The Great Race

Another day, another Democrat declares his or her intent to seek the party’s presidential nomination in 2020.

It’s way too early to handicap this thing, so I’ll start with a paraphrase of a very concise analysis offered by Ben Shapiro. (Yes, the same Ben Shapiro who’s been banned from speaking at college campuses because the liberals in those institutions’ administrations only believe in free speech for themselves; anyone who thinks differently must be silenced, especially on college campuses, lest our impressionable kiddos actually learn to think for themselves and perhaps become - *gasp* - conservatives.)

I’ll intersperse that with some general observations of my own, and wrap up with some creative ideas for choosing a single candidate from so crowded a field of contenders. All of this will be done with tongue placed firmly against cheek, so lest any of this offend – relax, already, and laugh along.

First, the summary of Shapiro’s analysis (with my own observations sprinkled in). Bernie Sanders owns the left lane of the party (meaning the uber-liberal, socialist faction). In a party that has elevated Alexandria Ocasio-Cortez to the improbable role of thought leader (and I threw up in my mouth a little bit just typing this sentence), many candidates see their best shot as bearing hard left, so some others are trying to crowd into Sanders’ lane, including Kamala Harris, Cory Booker and Elizabeth Warren.

In doing so, they’re getting lost, because again, he owns the lane. To counter that, they’ve spawned a new “me-too” movement: one in which they jump on the Sanders bandwagon for whatever bat-poo crazy liberal idea he floats. Sanders wants to raise taxes on the wealthy (wealthier than him, presumably; now that he’s a millionaire he no longer attacks millionaires, just billionaires)? Gee, so do Harris, Booker, Warren, Kirsten Gillibrand, and Julian Castro. Those same “me-too” Dems have also jumped on Sanders’ Medicare-for-all bandwagon.

In some cases, to draw a distinction, they’re trying to out-liberal Sanders and each other. Oh, Sanders wants to legalize marijuana? Cory “Spartacus” Booker will call your legalization of marijuana and raise you reparations for everyone incarcerated for marijuana possession. (Of course, Spartacus has already made a name for himself in terms of making outrageous comments.)

And in other cases, their me-tooism backfires and they have to back-pedal. Sanders recently said that convicted prisoners should be allowed to vote. An audience member asked whether that would include felons like the Boston Marathon bomber, and Sanders replied that yes, it would, stating that the right to vote is so fundamental that even “terrible people” convicted of heinous crimes should retain it (sidebar to come).

Later, Harris was asked whether she agreed. Proving that she can’t take a controversial position, but wanting to jump into the left lane and draft off Sanders, she said, “We should have that conversation.” (By contrast, “Mayor Pete” Buttigieg opposed the idea when asked, noting that when you’re convicted of a crime you give up some rights, and voting is one of them, but then he’s not navigating toward the left lane, he’s driving in the center – more on that later.)

After Sanders was universally blasted for his statement, Harris recanted in a statement that, as a former prosecutor, she believed that “people who commit murder, people who are terrorists, should be deprived of their rights.” No mention of the earlier comment, no explanation of the about-face. George Orwell would be proud.

(Sidebar: a better question for Sanders would have been whether the white supremacist who ran over and killed a woman in Charlottesville should have the right to vote. See, the only reason Bernie would want prisoners to be able to vote would be if the majority of prisoners were Democrats – let that sink in.

And a more rational approach to the question would relate the right to vote to the crime. Should a convicted abortion clinic bomber be allowed to vote for a president who’s likely to appoint conservative SCOTUS justices who might overturn Roe v. Wade? Should death row inmates be allowed to vote for a candidate for governor whom they think is likely to stay their executions? Should a convicted criminal in a given county be allowed to vote for sheriff of that county? Should any convicted criminal be allowed to vote for appellate court judges?)

To her credit, Warren is trying to set herself apart with her own ideas. The trouble is, they’re so crazy – like forgiving all student loans and making college tuition free – that they’re doing nothing to elevate her from the muck she mired herself in with her “23 and Me” stunt. (By the way, if she were to be elected and forgave all student debt and made tuition free, I’d demand reparations for that. I’d like my tuition and my student loan payments back. With interest.)

So much for the left lane, let’s shift to the self-proclaimed center. Now that Biden has officially declared his candidacy, we can presume he owns that lane. Biden’s problem is his platform: “Trump sucks, so vote for me.” Trouble is, every other Democrat in the race, as well as Howard Schultz, is saying the same thing. Hard to differentiate your product when all of your competitors have the same sales pitch.

Biden has already told the first lie of his young campaign, when he said that he asked President Obama not to endorse him, but to let the primaries play themselves out. Are you flipping kidding me? Anyone who believes that should look up, because it says “gullible” on the ceiling. An Obama endorsement would be gold for any of these candidates – no way would they refuse it. Obama was the one who said he’d let the primaries play out before endorsing a candidate, not Biden. When the time comes, Obama will likely endorse whomever can unseat Sanders, if he endorses anyone at all.

I think Beto is in the center lane too; it’s so hard to say as he doesn’t have a solid position on any issue, large or small. I suspect he’s actually as liberal as they come. But no matter, because Mayor Pete roared past Beto to position himself firmly on Biden’s bumper, and Beto will never catch up. Mayor Pete is also largely devoid of firm positions, and is also likely more left than center. But he talks a good game.

That’s reminiscent of another young candidate, who was equally devoid of ideas and experience (I mean, really, mayor of South Bend, IN?), but turned a pretty phrase. That candidate rode into the White House on identity politics, and Mayor Pete appears to be attempting the same feat.

But this is a guy who couldn’t get elected Indiana State Treasurer. Only three former mayors have ever been elected President; none of them advanced directly from the one office to the other; and all were President before 1930. (For the record, Calvin Coolidge went from mayor of Northampton, MA, to the state House, then the state Senate, then the Lt. Governor, then Governor before becoming Vice President, then President. Grover Cleveland was mayor of Buffalo, having been Sheriff, then became Governor of New York, before being elected President. And Andrew Johnson was mayor of Greeneville, TN, then was elected to the Tennessee House, then the state Senate, then the U.S. House, then the Tennessee Governorship, then the U.S. Senate, before being appointed by Abraham Lincoln as Military Governor of Tennessee, then becoming Lincoln’s running mate for his second term. After Lincoln was assassinated, Johnson became President, and of course was later impeached.) Suffice it to say that to get from mayor of South Bend directly to the White House, Mayor Pete will need a vertical jump to rival Michael Jordan’s.

Do any of these (and the many other) declared Democrat candidates have a snowball’s chance in hell of unseating Trump? Apparently the Republicans don’t think so. In many ways, this is the most vulnerable incumbent president this nation has ever seen. If there was any concern whatsoever in the GOP ranks that they’d lose the White House in 2020, especially to one of the many radical far-left candidates, a challenger would emerge to contest the GOP primary, and that hasn’t happened. Sure, we could still see a Flake or a Romney or a Kasich step up, but the complete lack of noise from any of them appears to reflect fear of getting thrashed.

Usually, a very crowded field of candidates trying to unseat an incumbent president means dim chances of one of them getting elected. It smacks of desperation. So many of them lack experience. Most of them lack ideas, and the ones that don’t have such crazy ideas they don’t stand a chance in a general election. The current number of Democrat candidates is unprecedented, but in 2004 the field was, by previous standards, crowded. The initial front-runner in that field was Dean, who ultimately blew himself up with his infamous “Yeah!!” screech – er, speech. The sharpest crayons in that box were Dennis Kucinich and Joe Lieberman. But the candidates canceled each other out right and left, until the last man standing was John Kerry, and we saw how he fared in the general election against an also-vulnerable George W. Bush.

In another crowded field, this one not facing an incumbent, 2016 saw 16 Republicans contest the primaries. Most observers believed that Donald Trump didn’t stand a chance, and that Jeb Bush was the most likely candidate. Yet again, other candidates canceled each other out right and left, and Bush exited early while Trump emerged as the nominee, then went on to win the general election.

That could well play out in 2020. Biden has the best chance against Trump. (Sanders polls well against him, but we learned in 2016 how reliable polls are. I’ll go out on a limb and say that Sanders is unelectable in a general election, and I’ll pray I’m right.) However, Biden likely can’t survive the primaries; his past failed presidential bids and his more recent “creepy Uncle Joe” image, combined with his advanced age and the fact that he just sounds tired all the time, will not help him against such a crowded field. I’m not convinced he has the energy to aggressively campaign – and that’s not a knock on him; I wouldn’t either at his age. And, again, he has no differentiating message.

If candidates do cancel each other out along the way, we could wind up with a Harris or a Gillibrand or a Mayor Pete as the nominee, and any of those would get crushed in the general. It’s virtually certain that the nominee will not be Warren (too much baggage), Booker (too much drama) or Beto (too little substance). (AOC would be running if she were old enough, and wouldn’t that be fun to watch?)

However, my money is on Sanders. But again, it’s too soon to tell.

With such a large field, though, it seems we can surely come up with something more creative than the current process to pick a winner. Can you imagine a debate with 20+ candidates? They’d only get one question each before all the TV viewers (and Biden) had to go to bed. And the Dems may not be done yet – Hillary earlier said she wouldn’t rule out a bid, though she will not run, IMO; NYC Mayor Bill DeBlasio will probably throw his name in the ring; and we can’t eliminate the possibility of Alec Baldwin stepping in to play the Pat Paulsen role.

If the numbers reach 25 or more candidates, we could set up a bracket similar to the NCAA basketball tournament, which featured 25 teams from 1968-1974, before the bracket was expanded. (This approach could actually accommodate a field as large as 68 candidates, which is the current number of teams that contest the hoops tourney.) The long-shot outsiders could compete in the play-in round, then the others would be seeded according to polling position. Competition would take the form of one-on-one debates, with voters picking a winner after each. Fouls could be called, with free-throw questions granted. Major policy questions would be three-pointers. The winner would advance to the next round. Spike Lee, Samuel L. Jackson and Charles Barkley would provide commentary, or maybe even be the moderators. Definitely more fun than the current scheme.

A Starbucks in the White House?

I watched with interest the Town Hall with Howard Schultz a couple of weeks ago. Schultz, the former CEO of Starbucks, is considering a run for the presidency in 2020 as an Independent.

Sidebar: I also listened to the Town Hall with Bernie Sanders. Like the Schultz event, Sanders’ was hosted by Fox News. By way of a brief summary, Schultz performed far better than Sanders, who came off as combative, partisan and angry, and dodged challenging questions. The most comical exchange was when one of the moderators noted that Sanders, a self-avowed Socialist, wrote a best-selling book and earned millions of dollars, adding, “Isn’t that the very definition of capitalism?” There was a pregnant pause as the prey considered that either of the trap’s jaws would finish it, then Sanders replied, incredibly, “No.” After which he proceeded to divert the discussion to a different topic, rather than explain his obviously illogical answer.

I found Schultz to be intelligent and credible. Plus you have to respect a guy who turned mediocre coffee into an iconic brand with a cult following.

And he’s a likable, respectful man. In fact, that’s a lot of what he proposes to bring to the White House: respectability, decorum, character. At one point, he turned to the audience and polled them, asking them to raise their hands if they would want their children to emulate the behavior of Donald Trump.

Not one hand went up.

But, you know what? While I wouldn’t have raised my hand, either, I’m not necessarily looking for a President whose behavior I’d want my kids to emulate. I want a problem-solver, and I’ll live with churlishness to get that. I wouldn’t have wanted my kids to emulate the behavior of JFK or Bill Clinton, but both were decent Presidents overall. I would want my kids to emulate the behavior of Jimmy Carter when he was President, but other than appointing Paul Volcker to chair the Fed, Carter’s presidency was an unmitigated dumpster fire. So Schultz’s question to the Town Hall audience evokes a “so what” response from me in terms of the criteria for selecting a POTUS.

Schultz also took on Sanders’ “Medicare for All” pipe dream, correctly noting that 180 million people who currently get their insurance through their employer would lose that insurance.

Second sidebar: Sanders would have it replaced by government insurance, but he ignores the fact that, to keep premiums affordable, someone has to subsidize them, so under his plan the portion of premiums currently borne by employers would be borne by taxpayers, meaning the very people paying the premiums. In other words, we’d all pay 100% of our healthcare premiums, vs. paying a much smaller percent due to employer subsidies. Meanwhile, corporations would presumably save the expense of their share of employees’ insurance premiums, becoming even more profitable, which Sanders claims to be against, but no one is questioning him on that (which doesn’t matter; he’d dodge the answer). Sanders also doesn’t mention that the government would get to decide what treatments you can get, and what ones you’d be denied. O, Canada.

Schultz cited the fact that Starbucks was the first U.S. company to offer healthcare to all its employees, including part-timers. That sounds great, but what does it really mean? It means that Starbucks arranges private group medical insurance from Premera Blue Cross and Kaiser to be provided for its employees who work at least 20 hours a week (sorry, part-timers who work fewer hours), who pay at least $37 per paycheck for the benefit, depending on the plan (plans with lower premiums have higher deductibles, just like everybody else’s employer-provided plan). So a part-timer working 20 hours a week and making, say $15 an hour in Seattle, where Starbucks is headquartered, would see more than 12% of his or her pre-tax paycheck go to insurance coverage.

Now, I’m not saying that’s bad; it’s still a good benefit. What Starbucks does is pretty much what every other company does: use private insurance companies to provide benefits to their employees, and pay a part of the negotiated group premiums on employees’ behalf. I’m just saying that Starbucks isn’t doing anything revolutionary, and the only thing Schultz would need to do to expand the Starbucks healthcare “miracle” to the entire U.S. would be to just eliminate Obamacare and maintain the old status quo.

Schultz noted that 42% of Americans are “disgusted” with political fighting between Republicans and Democrats. (Count me among them.) He claims that, as an Independent representing neither party, he could bring both sides together and stop that fighting.

Yeah, that’s what another outsider said in 2016, but look what happened. The problem is that as long as the Congress and the electorate are made up of Democrats and Republicans, there’s going to be fighting between the two parties, and any Independent President has about as much chance of stopping that as PeeWee Herman has of breaking up a fight between Mike Tyson and Conor McGregor.

And again, while I’m fed up with the partisan bickering, I’m looking for policy solutions to specific problems, not a guy who can come in and get everyone singing Kum-Ba-Yah, but whose ideas I’m opposed to.

In terms of policy, Schultz is a much younger Joe Biden, without the creepy groping and with business acumen. And unlike Biden, Schultz is his own man. When asked whether he felt that President Trump had done some good things, Schultz replied that he had, and he has not since recanted that statement. After Biden called his successor, Mike Pence, a “decent guy,” he was lambasted by the gay community, and a day later he trotted along behind his critics like a dog on a leash, saying that no one who believes as Pence does can be “decent.” (Yes, this is the “tolerance” of the Left: I believe differently than you, and you must consider me decent; you believe differently than me, thus you cannot be decent.)

In other words, Biden is just another politician who will turn whichever way the winds of fortune blow. Schultz isn’t afraid to give some credit to those with whom he disagrees overall, which is as rare on the Left as a Honus Wagner baseball card.

Schultz’s ideological similarity to Biden represents the problem for Democrats. Even before he’s announced his candidacy, Biden is the front-runner in the Democrat primary polls, by a wide margin. Assuming Biden declares his candidacy (he will) and wins the nomination (by no means a certainty at this point), and further assuming that Schultz does run as an Independent, they will split the Democrat vote, and Trump will win re-election handily. Sure, Schultz may pick up some Independent voters who value character over results, but aren’t willing to pull the D lever. (Biden will get some of those Independent voters too, the ones who are willing to vote Dem.)

The potential to divide the D vote and give Trump an easy win is why Schultz has been castigated by the Left for considering a third-party run. Why would anyone discourage a fellow American from pursuing public office? Because Democrats don’t want democracy, they want totalitarian control. So they’ll target anyone who, in their estimation, threatens their ability to gain or retain power.

Why not just encourage Schultz to run, and put up a candidate so compelling that he or she can beat both Schultz and Trump? Because there is no such candidate among the Democrat field. In fact, there’s a good chance that a Democrat nominee could finish third in 2020.

For his part, Schultz states that he does not believe he would split the Democrat vote and usher Trump into a second term (he’s either wrong, or he’s lying). Schultz will most certainly run if Sanders is the nominee, as the moderate Schultz offers an alternative to the bat-poo left Sanders. But he’s also likely to run if Biden is the nominee, despite their similarities; when asked during the Town Hall if he would vote for Biden, he said, “I plan to vote for myself,” a pretty blatant show of hand. In any event, he will have had to declare before the Dem nominee is chosen, so given the possibility of a far-left candidate like Sanders, he’s very likely to run.

In that event, the Curmudgeon will make a bold prediction. Thus far, in the wake of the Mueller Report, the cooler heads on the Left (a relative term that means their hair is only smoldering, not an inferno blazing like Dante’s Fifth Circle of Hell) are not calling for Trump’s impeachment, knowing that the case therefor is weak and that there is no GOP support. However, if Schultz declares, look for Dems to mount a full-on impeachment effort, because at that point they will know with certainty that their chances of unseating Trump in November 2020 are as doomed as a Hillary Clinton presidential bid.

Dear Mr. President: Please Make Good Choices

No, this isn’t a plaintive plea for the President to be mindful of his use of Twitter, or his comments, or the labels that he applies to those with whom he disagrees. Sadly, this President is beyond any hope of reforming such behaviors.

Nor does it refer to his judicial nominations, which have been nothing short of brilliant, at least from this anti-activist, Constitutional originalist’s vantage point. It doesn’t even refer to his cabinet picks, many of which have been quite good (Pompeo, Chao, Mnuchin), some of which have been quite bad (Tillerson), and others of which fell victim to forces beyond his or their control. To wit, Jeff Sessions was a decent choice for AG, but then came the Mueller investigation, and Sessions rightly (from a legal perspective) recused himself, which drew the ire and frustration of Trump, the consummate Washington outsider – all of which doomed Sessions’ future as AG.

Likewise, Kirstjen Nielsen wasn’t a bad choice for DHS Secretary, but with the Dems’ (and some key Republicans’) opposition to border security, no progress could be made. And with the media using photos of children in cages that were taken during the Obama administration to make the claim that BABIES ARE BEING RIPPED FROM THEIR MOTHERS’ ARMS!!! (never mind the fact that the Left couldn’t care one whit if a child is trafficked into sexual slavery; that doesn’t affect its ultimate collective aim of turning America blue), Nielsen was in a no-win situation. The same will prove true for the next DHS Secretary, until someone in this country wakes up and does something about border security.

(And as an aside, lest I be accused of being a racist, I’d feel the same way if Canada’s economy were the shit-show that is Mexico’s or Nicaragua's, and if our northern neighbors were overrun with drug cartels, aided and abetted by a corrupt government, and white Canucks were pouring across our northern border in the same numbers that we’re seeing on the southern border. It has nothing to do with race for me, nor is the central issue gang members or terrorists. It has to do, plain and simple, with sovereignty and the rule of law. Either you have those things or you don’t, and if you don’t, you’re not a country, you’re a human landfill for those nations who consider their poorest citizens nothing more than trash.)

No, I’m talking about the two worst decisions President Trump has made since his inauguration: the nominations of Herman Cain and Stephen Moore to the Federal Reserve Board of Governors. Neither is qualified to serve on the Fed, and either would be a liability in the role.

First, to Mr. Cain. I like the guy. He’s smart, and was a good businessman. He knows something of the inner workings of the Fed, having served on the board of directors of the Kansas City Fed bank. I generally agree with his political positions, though agreeing with one’s political positions should have nothing to do with determining whether that individual would make a good Governor of a truly independent Fed.

Next, to Moore. I know less of him, but he’s a supply-sider, as am I, so he must be okay. Unlike Cain, he also has a graduate degree in economics, though not a PhD (more on that later). However, he’s apparently not much of a student of the science. An advocate of using commodity prices rather than overall prices as a gauge of inflation – folly to most economists, including this one – he attributed a commodity price rule to former Fed Chairman Paul Volcker, who never advocated such a rule. Moreover, he referred to that rule as “the Volcker Rule.” The Volcker Rule actually relates to restricting commercial banks from investment trading activity; in other words, it would reinstate the Glass-Steagall Act, which was repealed in 1999, during the Clinton administration.

Finally, after Moore’s nomination to the Fed was announced, he said, “I’m kind of new to this game, frankly, so I’m going to be on a steep learning curve myself about how the Fed operates, how the Federal Reserve makes it decisions, and this is a real, exciting opportunity for me.”

Sorry, but my view of the Fed is that it’s one of those places whose motto should be, “You don’t get trained here, you get here trained.” Because one false move can affect the entire world and everyone in it.

Neither man is a PhD economist. Now, I should be the last person to say that one has to have a PhD in economics to hold a position as an economist. Armed with nothing but a generalist MBA with emphases in economics and finance, I held the title Chief Economist for a national, $35 billion financial institution. And over the course of my career, I’ve corrected the work of PhDs from Ivy League institutions.

However, when it comes to the Fed, I do believe its members should either be academic or private-sector economists, or career bankers, such as current Fed Chair Jerome Powell. I’ll get to the reason why shortly.

Powell was also a Trump nominee, and he was a brilliant choice to replace ivory tower academics like Janet Yellen and Ben Bernanke, who preceded him. He understands the banking system and how interest rates influence money movement and economic activity, but from a more practical vantage point.

The problem with a businessman like Cain, or a political pundit like Moore (Moore is to the right what Paul Krugman is to the left – an economist-cum-political commentator; only Moore is smarter than Krugman) is that all they want is lower rates, all the time.

I don’t have time to get into the whys and wherefores in this post, but I’ve commented on this plenty in the past: easy monetary policy (i.e., too-low rates) is more disastrous to an economy than tight monetary policy (higher rates). The latter can be paused or undone relatively quickly, while the former results in bubbles that wind up being catastrophic, with long-lasting after-effects, and are extravagantly expensive to extricate from. And the usual policy response to a burst bubble is even lower rates. It's a race to the bottom in which everyone loses.

Powell’s rate hikes last year were good policy, even if they caused turmoil in the markets (however, that was short-lived and had as much, if not more, to do with tariffs as with rates) and kept growth from being even higher than it was. Those rate increases kept the economy growing at a strong, sustainable pace (in a mature economy, annual output growth above 4% cannot be sustained without adverse consequences, no matter what any politician claims). More important, those increases paved the way for the Fed to begin unwinding its bloated balance sheet that was inflated by Bernanke’s incredibly risky quantitative easing strategy, which was always going to require the deftest of touches to reverse. In my estimation, Jay Powell is the best Fed Chair since Paul Volcker.

So whom would I appoint, were the decision in my hands? Though he’s no spring chicken, my first choice would be Thomas Hoenig, former CEO of the Federal Reserve Bank of Kansas City. In that role, he served on the FOMC, and was often the lone dissenting vote in the face of Bernanke’s flock of doves, arguing for less accommodative policy (in other words, he was against driving rates too low). He’s smart, knows the territory, and is a reasoned voice.

My other choice might be an academic, but not necessarily one from the usual institutions whose progeny populate the Fed. I don’t believe you need a pure ivory-tower academic from U. of Chicago (or, perish the thought, Princeton or Harvard, which produce only Keynesians). Another banker like Powell would be fine, if the right person could be enticed away from the hefty paychecks of the private sector. 

One thing is certain: neither Cain nor Moore is right for the job. Both are bad-faith nominations by Trump in an effort to punish Powell, and sway the Fed toward easier money. And that is neither necessary – because the Fed is in very capable hands with Powell at the helm – nor wise.

Mueller’s Diner Special of the Day: the Nothingburger

I actually wanted to post about other topics, but the Mueller Report is so front and center in the collective political consciousness right now that I’d be remiss to ignore it, plus readers are asking me to address it, so here goes.

In a nutshell, the report was simply a repeat of the 2016 election: Dems were salivating in anticipation of it, because they were so cock-sure of its outcome, which turned out to be the opposite of what they were expecting, and in the aftermath they can’t accept the result.

Once again, the Democrat party has proven that it doesn’t believe in democracy. It only exists to get its own way, and pout when it doesn’t.

The report concluded that there was no collusion between the Trump campaign and the Russians, and that while Russia attempted to interfere in our election – which should be concerning to all, but is surprising only to the naïve (in part because we do it to them, too) – Russian influence did not affect the outcome of the 2016 presidential election.

Repeat that until you get comfortable with the fact. Because it is fact.

The Left is raising questions as to whether the report was conclusive on the question of obstruction of justice. First, let’s look at the law.

Obstruction of justice is defined as attempting to interfere with a legal proceeding. It certainly appears that Trump’s actions met that definition. However, let’s dig deeper. Cornell Law School’s Legal Information Institute states:

“Someone obstructs justice when that person has a specific intent to obstruct or interfere with a judicial proceeding. For a person to be convicted of obstructing justice, that person must not only have the specific intent to obstruct the proceeding, but that person must know (1) that a proceeding was actually pending at the time; and (2) there must be a connection between the endeavor to obstruct justice and the proceeding, and the person must have knowledge of this connection.”

Did Trump have intent when, for example, he asked his personal legal counsel to pressure Rosenstein to fire Mueller? Maybe. Did he know that the proceeding was pending at the time? Pending, heck – it was underway.

But was there a connection between the endeavor, if it qualifies as such, and the proceeding?

The affirmative argument would presume that the Mueller investigation would find evidence of collusion, which was unknown at the time (and which it ultimately did not).

In other words, as others have noted, how can you be guilty of obstructing justice when no crime was committed? Put another way, how can you be guilty of obstructing justice when justice was served – i.e., the outcome of the proceeding was a conclusion of no evidence of the crime in question (collusion)? Ah, but logical arguments are lost on the illogical.

Second, let’s consider intent vs. action. Did Trump succeed in efforts to keep people from talking to Mueller, or in getting Mueller removed? No, and no. As for his motives, let’s not forget that Trump is a businessman, not a lawyer or politician. And as a businessman, he’s used to being able to direct people not to talk to certain other people, or to fire whomever he wants.

(I spent 15 years as a CEO. On numerous occasions, I directed my staff not to talk to the media about certain matters. And when necessary, I fired people. It’s a part of business, and it’s understandable that when a businessperson enters politics and finds that he or she can’t always do that, it’s frustrating. But it’s only natural that they would try; that’s how things are done in the world they’ve always lived in.)

Back to intent. Is that a crime? I’m reminded of my youth, spent in Newton, Kansas. Newton has a “suburb,” if you will, called North Newton, where Bethel College is located. When I was in high school, North Newton had one cop (let’s call him Barney, so as not to name names).

Now, Bethel was a small college affiliated with the Mennonite faith, and North Newton had a population of about 1,100 back in those days. So needless to say, Barney didn’t have a lot to do.

This was back when streaking was popular. One night Barney came upon a male student wearing a trench coat, but bare-legged beneath it, and wearing running shoes. Barney picked the young man up and confirmed that he was wearing nothing beneath the trench coat, so he took him to the county lock-up in neighboring Newton (North Newton had no jail or police station of its own).

Barney led the young man into the sheriff’s office and demanded that he be arrested, since Barney had no authority to make an arrest in the county’s jurisdiction. The Sheriff asked Barney what the charge was, and Barney stammered, “Intent to streak.”

The laughter that ensued is similar to the laughter that should follow the Left’s ludicrous assertions that Trump should be found guilty of “intent to obstruct” – especially since, again, any such attempt would presume the commission of the crime of collusion, which didn’t happen.

One of the more interesting – and widely-discussed – aspects of the Mueller Report is the statement that the report did not exonerate Trump of the allegation of obstruction, and that if the investigation had found evidence that enabled Mueller to so state, he would have.

The Left, of course, has pounced on that, claiming an “Aha!” moment, and conflating the inability to exonerate with a presumption of guilt that flies in the face of Western jurisprudence.

However, it’s interesting for another reason, and one that no one is talking about except yours truly.

Follow carefully. Mueller was in the role of a prosecutor. Prosecutors are not in the business of exonerating people. They seek evidence, and on the basis thereof, they conclude whether they can bring a case, or whether it’s unwarranted.

So Mueller could not possibly have exonerated Trump, not because there was insufficient evidence to do so, but because doing so would be inconsistent with his role as a prosecutor.

And Mueller would never have stated that Trump was exonerated of the allegation of obstruction, because that’s not what prosecutors do.

So why did Mueller include that nugget in his report? You tell me. A swipe at Trump, who repeatedly criticized Mueller and his investigation? A bitter attempt to try Trump in the court of public opinion, having failed in his lengthy and expensive efforts to find him guilty of a violation of law?

I’ll tell you this: Bob Mueller is a smart guy who’s been around the block, and he did a thorough job. And his inclusion of that tidbit certainly wasn’t a rookie mistake. It was intentional. We just don’t know the intent. However, politics were likely involved.

Next, to the whole laughable dust-up over Attorney General William Barr’s summation of the Mueller Report. Barr issued a brief overview of the report when it was first delivered to him. Once the redacted report was released to lawmakers and the public, the Left’s collective hair caught fire over the fact that Barr’s summary did not include every detail contained in the full report.

Well, let’s see, the full report was over 400 pages (with little of that redacted), and Barr’s summary was delivered in a presser. He didn’t take the time to read the whole report.

Yet still, the Left accused him of being Trump’s lap dog, noting he’s “the Attorney General of the United States, not the Attorney General of the President of the United States.”

It’s to laugh.

If Barr were acting in Trump’s interest, he never would have released the report to begin with (he didn’t have to, under the law). Or, he’d have redacted all the parts that were embarrassing to Trump (and there were a number of those). But he didn’t. So he’s guilty only of not reading the entire report to the media after he released it.

Contrast Barr’s handling of this matter with former Attorney General Eric Holder, who publicly stated that he was President Obama’s “wing man.” Or Holder’s successor, Loretta Lynch, she of the infamous tarmac meeting with Bill Clinton when the investigation into Hillary’s deleted emails was in full swing.

I’d say William Barr is significantly more independent than his two immediate predecessors. Plus, he’s forgotten more about the law than every Democrat lawmaker combined will ever know. Had Barr been appointed by anyone but Donald Trump, his confirmation would have been unanimous, so well-qualified is he.

So what are we left with? A report two years and millions of taxpayers’ dollars in the making, which concluded that the Trump campaign did not collude with Russia, that Russian influence did not affect the outcome of the election, and that there is not enough evidence of obstruction of justice to make a case for it.

We are also left with a report that is, in some parts, unflattering to Donald Trump. Big deal – there’s nothing about Donald Trump in the report that the American people didn’t know, including his staunchest supporters. We all knew he was an egotistical, overbearing, autocratic guy. Nothing in the report is going to change anybody’s mind about the man: if they hated him before, they still hate him, because they’d hate him if the report had concluded that he was completely exonerated (even though it couldn’t) and that he’s a really terrific guy. And if they supported him before, they still support him, because they knew about his warts all along, and still believe he was the best candidate in the 2016 race.

So the Dems are going to move on, right?

Wrong. Dem lawmakers want Mueller to testify. Why? Ostensibly, because they want to hear his summary of his investigation.

News flash: he wrote that summary, all 400+ pages of it. Read it.

They also want to hear from everyone he talked to in his investigation: Manafort, Cohen, Stone, et al, even though several of those people have already testified before Congress.

Again, why? The summary of those interviews by the Mueller team is included in the report.

The Dems won the House back in the mid-terms on a platform of health care reform. Have you seen the bill that House Democrats penned to overhaul Obamacare? Neither have I, nor has anyone else, because it doesn’t exist. So why don’t the Dems move on to legislating, rather than investigating? The answer is simple:

Legislating is largely done behind closed doors. Then, when bills are debated, the debates are generally broadcast on C-Span, and the average American doesn’t watch C-Span, nor have the attention span to view the legislative process.

However, when the Judiciary Committees grill a Paul Manafort, a Michael Cohen, a Brett Kavanaugh, or a Robert Mueller, it’s high theater, broadcast on all the cable “news” outlets. It’s a public forum for people like Kamala Harris, Cory Booker, and Amy Klobuchar to make widely-televised campaign speeches in front of the American people, thinly disguised as investigative questions. It’s an opportunity to look tough in front of their base. An opportunity to show how anti-Trump they are to a constituency whose sole policy prescription is to see Donald Trump voted out of office, for the high crime of not being a Democrat.

Democrat lawmakers say they want answers. You think they’re telling the truth? Tell you what – when they do parade Mueller and others in front of their committees, take out a stopwatch and time their questions, and compare that to the time they allow their witnesses to answer them. You’ll find that the lawmakers talk far more than the witnesses do. They don’t want answers; they want airtime.

I could go on to discuss what should happen in terms of investigating what was behind the whole collusion myth, or why the Obama administration knowingly allowed Russian interference in our election process for two years and did nothing about it, but I’ve already subjected you to 2,000 words, so I’ll save that for another day. Suffice it to say that it appears the Teflon coating on the Clinton Machine has yet to wear off.

A Shutdown Solution

It's been a long hiatus, but I simply haven't enough time to respond to every trifling matter that ignites the collective hair of the left.

The concept of a government shutdown pisses me off. Whatever your views on it, I invite you to consider, as I do, that it is simply wrong to use people's livelihoods as a political football. Maybe it's because I have relatives who are Federal employees, and I don't like seeing them have to wait for back pay while they work, or to be furloughed and have to work like hell to catch up after the furlough ends, even if they do get back pay.

Maybe it's because I've had my own livelihood threatened due to corporate politics, and I tend to go full-on Braveheart mode when somebody messes with my livelihood for their own gain.

Or maybe it's because I'm a states' rights advocate, and requiring people to work without pay violates the wage and hour laws of every state. Yeah, I get it - as Federal employees they're exempt in this instance. But, were I an attorney, that wouldn't stop me from filing a class action suit against every Federal agency, the Congress, and the administration in response to any shutdown that requires people in my state to work for no pay, and have to wait for back pay, assuming their union's negotiating skills are good enough to secure it. Let the courts sort it out.

So I have a solution for this ongoing shutdown issue (I don't mean just the current shutdown; I'm referring to the fact that it's been used as a pawn in the political game of chess across numerous administrations now, with both parties controlling the White House, Congress, or both).

First, we have to accept the irrefutable fact that the shutdown is not solely the fault of the President - Congress shares the blame. That's true now, it was true when Obama was President and the government shut down, it was true when Bush was President and the government shut down, ad nauseum. The problem is not one party or another, it's not Trump's fault or Schumer's fault or Obama's fault or McConnell's fault or Bush's fault or Pelosi's fault. Not in isolation.

The blame rests on the shoulders of all politicians who employ this gambit for political gain. At issue is that they're unwilling to do what they were elected to do: govern, which requires compromise. But compromise threatens the ability to get re-elected, which is the end game in Washington.

Second, we have to recognize that it's all too convenient for these politicians to employ this gambit, because they go unaffected. And that's what needs to change.

So, if they're going to allow a government shutdown, the following conditions apply:

• The salaries of all elected officials, and their aides, are likewise suspended, but there is no back pay. After all, they're Federal employees too. That includes cabinet members and diplomats.
• Air Force One is grounded. And travel to a Senator's or Representative's home state is on their own dime. No taxpayer-funded trips home. In fact, they're all required to continue working until the shutdown ends. No trips to Camp David. No recesses. And all fundraising activity is suspended until the shutdown is over. Any contributions received are forfeited, and will go to reduce the deficit.
• White House staff are furloughed, except for the Secret Service. Capitol Police will also work. Both groups will be guaranteed back pay. No cooks or maids at the White House. No Congressional cafeteria. And definitely no Congressional gym or golf course.
• If a member of Congress allows a shutdown to happen and then leaves office, pension payments are suspended, again with no back payments.

Now, as to what to do to fix the current crisis. I've written before on immigration policy so I won't go into great depth here. But let me remind readers that I'm in favor of legal immigration. I have family members and friends who are or were legal immigrants, including my forebears. I believe in immigration.

But we are a nation of laws, and nations have borders. I've traveled to more than 30 countries, and every time I crossed a border, I had to show a passport or at least a cruise ship card (which requires a passport to obtain) to verify my identity, the purpose of my stay, and the duration. I've also had to clear security. Every. Single. Time. All nations have borders, and those borders are enforced everywhere but on the southern border of the U.S.

Also, let's take fear out of the equation. The concern should not be that those crossing our southern border illegally are murderers, rapists, drunk drivers, drug dealers, human traffickers or terrorists, although any of those may be valid concerns.

The fact that one has crossed our border illegally makes one guilty of breaking the law. We have laws restricting entry into our country, and if those laws are broken, that individual should not be allowed to remain in our country illegally. Period.

Given that, my solution (and note that it does involve compromise, but that's the strange bedfellow of the political process; you may disagree, and that's fine - I disagree with some of these premises myself, but propose them in the interest of compromise, and getting something done):

1. Build the damn wall already. Call it a slatted fence, call it a picket fence, call it a garden hedge, call it Fred for all I care. But build it. At various points in time, Obama (the revered King of the left), Bill Clinton, Hillary Clinton, Chuck Schumer, Nancy Pelosi, Joe Biden, and other Dems have called for a barrier on our southern border. So that's how they can save face in spinning why they compromised: it's not about denying a Trump campaign promise, it's the Obama/Clinton/Clinton/Schumer/Pelosi/Biden wall. It's the wall they wanted all along. They can spin that without recourse, because their followers will lap up any revisionist statement they make as though it were mother's milk - after all, those followers had no issue with a wall when their party's leaders proposed one. The border patrol wants a wall. The border cities where there is a wall have seen reductions in illegal border crossings. It's not the only solution, but it's a solution.
2. As for who pays for it: if the new trade deal with Mexico results in just an 8% reduction in our trade deficit with Mexico, it will indeed pay for the wall, in one year's time. So it's easy to demonstrate that the trade deal will, in fact, result in Mexico paying for the wall. (If the deficit is only reduced by 4%, then Mexico pays for the wall over two years' time, etc.)
3. Grant amnesty to the DACA population. That wouldn't be my preferred policy, but again, compromise is necessary. However, they have to pass a background check and maybe meet other criteria, like having valid government ID, etc. Heck, I have to meet those criteria to get a job, why shouldn't they?
4. Include funding for other security measures. Pelosi says we need drones, not a wall. Well, drones won't do what a wall does to prevent illegal border crossings, but nor will a wall give us the intel that drones will. So include funding for drones, technology to scan vehicles for drugs, an increase in border patrol agents, whatever is needed. I'm not for more government spending, so let's cut spending in other areas that are unnecessary. It isn't hard to find the fat that needs to be cut in order to make border security comprehensive. Chuck Schumer and Nancy Pelosi aren't afraid to spend money - recall that Nancy supported spending more than $700 billion on the Obama-era stimulus package, and said "We need to pass this bill so we can see what's in it."
5. Address reforms in TPS status for immigrants from Central American countries on the list. Make it easier for them to gain asylum - if they cross the border through legal ports of entry and can present a qualifying case. Wanting a job isn't a qualifying case.
6. On the flip side, end chain migration. Make it a felony to cross the border illegally with a minor in tow. That felony being punishable by immediately providing transportation back to Mexico, with a felony charge on your record in case you try to come back in. If Mexico won't help solve the problem, Mexico can own the problem.
7. End sanctuary policies. If a law enforcement officer in a sanctuary city, county or state interferes with ICE, that official can be arrested by ICE, and is banned from working in law enforcement for life, and is subject to federal fines and incarceration. End federal aid to sanctuary locations. California wildfires? Tragic, but if aid is cut off because California wants to pretend it's a sovereign nation by defying federal immigration laws, the crisis is on the shoulders of California lawmakers. Contrary to what some Californians believe, California is no better than Iowa.

There are probably more things I could come up with, but that's a start. It's a compromise, but it's a workable compromise, and it accomplishes what those on the left and the right say they support: increased border security. And either side can spin it to their advantage, so Congress: do your jobs, compromise, negotiate, then spin. It's what you do. Don't worry about the repercussions; your partisan constituents will love you no matter what you do.

Illegal immigration is a problem - no one on the left or right can deny that - and it is wanting for a solution. So I leave you with the problem-solving approach of my one-year-old grandson, who would probably do a better job running this country than anyone we've elected.

My daughter was working with my grandson, Aiden, on using a shape-sorting bucket. You know, those plastic buckets with different shaped cutouts in the lid, and plastic blocks matching those shapes. You put the shaped blocks through the shaped holes in the lid to get them into the bucket - the problem to be solved being getting the blocks in the bucket.

My daughter showed Aiden the round block, and put it in the round hole. Into the bucket it went. Then she did the same with the square block. Then, she handed Aiden the triangular block. He tried the round hole, but to no avail. Then he tried the square hole, again to no avail. He paused, looked at the bucket thoughtfully, and then ...

He lifted the lid off the bucket and dropped the triangular block into it.

The moral of the story? Don't worry about the hurdles in front of you, just solve the dad-gum problem.

I Hold These Truths To Be Self-Evident (But Many Apparently Don't)

I'm writing this on election eve, 2018. As you head to the polls tomorrow (or, if you voted early, as you watch the election coverage on TV and follow the myriad social media rants about it), remember these truths:

• All politicians lie, at all levels, from both parties (and the Independents and "secondary" parties). To wit (and I could go much further back in history, and deeper down the level of elected official, but this will at least get you started):
• "This is the biggest tax cut in our nation's history."
• "You can keep your health care plan and your doctor."
• "I did not have sexual relations with that woman."
• "Read my lips: no new taxes."
• All Presidents blame their predecessor for everything that goes wrong during their administration, and they've begun taking credit for everything that goes right under the subsequent administration. There are some kernels of truth in that, but most of it is BS, and it's self-serving at best.
• If the Democrats win control of the House, the Senate, or both, the world as we know it will not end. Nor will it end if they don't. You'll still have your family, your home, your health and your puppies. (Or kitties, if you're a cat person - and if you are, I love you anyway.)
• Increasingly, each party, once it regains control of the House, the Senate, the White House, or any combination thereof, spends most of its political capital trying to undo whatever the previous House, Senate or Administration did. (Some of this is okay in terms of bad policies, but much of it has become about nothing more than undoing the previous legacy, like little kids who win at a playground game suddenly deciding to re-write the rules because, hey, they won.) And they do it because we not only let them, we encourage them. It's time to move forward, and to break the cycle of doing and undoing the same old stuff.
• Journalism is dead. All media reporting is biased. We choose our outlets to affirm us, not to inform us. If you want the truth, research relentlessly, fact-check suspiciously, and go to source documents when they're available. Take time to read them fully. Do it with an open mind. Check your bias at the door. Be willing to have your mind changed.
• Nazis are Nazis, Hitler was Hitler, the Mafia is the Mafia, fascists are fascists. Just because you're a member of one party or the other doesn't necessarily mean you fall into one of those groups. Similarly, the overwhelming majority of Republicans are not racist, sexist, anti-Semitic, or evil, but a small number undoubtedly are. At the same time, a small number of Democrats undoubtedly are racist, sexist, anti-Semitic or evil, though the overwhelming majority of Democrats are not. If you claim otherwise, you're painting with too broad a brush.
• Everyone should vote their conscience, and if they do, there is no wrong in the way they vote. So don't try to claim that if someone votes for candidates you oppose that those voters are wrong, bad, evil, Nazis, racist, sexist, anti-Semitic, fascist, or that they should be ashamed of themselves, or shouldn't be able to live with themselves, or sleep at night. Bash all the candidates you want, but if you value your right to vote, respect everyone else's. Be glad they exercised their hard-fought right to vote in the first place, and don't denounce them because they don't see the world as you see it. Our brothers, sisters, mothers, fathers, grandparents and ancestors didn't fight on the battlefield or in the suffrage or civil rights movements to earn us the right to vote Democrat or Republican; they fought to secure us the right to vote as we choose. Group-think only exists within Communism, and even then it's not voluntary. So embrace our differences and understand that what unites us is far greater than what divides us.
• Social media has gotten way out of hand. So pledge to avoid the memes (I'm tempted to embark on a mission to correct every misinformed or just plain false meme I see on social media, but I won't; I don't want to alienate my friends, and I don't have that much free time), the extreme, over-the-top name-calling (see the sixth bullet point above), and the extreme rhetoric. Stick to the facts. Keep calm. Self-medicate if you need to. Remember that it's better to remain silent and be thought a fool, than to open one's mouth (or keyboard) and remove all doubt, and that we rarely regret what we didn't say.
• Political rhetoric has gotten out of hand as well. Don't let that justify stooping to the level of a Donald Trump or a Maxine Waters. What-aboutism is a dangerous disease, and if you don't innoculate yourself against it, you risk atrophy of the soul.
• As a friend once said, no one is as bad as you think they are, and no one is as good as you think they are.
• At the end of the day, Democrat or Republican, liberal or conservative, white or black, male or female, gay or straight, young or old, Christian, Jew, Muslim or atheist, we are all Americans. It's high time we started acting like it again.

My Biggest Mid-Term Nightmare

With less than a week to the 2018 mid-term elections, there's a lot to talk about. The 24/7 cable news cycle is moving fast these days, and it's hard for a busy Curmudgeon to keep up. There's a lot to be said, but I want to cut to the chase and address the most frightening scenario from the mid-terms, at least to me.

No, this election isn't about immigration, illegal or otherwise. It isn't about the 14th Amendment, the First Amendment, the Second Amendment, the Supreme Court, legal abortion, Socialism, the media, rhetoric, protests, or even the current state of the economy, at least not to me.

It's about what happens if we wind up with a Democrat majority in the House, the Senate, or both.

Don't get me wrong; the prospect of that in and of itself does not frighten me. See, I've lived through Democrat majorities in both houses of Congress, Democrats in the White House, and a liberal majority on the Supreme Court. I've lived through elections where the people I voted for lost.

And, you know what? I never cried the next day. I never even got angry. I never believed that life as we know it would end. Heck, I never even worried that our Republic as we know it would end.

No, I just said, "Oh well," hoped for the best, prepared to be disappointed in this policy decision or that, and worked to jump over whatever hurdle was placed in front of me: high taxes, excessive regulations, rapidly rising health care premiums, whatever.

(The same can probably be said for most Republican voters - I've never seen huge marches and protests and general outrage after Democrats took control of the House, the Senate or the White House. I guess that's another distinction between the two parties today. Republicans accept the outcome of the election and move on.)

The worst thing to me isn't the fact that Washington would basically get nothing done for the next two years; we've seen that before. I understand why that's a good thing to Dems: they don't want any aspect of Trump's agenda, be it immigration reform, health care reform, spending cuts, or further tax cuts, to succeed. That's okay, there's still the veto.

The most frightening thing to me isn't Sen. Schumer or Rep. Pelosi having the gavel they so covet. (Actually, Rep. Pelosi, who seems to wax near-orgasmic when talking about the gavel, may not get it even if the Dems win the House. And Schumer spends as much time in front of the camera now as he would if he were Majority Leader. Let's face it, the only thing he loves more than the gavel is the microphone.)

It's not Feinstein as Judiciary Committee Chair. The only Justice likely to leave the bench in the next couple of years is RBG, and I don't think Feinstein could find a more liberal judge to replace her. Besides, the appointment wouldn't be Feinstein's to make. The worst she could do is engineer another hijacking of an appointment.

(A quick aside about Feinstein: even if we accept the premise that she didn't leak Dr. Ford's letter, she at a minimum failed to safeguard it. I work in the area of risk management for credit unions, and their biggest concern these days is cyber-risk, of ensuring the security of their members' data. If my credit union gives my data to a fraudster, it is liable. However, if it doesn't adequately safeguard my data and a hacker gets his hands on it, guess what? The credit union is still liable. Failing to safeguard confidential information is nearly as bad as deliberately releasing it, and makes one no less culpable.)

No, it's Maxine "you're not welcome anywhere, anymore" Waters. But not because she advocates public harassment of anyone you disagree with. Not because she calls for impeachment as frequently as a chain smoker coughs.

It's because she'd be Chair of the House Financial Services Committee.

Why is that my biggest fear, you ask? Well, I'm a finance guy, and I know the importance to the overall health of the economy of the financial sector, and the importance to the country of a healthy economy.

The current chair, Rep. Jeb Hensarling, has an economics degree and has run businesses in the financial sector. Rep. Waters has a sociology degree and, since earning it, has been in politics. She's never worked in the financial sector. (Prior to earning her degree, she was a garment worker, a telephone operator and a teacher - all noble professions, but perhaps not adequate preparation for governing our financial sector.)

The biggest issue is her role in creating the housing crisis that led to the most severe economic downturn in most of our lifetimes, one that put millions out of work, caused thousands to lose their homes, and cost workers and retirees untold sums from their retirement savings.

So sit back, grab a drink, and let the Curmudgeon take you on a history of the true genesis of the housing crisis. (Take a break here, if you need to, and don't keep reading if you just want to take my assertions at face value. But if you want to really understand the housing crisis, read on. This is the Curmudgeon's area of expertise.)

*************************

In the olden days, before I was even a Curmudgeon, lenders kept all the mortgage loans they made on their books. Then, in the 1960s, they began packaging and selling them as mortgage-backed securities (MBS). In the 1980s, investment banks began slicing and dicing the cash flows from mortgages into bonds with different characteristics intended for investors with different needs, and those bonds were called collateralized mortgage obligations (CMOs). I won't burden you with the complexities of these bonds, but I spent most of my career intimately involved in analyzing, buying and selling, managing, and hedging MBS and CMOs. I know the difference between a sticky jump-Z, a residual, and a busted PAC. I've built mortgage prepayment models. I get this stuff.

Initially, virtually all MBS and CMOs were issued by the Government National Mortgage Association (GNMA, or Ginnie Mae), a government agency backed by the full faith and credit of the U.S. government, which only bought and packaged FHA and VA mortgages; the Federal National Mortgage Association (FNMA, or Fannie Mae), a quasi-agency backed by the implied full faith and credit of the government, which bought "conventional" mortgages; and the Federal Home Loan Mortgage Corporation (FHLMC, or Freddie Mac), another quasi-agency backed by the implied full faith and credit of the government and which also bought "conventional" mortgages.

What's important about this?

• All three agencies have the explicit or implicit backing of the U.S. government, and that means you, the taxpayer.
• All three bought high-quality, relatively safe mortgages.

In the case of Fannie and Freddie, "conventional" mortgages require sane down payments of at least 10%, or private mortgage insurance (PMI) for loans with lower down payments. All require proof of income and assets, and carry stringent underwriting guidelines intended to provide greater assurance of the borrower's ability to repay regardless of economic conditions. As a backstop, the down payment or PMI requirement covers the taxpayer in the event the borrower defaults. If the lender has to foreclose and sell the property, for example, the home's value would have to decline by more than 10% for the borrower - and by extension, Fannie and Freddie - to take a loss.

Ginnie, Fannie and Freddie also had minimum capital requirements as a further backstop against losses.

Now, in the aftermath of the dot-com recession of 2000-01, Fed Chairman Alan Greenspan's Fed cut short-term interest rates to 1%, a previously unheard of level. That made mortgages very cheap - as low as 5-6%, which sounds high today but was unheard of until 2002. And the Greenspan Fed held rates at 1% longer than they should have. (For those of you lamenting that the Fed today is raising rates too fast, pay attention, and be careful what you wish for. Rates held artificially low for too long inflate bubbles.)

What resulted was a housing bubble of mammoth proportions. But it wasn't just cheap mortgages that were the problem. No, it was exacerbated by a handful of Democrat legislators who decided to erode the safety of the traditional, conventional mortgage, and put taxpayers at risk by loosening the standards for what kind of mortgages Fannie and Freddie could buy, all in the name of a social engineering experiment that attempted to alter the course of an immutable economic measure.

That measure is the homeownership rate. Throughout the 1980s and early 1990s, it remained range-bound at around 64%. Why not higher? Some people can't afford to buy a home, for example those just starting their careers. Some people shouldn't be homeowners - they don't have the financial wherewithal to make a mortgage payment and pay for the upkeep and insurance on a home.

This data series is naturally mean-reverting, meaning that there will always be about 35% of the population that can't afford a home, and shouldn't be trying to until they have the means. (That may sound heartless, but losing a home because you couldn't afford it in the first place is hardest on the homeowner, who loses their place of residence and suffers a major hit to their credit rating.) If you do something to artificially increase a mean-reverting series above its mean, there's going to be an inevitable and painful correction. Supply and demand rule. (Proof: after the correction that resulted from the housing crash, guess what the homeownership rate is today? About 64%.)

Beginning in 1995, the homeownership rate began to rise. This resulted from the Greenspan Fed cutting short-term rates to 3% in the wake of the 1990-91 recession, and again holding them there too long, which made mortgages historically cheap at that time. But then, in the early 2000s, Congress got involved, and made matters worse in the name of increasing homeownership.

First, they allowed mortgage lenders to dramatically relax their lending standards. They were able to make loans with no down payment, or even for more than the purchase price of the home. They didn't have to require proof of income or assets. They didn't have to meet total debt-to-income ratios. They didn't have to require PMI.

In other words, lenders were allowed to make loans for more than the value of the house, to people who didn't have the income to make the payments, who had no other assets, who had huge amounts of credit card and auto loan debt, and who didn't pay for PMI. They did this by structuring loans such that the borrower only paid interest for the first few years, then interest and principal payments would kick in. Or loans where the borrower paid no interest initially, then a rate of interest above the market rate kicked in. In both cases, those borrowers often found themselves unable to make those new, higher payments, and they'd default.

That kind of lending activity was crazy, but that alone wasn't sufficient to tank the economy and threaten the financial system. At that time, Fannie and Freddie couldn't buy those loans. The lenders couldn't hold them on their books beyond the ability of their capital to absorb the losses (and who in their right mind would want to hold those loans in portfolio anyway?). So they packaged them and sold them as MBS and CMOs.

But these were so-called private-label bonds. That meant that the issuer wasn't Fannie or Freddie, it was a mortgage company like Countrywide Mortgage or an investment bank like Bear Stearns, two firms who failed spectacularly in 2008. So the risk was isolated to those lenders and investment bankers who made or securitized or invested in private-label paper.

Then, Maxine Waters, Chris Dodd and Barney Frank stepped in. Dodd had a bachelor's degree in English Literature, and was Chair of the Senate Banking Committee. Frank had a degree in government, and chaired the House Financial Services Committee. Both were career politicians. Neither ever worked in the financial sector.

Dodd, Frank and Waters decided to try to increase the homeownership rate - a noble social cause for someone who's clueless about economics and mean reversion - by allowing Fannie and Freddie to buy the crap loans that lenders were now allowed to make, again thanks to the senseless relaxation of lending requirements by this triumvirate of morons. (The homeownership rate peaked at 69% in 2004, which proved unsustainable.)

Barney Frank went so far as to say, "When it comes to increasing the homeownership rate, I'm willing to gamble with the taxpayers' money." Folks, any politician who states a willingness to gamble with the taxpayers' money has abrogated his or her fiduciary duty to we the people, and should be run out of Washington post-haste. But Frank and his two compatriots did just that - they gambled with our money, and we lost. They didn't.

When Fannie and Freddie were allowed - even instructed - to buy these subprime mortgages, the volume mushroomed. The housing bubble ballooned, as more and more people bought houses they couldn't afford, while Fannie and Freddie supplied the liquidity to buy those loans. More investment banks bought and sold the crappy bonds that Fannie and Freddie were issuing. The ratings agencies slapped triple-A ratings on those bonds, because hey, they were issued by Fannie and Freddie. (And the ratings agencies themselves had their own corrupt conflicts of interest going on, but that's another story.)

The result was a catastrophe that we all remember, all too well. It wasn't the fault of investment banks, though they played a role. It wasn't the fault of predatory lenders, though they played a role. It wasn't the fault of real estate developers and builders, though they played a role. (So did thousands upon thousands of supposedly poor, unsuspecting borrowers who willingly and knowingly lied about their incomes in order to buy a McMansion that they knew they couldn't really afford.)

The genesis was the social experiment conducted by Chris Dodd, Barney Frank, and Maxine Waters at the taxpayers' expense. (I'll also lay blame at the feet of Republican lawmakers and President Bush, who let it all happen.)

Dodd is no longer in the Senate. Frank is no longer in the House. Neither was voted out; both retired.

Maxine Waters is still in the House, and she's poised to become the next Chair of the Financial Services Committee. Her total cluelessness about all things financial isn't the only thing that bothers me, nor is her role in creating the most recent financial crisis.

Just recently, she issued an ominous warning to banks and investment firms, telling them that she's going to hold that Chairmanship, and that when she does, "I'm going to do to you what you did to us."

Except she did it to us, not them. She paved the way for the housing collapse to happen. The banks and investment banks just did what she allowed, and even encouraged, them to do.

Even with all that, I'm not too worried. President Trump will still be able to veto any stupid thing she tries to do, whether it's increased regulations that would stifle growth, or relaxed regulation that would inflate another bubble.

But even if she does hold that position, and is able to somehow create another catastrophe for the U.S. economy, I won't lose sleep. I may move my retirement assets to cash. Or I may short the market, as I did in 2008, when I was able to earn a hefty return from the tanking market. I sure as hell won't take out a subprime mortgage loan to leverage myself into more house than I can afford.

Having said that, there are a lot of unsuspecting people out there who don't understand their finances, and might make bad decisions on the basis of Congress creating stupid financial rules. Just as Congress created the savings and loan crisis of the late 1980s, Congress - led by Maxine Waters and her ilk - created the housing crisis. Maxine Waters chairing the Financial Services Committee is the scariest thing about a "blue wave" that would result in the House changing hands, and it's reason enough for me to vote red in these mid-terms.