President Armageddon
President Obama returned from a long weekend with his golfing buddies on Tuesday to take up his by now familiar political stand: If Republicans don't raise taxes in return for more spending, the world will end. We wish he'd stayed on the putting green.Flanked by emergency medical personnel, Mr. Obama made his usual threat of Armageddon if automatic spending cuts go forward on March 1. Americans can expect more such melodrama in the coming days, so as a public service we thought we'd break down the President's three biggest political tricks.
• The Washington Monument ploy. "If Congress allows this meat-cleaver approach to take place," he moaned, "it will jeopardize our military readiness; it will eviscerate job creating investments in education and energy and medical research." His parade of horribles went on for several minutes. All of this wreckage from a 5% cut to domestic agencies and a 7% cut to the military.
Americans need to understand that Mr. Obama is threatening that if he doesn't get what he wants, he's ready to inflict maximum pain on everybody else. He won't force government agencies to shave spending on travel and conferences and excessive pay and staffing. He won't demand that agencies cut the lowest priority spending as any half-competent middle manager would.
It's the old ploy to stir public support for all government spending by shutting down vital services first. Voters should scoff at the idea that a $3.6 trillion government can't save one nickel of every dollar that agencies spend. The $85 billion in savings is a mere 2.3% of total spending. The agencies that the White House says can't save 5% received an average increase in their budgets of 17% in the previous five years—not counting their $276 billion stimulus bonus.
• The recession scare. Mr. Obama warned that the sequester will "hurt our economic growth [and] add hundreds of thousands of Americans to the unemployment rolls." But hasn't Mr. Obama been telling us that the economy is coming back and the stock market is up?
Mr. Obama just whacked the economy with a roughly $160 billion tax increase in 2013 that he says will do no harm, but he wants us to believe that $85 billion in spending cuts will trigger a recession. The sequester shaves the equivalent of about 0.25% of GDP when offsetting it against the extra money the feds are spending on Sandy relief.
After World War II federal spending fell from 42% of GDP to 14.8% in two years, yet the private economy and employment roared back to life. In the 1980s domestic spending fell by about two percentage points of GDP and in the 1990s it fell by more than three. Those were decades of government austerity but rapid growth in private output and wealth. Mr. Obama has taken government spending from 21% to 24% of GDP, yet we've had the weakest economic recovery in three generations.
• A tax increase disguised as "tax reform." Mr. Obama isn't proposing to substitute other spending reforms for the blunt instrument of the sequester. He is actually demanding another tax increase on top of the one he just beat out of Congress. His trick is to pretend that this is "tax reform" that would eliminate loopholes, but this is the same President who insisted on more than $30 billion in tax breaks for big business (including $12 billion for the wind industry) in the fiscal-cliff deal.
For 30 years bipartisan tax reform has meant lowering tax rates in return for closing loopholes. But having already raised rates, Mr. Obama now wants fewer loopholes for those he dislikes while keeping the higher rates. This is nothing but a grab for more revenue so he and Democrats can keep spending.
The sequester is far from ideal and it would make much more sense to work with Congress to set priorities. But Mr. Obama has rejected every meaningful reform in entitlements that Republicans or his own Simpson-Bowles commission have offered. ObamaCare will add more than $1 trillion in new costs and add some 17 million people to Medicaid, but he says this can't be touched. In his State of the Union address Mr. Obama proposed $83.4 billion in new spending, according to a tally by the National Taxpayers Union.
If Mr. Obama really wants to eliminate the sequester, Republicans are ready to negotiate. But if he won't drop his tax increase and negotiate in good faith, as he hasn't during his Presidency, then the sequester is the only way that any spending is going to be cut. The economy will be better for it.http://online.wsj.com/article/SB10001424127887323495104578314301609669998.html?mod=WSJ_Opinion_LEADTop
Georgia Elementary School Verse: ‘Obama Ran So Our Children Could Fly’
It’s no secret government schools have put President Obama on a pedestal unlike any other national leader.Schools have been named after him long before his retirement or death, which is rather unprecedented. Students have been led in organized chants of his honored name. There are lesson plans comparing him to Abraham Lincoln.
But sometimes school employees take the rhetoric a bit too far and wind up in propaganda territory. The latest example comes from DeKalb County, Georgia.
For Black History Month, Livsey Elementary School created a cute display with the lines:
Rosa sat…so Martin could walk.The jingle obviously refers to Rosa Parks and Dr. Martin Luther King, Jr, and the display features their pictures. There’s no questions their actions forged a pathway for many black Americans to have decent lives, and for first-term Illinois Sen. Barack Obama to run for – and win – the presidency of the United States.
Martin walked…so Obama could run.
Obama ran…so our children could fly.
But Americans shouldn’t teach children that they need politicians of any stripe to be successful in life. In fact, they should know that President Obama’s is about to hand them - and successive generations – an astronomical national debt that they will have to deal with someday.
This deifying of Obama is unhealthy for our students because we’re teaching them to look to an individual – or government in general - for life solutions. If anything, today’s kids need to be reprogrammed to remember that they are the masters of their own destinies, and they themselves make the decisions that will ultimately determine the course of their lives.
As President John Adams said, we have “a government of laws, and not of men.” The unhealthy tendency to worship the people that temporarily fill government positions is a distraction for young people who should be focused on their own efforts to find their way in life.
Students need responsible parents and high quality teachers and educational options to be prepared for life, not pandering politicians or a nanny state that tells them what to eat for lunch, makes excuses for failing schools and defends subpar teachers.
http://townhall.com/columnists/kyleolson/2013/02/20/georgia-elementary-school-verse-obama-ran-so-our-children-could-fly-n1515607
Schools Jump the Shark
Around the ranch we usually mutter and shake our heads, but now they've gone too far.Public school officials at Heritage Middle School in Meridian, Idaho put the school on 'lockdown' because a teenage boy was seen 'roaming the halls' with a ... ready? ... a folding military style ... shovel.
A shovel.
No report filed on whether it was a high capacity shovel. Might have been high capacity in the hands of Big John, loading sixteen tons. Certainly not in the soft un-calloused hands of a school bureaucrat.
A middle school teenage boy was spotted in the halls with a 'suspicious' object and the school "resource officer" leapt into action. Only trouble was the boy was on an errand for a teacher who had forgotten the folding entrenching tool, meaning shovel. A prop for a history lesson on WWII.
Local police said no charges would be filed. So the kid's got that going for him, which is nice.
Meanwhile, quoting the KTVB article:
... Nearby Rocky Mountain High School, Paramount Elementary, Prospect Elementary, Sawtooth Middle School were put in "shelter in place" mode, which means students weren't allowed to leave those schools while police responded to Heritage Middle School. Exline says those schools took the measure as a precaution.Dear God. Whatever happened to a proud and resilient people who took pride in the phrase "One Riot. One Ranger"? Are our public schools really captained by idiots and Peter Principle bureaucrats? Has it really come to this, that a boy with a shovel is a threat to the community?
Yes.
There's the boy who brought kombucha tea to school in his own lunchbox.
The six year old Maryland boy suspend for making gun-hand gesture and saying ... gasp ... Pow!
The Hyannis School District's threat to rid themselves of a boy, age five, who made a gun out of Legos!
The Arizona high school freshman suspended for being in possession a blankety blank picture of a gun.
A Loveland, Colorado 2nd Grader playing at being hero during recess in a make believe game of saving his friends by throwing an imaginary grenade into a box.
(take the blood pressure pill, Geer)
The five year old suspended in Mount Carmel, Pennsylvania and actually accused of being a terrorist for playing with her 'Hello Kitty Bubble Gun'. No, I did not make that up. Wait, I typed that wrong. Suspended for talking about playing with her bubble gun.
Melody Valentin was searched, harassed, interrogated, chastised, yelled at by school officials, ridiculed by her classmates and suspended for the crime of having a piece of paper with her that sorta kinda resembled a gun. Quote: "He [school official] yelled at me and said I shouldn't have brought the gun to school and I kept telling him it was a paper gun, but he wouldn't listen." She was even called a murderer.
Paper bullets, anyone? A grown man yelling at a little girl, making her cry in public? He needs to meet Trace Adkins.
A Waco, Texas four year old boy suspended for hugging a teacher's aide.
A San Diego teen suspended for bringing his Bible to school, and the horror of sharing his faith while at school.
Alyssa McKinley thought her Monument, Colorado friend was having an asthma attack and shared her asthma inhaler with her. That's how they got thrown out of school. For an act of kindness.
Suspended for taking a picture of a teacher napping on the job. Yep, Mustang, Oklahoma. Not the teacher. The student.
And the infamous Jello suspension. Don't do Jello, kids. Not in school anyway.
Yes, being employed in the teaching professions is hard work, and Lord knows these brave men and women get little to no help from parents who treat school like a Government Baby Sitting Entitlement Program. But c'mon. Be serious.
A West Michigan school district is seriously considering raising teacher salaries to $100,000 in order ... and I quote ... "attract the best talent".
How about we start with school administrators and their minions on down to the teacher being tested for common sense, traditional values and hard headed character? You know, like the Rev. Martin Luther King wanted? Content of character? Instead of The Indomitable Fortress of Rule-Gods and their Holy Book of Ever Expanding Rules?
For pity's sake, even Wikipedia now has an entry for The War On Kids. You can go here to see what Wiki is referencing.
Here is my analysis. Not American Thinker's analysis. My analysis. The war on kids, authoritarian bullies sucking up massive paychecks on our dime, the impenetrable wall of ideological ignorance married to an intensely juvenile and callow state of mind fostered and nurtured by American Higher Education has produced a hell children must not be exposed to. The active propaganda and literal Pavlovian behavioral training that goes on in public schools to force and reinforce a Progressive agenda is disgusting at best and terrifying in reality. If they know how to rewire a child's brain in pursuit of reading skills, do I need posit the next obvious postulate?
Expelling a child for supposed gun related issues at 4, 5 even 6 years old is behavioral modification taken to the level of brainwashing.
Get your children out of public schools. Do not sacrifice your children. Get out now. Because John D. Rockefeller meant it when he said "I don't want a nation of thinkers. I want a nation of workers."
Why do I mention John D.? Because it was John D.'s money through the Trust that founded the National Education Association. The largest labor union in America.
In 1936, the National Education Association stated its position, from which they have never wavered; "We stand for socializing the individual."
The NEA in its "Policy For American Education" stated,
"The major problem of education in our times arises out of the fact that we live in a period of fundamental social change. In the new democracy [we were a Republic] education must share in the responsibility of giving purpose and direction to social change. The major function of the school is the social orientation of the individual. Education must operate according to a well-formulated social policy."Paul Haubner, specialist for the NEA, tells us,
"The schools cannot allow parents to influence the kind of values-education their children receive in school; that is what is wrong with those who say there is a universal system of values. Our goals are incompatible with theirs. We must change their values."
"Education for international understanding involves the use of education as a force for conditioning the will of the people." - National Education Association, Education for International Understanding in American Schools, page 33 (1948)
"Schools will become clinics whose purpose is to provide individualized, psycho-social treatment for the student, and teachers must become psycho-social therapists."- National Education Association, "Education for the '70s," Today's Education, January 1969
"Far too many people in America, both in and out of education, look upon the elementary school as a place to learn reading, writing and arithmetic." - Association for Supervision and Curriculum Development, National Education Association Yearbook, 1947
"The NEA's ultimate goal is to tap the legal, political and economic powers of the U.S. Congress. We want leaders and staff with sufficient clout that they may roam the halls of Congress and collect votes to re-order the priorities of the United States of America." - Terry Herndon, NEA Executive Director, 1973
"We are the biggest potential political striking force [union] in this country, and we are determined to control the direction of [public] education." - NEA President Catherine Barrett (1972)
"In the struggle to establish an adequate world government, the teacher can do much to prepare the hearts & minds of children for global understanding and cooperation.... At the very heart of all the agencies which will assure the coming of world government must stand the school, the teacher, and the organized profession." - The Teacher & World Government by former editor of the NEA Journal, Joy Elmer Morgan, 1946
"NEA and its affiliates are effective advocates because we have power, and we have power because there are more than 3.2 million people who are willing to pay us hundreds of millions of dollars in dues each year." - Bob Chanin, NEA General Counsel
"I don't want a nation of thinkers. I want a nation of workers." - John D. Rockefeller, created the General Education Board (GEB) in 1903 to dispense Rockefeller funds to the National Education Association.You serve up your child to a godless-ness always roaming in the world since the days of child sacrifice to Moloch. I beg you, get your children out of public schools.
PK'S NOTE: Stooge for the UN, anyone? Excuse me, these are the tasks for the Sec of State: "The primary responsibility of the secretary of state is international relations, and he spends much of his time traveling abroad on diplomatic missions. The secretary of state also is responsible for advising the president on international matters and conveying his foreign policy agendas. Other tasks include working with foreign embassies and monitoring international arms issues."I don't see pushing a green agenda on the US in there.
Kerry comes out swinging on climate change
John Kerry used his first major speech as secretary of State to make that case that failing to confront climate change means missing big economic opportunities — and worse.“If we waste this opportunity, it may be the only thing our generation — generations — are remembered for. We need to find the courage to leave a far different legacy,” Kerry said in a wide-ranging address Wednesday at the University of Virginia.
Kerry again signaled that he hopes to use his role as top diplomat to promote green energy technologies, arguing they can provide a major boost to U.S. industries in the “next great revolution in our marketplace.”
He also cited the prospect of new markets for “America’s second-to-none innovators and entrepreneurs.”
“We need to commit ourselves to doing the smart thing and the right thing and to truly take on this challenge, because of we don’t rise to meet it, then rising temperatures and rising sea levels will surely lead to rising costs down the road. Ask any insurance company,” he said.
The Hill’s Julian Pecquet has much more on the speech here.
The State Department represents the U.S. at ongoing international talks to craft a new global climate accord, and has an array of bilateral climate and green energy partnerships, among other global warming-related work.
Kerry is also under pressure from green groups to reject to proposed Keystone XL oil sands pipeline that State is reviewing.
Says Congress greater threat to foreign policy than China, Middle East...
Complains about lack of funding...
http://thehill.com/blogs/e2-wire/e2-wire/284017-kerry-comes-out-swinging-on-climate-change#ixzz2LT4SNvmh
PK'S NOTE: NOBODY is covering these issues, not just Fox. And it is a real threat. I don't buy into her premise of the influence of Saudi Arabia, but there is influence from other sources. You will only find this kind of information in alternative resources online.
Fox News and the Saudi Prince
Diana West has provided a uniquely incisive critique
of Fox News' coverage of Islam -- its ongoing bowdlerization, or "Bin
Talalization"-with a fascinating chronology that includes coverage of
how the network reacted to billionaire Saudi "Prince" Bin Talal's
rejected offer of $10 million in assistance to "The Twin Towers Fund"
during the immediate aftermath of the 9/11/2001 jihad terrorist
attacks. The ongoing 12-year evolution of its coverage has not been
salutary.
Here is a synopsis of her argumentation:
Here is a synopsis of her argumentation:
This phenomenon, of course, is by no means unique to Fox, just as it is by no means unique to journalism. If we examine Fox's body of work I believe the unspoken guidelines for coverage and discussion become quite clear. As noted above, Fox News covers terrorism, war, national security. It does not cover, let alone chronicle, the introduction of sharia -- Islamic law -- into the West. It does not cover the massive ongoing Islamic movement by which the Western world is being rapidly Islamized. It does not cover what the Muslim Brotherhood calls "civilization jihad." It does not cover the disappearance of Western culture in Europe. What we know as "political correctness" probably keeps such issues off the air in the MSM, but Fox makes a point of rising above such PC. I think the news vacuum we can see on Fox is at least partly a result of News Corp.'s Saudi influence. Such influence does not serve the American public interest.Here is the entire interview.
The future of free-market healthcare
Over nearly a century, progressives have pressed for a national, single-payer healthcare system. When it comes to health reform, what have conservatives stood for?
For far too long, conservatives have failed to coalesce around a long-term vision of what a free-market healthcare system should look like. Republican attention to healthcare, in turn, has only arisen sporadically, in response to Democratic initiatives.
Obamacare is the logical byproduct of this conservative policy neglect. President Barack Obama’s re-election was a strategic victory for his signature healthcare law. Once the bulk of the program begins to be implemented in 2014 — especially its trillions of dollars in new health-insurance subsidies — it will become politically impossible to repeal. And as the baby boomers retire and Obamacare is fully operational, government health spending will reach unsustainable levels.
The great irony of Obama’s triumph, however, is that it can pave the way for Republicans to adopt a comprehensive, market-oriented healthcare agenda. The market-oriented prescription drug program in Medicare has controlled the growth of government health spending. Similarly, conservatives can use Obamacare’s important concession to the private sector — its establishment of subsidized insurance marketplaces — as a vehicle for broader entitlement reforms.
While most Americans view their healthcare system as “free-market,” Switzerland actually has the most market-oriented healthcare system in the West. It translates into universal coverage and low entitlement costs. Swiss government entities spent about 3.5 percent of gross domestic product on healthcare in 2010, compared to 8.5 percent in the United States. That’s a difference of more than $5 trillion over 10 years: real money, especially relative to our $16 trillion debt.
There is no “public option” in Switzerland. Instead, citizens qualify for means-tested, sliding-scale subsidies and choose among a variety of regulated, private-sector insurance products. The Swiss have the freedom to choose their own doctors, as Americans do, and access to the latest medical technologies. They also have short waiting times for appointments.
Both Representative Paul Ryan’s “premium support” proposal for Medicare and Obamacare’s exchanges are modeled on the Swiss system. If premium support is a dastardly right-wing plot, despite its origins in Democratic circles, applying Obamacare’s exchanges to Medicare is even more so. After all, Obamacare’s subsidies only apply to those with incomes below four times the federal poverty level: $60,520 for a family of two. By contrast, Medicare subsidies apply to every American over age 65.
Shifting Medicare to the exchanges would save trillions of taxpayer dollars in future entitlement spending. After all, why should middle-class taxpayers be forced to pay for Warren Buffett’s health insurance?
There is, indeed, a way to use health-insurance exchanges to both reform our healthcare entitlements and reduce premiums for those with private insurance. This transition could take four steps.
The first is to replace or reform Obamacare’s exchanges, which are larded with costly mandates and regulations. These drive up the price of insurance, while limiting insurers’ ability to come up with more innovative, cost-efficient products.
“Community rating,” for example, will dramatically increase premiums for young people, a counterproductive approach when one considers that most uninsured Americans are in their 20s and 30s. States should build free-market exchanges with affordable health plans — as Utah has done — and demonstrate their superiority to Obamacare’s costlier approach.
Second, Republicans in Congress should put the size, scale and growth of Obamacare’s insurance subsidies on the table in all current and future budget talks. The subsidies should end at 300 percent of the federal poverty level, as they do in Massachusetts, instead of 400 percent. And they should not grow at a faster rate than the economy, as they are now designed to do.
Third, we should use the insurance exchanges in the service of Medicare reform. Instead of bothering with complex legislation, Congress should raise the eligibility age for traditional Medicare by three months each year — for the foreseeable future. Retirees will then gradually migrate into the exchanges’ premium-support systems.
Medicaid-eligible seniors should also be offered exchange-based coverage, to improve the quality and coordination of their care.
Fourth is to gradually shift the remainder of Medicaid’s low-income enrollees into the exchanges. Today, Medicaid recipients face a strong disincentive to seek work, because entry-level jobs can force them to give up their health coverage in exchange for modestly higher income. The exchanges would allow these workers to climb up the income ladder while maintaining their insurance.
The end result would be a fiscally sustainable, fully reformed set of entitlement and insurance programs that place American families in charge of their own health dollars. In other words, everything that conservatives have always wanted. And we’d have Obama, in part, to thank.
http://blogs.reuters.com/great-debate/2013/02/20/the-future-of-free-market-healthcare/
PK'S NOTE: We've got some policy stuff going on for the next few articles: investments, banking and housing...
Dodd-Frank Made "Too Big To Fail" Worse - Now A GOP Lawmaker Proposes A Fix
Congressman John Campbell (R-Calif.) has introduced a bill that would enforce simple and easy regulations that Campbell says will end the problem of too-big-to-fail banks in the United States - a problem that has been exacerbated by the Dodd-Frank financial regulation passed in the wake of the financial crisis. The biggest banks are bigger than ever and potentially pose more risk than they did before the 2008 financial crisis.Congressman Campbell's bill would raise capital requirements and require banks with more than $50 billion in assets to hold more "safe" assets like long-term bonds while repealing the "Volcker Rule" that prohibited certain kinds of speculative investments. Additionally, there would be rules in place that would give federal regulators an additional early warning system to indicate when a bank became hazardous.
The Reason Foundation writes in mild favor of Rep. Campbell's bill while identifying that it's imperfect:
Enter Congressman John Campbell, Chairman of the Financial Services Subcommittee on Monetary Policy and Trade, who just last week introduced the Systemic Risk Mitigation Act, a bill aimed at eliminating the TBTF problem. While the California Republican's bill doesn't go as far as saying big banks need to be torn apart, it does intend to shrink TBTF banks by requiring them to hold more capital. The idea is to get big banks to shrink their balance sheets, putting taxpayers at less of a risk in event of a failure. Perhaps the better line of delineation between big and small is $250 billion. This is more along the lines of the 12 U.S. Banks that Richard Fisher identified back in January as candidates for TBTF status. Together, these 12 banks hold 69 percent of total industry assets, but only account for .2 percent of all U.S. Banks.Ordinarily, such heavy-handed government intervention is anathema to free-market reformers. But as Reason writes, banks that are too big to fail is get a "hidden subsidy" that amounts to between $30 and $60 billion every year. Jim Pethokoukis at the American Enterprise Institute wrote about how the subsidy received by too big to fail banks poses more danger than most Americans believe:
The higher that capital ratios are, the less likely banks are to face liquidity and solvency problems... Thomas Hoenig, vice chairman of the Federal Deposit Insurance Corp., would prefer using stricter accounting standards. “Derivatives, like loans, carry risk,” Hoenig said in an interview with Bloomberg. “To recognize those bets on the balance sheet would give a better picture of the risk exposures that are there.” The big banks point out that US rules allow them and their trading partners “to add up the positions they have with each other and show what would be owed if all contracts had to be settled suddenly.” Thanks to this “netting” practice, US bank asset size is, in reality, a lot less.What's more, the Dodd-Frank financial regulation passed specifically to address some of the contributing problems of the financial crisis has made the problem worse, not better. Richard Fisher, President of the Dallas Federal Reserve and a Democrat, said that "Dodd-Frank has not done enough to corral 'too big to fail' banks and, on balance, the act has made things worse, not better."
Democrat Sen. Tim Johnson, the chairman of the Senate Banking Committee, has been urging regulators to ignore the too big to fail problem while instead focusing on the implementation of Dodd-Frank rules that enshrine too-big-to-fail as government policy.
Congressman Campbell believes that's the wrong approach, and that the too-big-to-fail problem poses the greatest federal banking policy problem at this point. It remains to be seen if his legislation gets much traction on the Hill.
http://townhall.com/tipsheet/kevinglass/2013/02/20/doddfrank-made-too-big-to-fail-worse--now-a-gop-lawmaker-proposes-a-fix-n1516405
A Different Standard
Housing regulation would encourage risky lending, critics say (AGAIN!)
The rule would establish a controversial standard for determining if discrimination was taking place in mortgage lending. Critics say such a standard would lead to more lending by banks to borrowers less able to repay their debts.
The debate over discrimination in lending revolves around two different standards. The first, known as disparate treatment, holds that one must intend to discriminate against borrowers in order to be legally liable.
The other standard, disparate impact, holds that any lending standard that yields different results for different racial or ethnic demographics is in itself discriminatory even if the lender has no intent to discriminate and applied lending standards equally to all applicants.
HUD is attempting to institutionalize the disparate impact standard in a rule finalized this month.
The rule would classify as discrimination any lending practice that results in a racial disparity in the makeup of borrowers, critics say. If a bank’s lending standards result in a larger share of Asian borrowers than Hispanic borrowers, for instance, those standards would be illegal, even if the bank had no intention to discriminate.
According to the Washington State Asset Building Coalition, blacks and Hispanics are significantly more likely to have lower credit scores than Caucasians. A lending policy based solely on one’s credit score would have a disparate racial impact, not due to any intent to discriminate but due to the varying creditworthiness of potential borrowers in different racial demographics.
“This is a foolish policy that will punish lenders for totally neutral, nondiscriminatory credit standards and policies,” said Hans von Spakovsky, a senior legal fellow at the Heritage Foundation and a former attorney in the Justice Department civil rights division.
The HUD rule “will impose racial quotas on lenders of the same type that previously led to the mortgage crash,” Spakovsky said in an email.
Critics note that the HUD rule is similar in intent to a 1977 law called the Community Reinvestment Act, which aimed to reduce racial discrimination in lending.
That law “led to riskier lending by banks,” according to a study by the National Bureau of Economic Research. The study found positive correlations between CRA compliance and the rate at which banks tended to lend as well as the delinquency rates of their loan portfolios.
The HUD disparate impact rule may lead to more risky loans and more defaults, observers warn.
The American Banking Association released a statement urging “regulators to refocus their fair lending supervision on potential differing treatment of borrowers with similar circumstances and creditworthiness, rather than applying statistical quotas.”
An ABA spokesperson declined to elaborate on the group’s objections to the rule.
Roger Clegg, the president of the Center for Equal Opportunity, also voiced concerns about HUD’s “politically correct” approach to mortgage regulations.
There is “a lot of evidence” that the rule would lead to more risky lending practices, Clegg said.
Clegg expressed doubts about the HUD rule legal grounding. The department cited “eleven federal courts of appeals that have ruled on this issue” and agreed that the disparate impact standard is the appropriate application of the Fair Housing Act, the law that governs lending discrimination.
However, Clegg noted, the Supreme Court has been cool to such an argument. The court was slated to consider the question of disparate impact last year in a case brought by the city of St. Paul, Minn.
The Justice Department, in a deal a number of lawmakers alleged was an improper “quid pro quo,” agreed to drop an unrelated False Claims Act case against the city if it withdrew its Supreme Court complaint.
“I don’t think that DOJ would dispute that it doesn’t want the Supreme Court to decide the issue” or that “they pressured the city of St. Paul” to drop the case, Clegg said.
Hans Bader, senior attorney and counsel for special projects at the Competitive Enterprise Institute, which filed a brief in the St. Paul case, said the HUD rule “would pressure banks to engage in the very same risky practices that led to the 2008 housing collapse such as mortgage lending to non-creditworthy borrowers. Thus, it could contribute to a future financial crisis, and it will help spawn future mortgage meltdowns.”
HUD did not respond to a request for comment.
http://freebeacon.com/a-different-standard/
Unsanctioned Investments
U.S. institutions hold shares of Turkish bank engaged in gold-for-oil trades
Several of America’s largest financial institutions are significant shareholders in Turkey’s Halkbank, a majority state-owned lender that has come under fire for enabling so-called “gold-for-gas” exchanges with Iran that violate U.S. sanctions, according to investment documents obtained by the Washington Free Beacon.
Multiple U.S. financial groups currently own shares in the bank, also known as Turkiye Halk Bankasi, which is state-owned and publicly traded. They include the Vanguard Group, Inc., Fidelity Management, J.P. Morgan, T. Rowe Price Associates, Inc., and Principal Management Group, among others.
Iran sanctions experts criticized these companies for profiting from investments in a foreign bank that has long been a key enabler of Iran’s efforts to skirt sanctions targeting its energy and oil industry.
“It is of great concern that U.S. institutions may be indirectly involved in the sale of Iranian oil for Turkish gold,” said Nathan Carleton, spokesman for United Against Nuclear Iran (UANI), a nonpartisan advocacy group that pressures international companies to cease dealings with Tehran. “The Iranian regime is conducting these transactions specifically to evade sanctions and fund its nuclear program.”
“The American people don’t want their money going toward Iran business, and once they’re informed of these situations the companies will have to make a choice between U.S. investors or the Iranian regime,” Carleton said. “Any U.S. entities invested in Halkbank should take immediate action to stop Iranian oil transactions, or divest.”
Halkbank has quietly been exchanging large amounts of gold for Iranian crude oil according to multiple reports. These large monetary exchanges have provided Tehran with an economic lifeline while the nation’s energy sector is subjected to international sanctions.
Turkey is believed to have swapped at least 60 tons of gold for several million tons of Iranian crude oil, though the amounts could be larger.
Halkbank has also processed monetary deals between Indian oil companies and Tehran, according to Bloomberg.
The U.S. has never formally blacklisted Halkbank despite its sanctions-evading practices. While it is legal to own shares in the bank, its behavior directly violates U.S. and U.N. sanctions on Iran.
Sanctions experts have speculated the state-controlled Halkbank may have escaped designation due to its political connections.
“The Obama administration relies heavily on Turkey—we have effectively sub-contracted our Syria policy to Ankara. A designation of Halkbank would greatly complicate that relationship,” said Jonathan Schanzer, a former terrorism finance analyst at the U.S. Treasury Department.
It is difficult to determine just how much U.S. money is tied up in the Ankara-based bank, though one of the its shareholders, Vanguard, maintains the investments in Halkbank are minimal and not “political” in nature.
At least five Vanguard funds have “relatively small investments in Turkiye Halk Bankasi as of Dec. 31, 2012,” David Hoffman, a Vanguard spokesman, told the Free Beacon.
Halkbank accounted for “0.02 percent to 0.16 percent” of fund assets, according to Hoffman.
Vanguard is one of Halbank’s top five American investors, owning nearly 2 percent of the lender as of late Friday, according to updated Bloomberg investment information obtained by the Free Beacon. This translates to more than 24 million shares in the bank.
Hoffman said Vanguard’s investments in Halkbank are primarily maintained through index funds, or collective investment systems.
These types of investments “are developed and maintained by independent, third-party companies,” meaning that Vanguard itself has “no input on the index construction methodologies or component companies that comprise any given benchmark,” Hoffman said.
Vanguard additionally retains an “actively managed fund” with shares in Halkbank. These types of funds include investments that are selected by a fund manager.
Asked why Vanguard would invest in a fund that has been identified as a partner in Iran sanctions-busting schemes, Hoffman said its advisers do not make “investment decisions based on social or political issues.”
Hoffman added that it is not prudent for Vanguard to make financial decisions based on the prevailing political climate.
“As an investment firm with a very large client base, Vanguard is frequently asked by clients to divest from stocks for a variety of reasons—from environmental and social issues to humanitarian and political concerns,” he said. “We simply cannot manage investment portfolios in an effective manner that would address all of these issues while fulfilling our fiduciary obligation to shareholders to produce the highest possible investment returns.”
The other U.S. financial institutions involved in Halkbank either did not respond to a request for comment or declined comment when reached by the Free Beacon last week.
A spokesperson for J.P. Morgan said the firm does “not to comment on individual companies,” but directed a reporter to the group’s Turkey Equity Fund, which “offers investors the opportunity to share in the development of the Turkish economy.”
Halkbank is listed as one of the top investments in this particular fund.
“This is not uncommon,” said Schanzer, a vice president of research at the Foundation for Defense of Democracies. “Without a U.S. treasury designation, such investments are legal. The corporate compliance officers have no legal reason compelling them to divest.”
Iran sanctions experts on Capitol Hill have long been watching Halkbank and its U.S. partners, sources said.
“Halkbank is one of the worst offenders in the world of U.S. sanctions violations on multiple levels, many of which are not even public,” said a senior Senate aide involved in sanctions legislation.
Foreign governments have detailed to U.S. officials “sanctionable activity with regard to Iran,” the source said. Yet “no action has been taken by the Obama administration, despite more than year now of sanctions violations going on in Turkey. It’s about time the American people know where their money is getting invested.”
U.S. companies involved in Halkbank have been walking a tightrope, said the Senate source.
“There’s a legal side to this and if I were Vanguard’s lawyers I’d be freaking out right now and figuring out how to divest because you are literally sitting on a volcano of sanctions violations that is about to erupt,” the source said. “It’s legal until its not, and one flip of the switch at the Treasury Department and suddenly you’re the primary U.S. shareholder of a sanctioned company under U.S. law”
Carleton said these types of questionable investments are not unusual.
“This sort of thing is sadly rather common, particularly since these deals often have been in place since before Iran sanctions and divestment were as popular as they are now,” he said. “We regularly find that simply highlighting the issue will result in change.”
Recently implemented economic sanctions could make it more difficult for Halkbank to support Iran’s energy sector.
Reuters reported Friday “tighter U.S. sanctions are killing off Turkey’s gold-for-gas trade with Iran.”
New regulations limiting the sale of “precious metals” to Iran could make it tougher for Turkey to transfer gold, according to report.
However, some experts doubt the new sanctions will have a meaningful impact as Turkey continues to back rogue terrorist regimes.
“The Halkbank issue is just one of several for Turkey right now,” Schanzer said. “Ankara has become one of the top sponsors of the Palestinian terrorist group Hamas.”
“It was also put on notice five years ago by the Financial Action Task Force (FATF), which is the United Nations of terrorism finance,” Schanzer said. “FATF warned that Turkey’s laws failed to properly criminalize terror finance and money laundering.”
http://freebeacon.com/unsanctioned-investments/
Also Reads:
No comments:
Post a Comment