Wednesday, April 08, 2015

Etiquette Versus Annihilation

By Thomas Sowell

Recent statements from United Nations officials, that Iran is already blocking their existing efforts to keep track of what is going on in their nuclear program, should tell anyone who does not already know it that any agreement with Iran will be utterly worthless in practice. It doesn’t matter what the terms of the agreement are, if Iran can cheat.

It is amazing – indeed, staggering – that so few Americans are talking about what it would mean for the world’s biggest sponsor of international terrorism, Iran, to have nuclear bombs, and to be developing intercontinental missiles that can deliver them far beyond the Middle East.

Back during the years of the nuclear stand-off between the Soviet Union and the United States, contemplating what a nuclear war would be like was called “thinking the unthinkable.” But surely the Nazi Holocaust during World War II should tell us that what is beyond the imagination of decent people is by no means impossible for people who, as Churchill warned of Hitler before the war, had “currents of hatred so intense as to sear the souls of those who swim upon them.”

Have we not already seen that kind of hatred in the Middle East? Have we not seen it in suicide bombings there and in suicide attacks against America by people willing to sacrifice their own lives by flying planes into massive buildings, to vent their unbridled hatred?

The Soviet Union was never suicidal, so the fact that we could annihilate their cities if they attacked ours was a sufficient deterrent to a nuclear attack from them. But will that deter fanatics with an apocalyptic vision? Should we bet the lives of millions of Americans on our ability to deter nuclear war with Iran?

It is now nearly 70 years since nuclear bombs were used in war. Long periods of safety in that respect have apparently led many to feel as if the danger is not real. But the dangers are even greater now and the nuclear bombs more devastating.

Clearing the way for Iran to get nuclear bombs may – probably will – be the most catastrophic decision in human history. And it can certainly change human history, irrevocably, for the worse.

Against that grim background, it is almost incomprehensible how some people can be preoccupied with the question whether having Israeli prime minister Benjamin Netanyahu address Congress, warning against the proposed agreement, without the prior approval of President Obama, was a breach of protocol.

Against the background of the Obama administration’s negotiating what can turn out to be the most catastrophic international agreement in the nation’s history, to complain about protocol is to put questions of etiquette above questions of annihilation.

Why is Barack Obama so anxious to have an international agreement that will have no legal standing under the Constitution just two years from now, since it will be just a presidential agreement, rather than a treaty requiring the “advice and consent” of the Senate?

There are at least two reasons. One reason is that such an agreement will serve as a fig leaf to cover his failure to do anything that has any serious chance of stopping Iran from going nuclear. Such an agreement will protect Obama politically, despite however much it exposes the American people to unprecedented dangers.

The other reason is that, by going to the United Nations for its blessing on his agreement with Iran, he can get a bigger fig leaf to cover his complicity in the nuclear arming of America’s most dangerous enemy. In Obama’s vision, as a citizen of the world, there may be no reason why Iran should not have nuclear weapons when other nations have them.

Politically, President Obama could not just come right out and say such a thing. But he can get the same end result by pretending to have ended the dangers by reaching an agreement with Iran. There have long been people in the Western democracies who hail every international agreement that claims to reduce the dangers of war.

The road to World War II was strewn with arms control agreements on paper that aggressor nations ignored in practice. But those agreements lulled the democracies into a false sense of security that led them to cut back on military spending while their enemies were building up the military forces to attack them.



The Green-Card Racket for Beltway Cronies

By Michelle Malkin

Can we stop putting America up for sale to the most politically connected bidders yet? Where is our self-respect?

Since 2001, I've warned about the systemic and bipartisan corruption of America's EB-5 immigrant investor visa program. The latest report from the Department of Homeland Security's inspector general — which outlines the meddling and pandering of No. 2 DHS official Alejandro Mayorkas, Nevada Sen. Harry Reid, Democratic bagman Terry McAuliffe, Hillary Clinton's brother Tony Rodham, former Pennsylvania. Gov. Ed Rendell and former Mississippi Gov. Haley Barbour, to name a few — provides yet more sordid evidence that the green cards-for-sale scheme should be completely scrapped.

Created under an obscure section of the expansionist 1990 Immigration Act, EB-5 promised bountiful economic development for the U.S. in exchange for granting permanent residency (and eventual American citizenship) to foreign investors. A few years later, Congress conjured up the idea of EB-5 "regional centers" — government-sanctioned business groups and corporate entities acting as middlemen to administer the immigrant investments and facilitate the visa peddling.

Beltway cronyism was embedded in EB-5's DNA from the get-go. The original Democratic House sponsor and his spokesman went on to establish for-profit companies that marketed the program and provided consulting services. Former federal immigration officials from the George H.W. Bush administration formed lucrative limited partnerships to cash in on their access and EB-5 expertise. An entire side industry of economic book-cookers arose to supply analyses of the "job creation" benefits of EB-5 projects and to gerrymander Census employment data to fit the program's definition of "targeted employment areas" in order to qualify for lower investment thresholds (as was done in New York City's Atlantic Yards/Pacific Park EB-5 deal).

Think Solyndra and federal stimulus math on steroids.

Since the program's inception, rank-and-file adjudicators have tried to enforce the investment standards. But senior managers leaned on them to reverse EB-5 rejections when wealthy donors, law firm pals and political hacks complained.

Fast-forward to 2015. The blood pressure-spiking DHS IG report released last week confirmed what whistleblowers have been telling Capitol Hill for years.

Behind the scenes, the IG found, Dirty Harry Reid pressured Deputy DHS Secretary Mayorkas to overturn his agency's rejection of expedited EB-5 visa applications for Chinese investors in a Las Vegas casino hotel, which just happened to be represented by Reid's lawyer son Rory. Adjudicators balked at the preferential treatment. Mayorkas steamrolled the dissenters, who reported on shouting matches over the cases. Reid's staffers received special briefings from Mayorkas to update them on the project's progress.

One underling called it "a whole new phase of yuck."

Meanwhile, in the words of one DHS official at the Immigration and Customs Enforcement bureau, Mayorkas "absolutely gave special treatment" to electric car racket GreenTech, which zealously sought EB-5 visas for another group of deep-pocketed Chinese investors. McAuliffe helmed the company after it was spun off from a Chinese venture. He plugged in Rodham as president of Gulf Coast Funds Management, which won designation as an EB-5 regional center certified to invest foreign capital in federally approved commercial ventures in Louisiana and Mississippi, including GreenTech. Louisiana GOP Gov. Bobby Jindal and former Mississippi GOP Gov. Haley Barbour both signed letters urging DHS to approve Gulf Coast as a regional center.

After adjudicators dismissed the company's job claims as "ridiculous," "flawed" and "not approvable," McAuliffe personally leaned on then-DHS Secretary Janet Napolitano, "complaining about the denial of the Gulf Coast amendment and requesting her assistance to get the amendment approved and to expedite more than 200 investor petitions."

In violation of recordkeeping and disclosure rules, Mayorkas met with McAuliffe in February 2011 after USCIS denied GreenTech's requests. Mayorkas mysteriously took no notes and could not recall just exactly how many phone calls he took from McAuliffe and what exactly they discussed, though he did remember the "caustic" Democrat yelling "expletives at high volume." Mayorkas met personally with senior staff to urge the agency to reverse its denials and give McAuliffe and company what they wanted and even offered to write the reversals himself.

On a third front, Mayorkas intervened on behalf of EB-5 petitioners seeking green cards by investing in Hollywood studios such as Sony Pictures and Time Warner. He had received pressure from the L.A. mayor's office, where an aide helpfully mentioned she knew a mutual acquaintance of his from his old law firm, O'Melveny and Myers, and from Rendell, a paid consultant to the EB-5 regional center representing the foreign investors. Mayorkas reversed his staff's rejections of more than 200 suspect EB-5 applications and set up a special "deference review board" to bow to Hollywood.

Two decades ago, when the program's failures were first exposed, Rep. John W. Bryant, a Texas Democrat, protested on the House floor: "This provision is an unbelievable departure from our tradition of cherishing our most precious birthright as Americans."

How much more evidence do you need that this foreign investor pay-for-play swindle makes an irremediable mockery of the American Dream? The only effective way to "reform" this abomination is to kill it.



The Next Bubble

By John Stossel

When the last housing bubble burst, politicians blamed “greedy banks.” They said mortgage companies lent money recklessly, making loans to people with dubious credit, for down payments as low as 3 percent.

“It will work out,” said the optimistic bankers. Regulators didn’t disagree. Everyone said, “Home prices will keep going up.” And home prices did – until they didn’t.

The bubble popped in 2007. Lots of people were hurt, and politicians took more of your tax money to bail out Fannie Mae and Freddie Mac along with reckless banks. They also gave the Federal Housing Administration a $2 billion bailout.

Then the politicians said, “We’ll fix this so it doesn’t happen again.” Congress passed Dodd-Frank and a thousand new regulations. The complex rules slowed lending, all right. It’s one reason this post-recession recovery has been abnormally slow.

But – April Fools'! – the new rules didn’t solve the problem of reckless lending, and it’s happening again.

Because our government subsidizes home purchases, recklessness is invited. Somehow, Americans buy cars, clothing, computers, etc. without government guarantees, but politicians think housing is different.

Both parties support the subsidies.

The left wants government to help struggling families, and the right thinks home ownership sends a wholesome cultural message. Both parties have cozy connections to home-builders and lenders.

At the time of the housing crash, most high-risk loans were guaranteed by the government. Those banks wouldn’t have been as reckless if they had their own money on the line.

But they knew they could grant a mortgage to most anyone and the FHA would back it or government-sponsored companies Fannie Mae and Freddie Mac would buy it. That fueled the frenzy of lending.

After the bubble popped, I assumed the political class would learn a lesson, but they haven’t. Today, even more American mortgages are guaranteed by government. More than 90 percent of new loans are backed by taxpayers. After the crash, Fannie and Freddie did raise their minimum down payment – to a measly 5 percent – but a few months ago, they lowered it again to 3 percent!

Are they crazy? A sensible congressman, Rep. Jeb Hensarling (R-TX), tried to get an answer from the administration’s new mortgage regulator, asking in a hearing, “All things being equal, is a 3 percent down riskier to the taxpayer than a 10 percent down loan?”

A pretty basic question – but one that director Mel Watt still dodged, responding, “Mr. Chairman, that is generally true. But when you pair the down payment with compensating factors … look at other considerations … you can ensure that a 3 percent loan is just as safe.”

What? That’s nonsense. This is what happens when pandering politicians get to dispense your money. Watt is among the worst. When he was a congressman, he pushed for mortgage subsidies for welfare recipients who made down payments as low as $1,000.

Edward Pinto, who studies housing risk for the American Enterprise Institute, says policies like this put us on the way to another bubble: “The government is once again … saying, let’s loosen credit, give loans to people that potentially can’t afford them, and everything will be fine because house prices will go up.”

On my show, former FHA commissioner David Stevens, who did improve lending standards a bit after the crash (before Watt and his cronies weakened them), responded that this time the government has new regulations that will prevent things falling apart: “I think in the effort, post-recession, to make sure we never go down this path again, we have created more rules than ever existed in the history of this country.”

But more rules aren’t a solution. Government’s regulators didn’t foresee the problems last time. Fannie and Freddie got a clean bill of health right up until the collapse.

The solution is less government involvement. Canada doesn’t have a Fannie, Freddie or FHA. Canada didn’t have the trauma of a housing bubble. In Canada, lenders and homeowners risk their own money.

Does that mean Canadians cannot afford homes? No! Without all that government help, Canada’s homeownership rate is higher than ours.



For more blog postings from me, see  TONGUE-TIED, EDUCATION WATCH INTERNATIONAL, GREENIE WATCH,  POLITICAL CORRECTNESS WATCH, AUSTRALIAN POLITICS, and Paralipomena (Occasionally updated) and Coral reef compendium. (Updated as news items come in).  GUN WATCH is now mainly put together by Dean Weingarten. I also put up occasional updates on my Personal blog and each day I gather together my most substantial current writings on A WESTERN HEART.

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