Crony Capitalism: The Love Affair Between the Obama Administration and the Worlds Creepiest Company
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Posted by admin | News
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| Wednesday 8 September 2010 4:37 PM

From Big Government

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A major Internet company is under investigation by more than 30 state attorneys-general

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for alleged wiretapping violations.  In Europe
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and now Texas
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that same company faces anti-trust inquiries on whether it unfairly penalizes its competitors, and its operations face criminal wiretapping inquiries throughout Europe, as well as in Australia and South Korea
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Yet, inside the Beltway, it’s business as usual.  The Obama Administration plans to award the company a sweetheart, no-bid contract

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for satellite imagery and access to classified data.  After protests, the Administration backtracks, allowing other companies to bid, but still intends to award the contract to the company
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.  According to industry sources the total spending in that segment on intelligence outsourcing in 2009 was $161 billion.  This is no small contract.

Surprising? Then how about this: This same company’s executives were among the Obama campaign’s largest contributors. Its CEO stumped for candidate Obama

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, while he and other senior executives ponied up $150,000
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to help pay for the inaugural celebration.

But, it gets even better: The CEO and another senior company official serve

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as technology advisors to the Administration on issues that directly impact their company.  The company’s senior lobbyist has had multiple secret meetings with senior officials at the National Security Council. Meanwhile, the company’s former top Washington lobbyist now works in the White House overseeing national policy over issues on which he used to lobby.

Is it Halliburton? Exxon? Boeing?  Nope.  The company is Google, the CEO is Eric Schmidt and the joke is on us.

Google Goes Creepy

Even on the most sweltering of dog days at Washington DC’s Maine Avenue Wharf Fish Market you’d have trouble finding something that stinks this bad.

And somewhere between Google’s pricey Mountain View, CA headquarters and its swanky Washington, DC lobbying center, there’s plenty of stink.  After all, this is a company that made  $24 billion last year

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by effectively snooping and analyzing the online habits of billions of consumers worldwide, and is now aggressively getting into the federal contracting business with some of our nation’s most secretive government agencies.  So much for openness and transparency.

At its core, Google’s business model is, and always has been, to amass, analyze, and sell as much information about you as it can.  It tracks you across the Internet.  It watches your house.  It records your Internet searches.  It keeps this information on massive computer server farms across the U.S. and uses it to predict your likelihood to buy things or go places.

In fairness, most people are unaware of the price they must pay for free services such as a Gmail account or software for a smart phone. In theory, there’s nothing wrong with a person voluntarily trading some privacy for personalized ads to get a free or discounted service.

But in Google’s case, it has gone well beyond serving personalized ads.  In a very short time, the company has developed a reputation for practices that violate even the most casual customers’ expectation of privacy. Back in 2007, this cavalier attitude was revealed in an independent survey of the privacy policies of major online companies.  According to a Privacy International survey that probed more than 20 global companies (AOL, Yahoo, MySpace, LinkedIn, Skype, etc.) on their protection of customers’ sensitive personal information — Google was the only company

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to receive the group’s lowest rating.  The survey found that Google was involved in “comprehensive consumer surveillance” and had an “entrenched hostility to privacy.”

Then, last December, Schmidt showed his true colors, giving this creepy assessment

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of his customers’ privacy: “If you have something that you don’t want anyone to know, maybe you shouldn’t be doing it in the first place.”

In May of this year, Google revealed that its Street View cars had been collecting sensitive personal information from unencrypted wireless networks all over the world – a privacy violation of Orwellian proportion.

And then this month, the creepiness factor went stratospheric when Schmidt quipped to a British newspaper

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, “I actually think most people don’t want Google to answer their questions. They want Google to tell them what they should be doing next.”

Feel better?

Obama’s “Halliburton”

Google’s “entrenched hostility to privacy” is troubling enough.  But its close partnership with the White House as well as its growing and secretive partnerships with the federal government’s alphabet soup of spy agencies is downright frightening.

With each passing day, Google is rapidly becoming to the Obama Administration what Halliburton was to the Bush Administration:  A symbol of appalling corporate coziness and crony capitalism. This, in an Administration that promised “change we could believe in”, and from a company that touts its commitment to “openness and transparency” at every turn.

After all, throughout 2008, candidate Obama blasted the “revolving door” of lobbyists joining the federal government, writing rules that impact their former companies, and then rejoining those companies.  The Obama-Biden campaign platform could not have been any clearer:

“No political appointees in an Obama-Biden administration will be permitted to work on regulations or contracts directly and substantially related to their prior employer for two years.”

Only four months into the Administration, that promise was abandoned as Google lobbyist Andrew McLaughlin was brought on board as the White House Deputy Chief Technology Officer in charge of Internet policy.  As Fortune magazine wrote last year

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, McLaughlin’s direct responsibilities would allow him to “shape policy that affects Google’s rivals.”

And shape he did.  This spring, a Freedom of Information Act (FOIA) request uncovered dozens of email conversations between Mr. McLaughlin and his former Google colleagues.   The emails from McLaughlin’s private Gmail account were a treasure trove of policy shaping to benefit Mountain View and penalize its rivals.  Mr. McLaughlin was officially “reprimanded” for his conduct with a slap on the wrist and continues to work in the White House as the official in charge of the Administration’s Internet policy.

Just as troubling, Google is in a flat-out sprint trying to squeeze anti-competitive deals through pliant Obama regulators as fast as possible while their influence is strong and before the November 2 election which could see a shift in the balance of political power.  Google just got FTC approval to acquire AdMob, their biggest threat in the mobile advertising space, and recently announced a $700 million transaction for control of ITA Software, the company that powers the online travel industry. Online travel is the single biggest driver of Internet commerce – accounting for 40% of all online purchases.  Then there’s a slew of “smaller” pending purchases including Metaweb,, and Jambool.

Who can forget those no-bid contracts to companies like Halliburton during the Bush Administration.  Or the controversy over domestic eavesdropping.  Or the ethics scandals over White House email

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s. Those were three separate and distinct controversies that dogged the Bush Administration for years.  But in just two short years, the current Administration and just one company (Google) are now embroiled in all three.

The disturbing record regarding Google’s conduct and the Obama Administration’s apparent willingness to look the other way, and in fact reward Mountain View with cozy access and no- bid federal contracts, should not be partisan.   Every American should be concerned about such a cozy relationship, especially when it involves an on-line company as dominant and with such an abysmal privacy record as Google. The fact is that were Google an individual it would never get a security clearance in the first place, and if it had one it would have long since been yanked.

The good news is that even while Congress sleeps, there are those on both the right and left that recognize the dangers.  For evidence, check out this segment on the liberal Democracy Now website

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that features Amy Goodman, a darling of the progressive movement, and Consumer Watchdog’s John Simpson.  Both are up in arms – and rightfully so — over Google’s latest bit of creepiness; a joint Google-CIA investment project called “Recorded Future” that monitors websites, blogs and Twitter accounts to “assemble actual real-time dossiers on people.”

Recently, Google’s Schmidt raised eyebrows with a comment that young people increasingly might need to start changing their names upon reaching adulthood to escape their youthful past. The irony is remarkable coming from the head of a company who has the world’s largest database of your personal online activity at his fingertips, an extraordinarily close relationship with the White House, and increasingly, a willingness to partner with the most secret agencies of our government to monitor who knows what… or whom.

Even more remarkable is that Schmidt did not appreciate the irony that is increasingly so obvious for everyone else to see.

Ken Boehm is the Chairman of the National Legal and Policy Center, a Falls Church VA-based organization promoting ethics in public life through research, education, and legal action.

Voters Approve Term Limits For Supervisors
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Posted by admin | News
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| Wednesday 9 June 2010 2:45 PM


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SAN DIEGO — The San Diego County Board of Supervisors will have to come to terms with a decision by voters to limit how long supervisors can serve.

San Diego county voters approved term limits for the Board of Supervisors. The current board hasn’t changed since 1995. The measure was largely supported by labor unions. Supervisors will now be limited to two four year terms. But Supervisor Dianne Jacob said she doesn’t believe the vote reflects dissatisfaction with the current board.

“There’s an undercurrent that’s going on nationally, statewide and San Diego County is no different,” she said. “There’s a lot of anger out there and I think people are grasping at whatever they can.”

Jacob said she and the other supervisors face reelection every four years and can be voted out if people are unhappy with them. The measure won’t force anyone out of office right away. Each supervisor can serve two more terms before having to leave office.

Pennsylvania governor candidates support many of grand jury's proposals
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Posted by admin | Issues
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| Tuesday 25 May 2010 2:27 PM

From Pittsburgh Tribune Review

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HARRISBURG — The Democratic and Republican candidates for governor support many of the proposals detailed in a grand jury report calling for sweeping changes in the Legislature, their spokesmen said today.

The report calls for reducing the size of the 2,800-person staff, returning to a part-time citizens Legislature, and imposing term limits, a constitutional convention and staff changes to end the illegal campaign culture that led to criminal charges against 26 lawmakers, former legislators and staff. Eight people, so far, have been convicted of felonies, two have been acquitted, and the remainder await trial.

“In the eyes of this grand jury, it is beyond dispute that numerous legislative employees have for years spent an enormous amount of time working on political campaigns when they were supposed to be performing their legislative duties,” the grand jury said. “All campaign work on legislative time must be eliminated and this will result in a surplus of legislative work unless rapid, meaningful change occurs.”

The grand jury asserted that current operational structure and ingrained procedures of the state House Democratic and Republican caucuses “are irretrievably broken and in desperate need of systemic change,” the jury wrote.

The grand jury report was filed in Dauphin County Court in February but wasn’t transmitted to legislative leaders until yesterday. The report became public yesterday.

Many of the changes recommended by the grand jury have bandied about after the 2005 ill-fated pay raise sparked reform efforts. Most of the changes have been rebuffed or ignored by the Legislature.

Republican candidate and Attorney General Tom Corbett, whose three-year investigation of the Legislature led to the grand jury report, realizes there will be “sticking points” with the General Assembly, which as a separate branch of government controls staff procedures, said Brian Nutt, Corbett’s campaign manager.

Last week, Corbett was nominated as the Republican candidate for governor. He will face Democratic candidate and Allegheny County Executive Dan Onorato in November.

Nutt said he wasn’t aware of the report until yesterday.

“Tom wasn’t using it as a political vehicle,” he said. “This is a nonbinding recommendation by the grand jury.”

Onorato has long advocated for legislative term limits, reducing the size and cost of the Legislature, reforming the budget process and imposing strict ethics rules, said Brian Herman, his campaign spokesman.

“While the report highlights important issues, it will take the next governor’s leadership to enact real reform and truly change state government,” Herman said. “Dan Onorato is the only candidate with a proven reform record, which includes eliminating row offices, cutting patronage, reducing the county workforce, and other efforts that have increased transparency, streamlined county government and saved taxpayers millions of dollars.”

Corbett supports term limits for legislative leaders and committee chairmen, not necessarily all legislators, Nutt said.

He believes moving to a two-year budget cycle would be a “good step” toward a part-time Legislature, Nutt added.

Corbett would support a constitutional convention but only if he is convinced it would be carefully constructed and limited, Nutt added.

America’s Repudiation of the Obama Agenda Continues
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Posted by admin | News
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| Friday 21 May 2010 2:01 PM

It began last November in statewide races in Virginia and New Jersey. Then it swept through Massachusetts in a stunning U.S. Senate special election this January. Most recently, it has spilled over into primary battles in Utah, Kentucky and Pennsylvania — growing more potent as the calendar year advances toward a climactic November 2010 showdown.

“It” is the ongoing, unequivocal public repudiation of the agenda of President Barack Obama — a seismic shift in the thinking of the American electorate regarding the sort of “change” they want for their country. In several races “it” is also a direct rejection of Obama himself — as evidenced by the deaf ear voters turned to his personal appeals on behalf of Massachusetts’ Attorney General Martha Coakley and party-switching Pennsylvania Sen. Arlen Specter.

Both Coakley and Specter enjoyed commanding leads over their opponents prior to Obama’s active engagement in their races, with Specter enjoying a 21-point cushion over Democratic Rep. Joe Sestak as recently as last month (Sestak ended up defeating Specter by a 54-46 percent margin). Similarly, Sen. Scott Brown trailed Coakley by 17 points just two weeks before pulling off his improbable five-point upset victory.

In both races, Obama appeared in radio and television ads on behalf of the losing candidates — and in the Massachusetts race he paid a last-minute visit to the Bay State in an unsuccessful effort to rally Coakley’s faltering campaign (similar to his failed last-ditch effort to revive the flagging candidacy of New Jersey Gov. Jon Corzine).

There was no eleventh hour visit for Specter — but only because Obama’s political advisors read the handwriting on the wall and were desperate to avoid yet another embarrassing image of their boss with his arms draped around another losing candidate. Accordingly, after pledging to give Specter his “full support,” when Election Day rolled around Obama was nowhere to be found – and wasn’t even following the race “all that closely,” according to his spokesman.

How’s that for loyalty?

Also worth noting was the tremendous shot in the arm that Sestak’s campaign received when he revealed that the Obama administration (in typical “Chicagoland” fashion) offered him a high-paying federal job in exchange for dropping his primary challenge against Specter — a charge which has yet to be properly investigated, but which served as a turning point in the race.

Meanwhile, halfway across the country in Kentucky another repudiation of Obama was taking place – albeit one that rattled the cages of a completely different set of Washington insiders. There, Kentucky ophthalmologist Rand Paul — son of Texas Congressman Ron Paul — trounced establishment Republican Trey Grayson in a race that demonstrated the growing political clout of the Tea Party movement.

Paul defeated the GOP’s hand-picked candidate by a 24 percent margin — even after Grayson received endorsements from Senate Minority Leader Mitch McConnell, former New York Mayor Rudy Giuliani and former Vice-President Dick Cheney. Similar to Obama’s last-minute shunning of Specter, McConnell also fled the scene of his anointed candidate’s downfall — ostensibly to attend to “Washington business.”

Paul’s win was the second demonstration of Tea Party power in as many weeks, coming on the heels of Utah Republicans’ refusal to re-nominate incumbent U.S. Senator Bob Bennett. Additionally, ten other U.S. Senators and twenty U.S. Representatives are retiring from politics in advance of the 2010 elections.

What’s fueling this “wave?”

The convenient answer is “voter angst,” but the truth is that each of these elections represents a mixture of prevailing national sentiment and more regionalized root perceptions. In Pennsylvania, for example, Democrats rejected Obama’s personal appeal to support a party-switcher — while in Kentucky, Republicans rejected their party’s chosen nominee to support a candidate who they believe will be more aggressive in taking the fight to the Obama regime.

In both cases, Obama loses. And while the mainstream media continues to portray the Tea Party as part of the “fringe” of America’s political spectrum (while relying on a generic “anti-incumbency” foil to insulate Obama from the dramatic electoral defeats), the truth is the roots of this new limited government movement are deeper and stronger than anyone previously imagined. Also, reversing Obama’s harmful policies not only remains the movement’s raison d’etre — but its source of popular support.

For example, two months after its passage, the latest Rasmussen reports poll shows that 56 percent of Americans favor repealing Obama’s socialized medicine law — which is actually a higher number than Rasmussen recorded in the aftermath of Congress passing the legislation.

That’s true “staying power,” and the longer Obama continues to ignore America’s rejection of him, his candidates and his agenda, the stronger the movement against him will grow.

Thanks to the Tea Partiers, Term Limits Have Arrived At Last
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Posted by admin | Issues
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| Monday 17 May 2010 3:48 PM

From Fox News

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Tea Partiers have found an organizing theme, even if they don’t know it yet. Like beaters flushing quail, they are turning incumbents out of office at an unprecedented rate – both on the left and the right. In effect, they are imposing their own special brand of term limits.

Political pundits are alternately rejoicing or despairing over this unexpected development, depending on the leanings of the latest victim. The passionate energy of the Tea Partiers was welcomed in right-wing circles when it stirred opposition to health care legislation and especially when it lobbed long-shot candidate Scott Brown of Massachusetts into the Senate. Now that it has upset long-time legislator Senator Robert Bennett of Utah and is threatening Arizona’s John McCain, Republicans are having second thoughts. Their anxiety is amplified by the primary contest in Kentucky, where Tea Partiers may push Rand Paul to victory over Trey Grayson, the more mainstream pick of Majority Leader Mitch McConnell. Tea Partiers already dumped Florida’s Charlie Crist; now there’s concern that party stalwart Orrin Hatch of Utah could be next.

Democrats started out anxious about the Tea Partiers. To lose Ted Kennedy’s Senate seat to a Republican upstart left no doubt about the group’s influence. Though party pundits have been not-so-secretly rejoicing about the quicksand Tea Partiers are spreading before Republicans, they may quickly change their tune. The loss of West Virginia Representative Alan Mollohan to right-leaning State Senator Mike Oliverio in that state’s primary is another wake-up call. Oliverio honed in on Mollohan’s ethics issues and pounded him on having supported the health care bill. Turns out the Tea Partiers are ambidextrous.

Should Americans celebrate these developments? Yes! Without a doubt one of the most corrosive influences in our body politic is the near-certainty of being re-elected to many Senate and House seats. The folks at Citizens for Responsibility and Ethics in Washington (CREW) who each year publish a list of the “Fifteen Most Corrupt Members of Congress” say that the most predictive indicator of joining that unholy club is time in office. Legislators who are voted in year after year acquire an unhealthy disdain for the voters they represent. It is but a short step from comfort to corruption.

Representative Mollohan, a multi-year member of CREW’s “Fifteen Most Corrupt” list, had served 14 terms – nearly 30 years – in office. And, he occupied a seat that his father had held for 14 years before that. His previous popularity and his ethics violations had derived from the amount of pork he was able to deliver on a consistent basis to his district and to friends and family. As a member of the House Appropriations Committee, he earmarked $369 million in grants to his district for 254 programs over the past ten years. Of that total, according to CREW, $250 million went to five non-profits created by Mollohan and staffed by his friends. Over that period, people associated with these same outfits funneled nearly $400,000 to Mollohan’s campaign and PAC.

While voters have previously been wooed by earmarks, assuming that money funneled to their district came from somewhere and someone else, they are waking up. The nation’s fiscal health is failing, and voters are consequently upending many previously sacrosanct notions. Among those previously taboo topics, for example, is cutting spending on public schools. Governor Chris Christie is daring to take on the militant teachers unions of New Jersey, cheered on by the hard-pressed taxpayers in that most high-taxed of all states. People – especially out of work people – are no longer willing to support the endless raises, bloated administrative budgets and insane work rules demanded by a union that arguably does not deliver a good product. People want a new deal.

Senator Jim DeMint from South Carolina has introduced a constitutional amendment to establish term limits on those serving in Congress. He notes that over the past two decades politicians have been reelected 90% of the time. “Americans know that real change in Washington will never happen until we end the era of permanent politicians” says DeMint. He is completely right. In poll after poll, a large majority of Americans say they support term limits. The good news is that we may not have to wait for DeMint’s long-shot bill to pass; the Tea Partiers may impose term limits all by themselves.

Lamontagne calls for congressional term limits
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Posted by admin | Issues
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| Monday 10 May 2010 2:20 PM

From Sea Coast Online

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PORTSMOUTH — Fighting for freedom and liberty, limited government and responsible spending are top priorities for U.S. Senate candidate Ovide Lamontagne.

“I think our country is heading in exactly the wrong direction,” said Lamontagne, of Manchester, who visited the Seacoast Media Group offices this past Thursday. He was in the area to meet with a University of New Hampshire student Republican group and to attend a Senate debate held by the 912 Project in Rochester.

The Republican says leaders in Washington are taking too many liberties and operating the country with deficit spending when they should be working from a zero-based budget approach. Reforming Congress by structured change — for instance, term limits of two terms in the Senate and six terms in the House — is another goal of Lamontagne’s. He also wants to foster job creation, lower the tax burden on businesses and increase national security — including border security.

“I believe we need to send conservatives to work to change the direction of the country,” Lamontagne said.

With the September primary quickly approaching, Lamontagne is in the thick of his campaign, organizing groups of supporters — friends, neighbors, business and civic leaders — from around the state who will show their vote. His GOP opponents are Kelly Ayotte, Bill Binnie and Jim Bender.

“This is a long campaign. It’s a marathon, not a sprint,” said the self-described independent conservative Republican. “I am not the party establishment choice; I am not independently wealthy; I am relying on the people to help me win this campaign.”

Lamontagne was a nominee for New Hampshire governor in 1996 and is a past chairman of the New Hampshire State Board of Education. His campaign is based on the same principles as his run for governor in 1996.

“I let the people know where I stand on the issues and hope that they get the vote out,” he said. “I’m going to have to do it the old-fashioned way — relying on people and letting them speak.”

What About Fan and Fred Reform?
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Posted by admin | News
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| Tuesday 4 May 2010 4:14 PM

From The Wall Street Journal

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Congress may be making progress crafting new regulations for the financial-services industry, but it has yet to begin reforming two institutions that played a key role in the 2008 credit crisis-Fannie Mae and
Freddie Mac.

We cannot reform these government-sponsored enterprises unless we fully confront the extent to which their outrageous behavior and reckless business practices have affected the entire commercial banking sector and the U.S. economy as a whole.

At the end of 2009, their total debt outstanding-either held directly on their balance sheets or as guarantees on mortgage securities they’d sold to investors-was $8.1 trillion. That compares to $7.8 trillion in total
marketable debt outstanding for the entire U.S.government. The debt has the implicit guarantee of the federal government but is not reflected on the national balance sheet.

The public has focused more on taxpayer bailouts of banks, auto makers and insurance companies. But the scale of the rescue required in September 2008 when Fannie and Freddie were forced into conservatorship-their version of bankruptcy-was staggering. To date, the federal government has been forced
to pump $126 billion into Fannie and Freddie. That’s far more than AIG, which absorbed $70 billion of government largess, and General Motors and Chrysler, which shared $77 billion. Banks received $205 billion, of which $136 billion has been repaid.

Fannie and Freddie continue to operate deeply in the red, with no end in sight. The Congressional Budget Office estimated that if their operating costs and subsidies were included in our accounting of the overall federal deficit-as properly they should be-the 2009 deficit would be greater by $291

Worst of all are the tracts of foreclosed homes left behind by households lured into inappropriate mortgages by the lax credit standards made possible by Fannie Mae and Freddie Mac and their promise to purchase and securitize millions of subprime mortgages.

All this happened in the name of the “American Dream” of home ownership. But there’s no evidence Fannie and Freddie helped much, if at all, to make this dream come true. Despite all their initiatives since the early 1970s, shortly after they were incorporated as private corporations protected by government charters, the percentage of American households owning homes has increased by merely four percentage points to 67%.

In contrast, between 1991 and 2008, home ownership in Italyand the Netherlands increased by 12 percentage points. It increased by nine points in Portugaland Greece. At least 14 other developed countries have home ownership rates higher than in the U.S.They include Hungary, Iceland, Ireland, Polandand Spain.

Canadadoesn’t have the equivalent of Fannie and Freddie. Nor does it permit the deduction of mortgage interest from an individual’s taxes. Nevertheless, its home ownership rate is 68%. Canadian banks have weathered the financial crisis particularly well and required no government bailouts.

This mediocre U.S.home ownership record developed despite the fact that Fannie and Freddie were allowed to operate as a tax-advantaged duopoly, supposedly to allow them to lower the cost of mortgage finance. But a great deal of their taxpayer subsidy did not actually help make housing less expensive for home buyers.

According to a 2004 Congressional Budget Office study, the two GSEs enjoyed $23 billion in subsidies in 2003-primarily in the form of lower borrowing costs and exemption from state and local taxation. But they passed on only $13 billion to home buyers. Nevertheless, one former Fannie Mae CEO, Franklin Raines, received $91 million in compensation from 1998 through 2003. In 2006, the top five Fannie Mae executives shared $34 million in compensation, while their counterparts at Freddie Mac shared $35 million. In
2009, even after the financial crash and as these two GSEs fell deeper into the red, the top five executives at Fannie Mae received $19 million in compensation and the CEO earned $6 million.

This is not private enterprise-it’s crony capitalism, in which public subsidies are turned into private riches. From 2001 through 2006, Fannie and Freddie spent $123 million to lobby Congress-the second-highest lobbying total (after the U.S. Chamber of Commerce) in the country. That lobbying was complemented by sizable direct political contributions to members of Congress.

Changing this terrible situation will not be easy. The mortgage market has come to be structured around Fannie and Freddie and powerful interests are allied with the status quo. I recall a personal conversation with a member of Congress who, despite saying he understood my concerns about the two GSEs, admitted he would never push for significant change because “they’ve done so much for me, my colleagues and my staff.”

Nonetheless, Congress must get to work on the reform of Fannie Mae and Freddie Mac. A healthy housing market, a healthy financial system and even the bond rating of the federal government depend on it.

Mr. Wilmers is chairman and CEO of M&T Bank Corporation, an independent commercial bank holding company. This op-ed was adapted from his speech at the company’s annual shareholders meeting last month.

Delaware man wins his battle against eminent domain
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Posted by Howard Rich | News
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| Friday 30 April 2010 12:54 PM

From The Tulsa Beacon

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The Sam Adams Alliance has awarded one of its annual “Sammie” awards to Ed Osborne, an auto repair shop owner in Wilmington, Delaware, who fought a three-year long battle to save his property from being taken by eminent domain and his drive to enact legislation that protects others from becoming victims in the same way that he was.

The Alliance was founded in 2006 and has been making its annual award since 2007. Their website states, “Our mission is to help Americans understand free-market-based principles and policies, and to help ensure the vision of Sam Adams and our Founding Fathers flourishes in the 21st Century.” They take their inspiration from Sam Adams, who fostered a popular movement against the British by encouraging grassroots communications between colonists.

Ed Osborne was one of six people who were awarded a 2010 Sammie award. Their website said that he had won the award “for his vigorous defense of property rights against eminent domain in Delaware. Osborne gained his notoriety as an activist when he and 61 other Wilmington business owners received notification that their businesses were on the city’s property acquisition list. Osborne resisted government offers for his land, and instead went on to lead a three-year battle in the Delaware General Assembly for legislation against eminent domain abuse. Despite heavy opposition and a gubernatorial veto, the legislation eventually passed, and transformed Delaware’s once-vulnerable property rights environment into one that protects private ownership.”

The boldness behind Wilmington’s attempt to seize Osborne’s property in order to give it to a private developer was inspired by the Supreme Court’s Kelo vs. New London case, in which Suzette Kilo and others lost their homes to a developer who was going to build offices and a hotel to support the presence of pharmaceutical giant Pfizer. Reportedly, $78 million was spent to remove the homes, but, in 2009, Pfizer closed its facilities, leaving the bulldozed area vacant.

Wilmington wanted the 62 properties, most of which were closed businesses, for their South Walnut Street Renovation Plan, which would have given the property to a developer. Osborne had invested his business in the area since 1994, and because it was a high-crime area, had taken the risk to do so when few others would.

Osborne first learned that his property was going to be taken when he received a condemnation notice. Neither the city or the developer had offered to purchase his property prior to the condemnation notice.

Osborne sued, stating that his rights had been violated because he was not being offered fair compensation, and because the use of his property would be for a private, not public, use.

As a result of Osborne’s case, Senate Bill 245 was passed to define and restrict the use of eminent domain, but the governor vetoed it.

The law that eventually passed was Senate Bill 7, which amended their existing laws regarding eminent domain. The synopsis of the bill stated that “This bill requires state, county, or municipal governments or state agencies or other condemning entities to use their eminent domain authority solely for ‘public use’ and defines that term. The bill specifically states that benefits derived from economic development do not constitute a public use.” (emphasis mine.)

The bill itself states that “the policy of the provisions of this chapter pertaining to eminent domain is to ensure that eminent domain is used for a limited, defined public use. Public use does not include the generation of public revenues, increase in tax base, tax revenues, employment or economic health, through private land owners or economic development.” (Again, emphasis mine.)

The bill still allows the use of eminent domain for the removal of blighted areas or “slums,” as well as buildings that are unfit for human habitation or abandoned properties.

While it is gratifying that Osborne won against huge odds, there are many cases that aren’t won, or even fought against, because of lack of funding for legal defense, or lack of knowledge of laws or how to change them. Osborne proved that with endurance and resourcefulness the little guy can be successful, but the real answer is that much more legislation needs to be done to protect individual property rights in other states, including Oklahoma.

Goldman: Creeping Socialism Finds A Convenient Enemy
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Posted by Howard Rich | News
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| Thursday 29 April 2010 9:00 AM

By Howard Rich

In its quest to ram perpetual bank bailouts and draconian new government regulations through the U.S. Congress under the guise of “financial services reform,” the administration of Barack Obama and its allies have seized upon a convenient new enemy – Goldman Sachs.

Armed with a government lawsuit tailor-made to stoke populist headlines, Obama and his allies want to further force Washington’s tentacles into a financial industry that it ostensibly “rescued” using trillions of dollars borrowed from future generations of U.S. taxpayers.

“If we don’t change what led to the crisis, we’ll doom ourselves to repeat it,” Obama said recently in an article conveniently headlined “Charges Against Goldman Sachs Boost Case for Financial Reform.”

Yet in typical Washington fashion, Obama’s proposed “reforms” do nothing to address government’s starring role in the most recent debacle. Nor do they protect taxpayers from future raids on the public treasury. In fact, the legislation Obama is championing would maintain (and even expand) the same federal regulatory conditions and incentives that led to the collapse of the housing market in the first place – while making taxpayer-funded bailouts for financial institutions a permanent part of public policy.

In other words, Washington has learned absolutely nothing.

“The American public has a lot to be angry about, but the spark for that rage was the bank bailouts,” writes Mark A. Calabria, director of financial regulation studies at the Cato Institute.

And yet as Calabria and others have astutely observed, government’s solution to the sub-prime mess is to encourage the same loose lending practices that created it – particularly as it relates to government-owned behemoths Fannie Mae and Freddie Mac, whose toxic assets helped sink Bear Stearns at the beginning of the current downturn. Accordingly, Obama’s reforms “wouldn’t bring stability to our financial system, but (would) further erode market discipline — while asking us to put all our faith in the same regulators who have failed repeatedly,” Calabria writes.

Ironically, the beleaguered Wall Street firm that Obama has selected to play the role of whipping boy in this process is a familiar “enemy,” having pumped $4.4 million into the coffers of Democratic candidates in 2008 (compared to $1.4 million for Republican candidates). Apparently, Goldman Sachs forgot the old adage about “not feeding the tiger in the hopes of being the last one eaten.”

All of this leads us to a fundamental question that must be asked (and answered) about our economy moving forward: Specifically, is it government’s job to assume the risk associated with bad business decisions? Or if you prefer to get even more Orwellian about it: Is it government’s job to arbitrarily restrict free market exchanges in an effort to prevent bad decisions from being made in the future?

If the government’s answer to either of those questions is “yes,” then it is embracing a Soviet-style command economy and repudiating the free market principles on which this nation was founded.

Finally, in assessing Obama’s populist push on “financial reform,” it would be wrong not to briefly mention the flimsiness of the federal case that’s at the forefront of literally tens of thousands of international headlines. At the heart of the SEC’s complaint against Goldman Sachs is the allegation that the firm misled a German bank into buying toxic assets at the behest of a savvy hedge fund manager. This simplistic salvo ignores two salient facts – Goldman’s $90 million loss on the deal as well as clear and compelling evidence that the German firm knew exactly what it was getting into.

In fact, just a year before the Goldman deal, the German bank referenced in the SEC filing was concluding similar agreements with other companies and bragging about its expertise in evaluating the very sort of “corporate loan portfolios” that it now claims it was misled into purchasing.

But as much as Obama and his allies are picking a fight against a convenient enemy, this debate isn’t about defending Goldman Sachs – it’s about defending the free market from additional government intervention.

Term limits
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Posted by Howard Rich | News
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| Wednesday 28 April 2010 12:46 PM

From The Great Falls Tribune

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I have been dismayed with the performance of the U.S. House and Senate for some time, as have the majority of American citizens. I keep hoping they will put partisanship aside, listen to the people who elected them rather than the lobbyists and do what is best for this country and its people.

The senators and representatives have voted themselves lucrative medical and retirement plans, collected huge sums from individuals and corporations for their campaign funds and, after a short time in Washington, seem more focused on partisanship and the next election rather than the peoples’ business.

Some say the periodic election process will cure this predicament, but when people are elected again and again for up to 50 years — and some have been carried in and out of the chambers or cannot speak competently from the podium — I say it’s time to change the rules.

The presidency has term limits. State governors have term limits, as do our state legislators. These limits are working well, no matter what the politicians say. Nobody is irreplaceable. This is the only legal solution I can think of to get Congress back to being more responsive and responsible to the American people.

I know the elected officials will not vote themselves term limits, so it’s up to the electorate to begin the process of change.

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