals, would it be the perfect world? If conservatives ran the world, our economy would be great and our future bright? It is greed that gets us into these sorts of problems. I wish it were so simple as being conservative or liberal. And I can't help but to get the feeling that you enjoy being right about your predictions and would take a certain amount of satisfaction watching our country's demise as you describe below. How does this letter help me? What should I do? My day was not so good. Thanks for making it worse.
- - - - - - - -
Dear friend,
I want you to know how I treasure your responses to my rants. I read them carefully and try to digest what you have to say. You are one of those few people who question me and work to keep me on track and I really appreciate it. I’m quite sorry I messed up your day.
I think you may have missed my point. Possibly because I didn't make it clear enough. The dichotomous and emotional positions of liberal vs conservative ignores reality and removes most rational conclusions about what is happening to our nation and what should be done about it. And yes, for a multitude of reasons I believe that application of liberal, socialist ideas, the proven destructive policies of the left, are responsible for the mess we are now in and for the coming, even more damaging debacle. I hear few ideas from liberal Democrats that address the real problems either. It is always my hope that the public, even all humanity, will see what's coming and take the necessary steps to either correct for it, or adapt to it. Sadly, those steps often come too late or are never taken. If I remember, I will attach a little thing I wrote about problems and how they are used. It sort if relates to this whole thing.
No, I certainly do not hope that this will happen. I will certainly take no joy in my predictions being correct. Unfortunately there are many sound reasons I make this prediction. I do not think our politicians on either side have a clue what to do. If they do, they are ignoring their own knowledge. I believe that as a people, Americans have become so luxury loving, self serving, irresponsible, and real work hating that we will not make the hard decisions necessary to stop the train wrecks such as the one we are already in the midst of. I certainly take no joy in my predictions being correct. I hope and pray that I am very mistaken.
Several people profited greatly from my earlier warnings by taking actions based on my predictions. One person sold most of his investments in computer companies when I told him of the coming PC business crash. He told me later I saved him from losing hundreds of thousands. Even though he was just an acquaintance he handed me a check for a thousand dollars in appreciation saying, "That's the cheapest good financial advice I have ever received." I was amazed. I know of no other such dramatic beneficiary.
A fairly close friend who had just sold his house for a handsome price was negotiating the purchase of another home when he read my prediction about the mortgage market. After looking further into what was happening, he decided not to buy right away and moved into a rental house. He called me about six months ago to tell me he just bought a home for around $200,000 that would have cost nearly twice that amount had he bought right after selling. He thanked me for warning him. Of course, he didn't do that on my say so alone. He studied the situation and sought advice of several people in the mortgage business before making his decision to wait. He saw my words not as gloom and doom, but as a positive, a valid warning.
My point is to warn people of the menace that is coming their way so they can prepare. It is far better to prepare for a calamity and not have it happen than not to prepare. There are some relatively simple and inexpensive precautions one can take to minimize the damage in any calamity. I assume you have insurance of several types and that your car has seat belts and even airbags. How about considering a little insurance against this probable catastrophe. Oh, I am not selling such insurance so my motive is not to profit.
If I warned you about a train coming loudly down the tracks where you were sitting—if you then noticed the great noise it was making and heard its loud horn, would you consider my words as doom and gloom? If you lived in tornado country and someone warned you of an approaching tornado would you call that doom and gloom? I think not.
Well, the noise from the coming disaster is deafening, if you listen for it. There is a great deal a person can do to prepare. There are even books written about it. A six month supply of staple foods is a good way to start, as long as you tell no one about it. A batch of candles or a stash of flashlight batteries would not be a bad idea should the electric grid fail. There are even flashlights you can crank to charge their batteries. I would even suggest a quantity of bottled water if you don’t have a well These inexpensive preparations are minimal and will not go to waste. Necessary medicines are another thing that a six month supply would not be prohibitively expensive and wouldn’t take up much room. A cache of silver coins might be another, just in case paper money became useless. Just think about it. These are preparations you would not lose as you could use them from your supply and then replenish as you go along until things go bad. Some of these things we already have as part of our preparations for a possible hurricane here in Florida..
I warn people because I care about them. I want them to be able to prepare, not wring their hands in despair after a disaster happens. Do you think it would be better if I kept silent?
Ho
- - - - - - - -
Hello,
Sorry for my delay in responding. We are in the midst of a blizzard warning and it made me realize I had not responded. Below makes me feel a little better but I still don't see the person that I met in your writings. Your predictions remind me so much of my own mother who is talking about a revolution (by black folks) etc. Plus all one has to do is listen to Fox radio and hear the same predictions so nothing new in these predictions. (Actually, my predictions are quite different in detail from those on Fox. Similar in the main, but the devil is in the details.)
I am surprised that you describe the problems so simply and without nuances. You blame everything on liberals. A remark that changed my outlook forever was a statement made by a German man who gave tours at Dachau (sp?). A young American guy told him that he had heard that the Nazi women were even more vicious than the Nazi men and wanted to know if this was true. This tour guide looked at this young man and told him that the reason he took the 7AM train every morning and did these tours in his retirement was that he wanted people to realize that all of us are capable of the atrocities that were done by the Germans in that era. That in the right circumstances we all have the capability to behave so poorly. In that tour I learned what I never learned in the history lessons in the USA.....that Germany had never recovered after WW1 and there was extreme poverty in the country. I find it so interesting that Americans living in their fancy homes and driving their fancy cars can make so many judgments of people that live in conditions that they cannot possibly even imagine. Instead of being grateful we are judgmental.
Having digressed a bit I guess my point is this. WE are the reason for the problems. There were so many layers to the mortgage problems that had nothing to do with being liberal or conservative. The common denominator was greed and denial. And we all benefited from the stupidity that was going on. In my case, it was the great returns that I was getting from the stock market and the low interest rates that allowed us to buy a nicer home than we would have been able to buy in the 80's. Thankfully we were experienced consumers and did not end up like a lot of folks did. But I wonder. Had I been buying my first home at the ripe age of 23 (as was the case in 1983) would I have done the right thing? We looked to the bank and the realtor to tell us what sort of home we could afford. Also in 1990 when we bought our second home we were guided by the realtor and bank as to what we could afford. When we bought homes in 2001 and 2007 we were shown homes that were valued at more than 100,000 dollars more than the value of the homes that we eventually bought. And the hint that was given by the realtors......that other people in our salary range were living in much nicer homes. Now, because we humans could not do the right thing, the government will step in with more regulations. And many of those regulations will be just plain stupid. But the people working in the industry nor the consumers were capable of guiding themselves.
My predictions for the future are not the same as yours. I predict that health care and education will be the next "crisis". And why? Because the so called professionals that work in those fields have let greed and denial guide them also. Take my profession. Hospitals have made money from PT's and abused situations where therapy gets involved. Many times I am just pushing an IV pole as someone walks down the hallway. This could easily be done by an aide. So instead of aides walking patients, physical therapy is ordered. This drove up the need for therapists and thus salaries and in the end more expensive for hospitals. Now the government has stepped in with regulations which limits this activity. There has also has been extensive fraud of therapy in various settings which has had to be limited also. Some of the regs are absolutely ridiculous and actually hurt the patient more than help. However, it was just human nature that created this whole mess and we were unable to guide ourselves. And there are so many other areas of waste in healthcare especially with end of life care. People will lose a dignified death if too many doctors become involved in a case. I have a friend who is a pediatric oncologist. She told me her nickname is Dr. Death. She has the highest number of patients die on her shift. The reason........she explains exactly what is involved with a lot of care and the eventual outcome. She says that many doctors view death as failure and will go to extremes to prevent a patient from dying on their shift. Ironically, she takes her nickname as Dr. Death as a compliment. All of this talk of death panels killed the conversation that needed to be had in this area. I think we are just starting to see the beginning in Arizona where the governor stopped all transplants for it's Medicaid recipients as the state can no longer afford it. And what do most people think? Well those people are on Medicaid/State aid. It won't happen to me. Well guess what? It will happen to everyone. Health care will have to be "rationed". Our technology is too expensive and our ability to keep dying people alive is too good. And now add obesity to the problem. We simply cannot afford it. There will be an adjustment. And we will probably blame each other and it will be very political. In the end I think it may be better. I think it will make people live a healthier lifestyle. That obese patient who is denied dialysis because of her poor prognosis related to her weight will make people take note of their own weight. But there will be lots of outcry first. And people in the USA get so many unnecessary medical treatments that only make the quality of their life worse. This waste will have to stop and the patient will be better off.
As far as education goes, I can't explain it like my husband can who was in the field from the mid 80's to 2007.
But back to your emails. I can appreciate the entertainment in provoking people. But there are some difficult issues ahead of us. And when people of your intellect only add to the problem, well, I lose my patience. Your emails mostly promote blame. And yes, I can hear you say that you offer solutions but they start off with a lot of blame and putting people on the defense. Problems will not be solved with this strategy. Your emails also many times just address one side to an issue. Again, someone of your intellect should be able to see both sides and the nuances. Makes me think of an article that I read that promoted staying involved in Afghanistan. Then I read another article that discussed all the reasons to leave Afghanistan. Both had very good points. Big problems are complex. My concern now is that there is so much negative communication out there. Yours and my generation did not grow up with all the negativity and inflamed news stories that run 24/7 now. Someone with you age, experience, intellect, and most importantly, the ability to articulate should be offering encouragement to the next generation. Assuring them they have the ability to solve these problems. That we have faced many problems in the past and overcame them. It doesn't matter if there is a black, yellow. or purple president, or that Congress is liberal or conservative. What matters is us. And talking about people taking up their guns and taking your money just does not help us. Those worries are better kept from the written word and forwarded to lots of people.
I will end this email as I started it. The blizzard warning. After 9-11 and the anthrax scares my husband assured me that these were not major concerns for him..... that we had an immediate danger right next to our house that he worried about. I must back up and tell you that Larry taught a Risk Assessment course at Cornell so his outlook has always been interesting. I asked him what that danger was. His reply......the railroad tracks a mile away from our house. He then noted all the containers of chemicals that passed through on a daily basis on those tracks. One derailment could cause a lot of problems. So it never hurts to be prepared. His other comment. People mostly die in bed. Given that statistic, is bed a dangerous place? Should we avoid laying in our beds? Complexity and simplicity.......Oh, and one other of my husband’s comments when, as a toxicologist, is asked about dangers......Wear your seatbelt.
Your friend
- - - - - - - -
Hi there:
This is a very long response to parts of your last email message. You took the time to say what you wanted me to hear. I appreciate that and listened carefully at what you said. I thought I would return the favor, so here it is. Incidently I don’t care much for sound bytes. They are emotional chirps that miss virtually all of the nuances, subtleties, and rational parts of any idea, proposal, or position. Sadly, the sound byte has come to constitute the majority of communications of news and many personal communications. Maybe that is because so many people now text message or use facebook or twitter. Sound bytes, text messages and postings on social networks are more like dogs barking than communications between thinking humans.
Oh, and about seat belts? I first installed seat belts in my car in 1952 when the only ones you could find to buy were surplus military seat belts. I have used them ever since then, even when I had to install them myself. Like the boy scouts, I like to be prepared.
Perhaps I have not provided you with an adequate understanding of where I get the basis for my opinions or what my political reasoning is. First of all, I am not a follower of any ism or group belief system. I consider myself a true liberal and a realist who knows what it means to conserve. No, that is not a contradiction. I have written extensively about things like legalizing drugs, http://hjdrugprb.blogspot.com - a negative income tax to replace welfare, and a completely new taxing system that will remove tax revenue from the control of politicians, http://jtax.blogspot.com. My tax plan would also make it difficult for a few people to control a large number of industries, corporations, or political patronage. Does that sound like I am a right wing conservative?
My personal social, environmental, and political beliefs are based closer to the world of science and humanity described in books like those by Eric Hoffer - The True Believer and The Temper of our Times, E. E. Wilson - several books, Jared Diamond - Collapse, The Last Chimpanzee, and Guns, Germs, and Steel, Stephen J. Gould - Bully for Brontosaurus, Nigel Calder - The Magic Universe, consumer advocate, John Stossel - Give Me a Break and Myths, Lies, and downright Stupidity, and even parts of the Bible. Included in my regular reading are Scientific American, Astronomy, National Geographic, and Smithsonian, each of which I read cover to cover. No, I don’t agree with everything they have to say, but I don’t always agree with everything I have to say, either.
In truth, I do not blame everything bad on “liberals.” The blame actually falls on the idiots who vote for politicians that promise them things impossible to deliver and use taxpayers money to buy their seats in legislatures, be they professed Democrat, Republican, libertarian, liberal, socialist, conservative, or whatever. I am not specifically anti liberal, but I am definitely anti government, and in particular, the huge, self serving “Jaba the Hut” monster our government has become. It has doubled in size in the last thirty years and more than doubled in cost. Since liberal Democrats took control of Congress in 2007, our government has expanded from about 32% of GDP to as much as 44%. This after holding steady at around 30% for many years. Our current government has been growing in power and wealth at the expense of primarily the American middle class, and the benefit of mega corporations, politicians, the super wealthy, and Wall Street bankers and others mad for power. (Check how many on Obamas cabinet or among his “czars” are ex Goldman-Sachs executives, for instance.)
The latest crop of self serving egomaniacs (there are a majority of these in all political parties) have conspired to move great wealth and power out of the hands of the American people and into those of the elite “royals” in government. The unbelievably expensive vacations of the Obamas, Nancy Pelosi’s private jet (now taken away and sold), Hillary’s extravagant senate offices she used for such a short time, are but recent examples of the personal excesses of those elitists who are now running our government. They do these things because they have learned that the power to control great wealth is at least the equal of actual ownership. Obama’s just proposed budget represents $30,500 spent for each American household or $11,290 spent for each man, woman, and child in the nation. That’s your money he and Congress propose to confiscate, control and spend. Much and possibly most of it goes for purely political pay offs to keep incumbent politicians in office. For those not aware of such things, that’s buying votes.
In all the years I have voted in national elections, I have only voted FOR a candidate five, maybe six times. Two of those were Democrats, Harry Truman and Evan Bayh of Indiana. The others were Republicans Dwight Eisenhower, Ronald Reagan, and Frances P. Bolton in Ohio’s 22nd congressional district. I came to regret voting for Bayh who once he arrived in Washington, quickly changed, joined the Washington elite ruling class, and became a dedicated, fiscally idiotic, liberal Democrat, beholden to lobbyists.
I’ll give you my reasons for being so anti government in a few examples of the thousands available for anyone who looks. They are in concert with my idealism tempered by a logical acceptance of reality. The best example is quite simple and it consists of one simple question. Do you think our country—any country—and the populace are better off with economic freedom or a government controlled economy? Same question stated differently. Are thousands of independent entrepreneurs and corporations with the freedom to make their own choices and stand or fall in a competitive, capitalist environment where profit is necessary for survival better able to control an economy for the benefit of the most individuals, or is a single government bureaucracy with employees that cannot be fired , managed by individuals appointed and/or chosen by politicians and unions, and not beholden to any profit or performance controls?
Here’s another example taken from my HoJo2Rants blog at http://hojo2rants.blogspot.com. Remember King Lyndon’s Great Society programs? Part of that was his Model Cities program which cost billions of taxpayer dollars and was a total failure. I need only repeat one of King Lyndon’s pronounced promises: “Detroit will be a shining example of the benefits of our Model Cities program.” It is quite telling how accurate Johnson’s prediction was. It certainly has become an example of the results of the policies of his “great society” programs now being greatly expanded by Obama and his cronies. Go to the following site for a more in depth description of the results of this example of liberal Democrat efforts and policies.
http://www.thedailycrux.com/content/3247/Government_Stupidity
Or better still, take a drive through the inner city of Detroit and see for yourself the results of fifty years of liberal Democrat policies and labor union efforts. By sure to do so in broad daylight because doing so at night carries a high risk of being car jacked and murdered. Actually, you can see a lot of abandoned homes and buildings just by driving through on I-75. I did that just a few days ago and burned out homes and factories were quite evident, even from the Interstate. Detroit looks more like the bombed out center of a third world city than an American one. The media elite boneheads are now beginning to extol a growing renaissance of Detroit in direct denial of realty and in spite of the fact unemployment is nearing 50%. Also, 30% of those working are employed by government. This shining example of liberalism in action has lost 60% of its population in the last 50 years. Those who fled the city were mostly middle class workers and included virtually all of the whites. They have been largely replaced by uneducated and poor Muslims and Hispanics with their huge birthrates.
Now, those same morally deficient snake oil salesmen and tyrants are using the same process that has clearly devastated all of the most liberal states and will certainly do the same thing to America. There may in fact be enough ignoramuses at the public welfare and employment trough, and that listen to a totally corrupt and deceptive media, to win the next election. Maybe there are enough of those who have had their fires of hate fanned by emotional blackmail to bring down America. (Thank you reverend Wright!) It is obvious to me that the left’s “spread the wealth to equalize economic conditions” means making everyone poor and dependent on government.
When I pointed this out to my Socrates discussion group, one of the many liberal members said I was wrong, that it was not liberal Democrat policies that brought about the demise of the American auto industry that caused Detroit to collapse. I then asked him what he thought was the real cause of the demise of the Detroit’s auto industry. “Why, the failure of the auto industry to compete with cheaper and higher quality foreign cars.” He replied.
I then asked him what he thought was the reason for that. “Older factories, antiquated equipment and the failure of management to modernize and adapt new manufacturing techniques.” He answered.
“I couldn’t agree more,” was my surprising (to him) reply. “And just who or what was it that prevented the industry from doing those important things?”
He had no answer concrete answer and mumbled something about greedy executives and poor management, so I continued. “The UAW demanded benefit and labor cost increases that took capital that could have been used for modernization, while union work rules prevented the adoption of new manufacturing methods, especially in the use of automation and robots. These union efforts were backed and supported totally by all liberal Democrats. That’s why liberal policies and politics are responsible for the demise of Detroit so I will stand on my original reasoning.
These examples are undeniable realities, and there are many many more. If Detroit is not enough, think Michigan, New York, California, Wisconsin, New Jersey, and all the other blue states that are virtually bankrupt. It certainly wasn’t conservatives who ran them into the ground. Now that the voters in several of those states threw out the Democrats and elected Republican governors and state legislatures, Democrats are using every legal and illegal tactic they can to continue the fiscal carnage they have wrought on those states. What do you think they will look like in five or ten more years? And how about Fannie Mae, Freddie Mac, Amtrack and the Postal Service? Competitive private entities clearly beat the pants off these government operations. These private companies make a profit (that word liberals hate) and pay taxes (the word liberals love) to boot. Those four (and every other government operation) require huge infusions of tax payer money to keep operating.
Then there were my predictions on the mortgage melt down. These were based on some unique realities in my experience. Barb’s younger son is a mortgage banker, has been since the 1990s. More than ten years ago he told me about some of what he was seeing in the mortgage markets that made him nervous. The relatively small bank he worked at then was told by agents of our federal government to make loans to disadvantaged (read mostly black or hispanic) home buyers that were far riskier than the bank’s rules allowed. When his bank refused, the government stepped in and actually seized the bank with some technical nonsense, turning it over to a much larger area bank. The bank owners received about twenty cents on the dollar, a major rip-off. Adam did not stay with the new bank, but went to work for another regional bank that had been trying to hire him for some time.
This bank also was ordered to make risky loans and also refused. Fortunately, they were big enough to weather the resulting storm even though they could no longer sell their mortgages to Fannnie Mae and Freddie Mac. (the federal government mortgage banks.). We talked about the situation for some time and that’s when I made my prediction about the coming collapse of the mortgage market. What would eventually happen was as plain as day to anyone who looked at it rationally. Yes there were a number of greedy people who bought houses to “flip” and make a fast buck, but the billions in loans to people who would never be able to fulfill their obligations was infinitely larger. This was a financial house of cards that had to crumble. When the Bush administration and conservative Republicans in Congress tried to check this fiscal lunacy, they were ridiculed and called “racist’ by many in the media and shouted down in Congress by the likes of Maxine Waters and Barney Frank.
Along with all the other solvent homeowners, my six children each lost a major portion of the equity in their homes. Fortunately, none of them became upside down. Each retained some equity.
In actual fact, that debacle was by far the largest financial loss the American middle class had ever suffered. It resulted in the transfer of more than half of the percentage ownership of all American homes from individuals to banks. (I’m sure you can understand that math.) Then the government forced hundreds of small and medium sized banks to close their doors or be taken over by larger banks. The total value of the nearly 400 banks that were closed between 2008 and the present was in excess of $633 trillion. Who ended up with those assets? Remember those few huge “too big to fail” banks? So much for liberal Democrats taking care of the small business owner. “Let’s give those megabanks a few hundred billion in taxpayer money and let all those small banks go under.” No wonder Goldman Sachs is now in bed with the Obama administration. Talk about interlocking directorates. How about interlocking ownership between the megabanks and federal government. Wall street bankers and the Whitehouse are definitely sharing the same bed. The media screams about corporate executive bonuses, but never mentions the huge bonuses paid to Fannie Mae and Freddie Mac executives—$900 million to Clinton buddy Franklin Raines of Fannie Mae alone—even as those two were going bankrupt. That’s reality, an undeniable fact. It sure as hell does not have “another side.”
Why the dichotomous “two sides to everything” stance anyway? If the truth be known, there are usually more sides to any question of opinion than there are people interested in it. Sometimes, there is only one side. For example: statements of truth (not opinions) have but one side, the factual. One plus two equals three does not have another “side.” That the sun rises every day does not have another “side.” The reality of the mortgage debacle does not have another “side.” The deliberately engineerd mortgage collapse does not have another “side.” These are undeniable realities.
On the other hand, opinions almost never have two opposite sides. Some are very close to the same while others can be quite different. Different does not mean opposite and visa versa. The enemy of my enemy is not necessarily my friend. He or she could be an even worse enemy.
While all this mortgage business was going on, my neighbor in Indiana (he ran for Congress a couple of years ago and lost) told me about a little problem the Fort Wayne banks were having. It seems there was a group of six men who cooked up an interesting real estate scheme. All were south side politicians, three were lawyers, two were real estate agents, and one was a professional appraiser. They would buy a run down southside (the slum neighborhood) house for between $5,000 and $15,000 and fix it up cosmetically for as little as they had to spend, usually between $5,000 and $10,000. Then they would find a buyer or someone to pose as a buyer. They would sell them the house for say, $100,000 and, using the appraiser and with government aid and guarantees, obtain a loan for still more than the appraisal. They would cut a check for the home buyer for $20,000 or a bit more, and pocket the difference, usually between $50,000 and $90,000. (Talk about greed) Neither this nor even the whole mortgage collapse would never have happened if it were not for housing and mortgage policies put in place by liberal politicians under Carter and then Clinton. These policies were opposed by Republicans and by the Bush administration as I mentioned earlier.
What happened next was quite predictable. The owners would finally defaulted on their mortgage, walked away from the place and left it empty. Within a week or so, strippers would remove everything useable from the house including pulling the wiring. (copper sold as scrap) sometimes they even took the doors. When they foreclosed, the bank got a property with a house that would cost far more to fix than it would ever be worth. Many of them were set afire before they could be bulldozed down. Others became crack houses or shelters for transients and drug dealers. The city received no taxes and the resulting blighted neighborhood rapidly went down hill. I don’t know it for a fact, but I’ll bet the same thing happened on a much larger scale in Detroit. Drive through parts of the south side of Fort Wayne and you’ll see what I mean. It’s Detroit on a much smaller scale.
The six men were sued by the banks. The city was working up a criminal suit as well. My neighbor knew all the details (and told me plenty) about this while it was happeing. He knew because he was one of the lawyers involved in the suit for the city. The six men were guess what, black liberal Democrats. They were also higher ups in the local ACORN group. Surprise, surprise! After making news in all the local media for about a week, things suddenly became very quiet. Remember, this was the spring of 2009 and ACORN’s buddy was in the Whitehouse. To make a long story short, the whole thing quickly and quietly was being swept under the rug. No more mention in any of the media—ever. The criminal suit was gone and so was the bank suit. I could find no records of either in a search of Fort Wayne public legal records on the Internet. Those records disappeared or at least public Internet access to them disappeared. They were there one time and gone a few weeks later. My friend now claims he knows nothing more about it and no longer will talk about it, even in private. Hmmmmmm? You can make your own assumptions about what happened here.
The things described in these paragraphs are all hard realities, not opinions. You can see them, photograph them, even buy them. Both Detroit and Ft Wayne would love some new owners who would pay taxes. Wherever government controls anything, you will find huge waste, crippling graft, crime, corruption, gross inefficiency and almost total financial irresponsibility.
You mentioned health care, your field, and the unconscionable waste and poor use of resources. Isn’t most of this paid for by medicare, medicaid and health insurance? Do you think government alone would do any better? And about rationing of healthcare I have had two experiences with government agencies that reflect the realities of government running anything. When Barb became ill with PPS in 2000 and had to step down from the pulpit, her healthcare was covered for one entire year by the Methodist church. During that year we tried obtaining a new healthcare policy with little success. We then applied for SSI which would have helped us quite a bit. She was denied coverage many times (at least ten times) over the next few years. In 2003, After her surgeries and heart attack cost us half a million dollars (really), a friend of ours put us in touch with a Republican Congressman, not from our district, but whose wife also had PPS. He was wonderful. Within a month we started receiving Barb’s SSI checks. Incidently, our own Republican Congressman did nothing for us.
About two years ago I applied for a federal grant from the Department of Energy to help with the publication and promotion of my book on energy, Energy, Convenient Solutions. I jumped through all of the hoops, filled out all of the forms, made certain that I was income qualified,, and after dozens of phone calls I was given an appointment for an interview with a grant officer in Jacksonville. It was fifteen months after my application was sent in. When I walked into the office and saw the grant officer I was certain I was in trouble. The officer who had just called me in was a black woman about fifty weighing at least 350 pounds. I walked over to her desk and handed her my papers. She took them, compared them with some papers she had on her desk, picked up a large rubber stamp, stamped and signed my papers and hers. Then without a word she handed them back to me and called out the name of her next victim. The big “Denied” in red told me everything I would ever learn about why the grant request was denied. (And there was no appeal) If I wanted to try again for a grant I would have to go through the entire process again. She must have felt a great sense of satisfaction in turning down my application without a word of explanation or help. I wondered what would have happened if I had been black or had slipped a few $100 bills inside those papers. Those are my two latest experiences with the federal bureaucracy. I can only imagine what a chaotic mess our government will make of our health care system if Obamacare is not repealed.
Incidently, have you ever spent any time in or visited a VA hospital? When I was in the dental business we did a lot of maintenance work on dental equipment in the VA hospital near Cleveland. We actually had to jump our bid prices about a third higher than what we charged private dentists because of all the costs associated with dealing with their red tape and special requirements, few of which made any sense at all. It finally became so expensive to deal with them we quit bidding. The first time we didn’t bid, their purchasing agent called and begged me to bid, admitting no one else had either. Then he said the following, “I don’t care if you double the regular price, we need that service.” I bid on two more small jobs and then quit for good. I have no idea how or from whom they purchased their service and supplies after that.
I was going to list the similarities between the Carter and Obama effects on our country and compare them to those of the Reagan years, but everyone knows the difference in the budgets, the deficit, the unemployment rates, and inflation. Remember Carter’s 20% interest rates, 12% inflation, and double digit unemployment? They say inflation is under control, but is it? Have you noticed the price of gasoline, diesel, and heating oil has doubled in the last year? (It just went from $3.14 a gallon to $3.42 a gallon in two weeks here.)
And how about food pries? Have you seen that they have increased by 50% or more during the same period? Ever wonder why those increases don’t seem to affect the government’s inflation index, or bring about an increase in COLA, the cost of living allowance used for Social Security and military pay? That’s because liberal Democrats under Bill Clinton, removed food and fuel from those calculations. This has seriously affected the poor who can least afford it because food and fuel consume a major portion of their income. And the unemployment rate that was 4.2 % when Reagan left office is only 9.4% under the way it is calculated using Obama’s new method. The current way to figure the unemployment rate does not include those who have stopped actively seeking work or are no longer receiving unemployment checks. If figured the same way it was during previous administrations including Reagan’s, the current rate would actually be close to 18%. And these deliberate deceptive manipulations of statistics by our government go on and on.
Is it any wonder that our federal government is mired in debt along with virtually every blue state in the nation? I ask you again, who is responsible, liberals or conservatives? Few people will pay any attention, and certainly few politicians are willing to address these serious problems. Could we correct these problems and once again become the dynamic leader of the free world? Yes, with the right leadership. Will we? I seriously doubt it. I am going to use two very telling quotes and related information that will explain why we will probably end up on the ash heap of history.
“A prediction of where we seem to be headed may have come from far back in history, when the 13 colonies were still part of England. This quote is often attributed to a Scottish Historian, Alexander Tytler or Tyler. The true origin of the quote is obscure and might actually have originated in the early 20th century from an unknown politician or writer. Nevertheless, this does not detract from its accuracy.”
One version of this quote on why democracies always fail and a near exact description of what is happening in our country right now, is:
“A Democracy cannot exist as a permanent form of government. It can only last until the citizens discover they can vote themselves largesse out of the public treasury. After that, the majority always votes for the candidate promising the most benefits from the public treasury with the result that the Democracy always collapses over a loose fiscal policy, to be followed by a dictatorship.”
“Paradoxically enough, the release of initiative and enterprise made possible by popular self-government ultimately generates disintegrating forces from within. Again and again after freedom has brought opportunity and some degree of plenty, the competent become selfish, luxury-loving and complacent, the incompetent and the unfortunate grow envious and covetous, and all three groups turn aside from the hard road of freedom to worship the Golden Calf of economic security. The historical cycle seems to be: From bondage to spiritual faith; from spiritual faith to courage; from courage to liberty; from liberty to abundance; from abundance to selfishness; from selfishness to apathy; from apathy to dependency; and from dependency back to bondage once more.
“At the stage between apathy and dependency, men always turn in fear to economic and political panaceas. New conditions, it is claimed, require new remedies. Under such circumstances, the competent citizen is certainly not a fool if he insists upon using the compass of history when forced to sail uncharted seas. Usually so-called new remedies are not new at all. Compulsory planned economy, for example, was tried by the Chinese some three millenniums ago, and by the Romans in the early centuries of the Christian era. It was applied in Germany, Italy and Russia long before the present war broke out. Yet it is being seriously advocated today as a solution of our economic problems in the United States. Its proponents confidently assert that government can successfully plan and control all major business activity in the nation, and still not interfere with our political freedom and our hard-won civil and religious liberties. The lessons of history all point in exactly the reverse direction.”
The person who is the actual author of the words that frequently are included as a part of the entire quote is Henning Webb Prentis, Jr., President of the Armstrong Cork Company. It is from a speech entitled, Industrial Management in a Republic, delivered in the grand ballroom of the Waldorf Astoria at New York during the 250th meeting of the National Conference Board on March 18, 1943, and recorded on page 22 of Industrial Management in a Republic.
Those words of Prentis clearly echo your comments about the health industry, indeed, it probably holds true for any industry or functioning body deeply dependent on insurance, government, or any other source of money not controlled by the rules of economics. It is so very clear that laziness, fraud, and being wasteful, ignorant, and destructive are easily accomplished by a growing section of our populace while hard work, honesty, thrift, and being creative and constructive may now be limited to a shrinking number.
In stark contrast, look at China. After decades of oppressive economic conditions, the government permitted an expanding number of economic freedoms including private ownership of farms, businesses, and even industries. The results of this complete reversal of policy has been the amazing growth of their economy and the creation of a rapidly expanding middle class of consumers. I believe that this economic growth and freedom will lead to more personal freedoms for the Chinese. They have let the capitalist free enterprise genie out of the bottle. It is hard to predict just where it will take them, but it is obvious that their direction is the opposite from where we in America along with most of the “Western” world are heading. The road up is a lot happier then the road down. Quite obviously, they are between courage to liberty; and liberty to abundance, while we are between apathy to dependency; and dependency back to bondage.
Yes, these last two paragraphs are personal opinions, but just look at the present realities of America compared to China. The factual realities are so obvious I think you would find it impossible to come to any very different conclusions. The lessons of history are pretty damned hard to deny. They have repeated over and over again.
Oh yes, wasn’t it Pogo who said, “I have met the enemy, and he is us?”
It is easy to see that two opposing groups ar squaring off for battle in Wisconsin and elsewhere over mostly government unions who are married to the liberal Democrats. This battle is over whether the SEIU and their buddies run things or the voters of Wisconsin do. Voters who have finally awakened to see the ruthless self-service of the SEIU and other government unions.
Here’s another link you might want to check out.
http://www.youtube.com/watch?v=tsH8xvjTAlo Tells how Obama and Eric Holder are joining in supporting a foreign nation and a criminal drug cartel against the state of Arizona. This is an evil unprecedented in our entire history.
Incidentally, I have the perfect answer to the illegal drug problem. It would remove all of the incentives for criminal activity and put the drug cartels out of business permanently. Check out http://hjdrugprb.blogspot.com. The only problem is all the drug cartel’s money that is paid to American politicians to keep drugs illegal and keep the Mexican border porous for the drug cartels. Why do you think Obama and Eric Holder are suing Arizona for enforcing federal law when they won’t? Hell, it’s pretty plain to see they want the drug cartels to keep on making money and killing Americans. I wonder how much of that Mexican drug cartel money flows into their coffers? Hmmmmm?
Remember prohibition? Of course you don’t. You are too young. Prohibition created many huge and powerful criminal gangs, the remnants of which still operate in many America cities. Just think Al Capone, Big Bill Thompson, (Republican and one of the most corrupt politicians in American history) and the current Democrat political machine in Chicago as one example. These criminal gangs pour billions into keeping drugs, prostitution, guns, and who knows what else illegal. They love those laws because they know it secures their illegal businesses. Just as prohibition created thousands of criminal organizations to supply alcohol, drug laws create thousands of criminal organizations to supply illegal drugs. The same thing applies to prostitution and guns wherever they are illegal. Good old Rom Emanuel, remember him as Obama’s right hand man? Anyway, as a member of the current members of the current version of the Capone gang structure was there any doubt he would be able to run for mayor even when his candidacy was illegal according to Chicago law? We all knew a way would be found to circumvent that law. As with any law they want to break, they simply get one of their judges to rule in favor of what they want, regardless of any law. On the larger scale, it looks as though that same criminal organization is now running the country, and running it into the ground.
Cordially, Ho
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment