Obama's Financial Fascism At Work At DOJ: Not A Single Prosecution Since 2008

'Between 2002 and 2008, for instance, [the] GAI [Government Accountability Institute] points out how a Bush administration task force “obtained over 1,300 corporate fraud convictions, including those of over 130 corporate vice presidents and over 200 CEOs and corporate presidents.”

'“Clinton’s DOJ prosecuted over 1,800 S&L [savings and loans] executives, senior officials, and directors, and over 1,000 of them were sent to jail,” GAI adds.

'But, despite having “promised more of the same,” especially in the wake of the 2008 financial crisis, the Obama administration’s DOJ has not brought criminal charges against a single major Wall Street executive.'

Read the whole sordid tale here at The Daily Caller, implicating Attorney General Eric

'Holder, Associate Attorney General Tom Perrelli, Associate Attorney General Tony West, Assistant Attorney General Lanny Breuer, Deputy Attorney General James Cole and Deputy Associate Attorney General Karol Mason — who “all came to the DOJ from prestigious white-collar defense firms where they represented the very financial institutions the DOJ is supposed to investigate.”'

The Market Was Already Overvalued In October 2011, And It Still Is

So says Robert P. Seawright, here, and here:

[T]he market remains overvalued and, if anything, somewhat more overvalued than it was last October. As I have been saying for a long time ... – we are (since 2000) in the throes of a secular bear market, subject to strong cyclical swings in either direction. I continue to encourage investors to be skeptical, cautious, and defensive yet opportunistic. I suggest that they look to take advantage of the opportunities that present themselves while carefully managing and mitigating risk, which should remain their top priority.

Seawright presents the case for overvaluation using a variety of metrics, not the least important of which is the Shiller p/e. Long term investors remain skeptical of the present rally based on these metrics.

Nevertheless, the SP500 shot up over 100 points from 1099 between October 3-20, 2011, and is again above 1400 today, a nominal gain of over 27 percent in less than a year. That's a pretty long sucker rally.

Neil Barofsky Calls Geithner And Obama Two-Faced Housing Bailout Liars

'[I]n 2009, $50 billion in TARP funds had been committed to help homeowners through the Home Affordable Modification Program (HAMP), a program that the president announced was intended to help up to 4 million struggling families stay in their homes through sustainable mortgage modifications. Hundreds of billions more were still available and could have been used by the White House and the Treasury Department to help support a massive reduction in mortgage debt. But Geithner avoided this path to a housing recovery, explaining that he believed it would be “dramatically more expensive for the American taxpayer, harder to justify, [and] create much greater risk of unfairness.” Treasury amplified that argument in 2010, after it reluctantly instituted a weak principal reduction program in response to overwhelming congressional pressure. ...

'[T]hree years later, with a tightening presidential election and a Democratic base disillusioned by the government’s abandonment of its promise to help homeowners (less than 8 percent of the funds originally allocated in TARP for foreclosure relief has actually been spent), Geithner and the administration would like to present themselves as having undergone a conversion.'

Read the entire entry here.

The announcement of HAMP is what really got Rick Santelli's goat on CNBC one day in early 2009 and set off a fire storm which coalesced in the outrage of the Tea Party movement. The conservative instincts of the Tea Party movement were and remain opposed to bailouts of homeowners, bankers, car manufacturers, insurers, multinationals like GE, and on and on. Barofsky is probably right that this is nothing more than a cynical political ploy to shore up support among Democrats. But if he's not buying it, who will? 

Bob Brinker Of "Money Talk" Is Wrong: GDP Isn't Growing At An Average Of 1.75 Percent

On his radio program "Money Talk" yesterday Bob Brinker sought to defend recent economic performance as better than the Q2 report of 1.5 percent makes it appear. He accomplished this feat by averaging that number 1.5 with the 2.0 percent reported in Q1, coming up with a little better number, 1.75 percent.

This is wrong and I stated so in a post I have since removed.

I thought Bob Brinker said this for political reasons in the context of the remarks, and in a fit of pique I posted that Bob Brinker is a shill for the Obama regime in doing this, remembering as I am wont that Bob Brinker has stated on the program, among other things that hint of leaning to the Democrats despite calling himself an independent, that Obama's man in the US Senate, Dirty Harry Reid, is "a good man, a good man." Harry Reid is manifestly not a good man, recently using the well of the Senate to innoculate himself for potentially libelous remarks he has made from there against Mitt Romney, a fellow Mormon to Reid no less. Harry Reid has also been the chief instrument of gridlock on Capitol Hill, both now and when Pelosi was Speaker of the House. Just ask her how many bills she sent to him which never received action.

I've removed that post because I think it's possible Bob Brinker made the comments entirely out of ignorance, not from political bias. The reason is that I've realized that I've made the exact same mistake about GDP myself on this very blog, and my bias against Obama didn't keep me from making it. I actually forgot about those errors long after I had improved my understanding of GDP. So even if Bob Brinker did make the statements in order to put Obama's performance in the best possible light, it's also possible Bob Brinker just isn't as smart about GDP as he thinks he is. After all, it is a complicated subject about which very few people really are expert, and if I can make an honest mistake about it, so can he.

So the politics aside, it is impermissible to take the sum of quarterly headline GDP and divide by 2 or 3 or 4 to get an average rate. Each quarterly statement of GDP is already stating the annual rate, that is, the annual rate prevailing during the quarter. That's what the meaning of annualized is. As the quarters roll and the data become more full and complete, the numbers are routinely refined, even many years after we learn of the third and final estimate of quarterly GDP for month x, y or z. GDP is always a work in progress, and even somewhat controversial among the truly expert.

So in the second quarter, the annualized rate of GDP growth is 1.5 percent, not 2 percent, and not 1.75 percent. And that is terrible for everyone, Democrat, Republican and independent alike, because we are all in this together.

At least that is what we would like to think.

Yuval Levin Opens A Window On Obama's American Fascism

Yuval Levin opens a window on Obama's American fascism, noting its assault on the middle ground which separates the individual from The State:

Its approach to the private economy has involved pursuing consolidation in key industries — privileging a few major players that are to be treated essentially as public utilities, while locking out competition from smaller or newer firms. This both ensures the cooperation of the large players and makes the economy more manageable and orderly. And it leaves no one pursuing ends that are not the government’s ends. This has been the essence of the administration’s policies toward automakers, health insurers, banks, hospitals, and many others. ...

The [contraception] rule implicitly asserted that our nation will not tolerate an institution that is unwilling to actively ratify the views of those in power — that we will not let it be and find other ways to put those views into effect (even though many other ways exist), but will compel it to participate in the enactment of the ends chosen by our elected officials. This is an extraordinarily radical assertion of government power, and a failure of even basic toleration. It is, again, an attempt to turn private mediating institutions into public utilities contracted to execute government ends.

Read it all, here.

The Detroit News Attacks Obama's Imperial Presidency, Congress' Servility

"The imperial presidency Obama is building should worry Democrats as much as it does Republicans. This has never been an "end justifies the means" nation. Even if you agree with the outcomes the president is seeking, his running roughshod over the rule of law should be objectionable, because the powers he is claiming will not be forfeited by the next Republican president."

Read it all, here.

Conservatives' Answer To Change

Spengler On Elections: Revolution Exalted Into A Constitutional Process

"[R]evolution, in the form of periodic mass elections fought by all available means of money, brains, and even - after the Gracchan method - physical violence, is exalted into a constitutional process."

-- Oswald Spengler

WaPo Repeats The Big Lie: "There Are Just Not Enough Tax Breaks To Close For The Rich"

Here:

"[T]here are just not enough tax breaks to close for the rich, and the big money is in those for middle-income taxpayers."

The leftist drumbeat to raise taxes on the middle class just never ends.

But it's not just their agenda, it's the agenda of Republicans and libertarians, and it flies under the radar of "tax reform" and "broadening the base". Its most passionate advocates in the Republican Party are people like Gov. Mitt Romney and Rep. Paul Ryan, and certain members of the Gang of Six and the Gang of Twelve, you know, like Sen. Tom Coburn and Sen. Saxby Chambliss. The Stupid Party is stupid because the rank and file of America end up voting for this liberalism all the time. But those elected officials aren't stupid. They know exactly what they are doing and how it works.

You promise lower marginal tax rates across the board in exchange for giving up some tax deductions. Then as time passes the Democrats get the government in their hands again and raise taxes. But those lost deductions? They remain lost, and overall the tax burden on the middle class increases. It's what happened in 1986 with the loss of deductibility of interest on revolving credit in exchange for tax reform which lowered rates. But along came Bill Clinton in 1992 and up went the taxes. To help pay for things during the recession which Clinton's higher taxes made worse, middle class Americans tapped home equity like crazy, which was the rope Republicans furnished to hang us with. And now look at us, tapped out like never before with owners' equity in real estate down to 41 percent, facing a bunch of traitors on our side who want more money to misspend.

Tax collectors for the welfare state is who they are, to borrow a phrase from a recent Republican candidate for president who really let us down by not using it during the primary season.

As usual, conservatism's worst enemies are in their own party.

I'm getting just a little sick of it, too, primarily because there is a HUGE pool of tax revenue forfeited by the government which amounts to a gift to the top third of income earners in America. In 2012 everything earned above $110,100 escapes Social Security taxation. That's roughly $2 trillion which flies under the tax radar. At 15.3 percent, that's the biggest tax loss expenditure out there by far: $306 billion of lost revenue to the federal government because high-income earners don't pay it. The mortgage interest deduction, by contrast, is less than a third of that.

Conservatives want the misspending stopped. Until it is, tax increases are off the table.

Total Value Of Household Real Estate, Owners' Equity and Percentage of Total Value

The following charts reproduce real estate data compiled from the Federal Reserve's z.1 Flow of Funds releases going back to 12-11-97 showing the most up-to-date values for the total value of household real estate, the value of owners' equity, and the percentage of owners' equity relative to total value.

Home-Owners' Equity Hollowed Out After 1986 Tax Reform

Did the 1986 tax reform unintentionally contribute to the hollowing-out of home-owners' equity?

It sure looks like it from the graph I've created below, which is compiled from the Fed's z.1 Flow of Funds releases which I've systematically reviewed from the latest release on June 7 all the way back to December 11, 1997.

In exchange for the elimination of a tax loss expenditure important to American consumers, Americans were treated in the '86 reform to lower top marginal income tax rates which fell as low as 28 percent for a brief time under President George Herbert Walker Bush between 1988 and 1992. Unfortunately for them, however, Bill Clinton came along and did away with those low marginal rates, and raised taxes. But Americans never got back the tax loss expenditure to which I refer.

What was it?

Deductibility of interest from revolving credit. You know, credit card interest and the like.

As a compromise, however, the law was structured in such a way as to expand the scope of HELOCs, home equity lines of credit, so that Americans could deduct larger amounts of interest on their taxes from those vehicles, treated pretty much the same as the mortgage interest deduction, the home improvement loan interest deduction or the second mortgage interest deduction. It was a financial innovation which shifted revolving spending on credit cards to these expanded equity lines so that it became fairly routine to buy even cars with home equity when interest rates were low, and all kinds of other stuff. You know, college tuition, that memorable vacation to Acapulco . . . and that condo you bought as an investment property. And some people actually used their HELOCs to improve the primary dwellings they were drawn on. But most of it was pretty imprudent, even though the intention was right in shifting spending from unsecured credit to secured credit.

We call it now "amortizing spending". It's really dumb to finance spending this way because you have nothing to show for it at the end of the term, unless the spending is on an asset which retains value. (If only we could get government to do this, but that's another horror story altogether. Government doesn't just finance spending and have nothing to show for it, it never pays it off. So in addition to blowing dough, it pays for it without a termination date, which means it pays forever.)

When the bottom fell out of real estate starting in 2007, for the first time since 1986 the total value of the real estate of households declined, from the all-time high of $22.731 trillion in 2006 to $20.861 trillion in 2007. That's an 8 percent decline in one year. By 2011 the metric had fallen all the way to $16.05 trillion, almost 30 percent down, with owners' equity bottoming out at $6.231 trillion, a level last reached sometime in the year 2000.

The data show that there have been two periods of the hollowing-out, one from which we recovered and one in which we still find ourselves. In the first, the dollar value of the equity recovered even though the percentage of equity relative to total value did not. In the second, both the dollar value of the equity and the percentage of equity relative to total value have failed to recover.  

In 1990 owners' equity started to fall from $4.274 trillion the year before to $4.097 trillion in 1991, a decline of just 4 percent. But it took all the way until 1996 for owners' equity to exceed that level which it had achieved in 1989. It's pretty clear that Americans financed themselves through the recession of these years under Bush 41 and Clinton in part by using home equity. Even though home values continued to increase, owners' share of equity declined from 66 percent in 1989 to 56 percent in 1994, at which level it stabilized.

Owners' equity continued to climb in dollar terms from 1996 all the way through 2005 when it reached its zenith at $13.158 trillion, but as a percentage of total value owners' equity remained fairly stable in a range between 56 percent and 59 percent. The dollar decline from the zenith in 2005, however, to $6.231 trillion last year represents a whopper of a decline in owners' equity, nearly 53 percent, much larger than the 30 percent decline in the over-all values themselves.

I'll leave it to others to figure out just how much of this nearly $7 trillion has been simply lost from the balance sheet and how much was extracted to help people get themselves through this Bush/Obama depression, but you get the idea. America's forced savings in the form of home equity was coaxed out by financial innovation brought to you by politicians intent on reforming the tax code. And, of course, they did this with the help of private sector actors who profited from the operation. 

Americans might want to think harder about it the next time politicians come promising lower tax rates in exchange for a similar thrilling game of tax reform Russian Roulette. Think the mortgage interest deduction itself, which many Republicans and libertarians today want to end. I think it's easy to imagine from recent history how we might be persuaded to give up the mortgage interest deduction today in exchange for lower tax rates which some future government will only end up raising just like Clinton did, at which time we'll be out both the lower rates and the deductions which offered us some protections from the greedy spending bastards who populate both political parties.

The great achievement of the debacle of the 1930s was amortizing mortgages over 30 years, forcing Americans to save in the form of owners' equity. The debacle of the late 20th century was letting politicians convince us it was time to spend it.      

Create a graph

The Anti-Abortion Line Of The Day From Albert Schweitzer

"Ethics is in its unqualified form extended responsibility to everything that has life."

-- Albert Schweitzer

"The spirit of the age is filled with disdain for thinking."

Jobs? There Is No Driver For Jobs.

Gridlock Is Ordinarily The Most Moral Form Of Government

So David Harsanyi, here.

Russians Care More About Liberty Than Americans!

The Trumpet That Gives An Uncertain Sound

Avoid the "O" symbolism, will ya buddy?

Here's A Conservative Tax Idea For Mitt Romney And The Republicans

Current dollar GDP is $15.596 trillion.

All you get, for everything, is $1.56 trillion.

Capice?

The Left's True Objective Is Higher Taxes On Middle Class: Citizen Cohn Admits It

Say whatever you want about Romney's tax numbers not adding up, the objective of the left in America is to raise taxes on the middle class, precisely because government spending as projected going forward cannot be paid for without it.

So Jonathan Cohn, here:

To reiterate something I've said before, I happen to support higher taxes for the middle class, at least over the long term, assuming they are part of a balanced deficit reduction approach that preserves Medicare, Social Security, and other critical programs. In an ideal world, Obama would make a case for precisely that sort of agenda, because without those higher taxes (above and beyond taxing the rich, as Obama has proposed) government won't have enough money to fund future spending obligations. But it's hard to fault Obama for not presenting the full facts about fiscal tradeoffs when the other side has shown repeatedly that it doesn't care about facts at all.

Conservatives need to make the point that government spending even at Rep. Paul Ryan levels is unaffordable without tax hikes on the middle class.

All the talk in the Republican Party about broadening the tax base is really about eliminating tax loss expenditures in order to raise revenues. In other words, taking away the deductibility of mortgage interest expenses, state and local income tax expenses, and the like. If it walks like a tax increase and talks like a tax increase, it's a tax increase, whether it's brought to you by the Gang of Six, the Gang of Twelve, or Mitt Romney.

The Stupid Party is about to vote for this again and the left knows it, which is why they are so happy. People like Jonathan Cohn know a Romney presidency will help achieve their goal, so it really doesn't matter if Obama loses. Unless conservatives take over the Republican National Convention and give the nomination to someone who will actually protect the middle class, taxes on the 66 percent of America which earns less than $100K per year are going up, up, up.

Conservatives need to remember what happened last time we fell for this gimmickry. Ronald Reagan agreed to eliminate deductibility of consumer interest in the 1986 tax reform in exchange for lower rates. We lost that deductibility and got the lower rates, but when Democrat Bill Clinton raised taxes in 1993, we didn't get back the deductibility. The same thing will happen again. We'll sacrifice deductibility of something else in exchange for lower tax rates, which liberals later will succeed in raising the next time they have power, putting the middle class even farther behind than it is now.

We didn't get back the deductibility lost in 1986 under George Bush in 2001, and we won't in future if we answer the siren call of broadening the tax base again.

Unemployment Rate Rises To 8.3 Percent: All 42 Months Under Obama Over 8

For the report from the BLS, see here.

For the interactive graphic of unemployment from The Wall Street Journal, see here.

Full-time employment DROPPED from 114.6 million to 114.3 million. In April 2006 the level stood 5 million higher at 119.3 million. 

As recently as April 2006, just six years ago, people working part-time for economic reasons had dipped to 3.9 million. Today the number still stands elevated at 8.246 million, an INCREASE from last month's 8.21 million and more than double the level of six years ago.

Total part-time INCREASED from 27.894 million last month to 27.925 million now. In April 2006 the level stood at 19.1 million. Total part-time employment today is nearly 9 million higher than it was six years ago.

Total self-employment INCREASED from 9.572 million last month to 9.616 million now. The number stood at 10.5 million in April 2006. The number of entrepreneurial Americans has declined by nearly a million in six years.

Holders of multiple jobs INCREASED from 6.769 million last month to 6.845 million now. The number stood at 7.4 million in April 2006. The number of people holding extra jobs has declined by over half a million in six years.

Change you can believe in.

Both Romney And Obama Will Destroy The Economy By Destroying Housing

In November 2011 Romney told Hugh Hewitt, here, that it was not a good time to eliminate the mortgage interest deduction in view of the problems in the housing sector:

My own view is that the idea of limiting deductions in the way the Bowles-Simpson panel recommended makes a good deal of sense. I’d like to see us have lower tax rates, and have a broader base. And it sounds like their idea is looking for a way of doing that. I must admit, I don’t think that this is a great time to be eliminating the home mortgage interest deduction. We obviously have a lot of trouble in the housing sector right now, but I haven’t seen their proposal. It may work just fine, but I just haven’t seen it, so I wouldn’t want to comment on that. But the home mortgage interest deduction right now is something that I think we need to keep in place.

But by February 2012 it had become a good time to eliminate the deduction, at least for the rich, a position identical to Obama's, as noted here:

“In order to limit any impact on the deficit, because I do not want to add to the deficit, and also to make sure we continue to have progressivity in our tax code, I’m going to limit the deductions and exemptions, particularly for high-income folks,” Mr. Romney, a former governor of Massachusetts, said.

Reiterated in April at a private fund-raiser as reported here, the idea suddenly had become toxic again, enough to merit walkbacks from his advisers, reported here:

Senior advisers to Mitt Romney said Monday that Mr. Romney, the presumptive Republican nominee for president, was merely tossing around ideas, not making policy announcements, when his chat with donors about some significant changes to the tax code was overheard by reporters at a fund-raiser this weekend.

When it comes to Mitt Romney, we all know that there's no there there on any number of issues. But it is especially disturbing that neither Romney nor Obama seem to grasp the scope of the damage their shared idea of eliminating the mortgage interest deduction for the wealthy would cause to the American economy.

Wayne Allyn Root explains, here:

If you think the housing market is in trouble now, wait until the home mortgage interest deduction is eliminated for upper income homeowners.

From Manhattan, Great Neck, and Scarsdale, to Boca Raton, Scottsdale, and Brentwood, home prices in upper class neighborhoods from coast to coast will drop by about 35% overnight. That 35% number is not a guess, it’s automatic.

Today, if you’re in the top bracket, you deduct 35% of your mortgage interest off your tax bill. If tomorrow you can’t, your home is worth about one third less.

That's how economics works.

Unless Obama manages to also raise the top income tax rate to 40%. Then, when you lose your mortgage deduction your home will drop by about 40% overnight. Can you imagine the carnage to the housing market if this happens?

Obama's economic theories just don't compute. He believes that if you take away more of rich people's income through tax increases, and take away their deductions so that the value of their net worth collapses, that will be good for the economy.

He thinks if you take away rich people's money, consumer spending will somehow increase. Even though the facts are that the top 2% of income earners produce over 30% of U.S. consumer spending, while the top 5% produce 40% of consumer spending.

Just as a rising tide lifts all boats, a tsunami wiping out values at the top end of the housing market can only swamp values at the low end.

Six years after the collapse in housing began, we still have no leadership on the most significant economic problem facing Americans at all income levels.