In my least cynical moments, I imagine the intentions of those who push welfare, entitlements and affirmative action are good. I imagine they really do want to level the playing field and help the less fortunate among us. I imagine they truly believe no one in America should live in poverty, and I imagine they are so motivated by these altruistic beliefs, that they will grasp at every opportunity to make it so. During these moments I envision a Utopia in which all Americans believe we are in this together, we all have empathy, and we all extend a helping hand to our neighbor. I envision a country in which every hour of labor is valued as highly as the next, and every person contributes to the success and health of society. I envision a place where everyone plays fairly, there is no class envy, and everyone has equal opportunity. It is a nice picture, and I understand what those well-intentioned persons are working for with such an intense and single-minded focus.
I am invariably shaken from my reverie by the realities on the ground in America. We provide welfare, food stamps and other relief to the poor and illegal aliens, and we get more illegal aliens. We send money and medical care overseas to feed and care for the impoverished in third world countries, and we get more impoverished. We provide and extend unemployment benefits to the unemployed, and we get more unemployed for a longer term. And on and on. In every situation, our welfare and entitlement programs not only beget more of the thing they are designed to alleviate, but add additional unintended consequences.
The most recent and highly visible example of this concerns the Wall Street Bailout. The noble goal was to provide home ownership to every American. Former President Jimmy Carter and a Democrat congress instituted the CRA or Community Reinvestment Act designed to provide low income persons with equal access to home loans. The program was pushed by the Clinton administration, and milked for every last drop from groups like ACORN, or the Association of Community Organizations for Reform Now. Along the way, mortgage brokers, loan officers and executives made money hand over fist following the government mandate to provide equal access to mortgage loans to persons who were not credit-worthy, and simply could not repay the loans even in the best of times. Corrupt politicians like Barney Frank, Christopher Dodd and yes, Barack Obama got sweetheart loans and campaign contributions from the very individuals and institutions they were propping up and enabling. With loan guarantees from Fannie Mae and Freddie Mac, it was simply a matter of time before this bubble burst. The bubble did burst, and these people are directly responsible for the glut of foreclosures, and the current crisis.
With this crisis staring us in the face, does anyone still hold the illusion of Utopia? Does anyone believe that persons with low-income were the beneficiaries of these ostensibly good intentions? Surely not. If you follow the trail of money, you will see the truth of who has benefited. When a house in a low income neighborhood changed hands, the former owner benefited. The loan officer and mortgage brokers benefited from commissions and other closing costs. The executives got bonuses from volume and from cooking the books. Banks profited from bundling mortgages and the leveraging of the assets. When the bubble burst, all of these people walked away with their booty, leaving the American taxpayer to clean up the mess. First we had to rescue Fannie Mae, Freddie Mac and AIG, and now we are poised to write a blank check to anyone holding a stack of worthless mortgages or other bad loans. No net relief whatsoever has accrued to the poor. On the contrary, the net effect is that more wealth has been transferred from the taxpayer to the opportunistic and corrupt.
Nobel prize winning economist Milton Friedman said, "One of the great mistakes is to judge policies and programs by their intentions rather than their results." I cannot read the hearts and minds of our representatives, so I don't really know their true intentions. However, I am skeptical when I see them benefit directly, while the ostensible beneficiaries still flounder and suffer. Even so, if I give the benefit of the doubt, and assume these persons and all who support them are persons of good will and good intent, I can be forgiving. I can forgive these people by virtue of their good intentions, but like Milton Friedman, I believe it is a great mistake to forgive, forget, or support the ideology and programs that get this kind of results.
With regard to the bailout plan, we are told that the beneficiaries are not Wall Street bankers and CEOs, but the American people. We are told that our economy depends on a thriving credit market, and that the bailout will keep us liquid. We are told we can still borrow money, keep ourselves in debt, and thereby keep our economy afloat. How about the Community Reinvestment Act? Does continued credit availability mean groups like ACORN will still be pushing for equal access by people who cannot afford it? I suspect it does. Is there really any reason to believe lenders will not go out and make more ill-advised loans we all have to bail out again? I will again assume good intentions, but my expectations of good results are very low indeed.
Going forward, Americans must send the message to Washington that we have had enough of the massive entitlement agenda, enough of a government that refuses to live within its means, and enough of legislation that delivers more of the same disappointing and disastrous results. Furthermore, we need to let our representatives know that we appreciate good intentions, but we will not tolerate the corruption and the conflicts of interest hidden behind them. We must insist on economic restructuring and rescue plans that account for this, and not blank checks that are doomed to more bad results and net losses to the taxpayer.
If you agree, please take some time to contact your representatives and tell them so!
Please visit these links for more information:
I am invariably shaken from my reverie by the realities on the ground in America. We provide welfare, food stamps and other relief to the poor and illegal aliens, and we get more illegal aliens. We send money and medical care overseas to feed and care for the impoverished in third world countries, and we get more impoverished. We provide and extend unemployment benefits to the unemployed, and we get more unemployed for a longer term. And on and on. In every situation, our welfare and entitlement programs not only beget more of the thing they are designed to alleviate, but add additional unintended consequences.
The most recent and highly visible example of this concerns the Wall Street Bailout. The noble goal was to provide home ownership to every American. Former President Jimmy Carter and a Democrat congress instituted the CRA or Community Reinvestment Act designed to provide low income persons with equal access to home loans. The program was pushed by the Clinton administration, and milked for every last drop from groups like ACORN, or the Association of Community Organizations for Reform Now. Along the way, mortgage brokers, loan officers and executives made money hand over fist following the government mandate to provide equal access to mortgage loans to persons who were not credit-worthy, and simply could not repay the loans even in the best of times. Corrupt politicians like Barney Frank, Christopher Dodd and yes, Barack Obama got sweetheart loans and campaign contributions from the very individuals and institutions they were propping up and enabling. With loan guarantees from Fannie Mae and Freddie Mac, it was simply a matter of time before this bubble burst. The bubble did burst, and these people are directly responsible for the glut of foreclosures, and the current crisis.
With this crisis staring us in the face, does anyone still hold the illusion of Utopia? Does anyone believe that persons with low-income were the beneficiaries of these ostensibly good intentions? Surely not. If you follow the trail of money, you will see the truth of who has benefited. When a house in a low income neighborhood changed hands, the former owner benefited. The loan officer and mortgage brokers benefited from commissions and other closing costs. The executives got bonuses from volume and from cooking the books. Banks profited from bundling mortgages and the leveraging of the assets. When the bubble burst, all of these people walked away with their booty, leaving the American taxpayer to clean up the mess. First we had to rescue Fannie Mae, Freddie Mac and AIG, and now we are poised to write a blank check to anyone holding a stack of worthless mortgages or other bad loans. No net relief whatsoever has accrued to the poor. On the contrary, the net effect is that more wealth has been transferred from the taxpayer to the opportunistic and corrupt.
With regard to the bailout plan, we are told that the beneficiaries are not Wall Street bankers and CEOs, but the American people. We are told that our economy depends on a thriving credit market, and that the bailout will keep us liquid. We are told we can still borrow money, keep ourselves in debt, and thereby keep our economy afloat. How about the Community Reinvestment Act? Does continued credit availability mean groups like ACORN will still be pushing for equal access by people who cannot afford it? I suspect it does. Is there really any reason to believe lenders will not go out and make more ill-advised loans we all have to bail out again? I will again assume good intentions, but my expectations of good results are very low indeed.
Going forward, Americans must send the message to Washington that we have had enough of the massive entitlement agenda, enough of a government that refuses to live within its means, and enough of legislation that delivers more of the same disappointing and disastrous results. Furthermore, we need to let our representatives know that we appreciate good intentions, but we will not tolerate the corruption and the conflicts of interest hidden behind them. We must insist on economic restructuring and rescue plans that account for this, and not blank checks that are doomed to more bad results and net losses to the taxpayer.
If you agree, please take some time to contact your representatives and tell them so!
Please visit these links for more information:
