Monday, April 23, 2012

Govt. Pays $200,000 to move Shrub

The government doled out more than $200,000 in 2010 to 
"translocate" a bush that was blocking the path of San 
Francisco’s $1.05-billion highway project — partially 
funded by President Obama’s 2009 economic stimulus
 law — adding to the laundry list of "shovel-ready" projects 
that resulted in a cesspool of taxpayer waste.
"In October 2009, an ecologist identified a plant growing
in a concrete-bound median strip along Doyle Drive in the 
Presidio as Arctostaphylos franciscana," (pictured at left) 
the U.S. Department of Interior wrote in an Aug. 10, 2010 
Federal Register journal entry. "The plant’s location was 
directly in the footprint of a roadway improvement project 
designed to upgrade the seismic and structural integrity 
of the south access to the Golden Gate Bridge."
"The translocation of the Arctostaphylos franciscana plant 
to an active native plant management area of the Presidio 
was accomplished, apparently successfully and according 
to plan, on January 23, 2010," the agency added. explained the purported "significance" 
of this particular plant:

The bush — a Franciscan manzanita — as a specimen 
of a commercially cultivated species of shrub that can be 
purchased from nurseries for as little as $15.98 per plant. 
The particular plant in question, however, was discovered 
in the midst of the City of San Francisco, in the median 
strip of a highway, and was deemed to be the last example 
of the species in the "wild."

Prior to the discovery of this "wild" Franciscan manzanita, 
the plant had been considered extinct for as long as 62 years
 — extinct, that is, outside of people’s yards and botanical 
Previously, the shrub was located in two cemeteries 
in the city’s Richmond District. The Interior Department 
also said there had been "unconfirmed sightings" of the 
plant in the Haight-Ashbury District, and that the district’s 
population of these particular shrubs has been "lost to 
On October 16, 2009, a botanist by the name of Daniel 
Gluesenkamp identified the bush along Doyle Drive, 
the highway that leads to the Golden Gate Bridge that 
is currently under renovation. Further examination from 
an ecologist and the Presidio Trust — which helps to 
 preserve the Presidio public park site — concluded 
that the shrub was a Franciscan Manzanita.
Consequently, on December 21, 2009, the Presidio 
Trust, the National Park Service, the California 
Department of  Transportation (Caltrans), the U.S. Fish 
and Wildlife Service, and the California Department of 
Fish and Game collectively drafted an agreement — 
 "Memorandum of Agreement Regarding Planning, 
Development, and Implementation of the Conservation 
Plan for Franciscan Manzanita" (MOA) — which detailed 
how, why, and when the shrub would be relocated.
The MOA called for a nearly $80,000 transfer to the 
Presidio Trust "to fund the establishment, nurturing, 
 and monitoring of the Mother Plant in its new location 
for a period not to exceed ten (10) years following 
relocation and two (2) years for salvaged rooted 
layers and cuttings according to the activities outlined 
in the Conservation Plan."
The agreement also called for $100,000 to finance 
the "hard removal" of the plant and $25,605 to fund 
the "reporting requirements" for the decade following 
the removal. Combined with the $79,470 transfer to 
the Presidio Trust, the overall cost for "translocating" 
the Franciscan Manzanita bush calculated to a 
 whopping $205,075. Other costs the project included, 
according to the memorandum:
"Contract for and provide funding not to exceed 
$7,025.00 for initial genetic or chromosomal testing of 
the Mother Plant by a qualified expert to be selected 
at Caltrans’ sole discretion." 

"Contract for and fund the input, guidance, and advice 

of a qualified Manzanita expert on an as-needed basis 
to support the tending of the Mother Plant for a period 
not to exceed five (5) years, provided that said expert 
 selection, retention and replacement at any point after 
hiring rests in the sole discretion of Caltrans."

"Provide funding not to exceed $5,000.00 to each of 

3 botanical gardens (Strybing, UC, and Tilden) to 
nurture salvaged rooted layers and to monitor and 
report findings as outlined in the Conservation Plan."

"Provide funding not to exceed $1,500.00 for the 

long-term seed storage of 300 seeds collected around 
the Mother Plant in November 2009 as outlined in the 
Conservation Plan."
The plant is now being guarded at an undisclosed 
location, partly because a fear that the "wild plant" 
 might be trampled by nature-lovers and other 
onlookers. "[A] single trampling event could result 
in damage or the death of the wild plant," the 
Interior Department wrote in a Sept. 8, 2011 
Federal Register entry. "As noted the Presidio 
Trust and NPS have made continuous efforts not 
 to reveal the location of Arctostaphylos franciscana. 
They are concerned that  public knowledge of the 
A. franciscana location would attract large numbers
of plant enthusiasts who may damage the A.
franciscana and compact the soil."
According to the 2011 Federal Register entry, 
because the plant has been relocated to an 
undeveloped area in the Presidio and is not 
benefiting from the level of protection and 
nutrients that other plants enjoy, it must be 
considered "wild."
But still, however "wild" Franciscan Manzanitas 
may be, one California nursery currently sells 
them online for only $15.98 per bush.
Source: New American via The Patriot Update, 4/13/12

Our versions of the $200 thousand dollar shrub move 
are the price tags for a 3.5 mile re-do of Mt Vernon for 
$12 million and the 1/2 mile re-do of Dunwoody Village 
Parkway for $2.4 million.

Norb Leahy, Dunwoody GA Tea Party Leader  

Saturday, April 21, 2012

Obama to Cede Oceans to U.N.

Shock recommendation buried in White House report     by AARON KLEIN
President Obama’s ambitious plan for stepped up government regulation of the oceans includes an unreported effort to cede U.S. oceans to United Nations-based international law, WND has learned.
The plan was previously a pet project of Secretary of Defense Leon Panetta, whose ocean-zoning scheme was partnered with a globalist group that also aimed to hand over U.S. oceans to U.N.
Obama’s plan is still in draft form. It calls for an executive order to be issued for a National Ocean Policy that will determine how the ecosystem is managed while giving the federal government more regulatory authority over any businesses that utilize the ocean.
The executive order is to be based on the recommendations of Obama’s Interagency Ocean Policy Taskforce, created in 2010 also by executive order.
The agency is tasked with recommending specific actions for a presidential plan to achieve the vision of “an America whose stewardship ensures that the ocean, our coasts, and the Great Lakes are healthy and resilient, safe and productive, and understood and treasured so as to promote the well-being, prosperity, and security of present and future generations.”
The Taskforce’s final recommendations, based in part on the supposed effects of “global warming, were released in a 78-page paper reviewed by WND.
The entire third section of the report recommends that the U.S. join the U.N.’s Law of the Sea Convention.
The convention defines the rights and responsibilities of nations in their use of the world’s oceans, establishing guidelines for businesses, the environment and the management of marine natural resources.
States the report:
The Task Force strongly and unanimously supports United States accession to the Convention on the Law of the Sea and ratification of its 1994 Implementing Agreement. The Law of the Sea Convention is the bedrock legal instrument governing activities on, over and under the world’s oceans.
United States accession to the Convention will further our national security, environmental, economic, and diplomatic interests.
The report lists key reasons for compliance with the law, including:
·         The Convention has garnered the unequivocal support of our national security leadership under both Republican and Democratic administrations, because, among other things, it codifies essential navigational rights and freedoms upon which our Armed Forces rely.
·         The Convention sets forth the rights and responsibilities of nations to prevent, reduce and control pollution of the marine environment and to protect and preserve resources off their shores.
·         By becoming a party to the Convention, U.S. legal rights to our extended continental shelf can be put on the strongest legal foundation.
·         As a party to the Law of the Sea Convention, the United States would have the ability to participate formally and more effectively in the interpretation and development of the Convention.
·         Joining the Law of the Sea Convention would reaffirm and enhance United States leadership in global ocean affairs.
While the White House claims its ocean plans are not meant to zone the seas, a major conclusion of the Taskforce was to “establish a framework for effective coastal and marine spatial planning (CMSP) that establishes a comprehensive, integrated, ecosystem-based approach to address conservation, economic activity, user conflict, and sustainable use of ocean, coastal, and Great Lakes resources.”
Panetta’s ocean scheme
Much of the Taskforce’s recommendations were previously called for by a group headed by Panetta until his appointment as CIA director in 2009. Panetta became defense secretary in July 2011.
Until his CIA appointment in 2009, Panetta co-chaired the Joint Ocean Commission Initiative, which is the partner of Citizens for Global Solutions in a push to ratify U.S. laws and regulations governing the seas.
The oceans initiative bills itself as a bipartisan, collaborative group that aims to “accelerate the pace of change that results in meaningful ocean policy reform.”
Among its main recommendations is that the U.S. should put its oceans up for regulation to the U.N. Convention on the Law of the Sea.
Other recommendations of Panetta’s Joint Ocean Commission Initiative, which mirror Obama’s taskforce recommendations, include:
·         The administration and Congress should establish a national ocean policy. The administration and Congress should support regional, ecosystem-based approaches to the management of ocean, coastal and Great Lakes.
·         Congress should strengthen and reauthorize the Coastal Zone Management Act.
·         Congress should strengthen the Clean Water Act.
The Joint Ocean Commission Initiative Leadership Council includes John Podesta, president and CEO of the Soros-funded Center for American Progress, which is reportedly highly influential in advising the White House on policy.
Podesta served as co-chairman of Obama’s presidential transition team.
Panetta’s oceans initiative is a key partner of Citizens for Global Solutions, or CGS, which, according to its literature, envisions a “future in which nations work together to abolish war, protect our rights and freedoms and solve the problems facing humanity that no nation can solve alone.”
CGS states it works to “build the political will in the United States” to achieve this global vision.
The organization currently works on issues that fall into five general areas: U.S. global engagement; global health and environment; peace and security; international law and justice; and international institutions.
CGS is a member organization and supporter of the World Federalist Movement, which openly seeks a one-world government. The World Federalist Movement considers the CGS to be its U.S. branch.
The movement brings together organizations and individuals that support the establishment of a global federal system of strengthened and democratized global institutions with plenary constitutional power accountable to the citizens of the world and a division of international authority among separate global agencies.
The movement’s headquarters are located near the U.N. building in New York City. A second office is near the International Criminal Court in The Hague, Netherlands.
The locations are significant, since the movement heavily promotes the U.N. and is the coordinator of various international projects, such as the Coalition for the International Criminal Court and the Responsibility to Protect military doctrine. That doctrine formed the basis of Obama’s justification last year to launch NATO airstrikes in Libya.

Source:  World News Daily, Aaron Klein is WND's senior staff reporter and Jerusalem bureau chief. He also hosts "Aaron Klein Investigative Radio" on New York's WABC Radio. His latest book is the N.Y. Times best-selling, "The Manchurian President: Barack Obama's Ties to Communists, Socialists and Other Anti-American Extremists."More ↓

The first thing the U.N. would do is to levy taxes payable to the U.N. These would be taxes levied against oil exploration companies and coastal fishermen.  It’s time to close the U.N.

Norb Leahy,  Dunwoody GA Tea Party Leader

Keystone Pipeline Goes Forward

TransCanada moves forward to build the southern half of Keystone XL pipeline…Obama says “OK” by Rebecca DiFede

In Jan., Obama made a big show of vehemently denying requests to build a Keystone XL pipeline, which would have created thousands of jobs and helped restore to the sluggish economy.

The funny thing is, Obama only controls three inches of the Keystone pipeline — the three inches that cross the US/Canada border. The majority of the pipeline, existing from the border to Alberta and from Cushing, OK to Port Arthur, TX is out of his jurisdiction.

However despite that fact, he vetoed the entire project because he (and his environmental supporters) believe that those jobs, since they are going to support oil instead of his preferred “green” energy, the jobs are now “dirty”. He refused to even consider it, and even lobbied the Senate against it.

Last month TransCanada, the company behind the project revealed plans to move forward with the southern half of the Keystone pipeline without Obama’s permission. They don’t need his approval to start building in Cushing, which just so happens to be the president’s third stop on his two day energy tour.

On Thursday, President Obama has decided to “approve” the move, and release plans to supposedly cut the red tape and expedite construction of the pipeline. What a sudden change of heart from our illustrious president, especially because of the ardent public outrage he originally displayed for the issue.

As recently as Mar. 8, the president was lobbying against the GOP fast track bill for the Keystone XL pipeline and now, a mere 22 days later, he is giving the green light to the southern portion of the exact same project. One that, as we’ve already established, doesn’t need his approval to proceed.

I suppose in this pre-election time, Obama wants all the attention he can get, and this stunt is surely an attempt to win him favor with some on-the-fence Democrats. By giving a very public thumbs up to this project, he hopes that when it is finalized, he will get credit for making good on one of his promises. As if his too-little-too-late announcement is going to allow everyone to forget how much time and money he spent arguing for this project’s dismissal.

All ploys aside, this is a low move, even for him. President Obama’s seeming endorsement of TransCanada’s decision was summarized best by Brendan Buck, Press Secretary to Speaker John Boehner, who said: “This is like a governor personally issuing a fishing license.” Or a mother telling her adult son not to get a tattoo, only to give her approval when he comes home with one.

Neither has the right to issue such an approval, and knows it, but feels the need to assert dominance anyway, as if to say “I see what you’re doing over there. No, I don’t like it. But hey, since you’re doing it anyway, who am I to stop you?”

The president just wants to focus attention on him, especially in the wake of the primaries, and he figured the best way to do it was to ride TransCanada’s bandwagon all the way to the polls. However this does pose one problem, he has become that which he has always aspired not to be: a flip-flopper.

Sure, he’s gone back and forth on issues before, all politicians do. But never before in his presidency has he gone on such a direct public tirade against an issue, only to give it credence once he realized he couldn’t stop it from being done.

He cannot stand to not have control of every aspect of America, and when TransCanada announced their plans to trudge into Oklahoma without him, waving their tails in his face as he visited the state, he had to fight back. He knew they didn’t need him, and feeling left out he gave them his “blessing”, framed by his ever-present Cheshire cat grin. After all, in this administration, everyone’s mad here.

Source: Rebecca DiFede is a contributing editor to Americans for Limited Government.

Friday, April 20, 2012

Inflation Over 10%, Unemployment Over 20%

Inflation Formula Critics: 'Real' Rate Over 10%, Unemployment Tops 20% Friday, 20 Apr 2012

Maggie Humphrey, a price collector for the Bureau of Labor Statistics, visits the same grocery store every month in the Chicago suburbs to punch the cost of a pound of bananas into her Lenovo tablet computer. “That price has not fluctuated since I’ve been here,” says Humphrey, who started gathering prices for the BLS in 2006 and has checked bananas at this particular establishment for about a year. She records it as 69 cents a pound and includes their country of origin, whether they’re on sale and any applicable sales tax. 

Humphrey is among 400 price collectors who visit 23,000 locations in 87 cities every month to determine the cost of 80,000 products and services, from breakfast cereal to haircuts. She and her colleagues feed a database in Washington, where statisticians compile the monthly inflation report, used as benchmark for everything from Social Security payments to the value of Treasury’s inflation-indexed bonds. The bureau’s price-gathering and statistical methods are standard practice from Japan to Switzerland.

That hasn’t averted a lashing from critics who say the government is engaged in a campaign to hide inflation of 10 percent a year or more. Assurances by Federal Reserve policy makers that inflation remains “subdued” also haven’t deterred the skeptics. “I’m as hawkish and worried about inflation as anybody,” said Stephen Stanley, Chief Economist at Pierpont Securities LLC in Stamford, Connecticut and one of the top forecasters of CPI over the last two years in Bloomberg News surveys. “But the idea that inflation is 10 percent is not a proper reading of the data.”

One Critic
One such critic is John Williams, the author of Shadow Government Statistics, a newsletter that he has run since 2004. Williams says the federal government understates the level of inflation to keep increases in Social Security payments and other costs down. “The reporting system increasingly succumbed to pressures from miscreant politicians, who were and are intent upon stealing income from Social Security recipients, without ever taking the issue of reduced entitlement payments before the public or Congress for approval,” Williams says on his website,

Williams’s alternate measure of inflation was 10.3 percent for the 12 months through March, compared with 2.7 percent for the Consumer Price Index. He calculates unemployment at more than 20 percent rather than the official 8.2 percent in March. His assessment of gross domestic product has clocked negative economic performance in every quarter since 2005. The Department of Commerce’s measure turned negative in 2008 and 2009, recording the worst recession since the Great Depression. The economy is nearing “hyperinflationary Great Depression,” he says on his web site.

Source: 2012 Bloomberg News Read more: Inflation Formula Critics: 'Real' Rate Over 10%, Unemployment Tops 20%

Thursday, April 19, 2012

Brunswick GA Against T-SPLOST

Glynn County group forms to stop transportation sales tax in coastal region. That's what a Glynn County group is calling a planned July 31 vote.

By Mike Morrison

BRUNSWICK — Two men have formed a group in Glynn County to oppose Georgia's Transportation Investment Act, or T-SPLOST, calling it a tax increase of unprecedented proportions.

"The government is addicted to SPLOSTs," Jeff Kilgore said, referring to the special-purpose local option sales taxes that counties have adopted individually around the state. "Rather than finding ways to cut and be more efficient, they're just trying to find another revenue stream."

A referendum on the proposed 1-cent tax, the first stab at a statewide SPLOST, will be on July 31 in conjunction with the state primary election, and Kilgore, who is calling his group the "STOP Ballot Committee," is urging voters to turn out and turn it down.

"At $18.7 billion over 10 years, this would be the largest tax increase in the history of the state," he said.

The General Assembly set up 12 regions for the collection and distribution of the taxes. Even if individual counties vote it down, their residents would still have to pay the tax if the majority of voters within the region vote for it.

Kilgore registered with the Georgia Transparency and Campaign Finance Committee in February as a political organization. Dale Provenzano serves as its secretary, and he and Kilgore are its only members. But they're looking to expand.

"STOP is functioning with a focus on our region, but we're also working with many other groups throughout Georgia including the Georgia Tea Party and the Atlanta Tea Party," Kilgore said.

Supporters of the tax tout it as a job creator and infrastructure enhancer. "I think it is a focused program on transportation only, unlike a general SPLOST, and will benefit the state and county by expanding, upgrading and improving our roads, bridges, ports and streets," County Commissioner Tom Sublett said.

In Glynn County, those projects include widening and repaving roads and constructing a new terminal at McKinnon St. Simons Airport.

"The projects are all locked and loaded, agreed upon by the 10 counties and all cities in our region unanimously and won't be changed," Sublett said. "TIA will create tens of thousands of jobs over about a 12-year period while the projects are under way."

Glynn is in the Coastal Region, which includes Bulloch, Bryan, Camden, Chatham, Effingham, Liberty, Screven, Long and McIntosh counties.

The Department of Transportation says $237.9 million will be collected in Glynn County over the life of the tax. All the money collected within a region will stay within the region.

But that doesn't include a hefty chunk that will go to the Transportation Department for administrative expenses, Kilgore said. And some counties — Glynn among them — will get less than they pay for.

The Transportation Department is projecting that $142.7 million will be spent on Glynn County projects, meaning $95 million will go elsewhere.

"Some money collected in Glynn County will be spent in Effingham County," Kilgore said. "Is that what we want?"

Source: Posted: April 14, 2012 | Updated: April 16, 2012


Most counties in Georgia are planning Vote No campaigns against T-SPLOST. If voters succeed in defeating the T-SPLOST, pressure will mount to make the Georgia Legislature repeal the Transportation Investment Act of 2010 as a bad idea. Counties would be better off on their own.

If Legislators do their homework in the meantime, they will see clearly that “regionalism” is part of U.N. Agenda 21, a diabolical plot to undermine local government sovereignty in our states.

Norb Leahy, Dunwoody GA Tea Party

Proposed transit line neither ‘seamless’ nor cheap

by Ron Sifen

Recently, Tad Leithead, chairman of the Atlanta Regional Commission and chairman of the Cumberland Community Improvement District, had a column in the Atlanta newspaper supporting the TSPLOST. His main point was that the Atlanta region needs transit to promote economic development. He also glorified a transit “plan” called Concept 3. Not much on alleviating traffic congestion.

Most of the TSPLOST money is being allocated to economic development projects that will do little or nothing to alleviate traffic congestion.

Mr. Leithead said, “As the Atlanta region grows ... residents will expect a seamless transit system that efficiently delivers them to work or other destinations. A myriad of separate systems do not promise what is needed for our future.”

Apparently, Mr. Leithead is defining “seamless” as meaning that we need to consolidate all of the region’s transit operating systems into one.

“Seamless” is supposed to mean that transit allows a person to travel efficiently from the Point A of the rider’s choice, to the Point B of the rider’s choice. “Efficiently” means the most time-effective route with the fewest possible changes of vehicles.

Concept 3 fails to put together a realistic, cost-effective, transit network focused only on “seamless” connectivity along potential high-ridership routes. Concept 3 is a bunch of politicians’ pet projects, using numerous different modes of transportation. Concept 3 is a blueprint for non-seamlessness.

Regardless of whether there is a unified regional transit operator, if a potential transit rider has to ride 3 different transit vehicles just to travel from Douglasville to Perimeter Center, then the transit is not “seamless.“

Light rail is incredibly expensive to build, and typically costs about $2 million per mile per year to operate. The region is proposing a light rail line into Cobb, which would connect to heavy rail at the Arts Center MARTA station (change of vehicles). Various transit will intersect the light rail line, but none of the intersecting transit is likely to be light rail (change of vehicles). The region cannot come up with a fraction of enough money to build a regional light rail network.

By definition, a few scattered unconnected light rail lines are not going to lead to a “seamless” transit system. And it is not financially realistic. And it is not cost-effective.

The only point on which I would agree with Mr. Leithead is that if the Atlanta region is going to implement a regional transit system, it needs to be seamless. However, I would add that it also needs to be financially realistic, and should not have huge operating costs that will burden taxpayers with even more large future tax increases.

In another recent Atlanta newspaper column, transportation professional, Wendell Cox points out that “Transit, on average, takes 70 percent longer than commuting by car ... and the roundtable plan will not change that.” And as I have previously pointed out, if you extrapolate travel times from the Northwest Connectivity Study to evaluate the proposed Cobb light rail line, total door-to-door travel times for a typical north Cobb commuter would more than double. This will not help to alleviate traffic congestion, because commuters who currently drive will continue to drive, rather than endure unacceptably long trip times.

Over the last 25 years, some cities have had some success implementing light rail, and some have faced huge problems with out-of-control construction costs, and staggering delays in getting the system completed.

In general, those cities that have been able to implement light rail at a reasonable cost did so by purchasing abandoned or under-utilized existing rail lines at extremely low prices, and then converted these already existing rail lines to light rail.

In general, most cities that attempted to build light rail from scratch wound up with staggering cost overruns and huge construction delays.

Atlanta is proposing a course that typically has resulted in failure. Special interests want their light rail line because they want their light rail line. And they want taxpayers to build and operate their extravagance. They insist they are going to build the Fulton County portion of the light rail in the I-75 corridor, despite the fact that the Northwest Connectivity Study has already discovered that the right-of-way is maxed out, and that all of the options to overcome this obstacle would be incredibly expensive. The special interests don’t care how much it costs, as long as they can manipulate taxpayers into paying for it.

Taxpayers need to demand some fiscal responsibility.

Source: Marietta Daily Journal, 12/09/11, Ron Sifen, Columnist
is former head of the Vinings Homeowners Association.

All transit should be private. No metro trains or light rail should be tax subsidized. Public transit is one of those financial black holes government should not fund. Over half of the T-SPLOST project list is for public transit. If T-SPLOST is passed, it will cost additional tens of billions to complete and maintain the train expansion. Public bus service is simply unnecessary. The private companies would do a better job.

Norb Leahy, Dunwoody GA Tea Party Leader

Wednesday, April 18, 2012

Bike and Trail Master Plans

Bike and Trail Master Plans---Surveillance in your backyard

Every town is doing these creek trails, bike trails, rails to trails, etc. These are impossible to police, negatively impact bordering properties' potential for controlling their borders and ensuring their privacy, and actually create security issues.

Maintenance is expensive--many of these trails will add tens of miles of public space to formerly private areas. Many are paved, this is costly and gives contracts to cronies. Not to mention that they are disturbing wildlife---going into areas that were previously quiet habitat.

These areas are now open to bikers, hikers, and transients. Crime by transients, gangs etc will make people demand more policing, and then there will be more police presence in your backyard.

These plans have prohibitions on solid fencing along the trail. No solid wood fence---it violates the 'viewshed' into your backyard. Will Google take a golf cart down these trails and photograph your back yard? Why are these trails paved? Is it so that a small vehicle will be able to go on them? So that a police vehicle can surveil you? This is not for the people. Not for the animals. It is for surveillance.

Exercise is the new god and the green mask. It creates justification for more surveillance and more dogma...this will result in required exercise in order to keep health care costs down.

Just think of the implications. Obesity epidemic. Healthy Eating Active Living. Blue Zones and all of the other programs nationwide will be required when mandatory health insurance takes effect. See our page on One World One Vision 2050 for more.

Source: Democrats Against U.N. Agenda 21 04/10/12


Land Use Master Plans in every U.S. city are peppered with very expensive “greenway” projects. We are in the 4th year of the 2nd Great Depression. Government incompetence, overreach and overspending caused this depression We have no money for this nonsense. We need to strip the multi-modal planning from our Master Plans and remove the greenways and bike paths from the drawings. All of this can be traced back to the U.N. plot to bankrupt the U.S. to enable a Marxist Totalitarian government to be imposed. Their excuse is the global warming hoax and they have the entire U.S. government working hard to implement their treasonous plan.

Norb Leahy, Dunwoody GA Tea Party Leader

Tuesday, April 17, 2012

The Decline of Greenism

By Bruce Walker

An April 9 Gallup Poll shows that since 2006, radical environmentalism has been losing influence in America. Gallup results are even more dramatic when viewed over the last couple of decades: worry about water pollution dropped from consuming 72% of Americans in 1989 to perturbing 46% in March 2011; worry about air pollution since 1989 dropped from 63% to 36% in 2011. When Gallup asks Americans to prioritize environmental concerns or economic concerns, the same pattern emerges. In the latest poll on the subject, 54% favor economic growth and 36% favor the environment.

Pew Research polls on global warming show a similar loss of trust in radical environmentalism. In 2006, the percentage of Americans who believe that there is "solid evidence" of global warming was 77%, but in 2011, only 63% believed that. Pew also shows that the percentage of Americans who do not believe in global warming or feel that there is not enough evidence rose in those five years from 33% to 43%. Pew shows that even among Americans who believe in global warming, fewer and fewer attribute that rise in temperature to man. In 2006, 47% of Americans believed that we were experiencing man-made global warming, but by 2011, only 38% of Americans believed in man-made global warming.

Rasmussen last August published a poll which indicates a serious credibility gap that the scientific establishment has with America: 69% of Americans believe that scientists have falsified global warming research. Gallup two years ago published a twelve-year trend which showed that the percentage of Americans who believe that the seriousness of global warming has been exaggerated has grown steadily to an all-time high of 48% in 2010.

What has happened to environmentalism? Conservatives were strong supporters of conservationism, which was the first name given to contemporary environmentalism. Strong conservatives like Calvin Coolidge and Barry Goldwater were champions of conservationism long before the left discovered this issue.

The loss of political support for the environmentalism reflects the disgust of conservatives today, and this is based upon three distinct failures: (1) the Green rejection of common sense and market operations, (2) worship of dirt replacing stewardship of Creation, and (3) the willingness of Greenies to win arguments through unsavory means.

(1) Conservatives grasp that living in the real world requires common sense and a grasp of market forces. Flushing the toilet too much is wasteful, but flushing the toilet only once a day threatens health as well as comfort. Recycling aluminum makes economic sense, but recycling everything is dumb.

Forty years ago, environmentalism made sense to Americans concerned about industrial pollution. Regulations which required inexpensive changes in factories to reduce air pollutants by 95% made for a prudent exercise of state power for the common welfare, but requiring businesses to spend huge amounts of money to reduce another 2% of air pollution did not help ordinary Americans and cost them millions of good-paying jobs.

Sportsmen have historically been among the strongest supporters of reasonable limits on hunting and fishing and the preservation of the natural beauty of our woodlands and streams. Lumber companies have no interest in cutting down trees at a faster rate than thoughtful reforesting will support. Green radicals who attack reasonable and good Americans, who know much more about the outdoors than Al Gore will ever know, display not an interest in nature, but instead another less pleasant motive.

(2) Conservative support for wise stewardship of the world has deep roots in Judeo-Christian values. Stewardship of Creation, however, is the antithesis of the worship of Creation. Praying to trees and to mountains is a grave sin to religiously serious Christians and Jews.

(3) Conservatives have learned that academia and taxpayer-sponsored research have been overrun with infestations of leftists with no interest in objective study. Climategate is, perhaps, the most notorious example, but the very disappearance of what were once called in academia "schools of thought" is a more sinister general condition. Anyone in any discipline who wants tenure, grants, and other perks of pampered pseudo-science must toe the line of party leftism.

Conservatives perceive the same dull pattern of all leftism: it lusts for power, and it schemes to increase our misery while loudly proclaiming its wish to do us well. If the planet is warming, for example, is that not a good reason to expand freedom and diminish the state? Individuals, families, and communities are much more agile and wise than government, especially remote government by insulated bureaucrats.

If industries are polluting communities, then members of the community have the greatest interest and the most influence in moderating the pollution to safe levels. Why are Washingtonians or New York media bosses more invested in the preservation of natural beauty than native Alaskans, Louisianans, West Virginians, and other folks who live in states with fossil fuels we need?

Ordinary people whose lives are impoverished by edicts which leftists living luxuriously on our tax dollars have enacted are waking up. They invent new problems which only the brute power of government can solve, and always at our expense. Just as racism is a problem which no leftist ever wants to solve, so the environment is a condition which requires eternal overlords comprising prissy and nasty radicals. That is, until we wake up -- which is exactly what we are doing.

Source: Read more: April 16, 2012

Coal and nuclear electrical power production still costs 2 cents per KWH. Solar and wind cost 5 times more. So, if your electric utility has caved in to the man-made “global warming” myth, whatever percentage they’ve signed up for will unnecessarily increase your electric bills by that proportionate amount. It’s time to demand an end to this nonsense. We have several government caused financial bubbles ready to burst and have run out of patience allowing government to continue to act like carbon is a pollutant. U.N. Agenda 21 in the J.S. is costing us an extra $1 trillion a year in government abuse. It’s way past the time to pull the plug on that scam.

Norb Leahy, Dunwoody GA Tea Party Leader

California Declares War on Suburbia

Planners want to herd millions into densely packed urban corridors. It won't save the planet but will make traffic even worse. by Wendell Cox

It's no secret that California's regulatory and tax climate is driving business investment to other states. California's high cost of living also is driving people away. Since 2000 more than 1.6 million people have fled, and my own research as well as that of others points to high housing prices as the principal factor.
The exodus is likely to accelerate. California has declared war on the most popular housing choice, the single family, detached home—all in the name of saving the planet.

Metropolitan area governments are adopting plans that would require most new housing to be built at 20 or more to the acre, which is at least five times the traditional quarter acre per house. State and regional planners also seek to radically restructure urban areas, forcing much of the new hyperdensity development into narrowly confined corridors.

In San Francisco and San Jose, for example, the Association of Bay Area Governments has proposed that only 3% of new housing built by 2035 would be allowed on or beyond the "urban fringe"—where current housing ends and the countryside begins. Over two-thirds of the housing for the projected two million new residents in these metro areas would be multifamily—that is, apartments and condo complexes—and concentrated along major thoroughfares such as Telegraph Avenue in the East Bay and El Camino Real on the Peninsula.

For its part, the Southern California Association of Governments wants to require more than one-half of the new housing in Los Angeles County and five other Southern California counties to be concentrated in dense, so-called transit villages, with much of it at an even higher 30 or more units per acre.

To understand how dramatic a change this would be, consider that if the planners have their way, 68% of new housing in Southern California by 2035 would be condos and apartment complexes. This contrasts with Census Bureau data showing that single-family, detached homes represented more than 80% of the increase in the region's housing stock between 2000 and 2010.

The campaign against suburbia is the result of laws passed in 2006 (the Global Warming Solutions Act) to reduce greenhouse gas emissions and in 2008 (the Sustainable Communities and Climate Protection Act) on urban planning. The latter law, as the Los Angeles Times aptly characterized it, was intended to "control suburban sprawl, build homes closer to downtown and reduce commuter driving, thus decreasing climate-changing greenhouse gas emissions." In short, to discourage automobile use.

If the planners have their way, the state's famously unaffordable housing could become even more unaffordable.

Over the past 40 years, median house prices have doubled relative to household incomes in the Golden State. Why? In 1998, Dartmouth economist William Fischel found that California's housing had been nearly as affordable as the rest of the nation until the more restrictive regulations, such as development moratoria, urban growth boundaries, and overly expensive impact fees came into effect starting in the 1970s. Other economic studies, such as by Stephen Malpezzi at the University of Wisconsin, also have documented the strong relationship between more intense land-use regulations and exorbitant house prices.

The love affair urban planners have for a future ruled by mass transit will be obscenely expensive and would not reduce traffic congestion. In San Diego, for example, an expanded bus and rail transit system is planned to receive more than half of the $48.4 billion in total highway and transit spending through 2050. Yet transit would increase its share of travel to a measly 4% from its current tiny 2%, according to data in the San Diego Association of Governments regional transportation plan. This slight increase in mass transit ridership would be swamped by higher traffic volumes.

Higher population densities in the future means greater traffic congestion, because additional households in the future will continue to use their cars for most trips. In the San Diego metropolitan area, where the average one-way work trip travel time is 28 minutes, only 14% of work and higher education locations could be reached within 30 minutes by transit in 2050. But 70% or more of such locations will continue to be accessible in 30 minutes by car.

Rather than protest the extravagance, California Attorney General Kamala D. Harris instead has sued San Diego because she thinks transit was not favored enough in the plan and thereby violates the legislative planning requirements enacted in 2006 and 2008. Her predecessor (Jerry Brown, who is now the governor) similarly sued San Bernardino County in 2007.

California's war on suburbia is unnecessary, even considering the state's lofty climate-change goals. For example, a 2007 report by McKinsey, co-sponsored by the Environmental Defense Fund and the Natural Resources Defense Council, concluded that substantial greenhouse gas emissions reductions could be achieved while "traveling the same mileage" and without denser urban housing. The report recommended cost-effective strategies such as improved vehicle economy, improving the carbon efficiency of residential and commercial buildings, upgrading coal-fired electricity plants, and converting more electricity production to natural gas.

Ali Modarres of the Edmund G. "Pat" Brown Institute of Public Affairs at California State University, Los Angeles has shown that a disproportionate share of migrating households are young. This is at least in part because it is better to raise children with backyards than on condominium balconies. A less affordable California, with less attractive housing, could disadvantage the state as much as its already destructive policies toward business.

Source: Mr. Cox, a transportation consultant, served three terms on the Los Angeles County Transportation Commission under the late Mayor Tom Bradley. A version of this article appeared April 7, 2012, on page A13 in some U.S. editions of The Wall Street Journal, with the headline: California Declares War on Suburbia.


Part of UN Agenda 21 is to move the U.S. population out of the suburbs and into transit villages, so they can take our cars away from us. The whole idea here is to prevent “man made global warming”. Of course, the other part of the plan is to remove our national sovereignty and subjugate us to totalitarian Marxist rule by the U.N. One World Government. Obama is on board to implement the U.N. global Marxist plan, so you will be seeing more reports of tyrannical government moves to destroy what’s left of our ability to earn a living. I don’t see haw government can do these things with a straight face. If elected officials were to restate governments responsibility to prevent “man made global warming” in a speech before an audience, they would be laughed off the stage.

Norb Leahy, Dunwoody GA Tea Party Leader

U.S. Forest Service Blocks City Water Rights

Historic Western Town Fights Feds Over Very Existence
'If they can take Tombstone down, nobody is safe' by Bob Unrah

A new fight has developed in the American West over water, where strategies to use the liquid gold routinely are litigated and challenged. But in one case, according to a legal team, the result literally could kill the historic town of Tombstone, Ariz.

The Goldwater Institute today told WND it has filed a motion for a preliminary injunction that would allow town officials to go into the Huachuca Mountains to repair the collection system – pools, pipes and related equipment – that provide the town with much-needed water in the desert climate. The federal government has said no.

Nick Dranias, head of the Joseph and Dorothy Donnelly Moller Center for Constitutional Government at the institute, said the issue is far larger than just a dispute over whether trucks and tractors can be used to repair city-owned property inside a federal land preserve.

“This is a case of egregious federal overreach,” an institute report on the conflict said. “If the Forest Service can effectively seize Tombstone’s 130-year-old water rights during a state of emergency – rights that the service recognized as valid in 1916 – no state or local government will be safe from the feds.”

In the arid West, most cities and towns, including Cheyenne, Wyo., and the Denver metropolitan area, draw at least some of their water from collection systems on federal lands. In other parts of the nation, municipalities have their wells and other critical infrastructure sometimes on federal properties.

“By denying Tombstone access to its water, the Forest Service is threatening to directly regulate Tombstone to death,” the institute said.

The shortage developed because of the Monument Fire in 2011, which denuded the hillsides of vegetation. After the fire, record-breaking monsoon rains hit the region, triggering huge mudslides that left boulders the size of cars tumbling down hillsides.

The slides crushed Tombstone’s mountain spring waterlines and destroyed reservoirs for the town’s main water supply network. “In some areas, Tombstone’s pipeline is under 12 feet of mud, rocks and other debris, while in other places, it is hanging in mid-air due to the ground being washed out from under it,” the institute reported.

However, instead of allowing repairs as has happened in the past, “federal bureaucrats are refusing to allow Tombstone to unearth its springs and restore its waterlines unless [city officials] jump through a lengthy permitting process that will require the city to use horses and hand tools to remove boulders the size of Volkswagens.”

Dranias told WND the organization expects to hear a decision on its request for a preliminary injunction by the end of next month. He called the skirmish just the “tip of the iceberg.” He said there is evidence that the Forest Service under Barack Obama’s leadership is adopting a comprehensive plan “to clear federal lands of any private or non-federal uses.”

Ranchers in the West, according to Dranias, have been told to give up their various access and water rights, ski resorts have faced problems with access to federal lands and Indian tribes have been dealt the same blow.

In another Arizona location, he said, a longstanding RV establishment, basically a permanent retirement community, has been denied a renewed lease on the land it has improved.

“The way I look at it is if they can break Tombstone, take Tombstone’s mountain water rights, then nobody is safe,” he said. History, he noted, is on the side of the town and its people.

A brief submitted to the court notes that in 1916, Tombstone’s predecessor in interest to the rights at issue, Huachuca Water Company, obtained a letter from the Forest Service admitting that it had full right and title to the Huachuca Mountain water infrastructure.

“What was abundantly obvious to defendants in 1916 is now being completely disregarded,” the brief said. “In fact, the chain of title to Tombstone’s water rights, infrastructure and rights of way in the Huachuca Mountains is clear. Tombstone actually holds previously adjudicated water rights, as well as appurtenant and independent land use, pipeline and access rights of way.”

The brief continued, “Defendants’ conduct in this case can only be explained as an arbitrary and capricious effort to enforce fealty to a clearly erroneous interpretation of federal law.”

It’s a key 10th Amendment fight, according to the institute, because, “Just as the federal government cannot regulate the states, it cannot regulate political subdivisions of the states, like the city of Tombstone. And despite what power it may claim, the Forest Service certainly has no power to regulate Tombstone to death.”
Forest Service officials declined to answer questions about the court fight.
The institute noted that Arizona Gov. Jan Brewer already has declared a state of emergency for Tombstone, gathering together “all police powers of the state,” to address Tombstone’s need.

The town has some wells, but they are subject to contamination in the desert region, and its water for generations has come from the clear springs of the nearby mountains.

“Gov. Brewer’s declaration of a state of emergency underscores the threat to public health and safety faced by Tombstone,” the court brief explains.

“The loss of Tombstone’s municipal water supply has caused a shortage of water for both consumption and fire suppression during peak demand. The resulting fire hazard is readily apparent from the fact that in December 2010 a devastating fire broke out in Tombstone’s 19th century wooden structure historic downtown district. The entire business district could easily have been lost.”

Source: World News Daily, Bob Unruh


All federal government departments and agencies are engaged in citizen rights abuses and they are spending an extra $1 trillion a year to do it. .Cutting off water to farms and towns is part of it. These agencies are engaged in regulatory overreach, using environmental laws they believe they can interpret however they please. They also use wildlife and buffer zone land classifications to justify their damage. The Feds are bribing States with borrowed and printed federal grant money to create an unconstitutional, unelected, regional layer of government in the States to usurp city and county sovereignty. Our government at all levels is working against us and we are not amused. Part of U.N. Agenda 21 implementation in the U.S. is to break the rural areas, force them to abandon their farms and homes and have them move to transit villages in metro areas.

Norb Leahy, Dunwoody GA Tea Party Leader

Monday, April 16, 2012

The Big Flaws in Dodd-Frank

The Big Flaws in Dodd-Frank by GENE EPSTEIN

A financial historian warns that it's done nothing to prevent the government subsidy of mortgage risk that fueled the financial crisis.

Charles Calomiris is nothing if not intense -- and tireless. The Henry Kaufman professor of financial institutions at Columbia Business School has published numerous scholarly papers in refereed journals on banking and finance, and is the author of the book U.S. Bank Deregulation in Historical Perspective. More recently, he has published pieces in the financial press, including The Wall Street Journal and Barron's, about the causes of the 2008 financial crisis, and has delivered talks and given interviews on this topic. His latest project is the forthcoming Fragile by Design: Banking Crises, Scarce Credit, and Political Bargains, co-authored with Stanford University political science professor Stephen Haber; the book takes a fresh look at the connection between politics and banking in several countries, including a detailed analysis of the U.S. I recently recorded an interview with Calomiris in his office at Columbia, from which edited excerpts follow.

Barrons: When President Obama signed the Dodd-Frank bill into law on July 21, 2010, he was photographed embracing former Federal Reserve Chairman Paul Volcker, who helped shape some of its provisions. Can Dodd-Frank prevent another financial crisis?
Calomiris: I don't know anyone who understands what happened who would say that Dodd-Frank solves the problems that created the financial crisis. The legislation runs 2300 pages, and so it would take some time to explain what Dodd Frank got wrong and what it should have done instead.

Gives us some idea of what it got wrong.
You mention Paul Volcker, so let's discuss the part of Dodd-Frank called the Volcker Rule. The Volcker Rule tries to ban proprietary trading within banks. The first problem with that -- which I foresaw along with many others -- is that it would be hard to define proprietary trading, because obviously, an essential role of banks is to help make markets in various financial instruments and to execute trades for their clients.

So the question is, how do you define the limits of proprietary trading? From the hundreds of questions that they asked people and the thousands of complicated responses that they have gotten, it's become clear that there is no hope of being able to describe what it is they are trying to prohibit in a way that can be predictably identified, so that banks can know whether or not are they are in violation.

Even if it can't be done, might it still be helpful to get rid of proprietary trading by banks?

I don't think so. One thing for sure: there is no story about proprietary trading having anything at all to do with the crisis. Even Paul Volcker practically admits that.

Then what do you think was motivating Volcker?
We all have our laundry lists of what we would like to see done. Paul Volcker is somebody who has been around for a long time, and has a long laundry list. Proprietary trading by banks is just something he doesn't like, and Barack Obama wanted to hear Volcker's ideas. So basically he gets a free pass to bring his laundry list to the Dodd-Frank bill.

"There is a powerful political interest that wants real-estate lending to be sponsored by the government." -- Charles Calomiris

You don't let the crisis go to waste.
You put it to a lot of different uses, except the ones that matter. Did the crisis have anything to do with women and minorities not being hired sufficiently by financial institutions? I could come up with a cockamamie theory that it might have, because women are more conservative than men. If we had more women running banks maybe we would have seen fewer imprudent risks. I haven't heard anyone make this argument, so why has Dodd-Frank created new quotas for financial institutions to hire women and minorities? I don't think any of us believe that was a crisis-mitigation policy. It was just politics.

Do you think the partial repeal of Glass-Steagall had anything to do with the crisis?
No, and the irony is that even the original of the Glass-Steagall Act, as passed in 1933, had nothing to do with the crisis it was supposed to address. Senator Carter Glass, who had been Chairman of the House Committee that drafted the Federal Reserve Act under President Woodrow Wilson in 1913, in 1933 played the same role as Volcker did some 75 years later.

On Carter Glass's laundry list was the notion that mixing investment banking with commercial banking was a bad idea. There was no evidence for that, and all subsequent research has rejected Glass's view. It's not even a close call. The Bank of United States' failure here in New York in 1930 had nothing to do with securities markets; it was exposed to Manhattan real estate and suffered losses related to the New York real-estate crash in Manhattan in 1929. Most of the other U.S. banks that failed in the 1930s did so as a result of farm problems and especially farm real-estate problems.

The Steagall part of the 1933 Act was federal deposit insurance, which was actually opposed at the time by Glass, the secretary of the treasury, the Federal Reserve, and President Franklin D. Roosevelt himself. But who did want it? Small banks in rural areas; Steagall was from Alabama. So we had ideology without evidence combined with special interests, and we got Glass-Steagall.

Federal deposit insurance has not been repealed.

No, but repeal would not matter; it has been trumped by "too big to fail." The government has made it clear that it will insure all deposits and bank debts without limit. So even if we got rid of the Federal Deposit Insurance Corporation, the difference would mainly be symbolic.

But what about the Glass part of Glass-Steagall? Did the ability of commercial banks to merge with investment banks have anything to do with the crisis?

Probably even less than the under-representation of women and minorities. Remember some of the illustrious names that got into deep trouble during the crisis -- Bear Stearns, Lehman Brothers, Merrill Lynch. They were all stand-alone investment banks at the time, unaffected by the partial repeal of Glass-Steagall. And we can only wish that commercial banks had done more of the relatively low-risk underwriting of securities that the repeal of Glass-Steagall permitted them to do, instead of accumulating toxic mortgages, which Glass-Steagall had not prevented them from doing.
And to make the whole argument about Glass-Steagall even more ludicrous, the repeal of the Act in 1999 made it possible for JPMorgan Chase [ticker: JPM] to acquire Bear Stearns and for Bank of America[BAC] to acquire Merrill Lynch, which helped stabilize the system.

You mention toxic mortgages. How does Dodd-Frank address that problem?
Not at all. There is no attempt in Dodd-Frank to address the key problem of government subsidization of mortgage risk, and the exposures of Fannie Mae [FNMA], Freddie Mac [FMCC], and the Federal Housing Administration are still growing.
How do you explain the omission?

There is a powerful political interest that wants real-estate lending to be sponsored by the government. Starting about 1830, an important influence on the politics of banking came from farming interests, which increasingly promoted bank exposure to farm real-estate risk. What has changed since World War II is the huge demographic shift toward the cities. And so the power of the agrarian populist movement has been replaced by the power of the urban populist movement, which has to do with subsidizing lending to housing in cities.

Organizations like Acorn [the Association of Community Organizations for Reform Now] and other urban community activists led the fight to subsidize risky mortgage lending. Christopher Dodd and Barney Frank of Dodd-Frank, our supposed reformers, have been poster-politicians for this movement. Dodd was driven from the Senate in a mortgage scandal involving Countrywide Financial, the former mortgage giant that was long a favored client of Fannie Mae. And Frank has been a major Fannie and Freddie supporter, as well as one of the great deal makers in one of the most important waves of bank mergers in U.S. history. Housing and banking are Frank's mutually supporting interests. But Democrats were not the only ones; President George W. Bush and Speaker Newt Gingrich were also prominent proponents of subsidizing mortgage risk and facilitating the political deals that made so many risky mortgages possible.
Could you give an example of what you mean?

Remember Washington Mutual, the bank that collapsed in 2008? WaMu has practically become a synonym for bad lending practices. The background on what happened is significant. When Washington Mutual signed a merger agreement in 1999, it was permitted to do so only after it also signed a written agreement to make loans to urban constituencies, especially poor and minority constituencies, under the Community Reinvestment Act. WaMu's combined resources after the merger came to about $150 billion in total assets. It was required to make a 10-year CRA commitment of $120 billion, plus contributing 2% of its pretax earnings to not-for-profits, which eventually helped to bring about its collapse.

That's just part of the larger story. The experience of the 1980s alone should have taught us to limit government subsidies of real-estate lending risks. There was the savings and loan crisis, which was all about speculation in real estate. There was the commercial real-estate crisis in the east after the 1986 Tax Reform Act caused some problems in commercial real-estate values.

So what did we do? In 1989 and 1991, we tinkered with capital ratios. But did we do anything to limit government subsidization of real estate risk? Quite the opposite -- the government doubled down.

Doubled down as in blackjack?
Yes, except the blackjack player doubles down by just doubling his original stake. The government effectively multiplied the bets many-fold.

How so?
The government geared up Fannie Mae and Freddie Mac -- "government sponsored enterprises" -- by allowing them to operate on very thin capital and by imposing new mortgage-lending mandates through the Department of Housing and Urban Development beginning in 1995. These mandates set growing minimum proportions of Fannie Mae and Freddie Mac mortgage lending targeting inner cities, low-income borrowers, and minority groups. That was the major part of it. There were also CRA mandates for commercial banks, of which WaMu was a notorious example. And, as if to keep the action even harder to track, the 12 Federal Home Loan Banks started lending to any financial institution that agreed to make mortgages.

And what did we see happening in the mortgage industry? We saw mortgage leverage ratios skyrocketing. The share of mortgages requiring a down payment of 3% or less went from about zero in the mid-1990s to about 40% just prior to the crisis, an unbelievable surge. We saw a boom in things called low-doc and no-doc mortgages, where "doc" stands for documentation. And guess what? When you don't ask people for documentation, they lie, and if you a hang a sign out your window that says ,"I am not going to ask for any documentation," you become a magnet for liars.

The mortgage lenders knew that. They did some experimenting with faster mortgages on a low-documented basis in the 1980s, and once they found out it was a bad idea, they abandoned it. Fannie and Freddie crossed the Rubicon in 2004, when they decided to take the caps off all their lending involving no docs and low docs. Why did they do it? Their risk managers objected, but they were steamrolled. The HUD mandates told them that they had to give an increasing amount of their mortgages to targeted groups, and to meet those targets they kept relaxing their underwriting standards.
With all this highly leveraged and undocumented borrowing, fueled by government policy, no wonder home prices assumed bubble proportions.

Are you against any government subsidy of homeownership?
Well, we could debate whether it is a good idea. But let's suppose it is a good idea. There are lots of ways to do it that are better than subsidizing risk, especially since subsidizing risk does no favor to people when they lose their homes through foreclosure.

One way to promote homeownership would be through matching down payments. This is along the lines of what the Australians do to help first-time homeowners. On a means-tested basis, we could help first-time buyers make their down payment. That would be rewarding thrift. We could also give special tax deductions for people who put money aside for their house. These measures would subsidize housing without subsidizing leverage.

But what do we do instead? All of our housing assistance subsidizes people only to the extent to which they borrow.

You would abolish that kind of subsidy altogether?
I would phase it all out over time, including the tax deduction for mortgage interest. By subsidizing the down payment on a means-tested basis for the purchase of the first home, we would reduce leverage and risk. And we'd make a bigger difference in encouraging homeownership, since the down payment, in a mortgage industry that has been taught to care about risk, is often the biggest hurdle.

And we would no longer subsidize credit risk. We would not encourage any institutions -- banks, Fannie, Freddie, the FHA, or the Federal Home Loan Banks -- to make or guarantee bad loans.

Do you think that idea would fly?

To begin with, the American taxpayer might vote thumbs down and say we can't afford it. But I would point out that subsidies already are happening through the back door. Fannie's and Freddie's losses together might ultimately cost the taxpayer $300 or $400 billion, but nobody knew they were spending that. Not only are we subsidizing housing, we aren't subsidizing it in a very smart way. We are subsidizing it in a way that creates financial instability and that hides from the taxpayers what they are spending.

And that greater transparency ultimately explains why my proposal has such a hard time finding support in Washington -- and perhaps why Dodd-Frank does not even address the problem.

The opposition would be too formidable?
You know who are the constituents that aren't going to like it? If you are Acorn, you won't like it, because that means you lose your hefty broker fees and political power. Acorn is a major intermediary for this whole racket. Members of Congress aren't going to like it because they get fees, too, called campaign contributions, from those who benefit from the subsidies, and lots of favorable press from attending ribbon-cutting ceremonies.

We are basically talking about undoing the deal between the urban populists and the too-big-to-fail financial institutions (banks and "government-sponsored entities"), who are given enormous market power and protection that boost their profits in exchange for agreeing to distribute some of those profits to favored constituencies. That is the deal Washington has brokered over the past 30 years, and it was done on a bipartisan basis.

I guess we can read more about that in the book you're completing with Stephen Haber. But let's try a counter-factual. Say that your radical proposal had been in place since 1995, and that the government's aggressive encouragement of high-risk mortgage lending had not occurred. Would that have been enough to prevent the 2008 financial crisis from happening?

Yes, it would have been enough. We would not have had the crisis. But I hasten to add that even if you'd had these government housing subsidies, they alone were not enough to cause the crisis. Had prudential regulation functioned properly for Fannie and Freddie and for the banks, you wouldn't have had this crisis, even with the mortgage risk subsidies. Even though risky mortgages would have been made, financial intermediaries would have been maintaining more capital against that risk. So the government created this concentration of risky mortgages and then the institutions who were intermediating those mortgages were highly levered. So we got leveraged banks on top of leveraged mortgages. The combination is what gave us the crisis.
So we have to find ways to make our regulatory system avoid the incentives to under-capitalize and to pretend, when losses start to mount up, that you don't have losses.
And in your view, we have to give up on the idea of imposing discipline on banks by taking measures like denying them the protection of federal deposit insurance?
Yes, I'm afraid I think proposals like that are lost causes, although I certainly agree that in a rational world, the abolition of federal deposit insurance would be a huge improvement.

Franklin D. Roosevelt himself made the prescient forecast in October 1932 that deposit insurance would "lead to laxity in bank management and carelessness on the part of both banker and depositor." At the time, postal savings accounts offered small depositors protection against loss. Today, depositors who want protection can be encouraged by banks to keep their funds in short-term Treasury bills, and rich depositors can buy their own insurance, if that's what they prefer. We don't need the FDIC for any of this.

Before federal deposit insurance, we find abundant examples of banks accumulating cash through times of stress in order to assure depositors that they were solvent and were prudently managing risk. The banks' incentive was simple; like any business, they didn't want to lose customers. But now that all deposits of any size are effectively insured by the federal government, along with the overriding ethos of "too big to fail," the laxity and carelessness which FDR warned against has become an ongoing nightmare.

There is no need for prudential regulation to tell our neighborhood deli how to manage risk; we can count on the market system to do that. But because the market system has been abrogated in crucial ways for our financial institutions, we need prudential regulation of finance.

But hasn't your own analysis put us between a rock and a hard place? You indict the government for subsidizing risk in mortgage lending. But who else except government will be imposing prudence on our financial institutions? Isn't that the fox guarding the chicken-coop?

Quite right. The regulators are willing accomplices. That's why you shouldn't even be allowed to talk about regulatory reform unless you can answer two important questions. First, how will the regulated banks not be able to get around it? And second, why will the regulator have an incentive to enforce it?

It turns out that it is not that difficult to think of rules that are so simple and transparent -- so automatic and nondiscretionary -- that the regulator would go to prison if they weren't enforced. For example, I would impose a rule requiring that banks hold cash at the central bank equal to 20% of their assets. They would earn the Treasury bill interest rate on those cash reserves. That would not cost banks very much because they are in normal circumstances holding Treasuries not far from that amount. So they would reduce their Treasury holdings commensurately and hold this cash.

Why at the central bank?

Because if they are holding them at the central bank, the regulator will know they are holding them continuously -- not just on the day that coincides with each accounting quarter.

Any other ideas?

Yes, about nine more. Here is just one: I would establish a minimum uninsured debt requirement for large banks in the form of subordinated debt, known as contingent capital certificates, or "CoCos." The CoCos would automatically convert to equity based on predetermined market triggers, which would be very dilutive to pre-existing shareholders. One banker who understood my proposal for CoCo's said, "You are putting an electric fence behind me."

He was exactly right. Since the bank managers would have every incentive to prevent the triggering of a CoCo conversion, it would force them to act prudently. It would be saying to the bank CEO, "If you don't manage your risk properly, it is not the taxpayer who is going to be subsidizing you. You're either going to have to go out into the marketplace repeatedly to raise equity, and that is going to be dilutive because you are going at the worst possible time. Or you are going to end up doing so badly that you trigger the CoCo conversion, which is even more dilutive, and in which case you are going to get fired immediately.

What all these ideas have in common is that they are incentive-robust, which mean they take into account the incentives of regulators and bankers.
Sounds feasible.

But it may not be feasible politically because anything that would work undermines the political coalition that is in charge of our financial system. They see types like me coming a mile away.

Did Dodd-Frank do any of this? Dodd-Frank said that we should study CoCos. Over 2300 pages, that's all we read on the subject. Remember the regulators are appointed by politicians. In Fragile by Design our first chapter on the U.S. is called "Crippled by Populism." I look forward to reading it. Thanks, Charles.

Source: Barron’s 4/14/12 HTTP://ONLINE.BARRONS.COM/ARTICLE/SB50001424053111904857404577342680482638196.HTML?MOD=BOL_HPS_MAG#TEXT.PRINT


Repealing Dodd-Frank and repealing the Community Reinvestment Act and all other associated legislation and regulations is a start. Ending all bailouts and subsidies should be the basis of the next Bill. Setting hiring quotas should not be the business of government. Somewhere in here it will be necessary to guarantee sound money. That sounds like the end of government overspending and the end of the Fed. That should lull the bankers into being responsible for themselves. .Unless we close down their slush funds, global Marxists will have us saluting the U.N. flag.

Norb Leahy, Dunwoody GA Tea Party Leader