Is GOP right about ACORN?

This is long but worth reading.  Get the facts about ACORN and voter registration in general.  Realize that voter registration, even if fraudulent, can't decide elections.  It's just not possible.

Are the Republicans Right About Acorn?

By Adam Serwer

October 31, 2008 | Prospect.org

During the third presidential debate, John McCain said the community organizing group ACORN was "maybe perpetrating one of the greatest frauds in voter history in this country, maybe destroying the fabric of democracy."

 

ACORN became national news before the debate, following an Oct. 7 raid by state officials on the group's Nevada headquarters. Law enforcement officials confiscated several boxes of documents and eight computer hard drives in what ACORN spokesman Matthew Henderson called "a politically motivated stunt." Bob Walsh, a spokesman for the Nevada secretary of state's office, argues that the raids were necessary to "determine the extent of the fraud being committed." The group has drawn negative attention for turning in suspect voter registration forms in several states, and for reports of voters being harassed by ACORN workers to register several times over. On Oct. 9, CNN's Drew Griffin reported that a criminal investigation of ACORN in Nevada would not be complete until "weeks, maybe even months down the road, and of course, that's going to be after the election," suggesting that the 2008 election would be riddled with voter fraud.

 

The allegations against ACORN are part of a tangle of misinformation and insinuation that is being played out across the media, and within the Justice Department. ACORN, because of its advocacy on behalf of low-income and minority families, and its efforts to register voters in poor and minority districts, has become a focus for the right's racial anxieties. At best, ACORN gives the right a weapon against the Democratic presidential candidate; at worst, it allows the conservative media machine to cast doubt on the results of the election should Barack Obama win. Adding to the controversy over ACORN is the organization's own internal problems, some of which are quite serious.

 

But the furor over ACORN obscures the fundamental problems afflicting our election system, among them flawed databases that have disenfranchised thousands over typos and data entry errors, secretive voter purges that are conducted without oversight, and partisan attempts to disqualify the other side's likely voters. "We have a system that's prone to error and manipulation that locks out eligible voters, because political operatives are allowed to challenge or otherwise undermine eligible voters," says Wendy Weiser who directs the voting rights program at NYU's Brennan Center of Justice.

 

The Allegations Against ACORN

 

At National Review Online, writer Mark Steyn declared, "What does ACORN do? It steals elections." ACORN is actually a community organizing and advocacy group whose affiliate, Project Vote, runs voter registration drives in mostly low-income and minority communities. The group also lobbies Congress for legislative action on behalf of those communities. The idea that ACORN "steals elections" via its voter registration efforts (or even has the capability to do so) has been aided by poor reporting on how groups who perform voter registration must legally operate, as well as through the conflation of registration fraud with voter fraud, a favorite tactic of the right.

 

In many of the states, such as Indiana and Nevada, where fraudulent voter registration forms have been turned in, local laws mandate that ACORN refrain from destroying completed forms, no matter how fraudulent they appear. As a result, ACORN turns in all forms, even in states where that isn't required, according to spokesman Brian Kittenring. ACORN says it labels problematic forms in order to help local election officials weed out bad forms.

 

This was the case in Nevada. Spokesman Walsh, said that while ACORN was cooperating, the raid on its headquarters was necessary. "We had reason to believe there was fraud occurring that was not being brought to our attention. Whether that was because ACORN simply missed it, or something more nefarious is part of the purpose of the investigation. Not knowing the extent of the alleged fraud, we felt the search warrant was the appropriate investigatory tool."

 

ACORN claims that it fires employees who consistently file fraudulent forms, but ACORN is compelled to turn forms in anyway. "We label and identify them with problematic card cover sheets. Our interpretation of the law is that we turn all of these in; it would be so much easier if we could just throw away Mickey Mouse," says Kittenring. In a Nevada affidavit ACORN claimed it was firing workers at a rate of 10 per week.

 

However, the larger issue is that there is scant evidence that registration fraud leads to voter fraud, although there is a history of Republicans attempting to use one to fuel fears of the other. Registration fraud refers to filling out a voter registration card with incorrect information. Voter fraud refers to the actual casting of fraudulent votes. The former rarely leads to the latter because of strict federal ID requirements for first-time voters mandated by the Help America Vote Act.

 

Republicans regularly cite registrations written in the name of celebrities or fictional characters to argue that ACORN is undermining the electoral process. "The only way Mickey Mouse could vote is if he shows up with a federally approved form of ID," says voting rights expert Weiser. "And if they wanted to affect the election, they'd have to have multiple addresses and do it an incredible amount of times."

 

Weiser adds, "It's an incredibly stupid way to commit fraud, and it's absolutely impossible to determine the result of the election that way."

 

That registration fraud is not the real threat was conceded by Walsh, "It's not our belief [that registration fraud leads to widespread voter fraud]. That's not to say we aren't cautious and mindful of that possibility."

 

The conflation of registration fraud with vote fraud is only the beginning of how the right is attacking ACORN. This election season, conservatives have developed a curious counter-narrative in which the sharpened fangs at America's throat are borne by racial minorities and the groups who advocate for them. In this retelling of recent history, ACORN is at once responsible for the economic crisis by advocating for banks to lend to minorities, responsible for John McCain losing the election by virtue of an elaborate vote fraud scheme, and a part of the radical leftist matrix that birthed presidential candidate Barack Obama.

 

At National Review, Stanely Kurtz wrote that "far more than we've recognized, ACORN's local, CRA-enabled pressure tactics served to entangle the financial system as a whole in the subprime mess." Conservatives argue that the Community Reinvestment Act, a 1970s-era law that was developed to prevent redlining and provide access to credit to low-income and minority communities is responsible for causing the credit crisis by "forcing" banks to make risky laws through federal regulation. Kurtz and others on the right maintain that ACORN, by advocating for fair housing laws, had a key role in exacerbating the credit crisis. But as American Progress Senior Fellow Robert Gordon wrote at TAP Online, only "one in four sub-prime loans were made by the institutions fully governed by CRA," and that most risky loans were offered by institutions not governed by federal regulation.

 

Conservatives have used ACORN's legal problems and mostly black membership to argue that the group's activities on behalf of minorities and low-income Americans are subversive. Rush Limbaugh concluded that "ACORN and Barack Obama [are] smack dab in the middle of it; they have been training young black kids to hate, hate, hate this country, and they trained their parents before that to hate, hate, hate this country. It was a movement."

 

Voter Fraud

 

The right's focus on ACORN is therefore seen by some voting rights advocates as a way to obscure real issues of voter disenfranchisement, chief among them purges of state voter rolls conducted in secret that may have disenfranchised thousands of voters. The New York Times reported that hundreds of thousands of voters were purged from rolls in Colorado, Indiana, Ohio, Michigan, Nevada, and North Carolina within 90 days of the presidential election, which is illegal. States use matching criteria, such as names, addresses, and social security numbers, to ferret out ineligible voters. But the process is vulnerable to data entry errors and even poor handwriting, as well as the simple fact that many Americans share similar names. A voter who shares a similar name to an ineligible voter could be erroneously identified by a computer as that voter. The criteria vary by state, but in one case in Florida in 2000, a Rev. William D. Whiting was misidentified as convicted felon Willie J. Whiting, because the system didn't account for middle names.

 

The rate of data-entry errors and mistakes due to poor handwriting varies, but the Social Security Administration database, which states often use, has an error rate of 28.5 percent, meaning that more than a quarter of the voters matched against it could be erroneously removed from the rolls. These are very large numbers in comparison to the handful of instances of voter fraud confirmed by prosecutions, and yet several states, including Florida, Iowa, Louisiana, and South Dakota, have instituted no-match-no-vote policies based on flawed databases and matching criteria.

 

"There is no question that the number of people voting wrongfully is infinitesimal compared to the hundreds of thousands being purged," Michael Waldman of the Brennan Center told a crowd of reporters at the Washington Press Club two weeks ago. Waldman subsequently added, "The level of disenfranchisement is greater than we have seen in previous federal elections. … It is fierce."

 

But disenfranchisement is not limited to purges. Partisan efforts to disenfranchise the other side's likely voters are occurring nationwide. In Ohio, Republicans are attempting to get their hands on a no-match list of 200,000 voters whose information did not match other state records, presumably for the purpose of challenging them at the polls. Ohio Secretary of State Jennifer Brunner argues that the mismatches are due to database errors, rather than fraudulent registrations. Brunner told The New York Times on Oct. 15 that "federal government red tape, misstated technical information or glitches in databases should not be the basis for voters having to cast provisional ballots." Brunner says the state will be notifying those voters who have been mismatched so they can correct their registration information. In Nevada, the local GOP attempted to prevent voters whose registrations were sent in on time from correcting errors on their applications.

 

In Indiana, the state GOP filed suit to prevent early voting centers from being set up in heavily African-American Lake County, arguing that the centers would increase the potential for voter fraud. A judge denied the GOP's request to shut down the early voting centers, but they have appealed the ruling. Indiana has one of the strictest voter ID laws in the country, voters must provide a government issued photo ID at the polls. Recently, Indiana's Secretary of State Todd Rokita, a Republican, announced he was requesting an investigation of ACORN, after the group turned in 1,400 bad registration applications. ACORN maintains that they flagged most of the forms they turned in as suspicious, and Indiana law requires third-party registration groups to turn in all the completed forms they receive. An AP report quoted Rokita at a Republican event last year suggesting that there was something suspicious about Democrats running up high margins among black voters. "How can that be? ... Ninety to ten. Who's the master and who's the slave in that relationship?"

 

In New Mexico, after erroneously claiming it had identified 28 voters registered by ACORN who had voted fraudulently in the June primary, the state GOP sent a private detective to the homes of at least two of these voters and demanded personal information. Guadeloupe Bojorquez was at work when her mother, Dora Escobedo, called distraught because a private investigator was asking to be let into their home so he could verify her citizenship and registration status. The investigator, Al Romero, was hired by a lawyer named Pat Rogers who was connected to the local Republican Party. Eventually Romero left, but Bojorquez says her mother was shaken by the incident. "About an hour later I left work and went over to her house, and she was still crying. She couldn't understand why she worked so hard to become a citizen to be able to vote, and then she was going through all of this," Bojorquez told the Prospect.

 

While voter-suppression efforts are often attributed to Republicans, Ohio's Secretary of State, Brunner, who accused the GOP of trying to disenfranchise voters whose names didn't match a database, attempted to reject absentee-ballot applications sent out by the McCain-Palin campaign on a technicality. The Supreme Court has rejected the GOP's demands that the GOP be given a copy of the mismatch list, ruling they had no legal standing to do so. Voting rights lawyer Daniel Tokaji, who filed an amicus brief on behalf of several civil-rights groups against the Ohio GOP's request, says, "There's no basis in law for requiring voters to reconfirm their eligibility because the database hasn't matched them."

 

Yet to be seen are the number of people who will be disenfranchised by partisan challenges at the polls on Election Day, on the basis of information gathered from these same voter databases. Speaking at a panel set up by the American Constitution Society, Kristen Clarke of the NAACP Legal Defense Fund expressed concern over these challenges, saying that "laws that permit challenges don't clarify the burden of proof on the challenger" but nevertheless result in voters being disqualified.

 

But all of these instances of voter suppression, and many more, from states ill-prepared to handle voter turnout to faulty or insufficient voting machines, have been obscured by the partisan conflict over ACORN and voter fraud.

 

A History of Partisan Conflict

 

In 2006, Tova Wang, now of the voter-advocacy organization Common Cause, was one of two consultants (the other, Job Serebrov, is a Republican) who completed a report on voter fraud and intimidation for the Election Assistance Commission. In a 2007 Washington Post op-ed Wang wrote that her original report found that while concerns about voter fraud had been greatly exaggerated, voter intimidation is "prevalent in a variety of forms." The commission kept the report under wraps for months, before releasing a version that excluded much of the discussion of voter intimidation.

 

Indeed, the U.S. attorney scandal that broke last year was largely the result of U.S. attorneys being fired for not pursuing politically motivated cases, among them alleged instances of voter fraud where the attorneys themselves claimed there wasn't enough evidence to make a compelling case.  The scandal was one of many that eventually led to the ousting of then-Attorney General Alberto Gonzales. One of the targets was ACORN. In Nevada, U.S. Attorney David Iglesias was fired after he failed to pursue several cases, including a case against ACORN and a local Democratic official, due to lack of evidence.

 

As Talking Points Memo reported in 2007, Missouri U.S. Attorney Todd Graves was replaced by Justice Department official Bradley Schlozman a month after he failed to bring charges against ACORN. Schlozman, who eventually left the Justice Department after admitting that he "noted the likely political leanings," of prospective hires, brought an indictment against ACORN workers in Missouri for registration fraud just five days before the 2006 Senate race.

 

Recently, news of an FBI investigation of ACORN was leaked to the press, prompting House Judiciary Chairman John Conyers to send an angry letter to Attorney General Michael Mukasey, noting that the Department of Justice's election crimes manual states that the department "must refrain from any conduct which has the possibility of affecting the election itself." Iglesias recently told Talking Points Memo he was "astounded" by the probe and called it "a scare tactic." As with the U.S. attorney scandal, the focus on voter fraud is a partisan pretext for establishing laws that make voting and registering to vote more difficult. "The rules of the elections become part of the battleground in our elections, instead of letting citizens choose the candidates," says voting expert Weiser.

 

Wang says that the efforts against ACORN this year are more pronounced than in 2004 and 2006, when the White House pressured U.S. attorneys to bring indictments of registration fraud against ACORN workers close to the midterm elections. "It's worse now; [Republicans] are calling ACORN a criminal enterprise. This is an organization that brings people into the process that would otherwise be marginalized from it." Except this year, the benefits of going after ACORN are magnified by its association with Barack Obama.

 

However there are some recent signs that the political interests of the Bush administration no longer drive the Justice Department's election-related work. "We're cautiously optimistic, but there's still a legacy of politicization that could affect their election monitoring efforts," says Weiser. Last week Bush asked the Justice Department to look into whether those 200,000 Ohio voters should have to reconfirm their registration before Election Day at the request of House Minority Leader John Boehner of Ohio. Daniel Tokaji argues that this is of a piece with the administration's "zealous prosecution of voter fraud, however implausible the claims may be. At the same time, the administration has largely overlooked the protection of voters' rights."

 

But despite Bush's request, the Justice Department declined to intervene in Ohio. It is reportedly also looking into the voter intimidation incidents in New Mexico.

 

Even so legal observer Dahlia Lithwick says the damage done to the Justice Department by the Bush administration is hard to overstate. "I think it's going to take years and years to restore the mandate of the civil rights-division [of the Justice Department] as preserving voter access."

 

ACORN's Internal Problems

 

While ACORN has previously been in Republican crosshairs, Obama's connections to the group have made it even more of a lightning rod. Neither camp has been entirely honest in making its case. In the last presidential debate, Obama maintained that his only connection to ACORN was that he represented the organization as a lawyer in a court case alongside the Justice Department. In fact, the Obama campaign paid ACORN affiliate Citizen's Services, Inc. $800,000 for get-out-the-vote efforts during the 2008 primary but not for registration, as conservatives have claimed. In addition, Obama's 1992 involvement with Project Vote occurred before the group came under the auspices of ACORN in 1994, according to Project Vote spokesperson Sarah Massey.

 

Nevertheless, ACORN is in many ways a troubled organization. Dale Rathke, the brother of the organization's founder, embezzled nearly $1 million dollars from ACORN between 1999 and 2000. The organization later tried to conceal the embezzlement from its donors. In addition, concerns of impropriety have risen over ACORN's stewardship of Project Vote, which is a federally tax exempt nonprofit and must be nonpartisan. The New York Times reported last week that the board of Project Vote was staffed entirely by members of ACORN, which is a nonprofit but is not tax exempt and therefore not subject to the same restrictions on political activity. ACORN also owes back taxes to several states and the IRS.

 

Recently the group overstated the number of new voters it has registered. ACORN first reported that it had registered 1.3 million new voters, but the exact number of new voters seems to have been 450,000, with close to 30 percent of the forms filed turning out to be faulty in some way, with many either being incomplete, duplicates, or having false names. As for the argument that ACORN is trying to swing the election through fraudulent forms, Brian Kettenring argues the organization is in fact, being victimized by employees who are being paid for not actually doing any work.

 

"The submission of bogus voter registrations is really workers ripping off their employer. … Registration fraud doesn't lead to [fraudulent] votes, so if one were trying to impact the outcome of the election, that would be an ineffective way to go about it."

 

Contrary to many reports, the group does not give employees bonuses for turning in extra registration forms.

 

This reconsideration of ACORN's culpability is making some inroads. A week after his original broadcast, CNN reporter Drew Griffin's tone on registration fraud and voter fraud had changed considerably. "One does lead -- or can lead to the other, but doesn't necessarily lead to the other. … Our research is showing this more looks like a fraud perpetrated on ACORN, who is paying these people to go out there and get these fake names and garbage registrations." The real victims of the fraud against ACORN may be the American voters, many of whom may be prevented from casting a ballot on Election Day, as a result of weak voter protections, partisan challenges, and a Justice Department whose civil-rights mandate comes second to serving the political interests of the Republican Party. If there is a "threat to the fabric of democracy," it is posed by the politicization of the election process.

Retrospective: National Nightmare of Clinton Era Finally Over

I think it's apropos to read this now, especially if you haven't voted yet and you're thinking of pulling the lever -- they don't still use levers, do they? -- for McCain. This piece was amazingly, sadly prescient. Just think: Do you really want everything McCain is promising: continued occupation of Iraq; war with Iran and possibly Syria; confrontation with nuclear Russia; "drill baby drill;" no action on global warming; deeper tax cuts leading to a larger national debt; continued outsourcing of U.S. jobs; and creationist, apocalypse-hungry Evangelical kooks with a White House hall pass, courtesy of Palin?

Bush: 'Our Long National Nightmare Of Peace And Prosperity Is Finally Over'

January 17, 2001 | The Onion

WASHINGTON, DC–Mere days from assuming the presidency and closing the door on eight years of Bill Clinton, president-elect George W. Bush assured the nation in a televised address Tuesday that "our long national nightmare of peace and prosperity is finally over."

President-elect Bush vows that "together, we can put the triumphs of the recent past behind us."

"My fellow Americans," Bush said, "at long last, we have reached the end of the dark period in American history that will come to be known as the Clinton Era, eight long years characterized by unprecedented economic expansion, a sharp decrease in crime, and sustained peace overseas. The time has come to put all of that behind us."

Bush swore to do "everything in [his] power" to undo the damage wrought by Clinton's two terms in office, including selling off the national parks to developers, going into massive debt to develop expensive and impractical weapons technologies, and passing sweeping budget cuts that drive the mentally ill out of hospitals and onto the street.

During the 40-minute speech, Bush also promised to bring an end to the severe war drought that plagued the nation under Clinton, assuring citizens that the U.S. will engage in at least one Gulf War-level armed conflict in the next four years.

"You better believe we're going to mix it up with somebody at some point during my administration," said Bush, who plans a 250 percent boost in military spending. "Unlike my predecessor, I am fully committed to putting soldiers in battle situations. Otherwise, what is the point of even having a military?"

[Neocon and conservative commentator William Kristol actually asked this same rhetorical question after 9/11, only he wasn't joking! – J]

On the economic side, Bush vowed to bring back economic stagnation by implementing substantial tax cuts, which would lead to a recession, which would necessitate a tax hike, which would lead to a drop in consumer spending, which would lead to layoffs, which would deepen the recession even further.

Wall Street responded strongly to the Bush speech, with the Dow Jones industrial fluctuating wildly before closing at an 18-month low. The NASDAQ composite index, rattled by a gloomy outlook for tech stocks in 2001, also fell sharply, losing 4.4 percent of its total value between 3 p.m. and the closing bell.

Asked for comment about the cooling technology sector, Bush said: "That's hardly my area of expertise."

Turning to the subject of the environment, Bush said he will do whatever it takes to undo the tremendous damage not done by the Clinton Administration to the Arctic National Wildlife Refuge. He assured citizens that he will follow through on his campaign promise to open the 1.5 million acre refuge's coastal plain to oil drilling. As a sign of his commitment to bringing about a change in the environment, he pointed to his choice of Gale Norton for Secretary of the Interior. Norton, Bush noted, has "extensive experience" fighting environmental causes, working as a lobbyist for lead-paint manufacturers and as an attorney for loggers and miners, in addition to suing the EPA to overturn clean-air standards.

Bush had equally high praise for Attorney General nominee John Ashcroft, whom he praised as "a tireless champion in the battle to protect a woman's right to give birth."

"Soon, with John Ashcroft's help, we will move out of the Dark Ages and into a more enlightened time when a woman will be free to think long and hard before trying to fight her way past throngs of protesters blocking her entrance to an abortion clinic," Bush said. "We as a nation can look forward to lots and lots of babies."

Continued Bush: "John Ashcroft will be invaluable in healing the terrible wedge President Clinton drove between church and state."

The speech was met with overwhelming approval from Republican leaders.

"Finally, the horrific misrule of the Democrats has been brought to a close," House Majority Leader Dennis Hastert (R-IL) told reporters. "Under Bush, we can all look forward to military aggression, deregulation of dangerous, greedy industries, and the defunding of vital domestic social-service programs upon which millions depend. Mercifully, we can now say goodbye to the awful nightmare that was Clinton's America."

"For years, I tirelessly preached the message that Clinton must be stopped," conservative talk-radio host Rush Limbaugh said. "And yet, in 1996, the American public failed to heed my urgent warnings, re-electing Clinton despite the fact that the nation was prosperous and at peace under his regime. But now, thank God, that's all done with. Once again, we will enjoy mounting debt, jingoism, nuclear paranoia, mass deficit, and a massive military build-up."

An overwhelming 49.9 percent of Americans responded enthusiastically to the Bush speech.

"After eight years of relatively sane fiscal policy under the Democrats, we have reached a point where, just a few weeks ago, President Clinton said that the national debt could be paid off by as early as 2012," Rahway, NJ, machinist and father of three Bud Crandall said. "That's not the kind of world I want my children to grow up in."

"You have no idea what it's like to be black and enfranchised," said Marlon Hastings, one of thousands of Miami-Dade County residents whose votes were not counted in the 2000 presidential election. "George W. Bush understands the pain of enfranchisement, and ever since Election Day, he has fought tirelessly to make sure it never happens to my people again."

Bush concluded his speech on a note of healing and redemption.

"We as a people must stand united, banding together to tear this nation in two," Bush said. "Much work lies ahead of us: The gap between the rich and the poor may be wide, be there's much more widening left to do. We must squander our nation's hard-won budget surplus on tax breaks for the wealthiest 15 percent. And, on the foreign front, we must find an enemy and defeat it."

"The insanity is over," Bush said. "After a long, dark night of peace and stability, the sun is finally rising again over America. We look forward to a bright new dawn not seen since the glory days of my dad."

English coot: Can we afford liberalism now?

I'm forwarding this because this old British coot Paul Johnson -- just check out his picture: you'll feel instantly ashamed of yourself! -- makes perfect caricature of the crusty, complaining British lord, while making a perfect mockery of his his crotchety brand of conservatism, which is back on its heels after the demise of capitalism's darlings on Wall Street. A few things I must point out though, in case they're not perfectly obvious:

1) India and China's boom has been in large part thanks to a bubble of consumer credit in the US and Europe. Without our borrowed dollars to consume all their cheap goods, they wouldn't have made it this far this fast. This is changing, to be sure, as they now have strong domestic and regional demand, but it was not the case 10 or 20 years ago.

2) What the hell do political correctness, environmentalism, and the media have to do with the financial mess we're in now? If using the "n-word," clubbing a seal, or turning off my TV will bring back the losses in my 401-(k), I'm ready to give it a try, but first somebody please explain to me how this is supposed to help.

3) Yes, we're in a moral crisis, but it is because conservatives perverted their own morals of thrift and prudence while telling the rest of us we just didn't understand markets or economics.

4) It's scary and absurd of Johnson to praise Red China's command economy, oppression of environmentalists, and coerced displays of enthusiasm before and during the Olympics. Johnson seems wistful not for conservative rule, but for dictatorship. Bring back the monarchy!

Can We Afford Liberalism Now?

By Paul Johnson

October 29, 2008 | Forbes

The financial crisis, detonated by greed and recklessness on Wall Street and in the City of London, is for the West a deep, self-inflicted wound. The beneficiary won't be Russia, which, with its fragile, energy-based economy, is likely to suffer more than we shall; it will be India and China. They will move into any power vacuum left by the collapse of Western self-confidence.

If we seriously wish to repair the damage, we need to accept that this is fundamentally a moral crisis, not a financial one. It is the product of the self-indulgence and complacency born of our ultraliberal societies, which have substituted such pseudo-religions as political correctness and saving the planet for genuine distinctions between right and wrong and the cultivation of real virtues.

India and China are progress-loving yet morally old-fashioned societies. They cannot afford liberalism. Their vast populations have only recently begun to emerge from subsistence living. Their strength is in the close, hard-working family unit in which parents train their children to work diligently at school and go to university when possible so they can acquire real and useful qualifications to then go out into the world as professional men and women determined to reach the top.

I am impressed at the rapid headway Indians (benefiting from their knowledge of spoken and written English) are making in all the advanced sectors of the global employment market--science, technology, medicine, communications, the law, engineering and mining. They are ousting Westerners from top jobs, and rightly so. They are better qualified, more highly motivated and more reliable and honest. They have the old-style work ethic that we, in many cases, have lost.

Prime Minister Margaret Thatcher was sneered at for stressing the Victorian virtues of industry and thrift. But she was right. These emergent Asian professionals have precisely those virtues, which is why they're moving forward and will eventually conquer the world--not by force but by hard work, intelligence and skill.

Equally impressive is the sheer physical power of the Chinese workforce. Anyone who goes to Beijing or Shanghai can't help but notice the astonishing speed at which buildings are rising.

There is nothing new in this. It was once the West that taught the world how to change its skylines through fast and furious efforts. One of the first examples was the Eiffel Tower, designed by engineering genius Gustave Eiffel (who also created the Statue of Liberty's internal structure). It was the centerpiece of the Paris Exposition of 1889. Using the principles of prefabrication, the 150 to 300 workers on the site put it up in only 26 1TK2 months.

Another example is the Empire State Building, which officially opened on May 1, 1931. Masterpiece of the firm of Shreve, Lamb & Harmon, the Empire State Building was completed in only one year and 45 days, a testament to business efficiency and the determination of the dedicated workforce.

We couldn't match those time frames today, despite the advances in technology, because the advances have been outstripped by an even more rapid growth in complex and idiotic planning procedures, bureaucracy, myopic trade unionism and restrictive legislation.

Wake-Up Call

In London today, for example, residents are infuriated and visitors horrified by the way in which the main sewer and water lines are being replaced over much of the city. The work is agonizingly slow. Contractors claim they are paralyzed by the laws (especially so-called health and safety regulations) that now govern work practices. Depending on the type of activity, these regulations can lower productivity by 15% to 25%. They don't save lives or prevent injuries; they provide lucrative jobs for bureaucrats and fit in well with the ideas of union officials on how things should be run. They are a typical by-product of a liberal society.

In an earlier age New York City would have defied the terrorists who brought down the World Trade Center by speedily rebuilding what they destroyed. What's happened instead is a sad and revealing story.

In August China pulled off a propaganda triumph with its staging of the Summer Olympic Games, which involved huge construction projects--all completed on time. London is currently preparing for the 2012 games. All indications, so far, are that this is going to be an embarrassing and hugely expensive fiasco.

I don't know whether this year's financial catastrophe will shock the politicians and people of the West into a new seriousness. There's certainly no sign of it yet. I had to laugh when a Chinese visitor recently said to me: "I see you're going back to the windmill in Britain. We Chinese cannot afford that."

That comment puts things in a nutshell: We are traveling along the high road to incompetence and poverty, led by a farcical coalition of fashionably liberal academics on the make, assorted eco-crackpots and media wiseacres. This strain of liberalism is highly infectious. The Indians and Chinese have yet to be infected. They're still healthy, hard at work and going places, full speed ahead.

Clinton, FMs not to blame for mortgage meltdown

I'm throwing down the gauntlet again.  Who will challenge me?

Poor Homeowners, Good Loans

By Michael S. Barr and Gene Sperling

October 18, 2008  | New York Times

 

 

For those who championed a hands-off approach to the supervision of finance, the economic meltdown should have prompted reflection on the value of common-sense regulation. Unfortunately, a growing chorus in conservative circles is trying to shift blame for the current crisis to the poor and the advocates for the poor.

 

Here's their story line: our current problems were caused not by people in high finance and government over the past eight years, but powerful antipoverty groups and the Clinton administration, which through their advocacy for the Community Reinvestment Act and homeownership goals for Fannie Mae and Freddie Mac bullied a Republican Congress and the titans of Wall Street into bringing global finance to its knees.

 

There's only one problem with this story: it isn't true.

 

It is not tenable to suggest that the Community Reinvestment Act, which was enacted more than 30 years ago, suddenly caused an explosion in bad subprime loans from 2002 to 2007. During the 1990s, enforcement under the reinvestment act was strong, prime lending to low-income communities increased and it was done safely. In 2000, a Federal Reserve report found that lending under the act was generally profitable and not overly risky.

 

By contrast, in the 2002 to 2007 period, the act's enforcement was weak and its advocates had little influence with Congress. In 2003, President Bush's chief thrift regulator — holding a chainsaw in his hands as a prop — boasted of his plans to cut banking regulations, including the scope of the reinvestment act and his enforcement staff, which he carried out over the next two years.

 

Instead, the bad subprime loans were predominantly made by financial firms not covered by the act. According to recent Fed data, 75 percent of higher-priced loans during the peak years of the subprime boom were made by independent mortgage firms and bank affiliates that were not covered by the act.

 

If the Community Reinvestment Act caused the subprime crisis, it is hard to make sense of why non-covered lenders drove the growth. These subprime lenders were competing with more responsible lending under the act by banks and thrifts. Their loans undid the work of community banks that had been making sound mortgage loans to creditworthy low- and moderate-income borrowers for years.

 

The second claim from advocates of deregulation is that the roots of the current crisis lie in efforts to encourage Fannie Mae and Freddie Mac to do more to help low- and moderate-income homeowners. The assertion is that Democrats encouraged financial recklessness by insisting that Fannie and Freddie fulfill their congressionally mandated public purposes by expanding access to home mortgage loans to non-creditworthy borrowers. But again, the argument is not supported by the facts.

 

The Clinton administration explicitly discouraged Fannie and Freddie from buying predatory subprime loans. A report on predatory lending in 2000 from a task force formed by the Treasury Department and the Department of Housing and Urban Development called for Congress to enact legislation to "prohibit the purchase by each of these entities of predatory loans."

 

Furthermore, Treasury Secretary Lawrence Summers and Gary Gensler, an undersecretary of the Treasury, were severely criticized by the Republican Congress in 1999 and 2000 when they called for reforms to address the systemic risk from Fannie and Freddie and to reconsider their government line of credit. When the Clinton administration left office, the two mortgage firms were still bit players in the subprime market.

 

The subprime boom was led by investment banks and mortgage brokers, not by government-sponsored enterprises. Fannie and Freddie became unhinged in the middle of this decade when they tried to play catch-up. Their shareholders and managers pushed them to recover the securitization market share they had lost to unregulated investment banks getting absurd AAA ratings for packaging subprime dross. From 2005 to 2008, Fannie Mae purchased or guaranteed $270 billion in loans to risky borrowers — triple the amount in all its earlier years combined. That was a serious mistake in risk management, but it was not driven by the desire to fulfill affordable housing goals set in the 1990s or by the Community Reinvestment Act.

 

There are many lessons to learn from the financial meltdown. Chief among them is to beware the reckless spending, conflicts of interest and opaque practices of those seeking high profits. But it is a serious mistake to attribute any of our troubles to consumer protection laws and the actions of those in the nonprofit community with a history of promoting responsible lending to families of moderate incomes.

 

Michael S. Barr, a professor of law at the University of Michigan, and Gene Sperling, the national economic adviser to President Bill Clinton from 1997 to 2001, are senior fellows at the Center for American Progress.

 

Taibbi's smackdown on cause of financial meltdown

Taibbi throws this National Review pseudo-intellect to the mat in this debate on what really caused the financial crisis.  Taibbi is my hero of the week for this.  Read this and weep, all you Fannie haters!

 

Matt Taibbi and Byron York Butt Heads Over Whether McCain Deserves Blame for the Wall Street Meltdown

October 14, 2008  |  New York Magazine

 

Every day (or close to it) until November 4, a series of writers and thinkers will discuss the election over instant messenger for nymag.com. Today, Rolling Stone's Matt Taibbi and National Review's Byron York argue over the headwinds facing McCain, what Phil Gramm had to do with the financial crisis, and the importance of credit default swaps.

 

M.T.: So how are you feeling about McCain's chances today?

 

B.Y.: I've just finished an article for National Review — the actual magazine — about the headwinds McCain faces. I was going to look at three, and then I started to list them. I stopped at ten. New Gallup numbers out today show that George W. Bush's job approval rating remains at 25 percent, while his disapproval rating has ticked up to 71 percent. How hard is it to succeed a two-term president of your own party who is at 25-71? We don't know because it's never been done.

 

M.T.: Yeah, that's a damned shame, too. I feel really badly for the guy. I suppose you think the media coverage is also a headwind?

 

B.Y.: Actually, I did not list media coverage among the headwinds. I listed the succeed-a-two-term-president problem, the right-track/wrong-track problem, the Republican-Democrat-enthusiasm gap problem, the Republican-Democrat-I.D.-gap problem, the financial meltdown, Iraq, Republican gloom on Capitol Hill, Obama's fund-raising advantage, and McCain's historical problems with the GOP base.

 

M.T.: But all of those "headwinds," or almost all of them, are the direct result of McCain having supported policies that are now unpopular. There is absolute justice in his facing a "headwind" from the financial meltdown, from the unpopularity of the Iraq war, and so on. How is that a "headwind"? That's just self-created unpopularity.

 

I mean, his onetime campaign co-chair and top economic adviser, Phil Gramm, basically created the credit-default-swap market back in 2000. Why shouldn't he get hammered on the financial crisis?

 

B.Y.: Did I suggest that headwinds are unfair? But on the financial meltdown in particular, if you're suggesting that that is a Republican creation, or even more specifically a McCain creation, I think you're on pretty shaky ground.

 

M.T.: You don't think the unregulated CDS market was a major factor in the current crisis? Were you watching when AIG almost went under? Were you watching the Lehman collapse?

 

B.Y.: I think that Fannie Mae and Freddie Mac were also major factors. And I believe that many of the problems in the mortgage area can be attributed to the confluence of Democratic and Republican priorities: the Democrats' desire to give mortgages to people, particularly minorities, who could not afford them, and the Republicans' desire to achieve an "ownership society," in part by giving mortgages to people who could not afford them. Again, I believe that if you are suggesting that the financial crisis is a Republican creation, or even more specifically a McCain creation, I think you're on pretty shaky ground.

 

M.T.: Oh, come on. Tell me you're not ashamed to put this gigantic international financial Krakatoa at the feet of a bunch of poor black people who missed their mortgage payments. The CDS market, this market for credit default swaps that was created in 2000 by Phil Gramm's Commodities Future Modernization Act, this is now a $62 trillion market, up from $900 billion in 2000. That's like five times the size of the holdings in the NYSE. And it's all speculation by Wall Street traders. It's a classic bubble/Ponzi scheme. The effort of people like you to pin this whole thing on minorities, when in fact this whole thing has been caused by greedy traders dealing in unregulated markets, is despicable. 

[Thank God Taibbi said in plain English what so many of you have smugly accepted as the truth: That black people who couldn't pay their mortgages destroyed the entire U.S. financial system.  That's what many of you have been trying to tell me.  Some have even claimed Wall Street was a "victim!"  But pinning this on blacks doesn't pass the smell test, or the brain test. I can almost understand why people like Al Sharpton are so paranoid, because at the first opportunity, blacks get blamed for everything that goes wrong in America.  - J]

B.Y.: I was struck by the recent Senate testimony of James Lockhart, who is head of the Federal Housing Finance Agency, about the sheer recklessness of Fannie in recent years. Despite "repeated warnings about credit risk," Lockhart testified, Fannie became more reckless in 2006 and 2007 than they had been in the scandal-ridden tenure of Franklin Raines (who departed in 2004). In 2005, Lockhart said, 14 percent of Fannie's new business was in risky loans. In the first half of 2007, it was 33 percent. So something terribly wrong was going on there, and it became a significant part of the present problem.

 

M.T.: What a surprise that you mention Franklin Raines. Do you even know how a CDS works? Can you explain your conception of how these derivatives work? Because I get the feeling you don't understand. Or do you actually think that it was a few tiny homeowner defaults that sank gigantic companies like AIG and Lehman and Bear Stearns? Explain to me how these default swaps work, I'm interested to hear.

 

Because what we're talking about here is the difference between one homeowner defaulting and forty, four hundred, four thousand traders betting back and forth on the viability of his loan. Which do you think has a bigger effect on the economy?

 

B.Y.: Are you suggesting that critics of Fannie and Freddie are talking about the default of a single homeowner?

 

M.T.: No. That is what you call a figure of speech. I'm saying that you're talking about individual homeowners defaulting. But these massive companies aren't going under because of individual homeowner defaults. They're going under because of the myriad derivatives trades that go on in connection with each piece of debt, whether it be a homeowner loan or a corporate bond. I'm still waiting to hear what your idea is of how these trades work. I'm guessing you've never even heard of them.

 

I mean really. You honestly think a company like AIG tanks because a bunch of minorities couldn't pay off their mortgages?

 

B.Y.: When you refer to "Phil Gramm's Commodities Future Modernization Act," are you referring to S.3283, co-sponsored by Gramm, along with Senators Tom Harkin and Tim Johnson?

 

M.T.: In point of fact I'm talking about the 262-page amendment Gramm tacked on to that bill that deregulated the trade of credit default swaps.

 

Tick tick tick. Hilarious sitting here while you frantically search the Internet to learn about the cause of the financial crisis — in the middle of a live chat interview.

 

B.Y.: Look, you can keep trying to make this a specifically partisan and specifically Gramm-McCain thing, but it simply isn't. We've gone on for fifteen minutes longer than scheduled, and that's enough. Thanks.  [That's called tapping out, folks.  Byron York just cried "Uncle!" - J]

 

M.T.:  Thanks. Note, folks, that the esteemed representative of the New Republic has no idea what the hell a credit default swap is. But he sure knows what a minority homeowner looks like.  [Boo-yah!  - J]

 

B.Y.: It's National Review.  [Who cares? - J]