Yes, It Was The Government’s Fault All Along

Today, Rep. Watt (D. NC), the incoming FHA director admitted the housing bubble was orchestrated by the Federal Government, and even after the disastrous housing collapse, he and Pres. Obama want to “roll the dice” some more. That is the logical conclusion to draw from Watt’s declaration that irresponsible lending standards will remain the rule.

To most of Washington, both GOP and Dem, houses are not objects to be purchased by families who can afford them. Rather houses are tools for social engineering. Deemed a prima-face and incorruptible good, home ownership was promoted for all without considering that they are expensive and require a long term commitment. Franklin Raines amassed an alleged $90MM fortune lobbying the government to lend to anyone with a pulse, and the likes of Rep. Frank was happy to comply. The government balance sheet was insolvent at the crash, and it has only become worse. FHA mortgage insurance is now a Ponzi scheme where if it were privately administered, its CEO would flee to a nation without extradition.

Believe in minor miracles, the CFPB clamped down on reckless lending at the public expense. Buyers with imperfect credit would pay more, and everyone would have to make a down payment. Banks were still free to lend as they wished with their own money, but government guarantees were no long available to anyone with a pulse – a mere five years after the housing collapse.

Pres. Obama has never courted the buzz-kill title, so this uncharacteristic act of responsibility did not stand. Fresh off of Sen. Reid’s nuclear option, Watt was confirmed. A member of the Congressional Progressive Caucus (read socialist), Watt was previously an attorney specializing in suing anyone who only lent money on the basis of who could pay it back. In short, Watt is comfortable with the idea that money is to be shared. The lending reforms did not last even a day, as Watt announced before taking office that the loose lending standards would continue.

Even the tiniest reforms cannot withstand the onslaught of Obama’s socialist army. Even now, Fannie Mae’s collapse’s total cost is unknown, yet Obama will not relent until he forces another crisis. AG Holder can fine JP Morgan all the tea in China, but when the government allows unworthy people to buy houses with 2% down, there will be a bubble and eventual collapse.

The crisis of 2008, upon which Obama glided into office, is being recreated thanks to radical socialists like Rep. Watt. This time, however, look for the banks to steer clear of buying impaired bond portfolios. Having been blamed, prosecuted, and fined for bailing out the government five years ago, the next crisis will rest solely upon Washington.

Let The Gas Loose

The price of oil is basically the same the world over. This is because fleets of ships and miles of pipelines transport oil from where it is plentiful to where it is needed (although a Carter era law bans the export of US oil). The only difference in oil price is due to its varying quality and the cost to transport it. Not so for natural gas. In the US, gas costs around $4 per MMBtu (million BTU, about a million cubic feet). In England, the price is $8, and in Japan, the price is $16. Why wouldn’t someone liquefy US gas, ship it to Japan and sell it for a profit? Of course because the government basically outlaws the practice.

The DOE and other authorities do authorize limited gas exports, but they are nowhere near enough to right the world pricing imbalance. Why should exports ever be limited, especially considering the US’s notorious trade deficit? Politics as usual.

Leftist politicians like Sen. Robert Menendez (NJ) want to outlaw the exportation of all energy. While saying they want the oil and gas to benefit the US, they really want control over the factors of production (hint: that is communism). Contrary to Menendez’s caucus, a free market sends efficient signals to energy producers and consumers. Banning trade has two inevitable results – wealth destruction and war.

The Obama administration is basically outlawing coal electricity, and contrary to enviro hype, the only technology capable of picking up the slack of the many retiring coal plants is gas. Wind and solar are pleasant fairy tales, but when renewable mandates hit the pavement, they are paid for with gas.

Outlawing coal, as is surely going to happen in June, can only work if gas is cheap, really cheap. Coal is a stable cost input for electricity, while gas has until recently been volatile. Enviros are in the tricky position of hating coal, hating fracking, hating drilling, and somehow often blaming everyone but themselves when energy prices spike.

If gas exports were unlimited, as the export of any civilian private property should be, foreign gas prices would fall more than US prices would rise, but US gas could rise perhaps 50%. If so, electricity would increase by about 30% depending on the simultaneous shutdown of coal plants. However, lifting of the de facto drilling ban on federal land and various fracking bans around the US would counter these pressures.

Even if the climate is warming, and the evidence is mixed, climate change should not be a religion wherein supplicants must accept the whole nut of enviro orthodoxy. There is no reason to believe outlawing US coal is going to stop or even slow global warming, and there certainly is no reason to believe the cost of outlawing coal is worth any environmental benefits. The only way to stop global warming within the largely artificial enviro construct is to keep China and the developing world in abject poverty.

So, let the gas loose on the world. Let electricity prices explode due to radical environmental policies such as drilling bans, fracking bans, and coal bans. Expose the folly of claims that wind and solar can replace coal. Force a complacent public to realize coal is a pillar of the US economy, and return environmental concerns to their proper framework, which is a balance between cost and benefit. Leftist enviros have lured many people into fool’s paradise wherein there are no costs or consequences to radical policies. It is time to grow up.

How I Judge

The other day, as I was about to walk the dog, I must have forgotten something, so I tied the dog up outside for a moment. A few days later, one of the typical neighborhood busybodies asked me why I was tying my dog up outside. Living in extreme-left Downtown Denver, I really do not care about their opinions – I could just as well strap the dog to the top of my car. However, it does remind me that people are judging me all the time and over anything. Perhaps Jesus’s commandment not to judge is trickier than I had thought. Anyway, here is how I judge my neighbors – maybe I should meditate on lightening up.

I judge those who give bums cash. I find it shockingly selfish to give a bum cash. The majority of them are drunks or some other sort of addict, so the money just goes straight to their habits. None of them are homeless for lack of money – they are homeless for inability to accept the immense generosity of people who would help them. Giving cash to bums only enables them to hurt themselves and my neighborhood. These softies are really giving money to their misguided sense of guilt in exchange for a quick fix of ill-deserved self-esteem.

I judge those who think it is OK to force the young to subsidize the old. Obamacare is the latest example of stealing from the young to give to the old. It is now illegal to buy health coverage based on one’s own needs and risk profile (i.e. age group). It is illegal to take care of one’s self and one’s family. It is illegal to be responsible for one’s traditional responsibilities. Those who think everyone should take care of everyone else (or face fines or prison), have a moral deficiency. When they are able, most families exist to help their young prepare and succeed. How telling that the government largely exists to steal from the young to give to the old (in the form of Social Security, Medicare, and Obamacare)

I judge public sector union leaders and their minions who think they earn their ridiculously cushy lives. They are thieves who appropriate more earnings than their private sector equivalents command while working lazy hours with no fear of layoffs. They give a portion of their earnings to politicians who then grant them more earnings to then give to politicians. This is not a matter of policy; it is common graft.

I judge hypocrites who live off the work of people like Gov. Romney. To be sure, Romney had a good start in life, but he also worked tremendously hard to turn a privileged upbringing into amazing wealth for himself and thousands others. I never supported Romney, but when politicians who never created a dollar in their lives criticize him for doing what every business must – lay off workers to save companies, invest where the profit is, and make the unpopular decisions – my head spins. When politicians like Pres. Obama who got their money largely by influence peddling claim businessmen like Romney did not earn their money, I can hardly stand it. Politicians who live off the fat of the economy should thank the Romneys prostrate for enabling their soft-handed mealy-mouth lives. There is a clear moral hierarchy, and populist politicians generally fall at the bottom.

I judge educators who shove nonsense and debt onto students who really need to learn a trade, and I judge the politicians who lie to young people and say everyone should go to college. I judge the Old Media that still clings to a wisp of credibility with the people while lying to their faces. I judge Hollywood leftist phonies who nag regular people into choices they never have to make themselves. I probably judge too much, but it is worth asking how the leftists that surround me judge back – probably harshly and in ways I can not imagine.