Tuesday, May 05, 2009

Civil Rights Commission Members Urge “NO” Vote on Federal Hate Crimes Bill

There is little doubt that this bill will soon become law. As the article below points out, however, the implications are alarming

Four members of the U.S. Civil Rights Commission urged Congress not to pass the federal hate crimes bill (H.R. 1913). In an April 29 letter to Congressional leaders, they point out that it would circumvent Constitutional protections against double jeopardy, giving the federal government the power to reprosecute people in federal court even after they have been found innocent of rape and other “hate crimes” in state court:

“We believe that LLEHCPA will do little good and a great deal of harm. Its most important effect will be to allow federal authorities to re-prosecute a broad category of defendants who have already been acquitted by state juries–as in the Rodney King and Crown Heights cases more than a decade ago.”

“We regard the broad federalization of crime as a menace to civil liberties. There is no better place to draw the line on that process than with a bill that purports to protect civil rights.”

“While the title of LLEHCPA suggests that it will apply only to “hate crimes,” the actual criminal prohibitions contained in it do not require that the defendant be inspired by hatred or ill will in order to convict. It is sufficient if he acts “because of” someone’s actual or perceived race, color, religion, national origin, gender, sexual orientation, gender identity or disability. Consider:

*Rapists are seldom indifferent to the gender of their victims. They are virtually always chosen “because of” their gender.

*A robber might well steal only from women or the disabled because, in general, they are less able to defend themselves. Literally, they are chosen “because of” their gender or disability.”

“If all rape and many other crimes that do not rise to the level of a “hate crime” in the minds of ordinary Americans are covered by LLEHCPA, then prosecutors will have “two bites at the apple” for a very large number of crimes.”

We wrote earlier about how backers of the federal hate-crimes bill want to use it to reprosecute people who have already been found innocent, and to prosecute people whom state prosecutors decline to charge because the evidence against them is so weak. Supporters of the bill have given only lame rationalizations for why state not-guilty verdicts should not be respected. (Some have even made the strange claim that the defendants in the Duke Lacrosse case, whom the North Carolina attorney general later admitted were actually innocent, should have been reprosecuted in federal court).

Such reprosecutions fall within a loophole in Constitutional protections against double jeopardy known as the “dual sovereignty” doctrine. But ironically, they violate Article 14 of the International Covenant on Civil and Political Rights — a treaty that many of the bill’s backers harp on to push liberal causes, such as restrictions on the death penalty and antiterrorism measures. Article 14’s ban on double jeopardy has no “dual sovereignty” loophole, unlike the U.S. Constitution. That is an additional reason to be skeptical of the hate-crimes bill, which is known as the Local Law Enforcement Hate Crimes Prevention Act of 2009 (LLEHCPA).



The Next Housing Bust

Everyone knows how loose mortgage underwriting led to the go-go days of multitrillion-dollar subprime lending. What isn't well known is that a parallel subprime market has emerged over the past year -- all made possible by the Federal Housing Administration. This also won't end happily for taxpayers or the housing market.

Last year banks issued $180 billion of new mortgages insured by the FHA, which means they carry a 100% taxpayer guarantee. Many of these have the same characteristics as subprime loans: low downpayment requirements, high-risk borrowers, and in many cases shady mortgage originators. FHA now insures nearly one of every three new mortgages, up from 2% in 2006.

The financial results so far are not as dire as those created by the subprime frenzy of 2004-2007, but taxpayer losses are mounting on its $562 billion portfolio. According to Mortgage Bankers Association data, more than one in eight FHA loans is now delinquent -- nearly triple the rate on conventional, nonsubprime loan portfolios. Another 7.5% of recent FHA loans are in "serious delinquency," which means at least three months overdue.

The FHA is almost certainly going to need a taxpayer bailout in the months ahead. The only debate is how much it will cost. By law FHA must carry a 2% reserve (or a 50 to 1 leverage rate), and it is now 3% and falling. Some experts see bailout costs from $50 billion to $100 billion or more, depending on how long the recession lasts.

How did this happen? The FHA was created during the Depression to help moderate-income and first time homebuyers obtain a mortgage. However, as subprime lending took off, banks fled from the FHA and its business fell by almost 80%. Under the Bush Administration, the FHA then began a bizarre initiative to "regain its market share." And beginning in 2007, the Bush FHA, Congress, the homebuilders and Realtors teamed up to expand the agency's role.

The bill that passed last summer more than doubled the maximum loan amount that FHA can insure -- to $719,000 from $362,500 in high-priced markets. Congress evidently believes that a moderate-income buyer can afford a $700,000 house. This increase in the loan amount was supposed to boost the housing market as subprime crashed and demand for homes plummeted. But FHA's expansion has hardly arrested the housing market decline. The higher FHA loan ceiling was also supposed to be temporary, but this year Congress made it permanent.

Even more foolish has been the campaign to lower FHA downpayment requirements. When FHA opened in the 1930s, the downpayment minimum was 20%; it fell to 10% in the 1960s, and then 3% in 1978. Last year the Senate wisely insisted on raising the downpayment to 3.5%, but that is still far too low to reduce delinquencies in a falling market.

Because FHA also allows borrowers to finance closing costs and other fees as part of the mortgage, the purchaser's equity can be very close to zero. With even a small drop in prices, many homeowners soon have mortgages larger than their home's value -- which is one reason FHA's defaults are rising. Every study shows that by far the best way to reduce defaults and foreclosures is to increase downpayments. Banks know this and have returned to a 10% minimum downpayment on their non-FHA loans.

In a rational world, Congress and the White House would tighten FHA underwriting standards, in particular by eliminating the 100% guarantee. That guarantee means banks and mortgage lenders have no skin in the game; lenders collect the 2% to 3% origination fees on as many FHA loans as they can push out the door regardless of whether the borrower has a likelihood of repaying the mortgage. The Washington Post reported in March a near-tripling in the past year in the number of loans in which a borrower failed to make more than a single payment. One Florida bank, Great Country Mortgage of Coral Gables, had a 64% default rate on its FHA properties.

The Veterans Affairs housing program has a default rate about half that of FHA loans, mainly because the VA provides only a 50% maximum guarantee. If banks won't take half the risk of nonpayment, this is a market test that the loan shouldn't be made.

These reforms have long been blocked by the powerful housing lobby -- Realtors, homebuilders and mortgage bankers, backed by their friends in Congress. They claim FHA makes money for taxpayers through the premiums it collects from homebuyers. But keep in mind these are the same folks who said taxpayers weren't at risk with Fannie Mae and Freddie Mac.

A major lesson of Fan and Fred and the subprime fiasco is that no one benefits when we push families into homes they can't afford. Yet that's what Congress is doing once again as it relentlessly expands FHA lending with minimal oversight or taxpayer safeguards.



All the News Not Fit to Print

It's no wonder that newspapers are going out of business when it's become obvious for anyone with a scintilla of honesty that, too often, their "reporting" -- intentionally or not -- is entirely informed by liberal group think. Columnist Andrew Smith, writing in the Nova Scotia News, lists the most dramatic examples of Barack Obama's failures in his first 100 days that you're not likely to hear about anywhere except Fox News. Here's a sample:

•Obama’s first two major bills alone, the "stimulus" and "omnibus," cost nearly twice as much as was spent on Iraq over six years – $1.2 trillion vs. $650 billion.

•Obama abandoned his campaign promise of "a net spending cut," his first annual deficit – not counting bailouts – being three times the worst deficit under President George W. Bush.

•Obama’s objective in his first G20 summit – commitments to spend our way to prosperity with massive stimulus boondoggles across the G20 – was rejected out of hand.

•Obama’s objective in his first NATO summit – commitments to combat troops for Afghanistan from "our European allies," which Obama and his party imagined were ready and willing to fight if only someone "enlightened" like him were running things – was predictably refused, with some more European non-combat contingents offered as a token.

•Obama’s Defence Department announced cuts of $1.4 billion to missile defence, the day after North Korea test-fired its long-range, multi-stage ballistic missile.

•Obama’s economics were criticized by Warren Buffet, whose endorsement had been candidate Obama’s highest economic credential.

•Obama reversed the free trade Bush policy that had allowed about 100 Mexican tractor-trailers into the United States, which the Mexican government immediately used as an excuse to levy tariffs on 90 American goods amounting to $2.4 billion in U.S. exports.

•Obama’s "tax cuts for 95 per cent" turned out to mean $13 a week from June to December, to be clawed back to $8 a week in January – as compared with President Bush’s 2008 tax rebates of $600 to $1,200 plus $300 per child, which were notably scoffed at during the election campaign by Michelle Obama.

This piece is a must-read. And its contents should be memorized by every Republican in Washington and repeated ad nauseam.




The authoritarian mindset: “When encountering those who have a desire to tell others what to do, to dictate to them, one can try to classify them into different categories. C. S. Lewis did so by discussing the difference between the dictator who dictates out of greed and the one who dictates out of a desire to help others. The former, he said, was preferable because his greed could sometimes be sated.”

Alternative voting methods needed?: “The reasons to change the way we vote are numerous. A fundamental reason to change it is that Americans tend to vote AGAINST candidates rather than FOR them. We have shaped the idea of democracy into an expression of our personal fears. We seem to feel stronger about candidate’s who we DON’T want in an office than we do about those we support. Usually this is perfectly understandable, as the candidates we have to choose from are often not that good, so it is often easier to identify candidates who are LEAST in line with what we want than it is to identity ones whom we can wholeheartedly support. One obvious problem with this method is that when people are primarily voting AGAINST a candidate, they are afraid to ‘waste’ their vote by casting it for someone who they might approve of but who has no actual chance of winning.”

Nudging revisited: “Ideas do have consequences and this is quite evident with the current administration’s adoption of what has been labeled — or mislabeled — ‘libertarian paternalism.’ It was two political economists, Richard Thaler and Cass Sunstein, who proposed the notion that what government should do is not intervene in the market forcefully, the way champions of the New Deal would advocate, but by establishing numerous incentives that would nudge people to do the right thing. … The approach favored by Thaler and Sunstein is one that is gaining much respect from center-left liberals because it avoids the failed and not too popular policies of aggressive interventionism, the sort that in fact had a lot to do with America’s current economic mess.”

FDR’s Social Security paradox: “If Social Security is so wonderful, why were people forced to participate, why was it set up as a monopoly, and why did it dump ever-larger costs onto the backs of future generations? There never was a popular demand for Social Security, even during the Great Depression. Few Americans were interested in the kind of government-run program that the German politician Otto von Bismarck had introduced in Europe.”


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The Big Lie of the late 20th century was that Nazism was Rightist. It was in fact typical of the Leftism of its day. It was only to the Right of Stalin's Communism. The very word "Nazi" is a German abbreviation for "National Socialist" (Nationalsozialist) and the full name of Hitler's political party (translated) was "The National Socialist German Workers' Party" (In German: Nationalsozialistische Deutsche Arbeiterpartei)


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