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Washington Alert (redesign-largerALG)-1

Tamny: The U.S. Will Go Back To The Gold Standard

Pinto: Subprime 2.0 Is Coming Soon to a Suburb Near You

By Edward Pinto

On the second anniversary of the bailouts of Fannie Mae and Freddie Mac, it’s now obvious that weak lending standards, serving the political interest of affordable housing for all, were the main reason for the nation’s mortgage meltdown.

But the government just can’t permit lending to anyone and everyone; it must insist on prudent judgment about who will repay and who will default. Not only will borrowers who lack a down payment, steady income, employment and a good credit history probably get into trouble — surprise! — but too much irresponsible lending also creates artificial demand for houses, driving prices into the stratosphere and, as we have just experienced, puts all homeowners at risk.

The same mistake occurred in 1929, when any investor could buy stocks on margin with as little as 10 percent down. Small wonder that after the crash the U.S. government instituted a margin requirement of 50 percent down.

Congress should apply the same principle to housing purchases, increasing the amount a buyer must put down and other safeguards to assure prudent lending. Congress refuses to do this. Why? Giving citizens cheap, easy housing is a great way to win votes, no matter what horrific repercussions ensue.

Get full story here.

Inside the Dome: September 8th, 2010

September 8th, 2010, Washington, DC–From ALG News’ Capitol Hill Correspondent Derek Baker:

In the Senate, just a week after Sen. Lisa Murkowski conceded to attorney Joe Miller in the Alaska Republican primary, there are reports that she’s actively considering a third-party run for the seat. Though rumors surfaced over a week ago that Murkowski was looking at a run under the Libertarian Party banner, numerous media sources reported the deal was rejected and wouldn’t happen. Now, Politico is reporting that Murkowski has recently met with Libertarian Party nominee David Haase just yesterday to discuss a possible swap where she would take his place on the ticket. Murkowski reportedly told Haase that she’d make a decision by this Friday, five days ahead of the September 15th filing deadline.

Meanwhile, Majority Leader Harry Reid disavowed any responsibility to the current economy recently. Reid stated, “You know that I had nothing to do with the massive foreclosures here. You know that I had nothing to do with these unemployment figures.” In an interview with ABC’s Top Line, Reid went on to blame the Bush administration and Republicans for the current economic problems, adding “I don’t have any hand in what took place during the Bush administration. I tried to rein that in.”

Bottom Line: Does Reid’s statements sound familiar? Reid has been the Senate Majority Leader since 2007, and he has “nothing to do” with the economic woes of Nevada or the country at large? Statements like this are why people are disgusted by politics and loathe politicians.

Of course, given the machinations that Sen. Murkowski is currently exhibiting, loathsome behavior is not affiliated to just one party. In the end, the Libertarian Party will reject the Murkowski swap for the same reasons Republicans rejected her in their primary. She can’t be trusted to do the right thing when it counts.

In the House, GOP Minority Leader John Boehner will reportedly be the primary target of Obama in a much-touted economic address the president is giving in Cleveland, Ohio this afternoon. The Hill is reporting that Obama will go after Boehner directly in the speech today – which he has been increasing doing lately – and that he intentionally chose Cleveland because it is the location of Boehner’s recent address. White House press secretary Robert Gibbs stated Obama will “’spend a decent amount of time’ contrasting his economic views with Boehner’s,” according to the article. Regarding Obama’s latest moves, Boehner spokesman Michael Steel stated “you can sense the panic setting in. When was the last time a sitting president of the United States chose to follow the minority leader of the House of Representatives to a city and respond to his or her speech?”

On the legislative front, Obama’s latest economic and stimulus policy proposals are gaining little support from members. A smattering of articles and private conversations with staffers indicate that Democrat members and staff are disappointed over Obama’s latest proposal and several are even arguing for Obama to give in on the extension of all Bush tax cuts, rather than allow the rates go up on higher income earners during this harsh economy. A Wall Street Journal article today also reports that many Democrats were hoping for more a “populist proposals, such as a payroll tax holiday” instead of more infrastructure spending.

On the campaign side, Democrat Majority Leader Steny Hoyer is still upbeat about Dem chances this fall, stating “Our candidates are energized and not hanging their tails between their legs. They are confident.” Hoyer added “There is not a member that we don’t think can win” and even defended Rep. Kratovil’s chances against Republican Andy Harris in MD-01. Hoyer may be facing a tough election of his own, with Republican upstart businessman and U.S. Marine Charles Lollar running an aggressive grassroots campaign in Maryland’s 5th District.

Bottom Line: As virtually every article on the subject today noted, Obama’s going to have a hard time demonizing Boehner, given that most of the country does not know his name. It does indeed smack of desperation and lends credence to what Boehner’s been saying about BO’s economic policies. Furthermore, most Americans are now quite weary of the president of the United States constantly blaming other people (Bush, Boehner, Republicans, etc.) for an economy that he took “ownership” of more than a year ago. As Boehner has asked repeatedly, “Where are the jobs, Mr. President?” Read the rest of this entry »

WSJ: The Obama Economy

So two months before an election, and 19 months after the mother of all spending programs, President Obama said yesterday he’s rolling out one more plan to stimulate the economy. We’ll discuss the details when they’re released, but the effort itself is a tacit admission that his earlier proposals have flopped. As the autumn economic debate gets underway, it’s important to understand how and why we got here.

Get full story here.

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