Posts Tagged ‘Economics’

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Cartoon: You’re Gonna Have to Trust Us

January 25, 2010

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Economics Professor

July 10, 2009

An economics professor at a local college made a statement that he had never failed a single student before but had once failed an entire class.

That class had insisted that Obama’s socialism worked and that no one would be poor  and no one would be rich, a great equalizer.

The professor then said,  “OK, we will have an experiment in this class on Obama’s plan”. All grades would be averaged and everyone would receive the same grade so no one would fail and no one would receive an A.

After the first test, the grades were averaged and everyone got a B.

The students who studied hard were upset and the students who studied little were happy.

As the second test  rolled around, the students who studied little had studied even less and the ones who studied hard decided they wanted a free ride too so they studied little.

The second test average was a D! No one was happy.

When the 3rd test rolled around, the average was an F.

The scores never increased as bickering, blame and name-calling all resulted in hard feelings and no one would study for the benefit of anyone else.

All failed, to their great surprise, and the professor told them that socialism would also ultimately fail because when the reward is great, the effort to succeed is great but when  government takes all the reward away, no one  will try or want to succeed.

Could  it be any  simpler than that?

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Start Parker Article

June 23, 2009

Dear Star,

Good, logical economics.  Yet we never learn and we always return to the trough.  God bless you for all you do to keep America focused.

In His Holy Name,

Don + Carol

Star Parker – Syndicated Columnist

Six years ago I wrote a book called Uncle Sam’s Plantation.  I wrote the book to tell my own story of what I saw living inside the welfare state and my own transformation out of it.

I said in that book that indeed there are two Americas — a poor America on socialism and a wealthy America on capitalism.

I talked about government programs like Temporary Assistance for Needy Families (TANF), Job Opportunities and Basic Skills Training (JOBS), Emergency Assistance to Needy Families with Children (EANF), Section 8 Housing and Food Stamps.

A vast sea of perhaps well-intentioned government programs, all initially set into motion in the 1960’s, that were going to lift the nation’s poor out of poverty.

A benevolent Uncle Sam welcomed mostly poor black Americans onto the government plantation.  Those who accepted the invitation switched mindsets from “How do I take care of myself?” to “What do I have to do to stay on the plantation?”

Instead of solving economic problems, government welfare socialism created monstrous moral and spiritual problems — the kind of problems that are inevitable when individuals turn responsibility for their lives over to others.

The legacy of American socialism is our blighted inner cities, dysfunctional inner city schools and broken black families.

Through God’s grace, I found my way out.  It was then that I understood what freedom meant and how great this country is.

I had the privilege of working on welfare reform in 1996, passed by a Republican Congress and signed 50 percent.

I thought we were on the road to moving socialism out of our poor black communities and replacing it with wealth-producing American capitalism.

But, incredibly, we are going in the opposite direction.

Instead of poor America on socialism becoming more like rich American on capitalism, rich America on capitalism is becoming like poor America on socialism.

Uncle Sam has welcomed our banks onto the plantation and they have said, “Thank you, Suh.”

Now, instead of thinking about what creative things need to be done to serve customers, they are thinking about what they have to tell Massah in order to get their cash.

There is some kind of irony that this is all happening under our first black president on the 200th anniversary of the birthday of Abraham Lincoln.

Worse, socialism seems to be the element of our new young president.  And maybe even more troubling, our corporate executives seem happy to move onto the plantation.

In an op-ed on the opinion page of the Washington Post, Mr. Obama is clear that the goal of his trillion dollar spending plan is much more than short term economic stimulus.

“This plan is more than a prescription for short-term spending — it’s a strategy for America ‘s long-term growth and opportunity in areas such as renewable energy, healthcare, and education.”

Perhaps more incredibly, Obama seems to think that government taking over an economy is a new idea.  Or that massive growth in government can take place “with unprecedented transparency and accountability.”

Yes, sir, we heard it from Jimmy Carter when he created the Department of Energy, the SynfuelsCorporation and the Department of Education.

Or how about the Economic Opportunity Act of 1964 — The War on Poverty — which President Johnson said, “…does not merely expand old programs or improve what is already being done.  It charts a new course.  It strikes at the causes, not just the consequences of poverty.”

Trillions of dollars later, black poverty is the same.  But black families are not, with triple the incidence of single-parent homes and out-of-wedlock births.

It’s not complicated.  Americans can accept Barack Obama’s invitation to move onto the plantation.  Or they can choose personal responsibility and freedom.

Does anyone really need to think about what the choice should be?

“The trouble with socialism is that you eventually run out of other people’s money.”

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Mortgage Plans Turn Economics Upside-Down

February 19, 2009

Mortgage Plans Turn Economics Upside-Down

By THOMAS SOWELL | 19 Feb. 09

From television specials to newspaper editorials, the media are pushing the idea that current economic problems were caused by the market and that only the government can rescue us.

What was lacking in the housing market, they say, was government regulation of the market’s “greed.” That makes great moral melodrama, but it turns the facts upside down. It was precisely government intervention that turned a thriving industry into a basket case.

An economist specializing in financial markets gave a glimpse of the history of housing markets when he said: “Lending money to American homebuyers had been one of the least risky and most profitable businesses a bank could engage in for nearly a century.”

That was what the market was like before the government intervened. Like many government interventions, it began small and later grew.

The Community Reinvestment Act of 1977 directed federal regulatory agencies to “encourage” banks and other lending institutions “to help meet the credit needs of the local communities in which they are chartered consistent with the safe and sound operation of such institutions.”

That sounds pretty innocent and, in fact, it had little effect for more than a decade. However, its premise was that bureaucrats and politicians know where loans should go, better than people who are in the business of making loans.

The real potential of that premise became apparent in the 1990s, when the Department of Housing and Urban Development imposed a requirement that mortgage lenders demonstrate with hard data that they were meeting their responsibilities under the Community Reinvestment Act.

What HUD wanted were numbers showing that mortgage loans were being made to low-income and moderate-income people on a scale that HUD expected, even if this required “innovative or flexible” mortgage eligibility standards.

In other words, quotas were imposed — and if some people didn’t meet the standards, then the standards needed to be changed.

Both HUD and the Department of Justice began bringing lawsuits against mortgage bankers when a higher percentage of minority applicants than white applicants were turned down for mortgage loans.

A substantial majority of both black and white mortgage loan applicants had their loans approved, but a statistical difference was enough to get a bank sued.

It should also be noted that the same statistical sources from which data on blacks and whites were obtained usually contained data on Asian-Americans as well. But those data on Asian-Americans were almost never mentioned.

Whites were turned down for mortgage loans more often than Asian-Americans. But saying that would undermine the reasoning on which the whole moral melodrama and political crusades were based.

Lawsuits were only part of the pressures put on lenders by government officials. Banks and other lenders are overseen by regulatory agencies and must go to those agencies for approval of many business decisions that other businesses make without needing anyone else’s approval.

Government regulators refused to approve such decisions when a lender was under investigation for not producing satisfactory statistics on loans to low-income people or minorities.

Under growing pressures from both the Clinton administration and later the George W. Bush administration, banks began to lower their lending standards.

Mortgage loans with no down payment, no income verification and other “creative” financial arrangements abounded. Although this was done under pressures begun in the name of the poor and minorities, people who were neither could also get these mortgage loans.

With mortgage loans widely available to people with questionable prospects of being able to keep up the payments, it was an open invitation to financial disaster.

Those who warned of the dangers had their warnings dismissed. Now, apparently, we need more politicians intervening in more industries, if you believe the politicians and the media.