The Conservative Edge

Just when everyone thought that the foreclosure crisis was easing, new data shows that the housing market remains in turmoil. This has contributed, in part, to the stock market’s recent slide. Investors are concerned that Europe’s financial problems, combined with the United States’ stagnant economy and continuing housing crisis, will delay any global economic recovery.

Here in Ohio, the Dayton Daily News reports that the state is on a record pace for foreclosure filings through the first quarter of 2010. In an eight-county region in southwest Ohio, foreclosures have gone up 8.8% over the same period from last year. The paper blames Ohio’s Republican-controlled Senate, and its failure to pass legislation aimed at helping distressed mortgages. However, there is a federal program that will likely be responsible for giving lenders a green light to seize troubled properties, further accelerating the foreclosure pace.

The HAFA (Home Affordable Foreclosure Alternatives) program that began in April of this year was supposedly designed to alleviate mortgage delinquencies through the short sale process. Borrowers could potentially receive cash bonuses for agreeing to either a short sale or deed-in-lieu-of-foreclosure procedure that would allow lenders to take the troubled property without resorting to foreclosure. That sounds good, in theory. But the reality is, the financial firms that own most of these mortgages aren’t even participating in the HAFA program.

Bank of America recently revealed that mortgages owned by Fannie Mae and Freddie Mac, as well as FHA/VA mortgages, are not subject to HAFA guidelines. These loans make up the vast majority of home mortgages. As a result, many short sale packages previously submitted to lenders are being rejected, with no new short sale proposals being accepted. This frees lenders to swiftly foreclose on distressed properties with no fear of reprisal from the federal government. Many real estate professionals expect foreclosures to increase dramatically through the rest of this year.

To make matters worse, the federal government, and the Democrats in particular, still seem reluctant to make job creation a top priority. The Labor Department said that the number of mass layoffs (which involves 50 or more people) rose by 228 in the month of April to a total of 1,856. So, despite the notion that an economic recovery is underway, it is clear that manufacturers are continuing to eliminate jobs. This will only aggravate the housing crisis, as more Americans lose their incomes.

Sadly, the Democrats have suggested that their big legislative push is over until the 2010 election. After passing huge bills to reform health care, provide insurance to children, restructure (downsize) auto companies, regulate financial institutions, and increase tobacco taxes, the Democrats now want to take it easy. They are fearful of voter backlash. They forget, however, that voters will be mindful of what the Democrats didn’t do, rather than what they have done to this point. The longer it takes for the Democrats to address job growth, the bigger the backlash will grow.

President Obama recently hammered the executives of the largest banks/financial institutions, calling them “fat cats” who should stop taking advantage of the American people. It wasn’t enough that Obama appointed a “pay czar” that gets to decide how much corporate executives can earn. Now Obama is calling them names, just to rub some salt into the wounds.

In truth, there are a lot of people who despise the rich bank executives. And it is equally true that many banks have oppressive fees and other regulations. Some mistrust of banking operations is to be expected. However, the American people should be just as upset with the growing size of the federal government and the earnings of government workers.

The USA Today just released its study of federal government pay data. The results show that, during the first year and a half of the economic downturn, six-figure salaries jumped from 14% of all civil servants to 19%. Additionally, in the same time frame, the Transportation Department went from having one employee making at least $170,000 to having 1,690 people earning that amount. This means that those 1,690 people in that department earn at least 287 million dollars. God only knows what the payout is for all of the people employed at the Transportation Department.

The liberals supposedly have such care and compassion for the Average Joe. But it is hypocritical for the Obama administration, and Democratic leaders in the House and Senate, to publicly skewer private sector executives for their pay scales, while government workers get larger salaries. This kind of growth in government is the last thing we need in recessionary times.

I wonder how many bankers it would take to earn $287,000,000?

There is an old Biblical proverb that says there is nothing new under the sun; things that are happening now have happened before (if you’re curious, read Ecclesiastes chapter one, verses 9 and 10).

That proverb has come to mind this week as I scanned a few articles in my local newspaper. I read about the proposals for health care reform, and legislation that will redefine or clarify abortion rights. I felt like I was reading articles from 1993. If you recall, it was Bill Clinton who, along with Hillary, attempted a massive overhaul of the American health care system. Clinton also endeavored to expand abortion services, and appropriate government funding for those services.

But during the election of 1992, Clinton had campaigned on economic issues. America had been in a mild recession, but statistics were showing that the economy was slowly recovering. However, the Democratic candidate painted a gloomy picture of our financial health, and promised quick action to stimulate our economy. His picture was indeed gloomy enough, and he was promptly elected.

Fast forward to 2008. As our nation faced a severe recession, Barack Obama promised to put thousands of Americans to work rebuilding our infrastructure. He also vowed to give a “quick Jolt” to the economy. But, like Clinton, Obama changed his priorities once he was sworn in to office. We now see the real goals set by the Democrats and liberals: higher taxes, increased regulation of banks and industry, health care reform, and abortion legislation.

It looks like Americans are going to recover in spite of the government, not because of it. There is still a lack of focus on job creation, which would stimulate the economy more than all the new regulations and taxes combined. Job prospects are still bleak. In my area of Ohio, for instance, there is the threat of closure of several public libraries. Voters will soon be deciding on whether to approve additional property taxes that will keep most library branches open. You know things are bad when public libraries have to shut down. But it’s like that all across the state.

I’m hoping that Obama will realize that the government should provide an environment for growth and innovation. When more people work, they buy more goods and contribute more revenue. But Obama’s efforts are going toward the taxation of the fewer Americans who are still working to create wealth. Many experts ridiculed the idea of “trickle-down” economics. If Obama isn’t careful, he will completely shut off the trickle we have left.

On Friday, June 12, I heard Larry Summers defend the government’s involvement in private companies. Speaking at the Council on Foreign Relations in New York, Summers said that President Obama “did not, as he has said many times, run for president to manage banks, insurance or car companies.”

That’s understandable. If Obama had mentioned those ideas, he might not have been elected. Like Bill Clinton in 1992, Obama campaigned on fixing the economy, but, once in office, began implementing the Democrats’ real agenda.

If Obama had been completely honest, before the election, about the liberals’ real intentions, he would have told us that (among other things):

• They would impose outrageous and illogical taxes on tobacco products (supposedly to fund health insurance for children), with further tobacco regulation directed by the FDA.
• They would decimate the American auto industry, causing the additional loss of thousands more jobs. They would have the authority to fire the CEO of GM, and arrange the sale of Chrysler’s assets to a foreign car maker. They would increase the regulation of the auto industry, with the EPA to be in charge of auto emissions.
• They would permit the White House to oversee the upcoming Census, removing the Department of Commerce oversight.
• They would increase spending and our national deficit, leading to inflation and higher interest rates.
• They would refuse to expand the exploration and utilization of our energy resources, risking our national security and maintaining our dependence on foreign oil supplies.

That’s been the focus of the administration during the first few months. There doesn’t seem to be much emphasis on job creation. We were supposed to get a “quick jolt” to the economy, but I haven’t noticed it yet. Most of the new jobs the Obama administration takes credit for have come from preparation for the Census. Unemployment has spiked well beyond government estimations. And the run-up in oil prices means that the markets are anticipating increases in inflation, due to the massive amounts of new money being released by the government.

It gets worse. If the Obama administration authorizes the pending cap-and-trade legislation, we will all be spending more on energy to heat and cool our homes. That’s besides the higher gasoline prices that are sure to come, because the Democrats refuse to capitalize on American resources. The real growth we are witnessing is not in job creation, but in the size and authority of the Federal government. God help us.