Plumber Joe and Barack Obama: The Full Video

This is an excellent video showing the full conversation between “Joe the Plumber” and Barack Obama.  Obama is clearly off script here, because he lets it slip that his tax plan is really to “spread the wealth around” (translation: income redistribution).

Close to 40% of Americans pay no income tax!  So how can someone who pays nothing, get a tax cut?  Answer: They can’t!  It’s really pretty simple.  If you don’t pay taxes, you can’t get a tax cut!

The Wall Street Journal published a fine article this week explaining how Barack Obama plans to give a “tax cut” to 95% of Americans.  It has to do with redefining what a “tax cut” is.  A Barack Obama “tax cut” to someone who doesn’t pay any taxes turns out to be a check from the government.  Call it what you want….welfare, income redistribution, etcetera….but it’s no tax cut.

When you take money from one group and give it to another, it’s called income redistribution and it isn’t American.  Where is the federal government given power to redistribute income?  How do they get to determine how much each person is entitled to?  Why does Barack Obama get to decide what is enough? “$250,000 a year is enough for you, so I’m going to take it from you and give it to someone else.”  I guess the American dream only goes up to $250,000 a year now.

Barack Obama plans to redistribute income and wealth in this country via the tax code and has no business becoming our next president.

Here is an area that John McCain can put his money where his mouth is.  He was one of a number of Republican Senators who called for reform of Government Sponsored Enterprises (GSEs), such as Fannie Mae and Freddie Mac, back in May of 2006.  Notice that the letter is calling for reform and regulatory oversight of these agencies.

The failure of Fannie Mae and Freddie Mac is a Democrat scandal. Here is a brief time line of the developments over the years:

1977:  Pres. Jimmy Carter signs the Community Reinvestment Act into Law.  The law pressured financial institutions to extend home loans to those who would otherwise not qualify.   The Premise:  Home ownership would improve poor and crime-ridden communities and neighborhoods in terms of crime, investment, jobs, etc.   Despite this act, statistics show that it did not help.

1992:  Republican representative Jim Leach (IO) warned of the danger that Fannie and Freddie were changing from being agencies of the public at large to money machines for the principals and the stockholding few.

1993:  Clinton extensively rewrote Fannie Mae and Freddie Mac’s rules turning the quasi-private mortgage-funding firms into semi-nationalized monopolies dispensing cash and loans to large Democratic voting blocks and handing favors, jobs and contributions to political allies.  This potent mix led inevitably to corruption and now the collapse of Freddie and Fannie.

1994:  Despite warnings, Clinton unveiled his National Home-Ownership Strategy which broadened the CRA in ways congress never intended.

1995:  Congress, about to change from a Democrat majority to Republican, Clinton orders Robert Rubin’s Treasury Dept to rewrite the rules.  Robt. Rubin’s Treasury reworked rules, forcing banks to satisfy quotas for sub-prime and minority loans to get a satisfactory CRA rating.  The rating was key to expansion or mergers for banks.  Loans began to be made on the basis of race and little else.

1997 - 1999:  Clinton, bypassing Republicans, enlisted Andrew Cuomo, then Secretary of Housing and Urban Development, allowing Freddie and Fannie to get into the sub-prime market in a big way.  Led by Rep. Barney Frank and Sen. Chris Dodd, congress doubled down on the risk by easing capital limits and allowing them to hold just 2.5% of capital to back their investments vs. 10% for banks.  Since they could borrow at lower rates than banks their enterprises boomed.

With incentives in place, banks poured billions in loans into poor communities requiring no money down and no verification of income.   Worse still was the cronyism:  Fannie and Freddie became home to out-of work-politicians, mostly Clinton Democrats.  384 politicians got big campaign donations from Fannie and Freddie.  Over $200 million had been spent on lobbying and political activities.  During the 1990’s Fannie and Freddie enjoyed a subsidy of as much as $182 Billion, most of it going to principals and shareholders, not poor borrowers as claimed.

Did it work?  Minorities made up 49% of the 12.5 million new homeowners but many of those loans have gone bad and the minority home ownership rates are shrinking fast.

1999: New Treasury Secretary, Lawrence Summers, became alarmed at Fannie and Freddie’s excesses.  Congress held hearings the ensuing year but nothing was done because Fannie and Freddie had donated millions to key congressmen and radical groups, ensuring no meaningful changes would take place.  “We manage our political risk with the same intensity that we manage our credit and interest rate risks,” Fannie CEO Franklin Raines, a former Clinton official and current Barack Obama adviser (according to the Washington Post), bragged to investors in 1999.

2000:   Secretary Summers sent Undersecretary Gary Gensler to Congress seeking an end to the “special status”.  Democrats raised a ruckus as did Fannie and Freddie, headed by politically connected CEO’s who knew how to reward and punish.  “We think that the statements evidence a contempt for the nation’s housing and mortgage markets” Freddie spokesperson Sharon McHale said.  It was the last chance during the Clinton era for reform.

2001:   Republicans try repeatedly to bring fiscal sanity to Fannie and Freddie but Democrats blocked any attempt at reform; especially Rep. Barney Frank and Sen.Chris Dodd who now run key banking committees and were huge beneficiaries of campaign contributions from the mortgage giants.

2003:  Bush proposes what the NY Times called “the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago”.  Even after discovering a scheme by Fannie and Freddie to overstate earnings by $10.6 billion to boost their bonuses, the Democrats killed reform.

2005:  Then Fed chairman Alan Greenspan warns Congress:  “We are placing the total financial system at substantial risk”.  Sen. McCain, with two others, sponsored a Fannie/Freddie reform bill and said, “If congress does not act, American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole”.  Sen. Harry Reid accused the GOP of trying to “cripple the ability of Fannie and Freddie to carry out their mission of expanding home ownership”  The bill went nowhere.

2006: Republican Senators, including John McCain, call for Fannie Mae/Freddie Mac reform yet again in the above letter from May 2006.

2007:  By now Fannie and Freddie own or guarantee over HALF of the $12 trillion US mortgage market.  The mortgage giants, whose executive suites were top-heavy with former Democratic officials, had been working with Wall St. to repackage the bad loans and sell them to investors.  As the housing market fell in ‘07, subprime mortgage portfolios suffered major losses.  The crisis was on,  though it was 15 years in the making.

2008:  McCain has repeatedly called for reforming the behemoths, Bush urged reform 17 times.  Still the media have repeated Democrats’ talking points about this being a “Republican” disaster.  A few Republicans are complicit but Fannie and Freddie were created by Democrats, regulated by Democrats, largely run by Democrats and protected by Democrats.

A video from the hearings.

Fannie and Freddie: The real story

Another fairly well done video summarizing the crisis from beginning to end.

The Housing Crisis: Affirmative Action Run Amuck

The fact that the Democrats and their willing accomplices in the media are attempting to hang this stinking albatross around the necks of Republicans is just dishonest.  Could 2008 be the year known as the “death of the objective media?”

The latest dust up between eventual general election opponents Barack Obama and John McCain came today in which John McCain characterized remarks made by Obama. I will recount them here to set the stage for my analysis:

Obama said on Sunday in Pendleton, Oregon:

“Iran, Cuba, Venezuela — these countries are tiny compared to the Soviet Union. They don’t pose a serious threat to us the way the Soviet Union posed a threat to us. And yet we were willing to talk to the Soviet Union at the time when they were saying, `We’re going to wipe you off the planet.’”

John McCain characterized what Obama said like this on Monday in Chicago:

“Such a statement betrays the depth of Senator Obama’s inexperience and reckless judgment. These are very serious deficiencies for an American president to possess,”

McCain further said of Iran regarding its threat to America vis-a-vis Obama’s comparison to the Soviet Union:

McCain listed the dangers he sees from Iran: It provides deadly explosive devices used to kill U.S. soldiers in Iraq, sponsors terrorists in Iraq and elsewhere in the Middle East and is committed to Israel’s destruction.

John McCain’s attempt to show Barack Obama as a naife because Obama does not see Iran and the Soviet Union as equal threats falls on its face from the start. Iran is not a world superpower. Iran does not have a military that is within the same tier as the United States military. Iran does not have missile silos with nuclear ICBMs targeting American cities simply awaiting the word to level them. In short, Iran is not an opponent capable of making war with the United States symmetrically and this is the distinction that John McCain fails to make.

On balance, most of the conflicts of the 21st century will not resemble those of the 20th century. They will differ just as the set piece battles and Napoleonic tactics of the 19th century advanced into the apex of 20th century war theory: maneuver warfare as opposed to static battle lines. That apex is reflected by the United States military today in its armor that carries great firepower while being able to move fast enough to outflank an opponent and a paratrooper force that is the envy of all nations, able to deploy anywhere in the world in a few dozen hours. The great majority of conflicts in this century will be of the asymmetrical kind. Barack Obama understands this and John McCain, it seems, does not.

It is apropos that this message be delivered in a place like Newsvine because the Internet is the primary driving force behind the change in how wars are fought just as the internal combustion engine was the primary driving force in changing how wars were fought in the 20th century. Enemies like Iran learned late last century after observing the United States fight wars that decentralization was its best option when confronting America. It was not a large army that drove the American Marines out of Beirut, it was a single suicidal member of Hezbollah.

Iran is likely our most troublesome enemy in the short term, but it is not because they resemble the Soviet Union in the least. It is because they have cultivated amorphous armies and terrorist cells across the world that it can call on to act or that are preset to act if Iran is attacked. The Iraq War only extended Iran’s reach, putting a Shiite government into power in Iraq which has allowed several powerful Shiite militias to spring into existence, two of which are al-Sadr’s group and the Badr militia. Destroying Iran is not an exercise which would be difficult if America were so disposed, dealing with the aftermath of the terrorist minefield that Iran laid to protect itself would be. Therefore, more is to be gained through diplomacy than through a standoff because diplomacy is a much craftier answer to asymmetrical warfare than brute force and it appears that McCain favors brute force while Obama favors diplomacy and, failing that, brute force.

Also fundamentally misunderstood by McCain and better understood by Obama is the threat that China presents in the long term. I believe this is a result of the generational gap between the two candidates. China is, without a doubt, the greatest asymmetrical threat that the United States will face this century. It has proved this over and over again through its satellite destroyer test that demonstrated its capability to wipe out the system that the United States military relies on (the Global Positioning System) to guide its bombs, its soldiers and its warships.

It proved that it could jam a powerful commercial computer network when Chinese hackers attacked CNN’s network because it did not like the coverage CNN gave regarding the Free Tibet protesters and the Olympic flame. China has official (black hat) hackers and unofficial (gray hat) hackers that both take direction from the Chinese government that could mobilize China’s computing power and sheer population volume to bombard and possibly take down essential defense networks that are used to relay orders to American military units. China is also the leader when it comes to espionage (corporate and military) against the United States government and American companies. This network was put on display recently when China chose to (unwisely in my opinion) use their embassies and registered college student organizations for Chinese students to organize pro-China rallies to counter the Free Tibet protesters in San Francisco.

These student organizations have been an engine for both corporate and military espionage as the students make contact with the Chinese government through the organizations and then, after graduation, go on to be employed by American defense contractors or other companies that have valuable technological developments that the Chinese government wants to obtain and disseminate to the People’s Liberation Army (which is then incorporated into Chinese arms manufacturing) or to one of China’s many industries who seek to compete on the global market with American companies in terms of quality. This is, admittedly, a cloud that is on the horizon but it is a cloud that is gathering and, in approximately 20 years, will settle over our country and will need to be weathered.

Whether it be on Iran’s asymmetrical terrorist warfare or China’s asymmetrical computer warfare and corporate & military espionage, I firmly believe that Barack Obama’s mindset and advisers far outclass John McCain’s mindset and advisers. To maintain our advantage over our direct enemies and current competitors that could turn into direct enemies in the future, we have to have a forward-looking view. McCain, to use a term from military history, wants to fight the last war. Obama’s newness is to our advantage because it gives him a view that is conducive to innovation and spurs him to envision the next war and be prepared to fight it.

There sure are some strange things taking place in the Middle East right now. And I don’t like any of it! This past week has been one of historic proportions. First we have this crazed liberal, former President Jimmy Carter, going to Israel on what he likes to think of as a goodwill mission. The only problem there is, where’s the goodwill?

There certainly wasn’t any “goodwill” created when Carter announced that he would be meeting with exiled Hamas deputy chief Khaled Meshal. And I doubt seriously that there was much goodwill created when Carter met earlier in the week with other members of the Hamas hierarchy. And there probably wasn’t a lot of goodwill when Carter laid a wreath at Arafat’s grave, either.

The goodwill wasn’t present when Israeli Prime Minister Ehud Olmert and other high-ranking Israeli’s refused to meet with the American apostate. (more…)