Time to turn my ire onto the GOP.
By this time in President Obama's first term, the Senate had approved a dozen of his cabinet nominees. Yet, today, only four of President Trump's nominees have been approved, and now the Democrats have decided to play hooky rather than even meet to approve additional nominees.
President Trump and the GOP, of course, are crying foul. But what goes around, comes around.
Sure, it would have been nice if we'd had an Attorney General in place when the immigration order was signed. The implementation of the order might have gone smoother, and Sally Yates wouldn't have committed an act of insubordination that (rightfully) cost her her job. And President Trump wouldn't have had to fire her, making her today's poster child for fake liberal outrage.
But what comes around, goes around.
When President Obama nominated Merrick Garland to fill the late Justice Antonin Scalia's seat on the Supreme Court, the GOP refused to even hold a hearing. Let's break down the political gamesmanship of that.
Consider the degree to which a justice is an activist vs. a constitutionalist as being akin to a gas gauge in a car. The activists are toward the "Empty" end of the gauge; the constitutionalists are toward the "Full" end, at least when it comes to upholding the Constitution and not legislating from the bench.
So Ruth Bader Ginsberg is the equivalent of running on fumes, while Antonin Scalia was full right up to the cap.
When Scalia died, the GOP wanted to replace him with someone pegging the "Full" mark. If Obama had had his druthers, he'd have picked someone who made Ginsberg look conservative. However, he knew the GOP would hold a hearing and reject that nominee like Shaquille O'Neal blocking a Muggsy Bogues jump shot.
Obama is nothing if not politically cunning. He knew that he could get the GOP to paint themselves as obstructionist. So he nominated Garland, a moderate conservative (on our gas gauge, Garland would be just to the right of the half-tank mark, but so close you couldn't tell the needle wasn't right on the line). Did Obama want a moderate conservative on the court? Heck no, he wanted an uber-liberal. But he knew that he was safe in nominating Garland, because he knew the GOP wouldn't place him on the court. It was a safe - and crafty - pick.
And why wouldn't the GOP compromise and settle for a moderate conservative? Even with Scalia on the bench, this Supreme Court had already proven itself to lean activist. So replacing a full-tank guy with a half-tank guy would shift the court further left. It would be like siphoning off one-half of one-ninth of your constitutional fuel, which is going to shift you about a gallon toward empty.
Then, if Hillary had won the presidential election, she could replace Ginsberg or Kennedy or whichever justice is the next to pass on to that big bench in the sky with the kind of uber-liberal that she would want, and the court would be activist for at least a generation.
Brilliant strategy on Obama's part. Ah, you say, but Mitch McConnell was equally brilliant, because he refused to hold a confirmation hearing on Garland, and Trump won, and he's now nominated another Scalia-like justice, and here we are.
No, Mitch McConnell was lucky. Lucky, and dumb.
No one expected Trump to win the election but Trump, so McConnell took a "yuuuuge" chance in potentially letting Clinton replace Scalia with a justice pegged on the "E" mark of the gauge. So McConnell gambled with justice, and he won, but only because he was lucky. Very, very lucky - like put all your chips and the deed to your house and your IRAs and your kids' college funds and your wife's wedding ring on one number of the roulette wheel and win lucky.
(Don't ever do that, by the way - especially with your wife's wedding ring.)
And, he played right into Obama's hands. Obama called the GOP obstructionist (rightfully so) and scored some campaign points for Hillary - though that wasn't enough to overcome her many negatives in the end. So McConnell made the GOP look bad, as Obama knew he would. And that was dumb. The smart play would have been to immediately hold a hearing and vote to reject Merrick.
Now, McConnell's chickens have come home to roost, and they're leaving guano all over Trump's cabinet, and some is bound to wind up on Judge Gorsuch. So I can't blame the Dems for playing tit-for-tat.
The GOP cries foul because the time is long overdue for the partisan tit-for-tat games in Washington to end. But should the Dems be the ones to end them? Should they be expected to take the high ground, when the GOP won't? (As a conservative, I'd rather see the GOP take the high ground and take the first steps in stopping the gamesmanship, because whichever party does that will wind up looking good in the eyes of voters. Why give the Dems that edge?)
The politics of "you do it too" and "you did it first" are tiresome. They remind me of the backseat arguments between my brother and me, riding in the car on the way to Colorado for vacation. It didn't play well with our Dad, who was inclined to just punish us both, and it doesn't play with the majority of voters, other than the most partisan among us (and among them, it only plays half the time).
So the GOP is reaping what it's sown. We all want these games in Washington to end - well, most of us do - and it's high time they did. If they don't, we're all in peril. It's simply a matter of which party has the moral will to take the first step in the process.
And from where I sit, I don't see either of the current major parties fulfilling that role.
Tuesday, January 31, 2017
Sunday, January 29, 2017
Righteous Balls of Hate
I borrowed the title of this post from a novel I recently read. It seemed particularly apropos as a description of many on the left since President Trump's election.
I see it in the mainstream media, as every Trump decision is derided as evil and nefarious. I see it in the posts on social media, in which the President's actions are misunderstood and misrepresented to paint them in the darkest light. And I see it in the now-daily protests against everything from the man himself to the decisions he makes and the actions he takes. (Do these people not have jobs?)
We need to put all of this hate in its true context.
I've seen Facebook posts that have stated as fact that the executive order on repealing and replacing Obamacare has already eliminated coverage for dependent children to age 26, and coverage of pre-existing conditions. This is patently false. The EO directed various Congressional committees to begin the work of developing a viable replacement for Obamacare - which, let's face it, has become an unmitigated disaster. (Note that no one on the left seems to care that some families' health care premiums have more than doubled.) The President himself has stated that he wanted to preserve the age 26 and pre-existing conditions coverages from Obamacare.
Of course, he's an evil liar who cannot be trusted to keep his word (even though he's fulfilling campaign promises at a rate unmatched by any POTUS in memory). I bet he hates puppies, too.
I've seen other posts decrying the recent EO "banning Muslims." Again, read the order. It has nothing to do with religion. It specifies seven countries from which we will not accept travelers. Those countries were selected because a) they have a history of supporting and/or exporting terrorism to the West, and b) it is relatively more difficult to properly vet people from those countries. Imagine our Secretary of State - if one had been confirmed by now - calling his counterpart in, say, Syria or Somalia and requesting background information on one of their nationals.
And I've seen posts that were downright hysterical over the notion of building a wall on our southern border (I'll probably devote a future post just to the topic of immigration). Never mind that Hillary Clinton voted for the Secure Fence Act of 2006, which provides the legal mechanism for the construction of Trump's wall. So did Senators Chuck Schumer, Joe Biden and Barack Obama. Under Obama's presidency, most of the existing 700-mile border fence was constructed. So a physical barrier on our southern border is not without precedent, and the aim is the same: to at least stem the tide of illegal immigration and the importing of drugs from our neighbors to the south.
This is an all-too-common thread in the attacks on the new President: previous Democrat administrations have done similar things, but there was no fake outrage over that. Obama, Carter and FDR implemented temporary bans on immigration from countries that would do us harm. They are revered by the left. As noted, Obama supported a border fence, and built much of it. He is idolized by the left. Obama promised that if we liked our coverage, we could keep it, which turned out to be untrue. The left would grant him sainthood if they could. Bill Clinton molested and abused numerous women. He is fawned over by the left.
This hypocrisy is evident in the posts themselves. Trump was widely criticized by many - myself included - for some of the language he used during the campaign, often stooping to petty, childish name-calling that would be more at home on an elementary school playground than in a presidential campaign. Yet the Facebook posts of many who criticized him for that very thing resort to the same tactics. "President Tiny Hands" seems to be the favored moniker of the left these days. How cerebral.
I've seen other posts that lamented the new era of "hate and fear-mongering" that we've supposedly now entered, then went on to say they hate Trump and his supporters, and to claim that Obamacare has already been repealed and Muslims are being banned. Fear-monger much?
I will submit that the actions taken to date have not been perfect. The immigration ban, for example, was effected before its ramifications could be properly coordinated by the affected agencies, including Homeland Security. A number of snafus resulted.
However, if just one San Bernardino can be prevented, I'm all for waiting until we have more robust vetting processes in place, and I don't care whose tender feelings may get hurt in the process. The left is worried that if we don't bring all the refugees here post-haste, they may die, but they don't give a good damn about a couple dozen people being gunned down during a holiday party at work (they call that "workplace violence," conveniently ignoring the perpetrators' sworn allegiance to al-Baghdadi).
And I'm skeptical about the effectiveness of a border wall. If people want to come into this country illegally, some of them are going to find a way to do it. And if money can be made smuggling drugs into this country, some of them are going to find their way here.
But I'm in the business of risk mitigation. And we have to recognize that some of our risk responses - those things we do to mitigate exposures - provide only partial mitigation. But the alternative - leaving oneself, one's business or one's nation completely exposed - is unacceptable.
Considering the hypocrisy noted above brings us a bit closer to understanding what's truly behind all the anti-Trump rhetoric and sentiment. But to complete the picture, let's focus our attention on the recent Women's March.
Let me first say that I fully respect and support the right of any American to engage in peaceful protest. I have relatives who participated in the march, and I love, respect and support them. I am tolerant of their views, regardless whether they are tolerant of mine.
That said, what was the march about? Human rights? Women's rights? The things Trump said about women in the past that were revealed during the campaign, or were stated by him on the debate stage?
In determining the answer, consider two facts:
- There were no women in pink hats marching in the streets after Bill Clinton's inauguration, and let's not forget what he did to numerous women over his political career.
- Women who wanted to participate in the march but were pro-life were told they were not welcome, and at least one pro-life organization that volunteered to sponsor the march was denied. I guess those on the left only believe in their own right to participate in a protest, not in anyone else's.
These facts, combined with the left's blind eye toward similar actions taken by Democrat Presidents while castigating Trump for doing the same things, reveal what's behind all the outrage:
It is, pure and simple, D vs. R. The Women's March was a march against a Republican actually being elected President - nothing more. It was a march in support of permanent Democrat Party rule. And the same is true of all of the outrage on social media, and on CNN, ABC and MSNBC. Whatever a Democrat President does or says is okay, but if a Republican says or does the same thing, there'll be hell to pay.
On that note, I want to close by addressing one more Facebook comment I read. The comment, a follow-up to a post that decried Trump in general, was this:
"We should hold everyone accountable for voting him in too!"
Ominous. The very idea that one is to be held to account for whom they voted for is antithetical to the basis of democracy.
Moreover, I have a question for anyone who believes that way: how, pray tell, do you propose to hold those people accountable? Imprison them? Publish their names to be publicly humiliated, harassed and threatened, as happened to the red-state electors? Shoot them? (You're probably anti-gun, so I don't see that happening.)
The likely remedy such people would propose is to strip them of their right to vote in future elections, since the end game is to ensure that the Democrats always win, and the Republicans always lose.
I'll just say this: anyone who ever wants to try to hold me to account for the way I voted had bloody well better come prepared. People have bled and died for my right to vote as I see fit, and I will honor their sacrifice with equal vigor.
I am The Economic Curmudgeon, and I approve this message.
Saturday, January 21, 2017
Debunking the Hysteria Over an Executive Action
It's nice to at last be able to write a post that sheds the light of truth on a financial topic, rather than purely political ones. I'm done with that - for now - though this one is related somewhat to the political hysteria that continues to grip so much of our nation.
After being inaugurated, President Trump signed several executive orders. One of them caught the attention of some of my Facebook friends, who shared a post from Sen. Elizabeth Warren that linked an article from the L.A. Times.
Friends, first and foremost, if Elizabeth Warren says it, don't believe it. It is undoubtedly misinformed sensationalist hyperbole. Note that Sen. Warren doesn't understand why student loan rates shouldn't be the same as what banks pay the Fed for overnight borrowings. Anyone who's taken a Money & Banking course in college - or has a modicum of common sense - knows better. Sen. Warren does not. I've forgotten more about finance, interest rates and banking than she will ever know.
The executive action in question rescinded one that President Obama made in the waning days of his administration. Obama's action cut the mortgage insurance premium on FHA loans from 0.85% to 0.60%. Trump's order rescinded that cut, leaving the insurance premium at 0.85%.
I understand why some people found this alarming. After all, they haven't the foggiest notion of what the insurance premium is for, why the premium rate is what it is, whether it covers the default risk of an FHA loan, what the default rate is on FHA loans relative to conventional loans, why the FHA default rate is higher ... in other words, they don't understand the issue regarding which they're posting.
That violates The Curmudgeon's Third Rule of Linking or Sharing Articles on Facebook: "Make sure you truly understand what it says."
But they shared it because Elizabeth Warren posted it, and that satisfies their pre-conceived partisan notions. Which violates the Curmudgeon's Fourth Rule: "Remember that just because it reinforces what you already believe, that doesn't make it true."
So we're going to break it down, crunch some numbers, and find the truth. But first, a primer.
FHA - named for the Federal Housing Authority, which administers the program - does not issue mortgage loans. Rather, it guarantees repayment of loans under the program that are issued by banks, credit unions, mortgage brokers and other traditional lenders. And since the FHA is taxpayer-funded, if enough borrowers under the program default on the loans to exhaust the FHA's reserves, you and I are on the hook to bail them out.
As we did during the recent housing crisis, to the tune of $1.7 billion.
Under this program, a borrower can make a down payment as low as 3.5%, vs. the 20% required to get a mortgage without paying for mortgage insurance, or the 10% minimum down payment required for a conventional mortgage, which requires borrower-paid mortgage insurance. Now, pay attention to the numbers, please.
An FHA borrower can qualify with a credit score (a measure of the borrower's creditworthiness based on credit usage and history) as low as 580, which falls into the "Poor" range, and may indicate past defaults and bankruptcies. The average credit score for FHA borrowers is 679, which falls into the "Fair" range.
So here's the idea behind the program: borrowers whose credit scores wouldn't otherwise qualify them for a mortgage, and who don't have the money to make a 10% down payment, can get a mortgage and buy a home. It's not a bad idea. In fact, my first mortgage loan was an FHA loan. Not all FHA borrowers have low credit scores, they just can't afford a 10% down payment on their first house - at least without mommy-and-daddy money, which many don't have access to. But on average, FHA borrowers have lower credit scores.
But there's increased risk involved: clearly, given their credit scores, FHA borrowers are more likely to default. In fact, the FHA default rate today - well after the crisis - is 36% for loans issued at the apex of the crisis in 2007.
Do you get the significance of that? More than a third of FHA loans granted in 2007 are in default today. That's a whole lot of risk - risk to be borne by you and me, the taxpayers. (Even if FHA doesn't exhaust its reserves, our tax dollars still fund it, so either way, we're on the hook for the defaults.)
But the risk doesn't end there. Since the down payment is smaller, there's a greater risk of not being able to recover the full loan amount, through foreclosure and sale, in the event of a default. If home prices fall, the value of the home is more likely to fall below the resale value than with a conventional mortgage. Home prices need only fall by 4% for the house to be underwater, vs. more than 10% for a conventional loan. And post-housing crisis, people are far more likely to default if their home's value falls below the loan balance than was true prior to the crisis. (This is now called a "strategic default." It used to be called "financial irresponsibility.")
Or, if the borrower doesn't take care of the home, in the event of a default and foreclosure, the lender may not be able to sell the loan at market value, which again can result in not being able to recover the full balance of the loan.
So, since the borrower is more risky, said borrower is asked to share in the risk by paying a mortgage insurance premium. The insurance policy pays the lender back in full if the borrower defaults. So the lender isn't on the hook, the insurer is - in this case, FHA (which means you and me, the taxpayer).
Okay, let's turn to some numbers. There's a maximum amount for FHA loans, which prevents the program from being abused by borrowers of more significant means, or by higher-risk borrowers that try to leverage themselves into more home than they're going to be able to afford. The maximum varies by state and county, based on home prices. For my home county of Johnson County, KS, the 2017 maximum is $308,200 for a single-family home. For reference, this is 31% higher than the median price for an existing home in the U.S. We'll look at the impact of the rescission of President Obama's premium cut on a loan of both values, but first, let's compare the FHA premium to mortgage insurance premiums on conventional loans.
For conventional loans, mortgage insurance isn't required if the borrower puts up at least a 20% down payment. The logic behind this is that a loan-to-value (LTV) of 80% (100% minus a 20% down payment) affords sufficient protection to the lender that mortgage insurance isn't necessary. If the borrower makes a smaller down payment (the minimum is 10% for a conventional mortgage), mortgage insurance is required.
Those premiums range from .32% to 1.20%. Note that the percentage is applied to the principal balance of the loan, as an annual amount. This amount is divided by 12 and added to the monthly payment. The premium range above is based on credit score, whether the loan is fixed-rate or adjustable-rate (adjustable-rate loans are riskier as the borrower may default when the rate adjusts upward, resulting in a higher monthly payment that the borrower may not be able to afford), and the down payment (between the 10% minimum and the 20% at which mortgage insurance isn't required).
So the average premium on a conventional loan, with 10% down, is .76%, compared with the pre-Obama executive order rate for FHA loans of .85%. In other words, if I put 10% down on a home and have a "Good" credit score, I pay only .09% less in mortgage insurance premium than a borrower who puts down 3.5% and has a "Poor" credit score.
That .09% difference isn't nearly enough to make up for the additional risk. And Obama's order would have meant that more risky borrower, with the "Poor" credit score and who put just 3.5% down, would pay .16% less in mortgage insurance premium than the higher-quality borrower with more skin in the game.
That doesn't begin to cover the additional risk associated with an FHA loan, and thus it puts the taxpayer at risk. Nor does it make sense: should a driver with a clean driving record pay a lower premium for auto insurance than a driver with a bunch of tickets and accidents on his record, who presents a higher risk of future accidents?
Okay, now to the calculations. A premium of .85% on the maximum FHA loan amount in Johnson County, KS equates to $218.33 added to the borrower's monthly payment. A premium of .60% equates to $154.10. Thus the difference is $64.23.
Or, if we assume a 3.5% down payment on the national median existing home price, the loan balance would be $226,678.50. On that balance, a .85% premium adds $160.56 to the monthly payment; a .60% premium adds $113.34, for a difference of $47.22.
Folks, if $47 to $64 a month means the difference between being able to buy a home or not, you're probably not ready to be a homeowner. Save a little more money, or wait until your income is a little higher. Then you can actually afford a house.
Now, the National Association of Realtors (NAR) stated that rescinding President Obama's order would result in some 40,000 people a year not being able to buy a home (yet). Looking at the numbers, those are 40,000 people who aren't yet ready to be homeowners. But note that it's the job of the NAR - a trade association for realtors - to lobby hard for anything that results in realtors making more money by selling more houses, with no regard for what happens to those homeowners, the lenders, the FHA or taxpayers as a result.
Suffice it to say that the NAR's chief economist proclaimed that the housing market was in recovery in 2009, when in fact it was still in free-fall. Promising news for realtors, but far from the truth.
Also, consider this. Existing home sales in November 2016 (the most recent data) reached a post-crisis high of an annualized 5.61 million units. (We use existing home sales because most FHA borrowers don't buy newly-built homes.) And since most FHA borrowers are first-time buyers (and those are the folks that the sensationalist reports focus on), let's apply to that number the first-time buyer rate of 32% of all home buyers. That's about 1.8 million first-time buyers a year.
So, if we believe the NAR, just 40,000 of 1.8 million borrowers - about 2% - might not be able to buy a home if the mortgage insurance premium is .85% instead of .60%. Considering that there are about 122 million Americans who pay federal income tax and are thus on the hook for FHA defaults, I'm okay with that.
The bottom line is that a mortgage insurance premium of .60% for an FHA loan not only is insufficient to cover the increased risk of an FHA loan, it's less than the average mortgage insurance premium paid by borrowers who put down nearly three times as much, and have credit scores more than 100 points higher. That's not equitable to those borrowers or to taxpayers.
President Obama's intentions were good, but he was attempting to tinker with numbers that he apparently didn't understand, in order to increase homeownership. The homeownership rate historically trended around 65%, and for good reason: some people just aren't ready to be homeowners (like those who can't afford an extra $47 a month to cover the risk of their own loans).
When politicians attempt to tinker with that natural trend - as Barney Frank, Maxine Waters and Chris Dodd, the architects of the housing crisis, did in the early 2000s - disaster can result. The trend in homeownership rates is mean-reverting, so when you artificially boost it higher, something will happen to revert it to the mean - defaults and foreclosures, in this instance. But first, it may revert well below the mean, as happened in the recent crisis.
The Fed recently increased interest rates by .25%. That will do far more to price would-be homeowners out of the market than holding the FHA mortgage insurance premium at .85%, because it affects ALL homebuyers, not just FHA borrowers. But no one is calling for Janet Yellen's scalp for raising rates.
Likewise, home prices rose by more than 5% over the past year, and that too will do more to price would-be buyers out of the market than yesterday's executive action, because again, it affects ALL homebuyers. But nobody's bitching about the housing market regaining strength.
So Elizabeth Warren et al can crow all they want about what a heinous act this is. But if they understood the math and the risks involved, they might think better.
Know the truth, and the truth shall set you free.
After being inaugurated, President Trump signed several executive orders. One of them caught the attention of some of my Facebook friends, who shared a post from Sen. Elizabeth Warren that linked an article from the L.A. Times.
Friends, first and foremost, if Elizabeth Warren says it, don't believe it. It is undoubtedly misinformed sensationalist hyperbole. Note that Sen. Warren doesn't understand why student loan rates shouldn't be the same as what banks pay the Fed for overnight borrowings. Anyone who's taken a Money & Banking course in college - or has a modicum of common sense - knows better. Sen. Warren does not. I've forgotten more about finance, interest rates and banking than she will ever know.
The executive action in question rescinded one that President Obama made in the waning days of his administration. Obama's action cut the mortgage insurance premium on FHA loans from 0.85% to 0.60%. Trump's order rescinded that cut, leaving the insurance premium at 0.85%.
I understand why some people found this alarming. After all, they haven't the foggiest notion of what the insurance premium is for, why the premium rate is what it is, whether it covers the default risk of an FHA loan, what the default rate is on FHA loans relative to conventional loans, why the FHA default rate is higher ... in other words, they don't understand the issue regarding which they're posting.
That violates The Curmudgeon's Third Rule of Linking or Sharing Articles on Facebook: "Make sure you truly understand what it says."
But they shared it because Elizabeth Warren posted it, and that satisfies their pre-conceived partisan notions. Which violates the Curmudgeon's Fourth Rule: "Remember that just because it reinforces what you already believe, that doesn't make it true."
So we're going to break it down, crunch some numbers, and find the truth. But first, a primer.
FHA - named for the Federal Housing Authority, which administers the program - does not issue mortgage loans. Rather, it guarantees repayment of loans under the program that are issued by banks, credit unions, mortgage brokers and other traditional lenders. And since the FHA is taxpayer-funded, if enough borrowers under the program default on the loans to exhaust the FHA's reserves, you and I are on the hook to bail them out.
As we did during the recent housing crisis, to the tune of $1.7 billion.
Under this program, a borrower can make a down payment as low as 3.5%, vs. the 20% required to get a mortgage without paying for mortgage insurance, or the 10% minimum down payment required for a conventional mortgage, which requires borrower-paid mortgage insurance. Now, pay attention to the numbers, please.
An FHA borrower can qualify with a credit score (a measure of the borrower's creditworthiness based on credit usage and history) as low as 580, which falls into the "Poor" range, and may indicate past defaults and bankruptcies. The average credit score for FHA borrowers is 679, which falls into the "Fair" range.
So here's the idea behind the program: borrowers whose credit scores wouldn't otherwise qualify them for a mortgage, and who don't have the money to make a 10% down payment, can get a mortgage and buy a home. It's not a bad idea. In fact, my first mortgage loan was an FHA loan. Not all FHA borrowers have low credit scores, they just can't afford a 10% down payment on their first house - at least without mommy-and-daddy money, which many don't have access to. But on average, FHA borrowers have lower credit scores.
But there's increased risk involved: clearly, given their credit scores, FHA borrowers are more likely to default. In fact, the FHA default rate today - well after the crisis - is 36% for loans issued at the apex of the crisis in 2007.
Do you get the significance of that? More than a third of FHA loans granted in 2007 are in default today. That's a whole lot of risk - risk to be borne by you and me, the taxpayers. (Even if FHA doesn't exhaust its reserves, our tax dollars still fund it, so either way, we're on the hook for the defaults.)
But the risk doesn't end there. Since the down payment is smaller, there's a greater risk of not being able to recover the full loan amount, through foreclosure and sale, in the event of a default. If home prices fall, the value of the home is more likely to fall below the resale value than with a conventional mortgage. Home prices need only fall by 4% for the house to be underwater, vs. more than 10% for a conventional loan. And post-housing crisis, people are far more likely to default if their home's value falls below the loan balance than was true prior to the crisis. (This is now called a "strategic default." It used to be called "financial irresponsibility.")
Or, if the borrower doesn't take care of the home, in the event of a default and foreclosure, the lender may not be able to sell the loan at market value, which again can result in not being able to recover the full balance of the loan.
So, since the borrower is more risky, said borrower is asked to share in the risk by paying a mortgage insurance premium. The insurance policy pays the lender back in full if the borrower defaults. So the lender isn't on the hook, the insurer is - in this case, FHA (which means you and me, the taxpayer).
Okay, let's turn to some numbers. There's a maximum amount for FHA loans, which prevents the program from being abused by borrowers of more significant means, or by higher-risk borrowers that try to leverage themselves into more home than they're going to be able to afford. The maximum varies by state and county, based on home prices. For my home county of Johnson County, KS, the 2017 maximum is $308,200 for a single-family home. For reference, this is 31% higher than the median price for an existing home in the U.S. We'll look at the impact of the rescission of President Obama's premium cut on a loan of both values, but first, let's compare the FHA premium to mortgage insurance premiums on conventional loans.
For conventional loans, mortgage insurance isn't required if the borrower puts up at least a 20% down payment. The logic behind this is that a loan-to-value (LTV) of 80% (100% minus a 20% down payment) affords sufficient protection to the lender that mortgage insurance isn't necessary. If the borrower makes a smaller down payment (the minimum is 10% for a conventional mortgage), mortgage insurance is required.
Those premiums range from .32% to 1.20%. Note that the percentage is applied to the principal balance of the loan, as an annual amount. This amount is divided by 12 and added to the monthly payment. The premium range above is based on credit score, whether the loan is fixed-rate or adjustable-rate (adjustable-rate loans are riskier as the borrower may default when the rate adjusts upward, resulting in a higher monthly payment that the borrower may not be able to afford), and the down payment (between the 10% minimum and the 20% at which mortgage insurance isn't required).
So the average premium on a conventional loan, with 10% down, is .76%, compared with the pre-Obama executive order rate for FHA loans of .85%. In other words, if I put 10% down on a home and have a "Good" credit score, I pay only .09% less in mortgage insurance premium than a borrower who puts down 3.5% and has a "Poor" credit score.
That .09% difference isn't nearly enough to make up for the additional risk. And Obama's order would have meant that more risky borrower, with the "Poor" credit score and who put just 3.5% down, would pay .16% less in mortgage insurance premium than the higher-quality borrower with more skin in the game.
That doesn't begin to cover the additional risk associated with an FHA loan, and thus it puts the taxpayer at risk. Nor does it make sense: should a driver with a clean driving record pay a lower premium for auto insurance than a driver with a bunch of tickets and accidents on his record, who presents a higher risk of future accidents?
Okay, now to the calculations. A premium of .85% on the maximum FHA loan amount in Johnson County, KS equates to $218.33 added to the borrower's monthly payment. A premium of .60% equates to $154.10. Thus the difference is $64.23.
Or, if we assume a 3.5% down payment on the national median existing home price, the loan balance would be $226,678.50. On that balance, a .85% premium adds $160.56 to the monthly payment; a .60% premium adds $113.34, for a difference of $47.22.
Folks, if $47 to $64 a month means the difference between being able to buy a home or not, you're probably not ready to be a homeowner. Save a little more money, or wait until your income is a little higher. Then you can actually afford a house.
Now, the National Association of Realtors (NAR) stated that rescinding President Obama's order would result in some 40,000 people a year not being able to buy a home (yet). Looking at the numbers, those are 40,000 people who aren't yet ready to be homeowners. But note that it's the job of the NAR - a trade association for realtors - to lobby hard for anything that results in realtors making more money by selling more houses, with no regard for what happens to those homeowners, the lenders, the FHA or taxpayers as a result.
Suffice it to say that the NAR's chief economist proclaimed that the housing market was in recovery in 2009, when in fact it was still in free-fall. Promising news for realtors, but far from the truth.
Also, consider this. Existing home sales in November 2016 (the most recent data) reached a post-crisis high of an annualized 5.61 million units. (We use existing home sales because most FHA borrowers don't buy newly-built homes.) And since most FHA borrowers are first-time buyers (and those are the folks that the sensationalist reports focus on), let's apply to that number the first-time buyer rate of 32% of all home buyers. That's about 1.8 million first-time buyers a year.
So, if we believe the NAR, just 40,000 of 1.8 million borrowers - about 2% - might not be able to buy a home if the mortgage insurance premium is .85% instead of .60%. Considering that there are about 122 million Americans who pay federal income tax and are thus on the hook for FHA defaults, I'm okay with that.
The bottom line is that a mortgage insurance premium of .60% for an FHA loan not only is insufficient to cover the increased risk of an FHA loan, it's less than the average mortgage insurance premium paid by borrowers who put down nearly three times as much, and have credit scores more than 100 points higher. That's not equitable to those borrowers or to taxpayers.
President Obama's intentions were good, but he was attempting to tinker with numbers that he apparently didn't understand, in order to increase homeownership. The homeownership rate historically trended around 65%, and for good reason: some people just aren't ready to be homeowners (like those who can't afford an extra $47 a month to cover the risk of their own loans).
When politicians attempt to tinker with that natural trend - as Barney Frank, Maxine Waters and Chris Dodd, the architects of the housing crisis, did in the early 2000s - disaster can result. The trend in homeownership rates is mean-reverting, so when you artificially boost it higher, something will happen to revert it to the mean - defaults and foreclosures, in this instance. But first, it may revert well below the mean, as happened in the recent crisis.
The Fed recently increased interest rates by .25%. That will do far more to price would-be homeowners out of the market than holding the FHA mortgage insurance premium at .85%, because it affects ALL homebuyers, not just FHA borrowers. But no one is calling for Janet Yellen's scalp for raising rates.
Likewise, home prices rose by more than 5% over the past year, and that too will do more to price would-be buyers out of the market than yesterday's executive action, because again, it affects ALL homebuyers. But nobody's bitching about the housing market regaining strength.
So Elizabeth Warren et al can crow all they want about what a heinous act this is. But if they understood the math and the risks involved, they might think better.
Know the truth, and the truth shall set you free.
Friday, January 20, 2017
Methinks Thou Doth Protest Too Much
First, let me say that I respect the right of every American to engage in peaceful protest. Many of my relatives, including my Dad, put themselves in harm's way to protect that right.
This post is about the reasons behind the protests and the outcome thereof.
From the time of Donald Trump's candidacy, the left turned out in droves to protest at his rallies and events. Granted, many of them were paid by organized left-wing organizations, intending to disrupt his candidacy.
I'll also grant you that a number of his supporters also engaged in hooliganism, sometimes with his encouragement. That encouragement is one of the reasons I couldn't bring myself to vote for him.
The protests intensified when he won the GOP nomination. Protesters attempted to block people who wanted to hear what he had to say - some of whom had not yet made up their minds, but merely wanted to hear both candidates' views from their own mouths - from their equally hard-won right to hear him.
That's plain wrong. There's an old saying about rights: Your right to punch me in the face ends at my nose. In other words, you have your rights, but when the exercise of your rights infringes upon mine, you no longer have your rights in that regard. It's like the right-of-way at a roundabout or a four-way stop.
To not want people to hear what a political candidate might have to say borders on totalitarianism. Had Trump supporters attempted to block people from hearing what Hillary had to say at her rallies, Godwin's Law would have been invoked post-haste.
At a protest in my home metro of Kansas City, a young woman actually punched a police horse in the jaw, for which she earned a face full of pepper spray.
My punishment would have been more severe: mucking out the police horse stables, clad in shorts and barefoot, on her hands and knees. With a spoon. Ten hours a day for a year.
What was the outcome of those protests? Nada. Trump won the general election by a very comfortable electoral vote margin.
So the protesters turned to protesting the electoral system, saying that presidential elections should be decided by the popular vote. Clearly, they didn't think it through (most of them couldn't even articulate the reasons behind the brilliantly designed electoral system, nor explain the distinction between federalism and a republic of states). They didn't consider the ramifications of allowing some 50 U.S. counties to dictate who would lead the 3,000+ counties that make up this nation.
Nor would they. All they care about is ensuring that a Democrat always occupies the White House. But more on that later. The bottom line is that the same people who called for replacing the electoral college with the popular vote would run headlong in the other direction if a Democrat won the electoral vote but lost the popular vote. They would become the electoral college's staunchest defenders.
So, the protesters next turned their attention to the electors. Electors in states like Wisconsin, Michigan and Pennsylvania - states that typically vote blue - received email, regular mail, phone calls and death threats. At least one of them was stalked in his car. They were implored to vote against the will of the majority of voters in their states, which would have represented an absolution of their duty.
Unsurprisingly, Hollywood got involved. A bunch of celebrities, most of whom nobody recognized, led by Martin Sheen (you know, Charlie's dad - ever wonder where Charlie got his crazy?), made a video insisting that the electors be "patriots" and "do their duty." In other words, they wanted them to absolve their obligation to vote the will of the majority of voters in their states, instead honoring the will of a handful of Hollywood celebrities.
Sadly, some of the electoral votes were public. And the protesters showed up there, too. In Wisconsin, after the electors fulfilled their responsibility, one apparently deranged woman jumped to her feet, screaming, "This is MY America!"
It reminded me of another crazy - Stephen the Irishman of Braveheart fame - when he declared, speaking of Ireland, "It's my island!"
The electors in all states did their jobs - in fact, more faithless electors abandoned Hillary than did Trump - and Trump won the electoral vote, fair and square.
So the protesters next turned their attention to the confirmation hearings of Trump appointees. A guy in a KKK outfit showed up at Jeff Sessions' hearing (the same Jeff Sessions who bankrupted the Klan in Alabama). Another seemingly deranged woman showed up at Rex Tillerson's hearing. How did these people get in the room to begin with?
Bold prediction: the outcome of those protests will be nil. Once the Dems have exacted their pound of flesh in terms of confirming Trump's appointees more slowly than the GOP confirmed Obama's, we're going to see every single Trump nominee confirmed.
So that brought us to Inauguration Day. As if they could change the course of history, reverse a process to which America has held true since George Washington left office, they protested the inauguration. It turned predictably violent. They smashed the windows of a Starbucks.
Guess they really needed their hot cocoa.
But - Donald Trump was sworn in. He is now President of the United States. And guess what, protesters? You can carry your signs and chant "Not my President" all you want, but until you renounce your citizenship, he is your President. Just as Barack Obama was mine, in spite of my strong disagreement with his policies.
Let me explain what irks me the most about the inaugural protests. Donald Trump is a businessman. His campaign cost vastly less than Hillary Clinton's, yet he defeated her. His transition came in ahead of schedule and under budget, and the new administration returned the unused funds to the Treasury, saving you and me, as taxpayers, millions of dollars.
This is what businessmen do. Politicians don't care what their transitions and inaugurations cost. To them, taxpayer money grows on trees. But a businessman who's used to negotiating with contractors to build hotels ahead of schedule and under budget pays attention to the bottom line. That's how Trump has been able to already get Boeing to agree to building Air Force One and fighter jets below the cost that America has paid in the past. Previous Presidents didn't care what Boeing charged, they just paid the tab. Trump negotiates. And we the taxpayers benefit.
Likewise, his inauguration was intended to be frugal. He had three inaugural balls, compared with double-digit numbers of balls for his three predecessors. However, his inauguration was the most costly on record, at $200 million. Why?
Increased security in preparation for the protesters, who, true to form, resorted to violence. Last I heard, two D.C. policemen have been hospitalized as a result. So these sore losers have cost you and me money. That pisses me off.
And I say "sore losers" because what these protests are really about is the fact that too many on the left cannot accept the outcome of a free and fair election, if in that election, a Democrat does not win. They want the White House in perpetuity. They care not about the quality of leadership, but about the letter behind the name.
I have no doubt that the level of vitriol would not be as high if the Republican that won were not Donald Trump, who admittedly has been over the top in many of the things he said during the campaign.
But the vitriol would still be there. The left will protest every election that does not go their way until the end of time.
That's okay. The outcome will be the same. Protest all they may, they will occasionally lose. And no amount of signs, marches, broken windows or punched horses will affect that outcome.
This post is about the reasons behind the protests and the outcome thereof.
From the time of Donald Trump's candidacy, the left turned out in droves to protest at his rallies and events. Granted, many of them were paid by organized left-wing organizations, intending to disrupt his candidacy.
I'll also grant you that a number of his supporters also engaged in hooliganism, sometimes with his encouragement. That encouragement is one of the reasons I couldn't bring myself to vote for him.
The protests intensified when he won the GOP nomination. Protesters attempted to block people who wanted to hear what he had to say - some of whom had not yet made up their minds, but merely wanted to hear both candidates' views from their own mouths - from their equally hard-won right to hear him.
That's plain wrong. There's an old saying about rights: Your right to punch me in the face ends at my nose. In other words, you have your rights, but when the exercise of your rights infringes upon mine, you no longer have your rights in that regard. It's like the right-of-way at a roundabout or a four-way stop.
To not want people to hear what a political candidate might have to say borders on totalitarianism. Had Trump supporters attempted to block people from hearing what Hillary had to say at her rallies, Godwin's Law would have been invoked post-haste.
At a protest in my home metro of Kansas City, a young woman actually punched a police horse in the jaw, for which she earned a face full of pepper spray.
My punishment would have been more severe: mucking out the police horse stables, clad in shorts and barefoot, on her hands and knees. With a spoon. Ten hours a day for a year.
What was the outcome of those protests? Nada. Trump won the general election by a very comfortable electoral vote margin.
So the protesters turned to protesting the electoral system, saying that presidential elections should be decided by the popular vote. Clearly, they didn't think it through (most of them couldn't even articulate the reasons behind the brilliantly designed electoral system, nor explain the distinction between federalism and a republic of states). They didn't consider the ramifications of allowing some 50 U.S. counties to dictate who would lead the 3,000+ counties that make up this nation.
Nor would they. All they care about is ensuring that a Democrat always occupies the White House. But more on that later. The bottom line is that the same people who called for replacing the electoral college with the popular vote would run headlong in the other direction if a Democrat won the electoral vote but lost the popular vote. They would become the electoral college's staunchest defenders.
So, the protesters next turned their attention to the electors. Electors in states like Wisconsin, Michigan and Pennsylvania - states that typically vote blue - received email, regular mail, phone calls and death threats. At least one of them was stalked in his car. They were implored to vote against the will of the majority of voters in their states, which would have represented an absolution of their duty.
Unsurprisingly, Hollywood got involved. A bunch of celebrities, most of whom nobody recognized, led by Martin Sheen (you know, Charlie's dad - ever wonder where Charlie got his crazy?), made a video insisting that the electors be "patriots" and "do their duty." In other words, they wanted them to absolve their obligation to vote the will of the majority of voters in their states, instead honoring the will of a handful of Hollywood celebrities.
Sadly, some of the electoral votes were public. And the protesters showed up there, too. In Wisconsin, after the electors fulfilled their responsibility, one apparently deranged woman jumped to her feet, screaming, "This is MY America!"
It reminded me of another crazy - Stephen the Irishman of Braveheart fame - when he declared, speaking of Ireland, "It's my island!"
The electors in all states did their jobs - in fact, more faithless electors abandoned Hillary than did Trump - and Trump won the electoral vote, fair and square.
So the protesters next turned their attention to the confirmation hearings of Trump appointees. A guy in a KKK outfit showed up at Jeff Sessions' hearing (the same Jeff Sessions who bankrupted the Klan in Alabama). Another seemingly deranged woman showed up at Rex Tillerson's hearing. How did these people get in the room to begin with?
Bold prediction: the outcome of those protests will be nil. Once the Dems have exacted their pound of flesh in terms of confirming Trump's appointees more slowly than the GOP confirmed Obama's, we're going to see every single Trump nominee confirmed.
So that brought us to Inauguration Day. As if they could change the course of history, reverse a process to which America has held true since George Washington left office, they protested the inauguration. It turned predictably violent. They smashed the windows of a Starbucks.
Guess they really needed their hot cocoa.
But - Donald Trump was sworn in. He is now President of the United States. And guess what, protesters? You can carry your signs and chant "Not my President" all you want, but until you renounce your citizenship, he is your President. Just as Barack Obama was mine, in spite of my strong disagreement with his policies.
Let me explain what irks me the most about the inaugural protests. Donald Trump is a businessman. His campaign cost vastly less than Hillary Clinton's, yet he defeated her. His transition came in ahead of schedule and under budget, and the new administration returned the unused funds to the Treasury, saving you and me, as taxpayers, millions of dollars.
This is what businessmen do. Politicians don't care what their transitions and inaugurations cost. To them, taxpayer money grows on trees. But a businessman who's used to negotiating with contractors to build hotels ahead of schedule and under budget pays attention to the bottom line. That's how Trump has been able to already get Boeing to agree to building Air Force One and fighter jets below the cost that America has paid in the past. Previous Presidents didn't care what Boeing charged, they just paid the tab. Trump negotiates. And we the taxpayers benefit.
Likewise, his inauguration was intended to be frugal. He had three inaugural balls, compared with double-digit numbers of balls for his three predecessors. However, his inauguration was the most costly on record, at $200 million. Why?
Increased security in preparation for the protesters, who, true to form, resorted to violence. Last I heard, two D.C. policemen have been hospitalized as a result. So these sore losers have cost you and me money. That pisses me off.
And I say "sore losers" because what these protests are really about is the fact that too many on the left cannot accept the outcome of a free and fair election, if in that election, a Democrat does not win. They want the White House in perpetuity. They care not about the quality of leadership, but about the letter behind the name.
I have no doubt that the level of vitriol would not be as high if the Republican that won were not Donald Trump, who admittedly has been over the top in many of the things he said during the campaign.
But the vitriol would still be there. The left will protest every election that does not go their way until the end of time.
That's okay. The outcome will be the same. Protest all they may, they will occasionally lose. And no amount of signs, marches, broken windows or punched horses will affect that outcome.
Thursday, January 19, 2017
Excuses Are Like ...
You know the saying: "Excuses are like (a part of the anatomy that rhymes with "grass pole") - everybody's got one." Except in the case of the Democrats' excuses for why Hillary lost the election, the saying should be "Excuses are like the hairs on your head," because there are so doggone many of them.
On this inauguration eve, let's enumerate them as we know them - debunking them along the way - then present the real reasons Hillary lost the election.
On this inauguration eve, let's enumerate them as we know them - debunking them along the way - then present the real reasons Hillary lost the election.
- The Russian Email Hack. I already debunked this in a previous post, so let's just summarize. It's highly unlikely that the contents of those emails swayed Hillary voters to change their minds and vote for Trump in sufficient numbers to carry traditionally blue states like Wisconsin, Michigan and Pennsylvania. But if they did, it was the contents that swayed the voters, not the fact of the hack. Those contents have never been disputed by the Clinton campaign, the DNC, or any rational liberal (wait, was that an oxymoron?). And those contents revealed that the DNC conspired against Bernie Sanders in the primaries, that Clinton staffers insulted Catholics and Latinos, and that DNC chair Donna Brazile obtained debate questions and provided them to Clinton in advance. In other words, Clinton and the DNC are just pissed that they got caught.
- James Comey's revelation that the FBI was re-opening the Clinton email investigation following the discovery of 650,000 emails on Anthony Weiner's laptop. I debunked that one, too, so another summary: Clinton should never have used a private email server, and could have had no plausible reason to other than to either hide information from the government, or share government information with whomever she pleased. The Weiner emails might well have been relevant. And Comey claimed, at the 11th hour, that the emails had all been reviewed (650,000 emails in about a week - riiight) and that the investigation was once again closed. So any fence-sitters would know going into the polls that Hillary had yet again been exonerated by the FBI (which, by the way, operates under the purview of the same Attorney General who met on an airplane with Clinton's husband, former President Bill Clinton, purportedly to talk about grandkids and golf). So they'd have had no reason to vote against Hillary on the basis of Comey's earlier revelation that the investigation was re-opened, because it was closed prior to the opening of the polls on election day.
- Bill Clinton blamed it on "angry white men." Like the angry white man who wagged his finger at an interviewer and stated, "I did not ... have sex ... with that woman"? Of all the people I know that voted for Trump, not one would I characterize as angry, and a number of them were women. Bill of all people should know the difference between a man and a woman.
So why did Hillary really lose the election? My underlying premise is that that's exactly what happened: those who voted for Trump were primarily voting against her, not for him. She lost, more than he won. Here's why, in order of importance:
- This election was about a repudiation of the Obama presidency. I don't mean this as a slam on Obama per se; this happens regularly in U.S. politics. Many people were tired of Bush II after eight years, so they voted against the Republicans. Obama was the Democrat candidate, so he won. Often, after eight years of one party being in power, people want a change of direction, so they vote for one. Note also that while Obama won re-election in 2012 by a wider margin of victory than his initial win in 2008 (thanks in part to record-low voter turnout on the part of Republicans in 2012, which was to some degree due to the fact that Mit Romney generated as much excitement as drying paint), Obama's platform continually cost the Democrats. First in the 2010 mid-terms, then in the 2012 down-ticket races, then en masse in the 2014 mid-terms. Finally, in 2016, Obama's party lost the White House, seats in both houses of Congress, and large numbers of seats in state legislatures and governorships. In all those elections, the voters spoke loud and clear regarding Obama's policies.
- Hillary's baggage. Corruption has followed her throughout her political career, and America did not trust her.
- The fact that Hillary is, and always has been, one of the most polarizing figures in American politics. She's as caustic as sulfuric acid.
- The fact that Hillary, in her elitist arrogance, took flyover states like Wisconsin, Michigan and Pennsylvania (the land of Obama's "God and guns" clingers) for granted, assuming they were forever blue. So she ignored them, instead campaigning in places like Florida, but also in California and New York. Why she campaigned in the latter two states - other than to hobnob with her buddies - is beyond me, as the population centers in those states will never vote red. In other words, Hillary's campaign strategy was about as effective as Obama's foreign policy.
Oh, the left will blame it on everything but the truth. And that's okay. As long as they ignore the truth, they'll continue to make the same mistakes, and that'll make it harder for them to regain power.
After all, those who ignore history are doomed to repeat it.
More Musings on the HEARings
First up: the grilling of DOCTOR Tom Price, the nominee for HHS Secretary (I capitalized DOCTOR to emphasize that he's more qualified than anyone questioning him to serve in this role).
Sen. Al Franken went for an "aha" moment when he revealed that Dr. Price (himself a member of the House since leaving private practice) had owned stock in a tobacco company, thereby profiting off the misery of millions of people who willingly buy cigarettes and somehow wind up with lung cancer.
Oh, the humanity.
But the "aha" turned out to be on Franken, when the committee chairman later noted that Franken, through a mutual fund he owned, also invested in the same tobacco company.
Oops.
Only Democrats would elect a comedian to the Senate. This is not meant to disparage all Democrats, as I do not believe all Democrats would elect a comedian to the Senate. However, I can't find one comedian that Republicans elected to the Senate. Well, I guess they did elect a pro wrestler, Jesse Ventura, as governor. But both Franken and Ventura were elected in Minnesota, so maybe it's just a Minnesota thing. By the time election day rolls around there, it's so darn cold that it's hard to think straight.
Franken's best work was as Stuart Smalley, and it's all been downhill from there. Maybe he'll run for President. His campaign slogan can be, "I'm good enough, I'm smart enough, and doggone it, people like me!"
Next, the vapid questions the Senators ask. "If confirmed, will you uphold the responsibilities of your office?"
"No, I plan to ride my Big Wheel through the streets of D.C. while singing 'Close to You' at the top of my lungs."
Sheesh.
But again, it's all about scoring sound bites. All of the nominees will be confirmed.
Finally, along the same lines, why do the questions begin with a lengthy soliloquy stating the questioner's own positions on the issues that will face the nominee? They're not up for confirmation, are they?
It's because they want to score those sound bites, and they love nothing more than the sound of their own voices.
You know how to get a Senator to come and talk to you? Bring out a TV camera and a microphone.
One final related note: in his press briefing, Press Secretary Sean Spicer was asked why Mr. Trump was planning to stay in his own hotel the night before the inauguration. Another brilliant question.
Um, gee, could it be because a) the White House's current occupants won't have moved out yet, and b) he can stay at his own hotel for free, thereby not costing the taxpayers any money, since he's there to be inaugurated as President and thus is there on our dime?
The fact of the matter is that Trump could sleep with the homeless in Franklin Square, and Democrats would fine some nefarious intent.
Sen. Al Franken went for an "aha" moment when he revealed that Dr. Price (himself a member of the House since leaving private practice) had owned stock in a tobacco company, thereby profiting off the misery of millions of people who willingly buy cigarettes and somehow wind up with lung cancer.
Oh, the humanity.
But the "aha" turned out to be on Franken, when the committee chairman later noted that Franken, through a mutual fund he owned, also invested in the same tobacco company.
Oops.
Only Democrats would elect a comedian to the Senate. This is not meant to disparage all Democrats, as I do not believe all Democrats would elect a comedian to the Senate. However, I can't find one comedian that Republicans elected to the Senate. Well, I guess they did elect a pro wrestler, Jesse Ventura, as governor. But both Franken and Ventura were elected in Minnesota, so maybe it's just a Minnesota thing. By the time election day rolls around there, it's so darn cold that it's hard to think straight.
Franken's best work was as Stuart Smalley, and it's all been downhill from there. Maybe he'll run for President. His campaign slogan can be, "I'm good enough, I'm smart enough, and doggone it, people like me!"
Next, the vapid questions the Senators ask. "If confirmed, will you uphold the responsibilities of your office?"
"No, I plan to ride my Big Wheel through the streets of D.C. while singing 'Close to You' at the top of my lungs."
Sheesh.
But again, it's all about scoring sound bites. All of the nominees will be confirmed.
Finally, along the same lines, why do the questions begin with a lengthy soliloquy stating the questioner's own positions on the issues that will face the nominee? They're not up for confirmation, are they?
It's because they want to score those sound bites, and they love nothing more than the sound of their own voices.
You know how to get a Senator to come and talk to you? Bring out a TV camera and a microphone.
One final related note: in his press briefing, Press Secretary Sean Spicer was asked why Mr. Trump was planning to stay in his own hotel the night before the inauguration. Another brilliant question.
Um, gee, could it be because a) the White House's current occupants won't have moved out yet, and b) he can stay at his own hotel for free, thereby not costing the taxpayers any money, since he's there to be inaugurated as President and thus is there on our dime?
The fact of the matter is that Trump could sleep with the homeless in Franklin Square, and Democrats would fine some nefarious intent.
Wednesday, January 18, 2017
An Illegitimate President?
Rep. John Lewis (D-GA) has decided to boycott President-elect Donald Trump's inauguration, citing as his reason that Trump is "an illegitimate President." The stated reasons for his assertion are that Russia interfered with our election by hacking DNC emails and exposing their contents to voters, and FBI Director James Comey's revelation that an additional 650,000 emails had been found on Anthony Weiner's laptop, both coming in the waning days of the Presidential election. According to Lewis, these factors apparently are what resulted in Trump's electoral victory.
In the interview with liberal TV commentator Chuck Todd of NBC and MSNBC (the media mouthpiece of the Democrat party), Lewis also noted that this would be the first inauguration he's missed in his 31 years in Congress.
John Lewis is a lying partisan hack.
I don't say that to disrespect his status as a civil rights hero. His partisanship and dishonesty have done enough to tarnish any good he may have done in the past.
See, Lewis has missed another inauguration during his tenure in the House - namely, that of George W. Bush. His reason? That Bush was not a legitimate President, because of the imbroglio over the Florida election (which Al Gore challenged in the courts - after he'd already conceded - and lost).
In other words, when a Democrat loses a close election to a Republican - especially if said Democrat won the popular vote but lost the electoral vote, as did both Gore and Hillary Clinton - Lewis pouts, like so many of his party brethren who don't like democracy and can't stand not getting their way. His motives are purely partisan, and nothing more.
But let's give this civil rights hero-cum lying partisan hack the undeserved benefit of the doubt, and examine his assertions that purportedly support his charge of illegitimacy.
First, the Russian hack. To date, we the people have not seen evidence of it, but given that the Russians and Chinese successfully hacked U.S. institutions from the Energy Department to the White House (with no strong response from the Obama administration), it's certainly plausible.
Those who state it as fact also go on to say that nothing happens in Russia without Vladimir Putin's knowledge and approval, thus Putin himself must have ordered the hack.
Really? Nothing goes on in a country with nearly twice the land mass of the U.S., and 144 million people, without its President's knowledge and approval? Do you think nothing happens in the U.S. without President Obama's approval? Did Obama know of and approve the numerous hacks of U.S. financial institutions?
Granted, Russia is a very different nation, and Putin a very different leader, than the U.S. and Obama. But if Putin knew everything that goes on in Russia, the CIA wouldn't have Russian citizens who serve as informants, and I guarantee they do, just as the FSS has American assets (without President Obama's knowledge, at least of who and where they are).
Also, why would Russia want Donald Trump as President vs. Hillary Clinton? The U.S., under President Obama and Secretary of State Clinton, stood idly and fecklessly by as Putin took ever-bolder moves on the world stage. You'd think Putin would want such a passive leader in the White House, one that wouldn't stand up to him as he continued to reinstate Russia as a dominant global power. Not a guy who has named tough-minded generals to head the Departments of Defense and Homeland Security, another hawkish general as his National Security Advisor, and a West Point grad and Army officer who patrolled the Iron Curtain as CIA Director.
Then there's the fact that Russians also attempted to hack the RNC, but the RNC's firewalls were apparently better, because those attempts were thwarted. Maybe we should support the party that has proven it can safeguard its information from foreign interests.
If Russia (officially) did hack the DNC - with or without Putin's knowledge and consent - the fact that they also tried to hack the RNC only proves that Russia was attempting to undermine America's confidence in its election process and its candidates, not that it favored one candidate over the other. That's bad, and we should retaliate (with more than just sanctions). But it doesn't render illegitimate the fair and proper election of the candidate that won the majority of the electoral votes.
There are those who claim that Trump himself asked Putin to hack the DNC when he made a comment in jest during a July 27 speech, saying he hoped Russia found the thousands of emails that Clinton deleted from her private server, which never should have been used by a Secretary of State. (Note that Trump indicated that Russia would be rewarded mightily by U.S. media if it did uncover those emails - not that Russia would be rewarded by his administration, if elected.)
Yeah, right. Trump's going to ask Putin to hack the DNC in front of millions of TV viewers. I'm sometimes amazed at the complete and utter lack of logic that permeates the left. I shouldn't be, but I am.
And there are the assertions that Trump is fond of Putin, that he thinks highly of him. BS. All Trump said was that Putin is a stronger leader than Obama.
That's like saying that Serena Williams is a better tennis player than me. Heck, the President of France is a stronger leader than Obama - at least he's not afraid to utter the words "radical Islamic terrorism."
And what about the appointment of Rex Tillerson, former CEO of Exxon Mobil, as Secretary of State? The left has made much of the fact that Putin awarded Tillerson the Order of Friendship, Of course, that means that Tillerson will remain friendly to Russia in his new role as head of the State Department, right?. I mean, in his previous role, his job was to make Russia happy enough to let Exxon Mobil profit from developing Russian oilfields. Why wouldn't he pursue the same objectives as America's top diplomat?
Again, I'm sometimes amazed by the ... ah, never mind.
The key point is this: I don't know anyone who voted for Trump that was swayed by the release of the contents of the emails that were allegedly hacked by Russia. However, I concede that some voters may have been. But enough to carry traditional blue states like Wisconsin, Michigan and Pennsylvania?
And what if those emails did sway that many voters? What, specifically, were they swayed by? The mere fact that DNC emails were hacked?
No, they'd have been swayed by the contents of those emails, which clearly proved rampant campaign corruption perpetrated by the Democrat Party. Those contents have never been disputed by the left - not once. In other words, they're only upset that they got caught, like any common criminal.
They revealed that, under the chairmanship of Debbie Wasserman Schultz, the DNC conspired to rig the primary debates to favor Hillary Clinton over Bernie Sanders. That, after Wasserman Schultz' fall from grace, new DNC chair Donna Brazile obtained debate questions from CNN and provided them to Clinton in advance of the general election debate. That Clinton campaign chair John Podesta, naively susceptible to phishing, had emails that revealed everything from Clinton's support for a no-fly zone in Syria (which would also make Putin very happy) to Clinton staffers insulting Catholics and Latinos.
As Kevin Bacon said in A Few Good Men, "These are the facts - and they are indisputable."
So if anything related to the Russian hack of the DNC influenced the U.S. Presidential election, it was the clear and compelling evidence of rampant corruption within the Clinton campaign and the Democrat Party structure.
And that's information that voters should have had going into the election. So if anything, this only shows that Russia cares more about American voters knowing the truth than do the DNC and Hillary Clinton.
On to James Comey. What the Democrats don't say is that, immediately before the election, Comey made a public statement that the FBI had reviewed all 650,000 emails obtained from Weiner's laptop (I cringe at even using the words "Weiner" and "laptop" in the same sentence), in a mere matter of days - a Herculean, if not impossible, task - and had found no evidence of wrongdoing.
In other words, the FBI cleared Hillary, just as it had back in June.
Now, if voters were undecided walking into the polls, does it not stand to reason that, Hillary having been exonerated not once, but twice, before the polls opened on November 8, they'd have breathed a sigh of relief and cast their votes in her favor? After all, to not do so would be to question Comey's veracity in exonerating her. But if they did that, why wouldn't they question his veracity when he made his earlier statement saying they'd found all those emails and were re-opening the investigation into Clinton?
Ah, there's that pesky logic thing again.
After Lewis' interview with Chuck Todd, Trump (inappropriately, in my view) lambasted Lewis on (what else?) Twitter. The response from the left was immediate, vitriolic - and opportunistic.
At this writing, 68 Congressional Democrats have joined Lewis in a show of "solidarity," pledging to boycott the inauguration. At least one of them said, "To attack John Lewis is to attack America," referring to Trump's tweet - which was a response, not an opening volley.
Hmm. Seems to me that attempting to disrupt the orderly transfer of power - a vital and necessary part of our republican (note the little "r," liberals) process - is more an attack on America than is a counter-attack on a partisan hack.
But again, this is pure partisan opportunism. It gives these left-wing sore losers an excuse to boycott the inauguration, an excuse they'd all been no doubt looking for, because they cannot accept the results of a free and fair election.
Donald Trump won the election. He won a strong majority of the electoral votes. He won somewhere in the neighborhood of 2,600 U.S. counties to Hillary's 500 counties. Hillary won 88 of the nation's 100 most populous counties, which resulted in her three million vote advantage in the popular vote. Without those 100 counties, Hillary would have lost the popular vote by more than 11 million votes.
Only those in New York, Hollywood and San Francisco believe that the popular vote should decide U.S. elections (and if a Republican had won the popular vote but lost the electoral vote, those leftists would defend the electoral college to the death - if they had the guts to defend anything to the death).
Like it or not, Donald Trump won a free and fair election. Subsequent challenges to that election found that his popular vote count actually increased in Wisconsin, and that there were polling areas in Detroit - which Hillary carried - in which more votes were cast than there were registered voters. Had we recounted all states, we might well have found that Trump won the popular vote as well, and that there was widespread evidence of voting fraud in the areas Hillary carried.
That undisputed electoral victory is all that is needed to declare Trump the legitimate next President of these United States. And those Democrat lawmakers who will boycott his inauguration do so at their peril. They believe they're safe, as all of them are from districts that Hillary carried (further proof that this is nothing more than partisan posturing). But Wisconsin, Michigan and Pennsylvania looked like locks for Hillary, too. Americans are tired of politics as usual. These fake protesters in Congress risk being taken to task in the midterms.
And beyond that, they're irrelevant. The GOP controls the House and Senate, not just the White House. These representatives will find themselves fighting a losing cause for at least the next two years, and likely beyond. All Donald Trump needs to do is to recite a line uttered by President Obama after he was sworn in in 2009, when GOP lawmakers urged him to work with them:
"We won."
In the interview with liberal TV commentator Chuck Todd of NBC and MSNBC (the media mouthpiece of the Democrat party), Lewis also noted that this would be the first inauguration he's missed in his 31 years in Congress.
John Lewis is a lying partisan hack.
I don't say that to disrespect his status as a civil rights hero. His partisanship and dishonesty have done enough to tarnish any good he may have done in the past.
See, Lewis has missed another inauguration during his tenure in the House - namely, that of George W. Bush. His reason? That Bush was not a legitimate President, because of the imbroglio over the Florida election (which Al Gore challenged in the courts - after he'd already conceded - and lost).
In other words, when a Democrat loses a close election to a Republican - especially if said Democrat won the popular vote but lost the electoral vote, as did both Gore and Hillary Clinton - Lewis pouts, like so many of his party brethren who don't like democracy and can't stand not getting their way. His motives are purely partisan, and nothing more.
But let's give this civil rights hero-cum lying partisan hack the undeserved benefit of the doubt, and examine his assertions that purportedly support his charge of illegitimacy.
First, the Russian hack. To date, we the people have not seen evidence of it, but given that the Russians and Chinese successfully hacked U.S. institutions from the Energy Department to the White House (with no strong response from the Obama administration), it's certainly plausible.
Those who state it as fact also go on to say that nothing happens in Russia without Vladimir Putin's knowledge and approval, thus Putin himself must have ordered the hack.
Really? Nothing goes on in a country with nearly twice the land mass of the U.S., and 144 million people, without its President's knowledge and approval? Do you think nothing happens in the U.S. without President Obama's approval? Did Obama know of and approve the numerous hacks of U.S. financial institutions?
Granted, Russia is a very different nation, and Putin a very different leader, than the U.S. and Obama. But if Putin knew everything that goes on in Russia, the CIA wouldn't have Russian citizens who serve as informants, and I guarantee they do, just as the FSS has American assets (without President Obama's knowledge, at least of who and where they are).
Also, why would Russia want Donald Trump as President vs. Hillary Clinton? The U.S., under President Obama and Secretary of State Clinton, stood idly and fecklessly by as Putin took ever-bolder moves on the world stage. You'd think Putin would want such a passive leader in the White House, one that wouldn't stand up to him as he continued to reinstate Russia as a dominant global power. Not a guy who has named tough-minded generals to head the Departments of Defense and Homeland Security, another hawkish general as his National Security Advisor, and a West Point grad and Army officer who patrolled the Iron Curtain as CIA Director.
Then there's the fact that Russians also attempted to hack the RNC, but the RNC's firewalls were apparently better, because those attempts were thwarted. Maybe we should support the party that has proven it can safeguard its information from foreign interests.
If Russia (officially) did hack the DNC - with or without Putin's knowledge and consent - the fact that they also tried to hack the RNC only proves that Russia was attempting to undermine America's confidence in its election process and its candidates, not that it favored one candidate over the other. That's bad, and we should retaliate (with more than just sanctions). But it doesn't render illegitimate the fair and proper election of the candidate that won the majority of the electoral votes.
There are those who claim that Trump himself asked Putin to hack the DNC when he made a comment in jest during a July 27 speech, saying he hoped Russia found the thousands of emails that Clinton deleted from her private server, which never should have been used by a Secretary of State. (Note that Trump indicated that Russia would be rewarded mightily by U.S. media if it did uncover those emails - not that Russia would be rewarded by his administration, if elected.)
Yeah, right. Trump's going to ask Putin to hack the DNC in front of millions of TV viewers. I'm sometimes amazed at the complete and utter lack of logic that permeates the left. I shouldn't be, but I am.
And there are the assertions that Trump is fond of Putin, that he thinks highly of him. BS. All Trump said was that Putin is a stronger leader than Obama.
That's like saying that Serena Williams is a better tennis player than me. Heck, the President of France is a stronger leader than Obama - at least he's not afraid to utter the words "radical Islamic terrorism."
And what about the appointment of Rex Tillerson, former CEO of Exxon Mobil, as Secretary of State? The left has made much of the fact that Putin awarded Tillerson the Order of Friendship, Of course, that means that Tillerson will remain friendly to Russia in his new role as head of the State Department, right?. I mean, in his previous role, his job was to make Russia happy enough to let Exxon Mobil profit from developing Russian oilfields. Why wouldn't he pursue the same objectives as America's top diplomat?
Again, I'm sometimes amazed by the ... ah, never mind.
The key point is this: I don't know anyone who voted for Trump that was swayed by the release of the contents of the emails that were allegedly hacked by Russia. However, I concede that some voters may have been. But enough to carry traditional blue states like Wisconsin, Michigan and Pennsylvania?
And what if those emails did sway that many voters? What, specifically, were they swayed by? The mere fact that DNC emails were hacked?
No, they'd have been swayed by the contents of those emails, which clearly proved rampant campaign corruption perpetrated by the Democrat Party. Those contents have never been disputed by the left - not once. In other words, they're only upset that they got caught, like any common criminal.
They revealed that, under the chairmanship of Debbie Wasserman Schultz, the DNC conspired to rig the primary debates to favor Hillary Clinton over Bernie Sanders. That, after Wasserman Schultz' fall from grace, new DNC chair Donna Brazile obtained debate questions from CNN and provided them to Clinton in advance of the general election debate. That Clinton campaign chair John Podesta, naively susceptible to phishing, had emails that revealed everything from Clinton's support for a no-fly zone in Syria (which would also make Putin very happy) to Clinton staffers insulting Catholics and Latinos.
As Kevin Bacon said in A Few Good Men, "These are the facts - and they are indisputable."
So if anything related to the Russian hack of the DNC influenced the U.S. Presidential election, it was the clear and compelling evidence of rampant corruption within the Clinton campaign and the Democrat Party structure.
And that's information that voters should have had going into the election. So if anything, this only shows that Russia cares more about American voters knowing the truth than do the DNC and Hillary Clinton.
On to James Comey. What the Democrats don't say is that, immediately before the election, Comey made a public statement that the FBI had reviewed all 650,000 emails obtained from Weiner's laptop (I cringe at even using the words "Weiner" and "laptop" in the same sentence), in a mere matter of days - a Herculean, if not impossible, task - and had found no evidence of wrongdoing.
In other words, the FBI cleared Hillary, just as it had back in June.
Now, if voters were undecided walking into the polls, does it not stand to reason that, Hillary having been exonerated not once, but twice, before the polls opened on November 8, they'd have breathed a sigh of relief and cast their votes in her favor? After all, to not do so would be to question Comey's veracity in exonerating her. But if they did that, why wouldn't they question his veracity when he made his earlier statement saying they'd found all those emails and were re-opening the investigation into Clinton?
Ah, there's that pesky logic thing again.
After Lewis' interview with Chuck Todd, Trump (inappropriately, in my view) lambasted Lewis on (what else?) Twitter. The response from the left was immediate, vitriolic - and opportunistic.
At this writing, 68 Congressional Democrats have joined Lewis in a show of "solidarity," pledging to boycott the inauguration. At least one of them said, "To attack John Lewis is to attack America," referring to Trump's tweet - which was a response, not an opening volley.
Hmm. Seems to me that attempting to disrupt the orderly transfer of power - a vital and necessary part of our republican (note the little "r," liberals) process - is more an attack on America than is a counter-attack on a partisan hack.
But again, this is pure partisan opportunism. It gives these left-wing sore losers an excuse to boycott the inauguration, an excuse they'd all been no doubt looking for, because they cannot accept the results of a free and fair election.
Donald Trump won the election. He won a strong majority of the electoral votes. He won somewhere in the neighborhood of 2,600 U.S. counties to Hillary's 500 counties. Hillary won 88 of the nation's 100 most populous counties, which resulted in her three million vote advantage in the popular vote. Without those 100 counties, Hillary would have lost the popular vote by more than 11 million votes.
Only those in New York, Hollywood and San Francisco believe that the popular vote should decide U.S. elections (and if a Republican had won the popular vote but lost the electoral vote, those leftists would defend the electoral college to the death - if they had the guts to defend anything to the death).
Like it or not, Donald Trump won a free and fair election. Subsequent challenges to that election found that his popular vote count actually increased in Wisconsin, and that there were polling areas in Detroit - which Hillary carried - in which more votes were cast than there were registered voters. Had we recounted all states, we might well have found that Trump won the popular vote as well, and that there was widespread evidence of voting fraud in the areas Hillary carried.
That undisputed electoral victory is all that is needed to declare Trump the legitimate next President of these United States. And those Democrat lawmakers who will boycott his inauguration do so at their peril. They believe they're safe, as all of them are from districts that Hillary carried (further proof that this is nothing more than partisan posturing). But Wisconsin, Michigan and Pennsylvania looked like locks for Hillary, too. Americans are tired of politics as usual. These fake protesters in Congress risk being taken to task in the midterms.
And beyond that, they're irrelevant. The GOP controls the House and Senate, not just the White House. These representatives will find themselves fighting a losing cause for at least the next two years, and likely beyond. All Donald Trump needs to do is to recite a line uttered by President Obama after he was sworn in in 2009, when GOP lawmakers urged him to work with them:
"We won."
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