Our valor and our patriotism have become his burden. How can we, as veterans, share the weight of his tragedy until he is old enough and wise enough to understand? Unwittingly and faultlessly he has paid the price of freedom and now he has become one of us. It is our sworn duty to insure that he understands and inherits the true freedoms and the sovereignty of one nation under God, indivisible, with liberty and justice for all.

Men Ain’t Supposed to Cry! I’m an old Seabee, 65 years old Seabee to be exact. But I wasn’t always an old Seabee. I’ve been many things at various times along the road of life. In my young years I was innocent and in my later years I was guilty as hell! I was unlucky at love and I was even more unlucky at success. I was a hobo, I was a carpenter, I was a drunk and I was a drugie. I was a poor excuse for a husband and a mediocre father. I was a businessman. I was an activist. I wrote news paper columns. I hosted radio and television shows. I was pretty cool at times and a total jerk at others. I was a fool. I am a veteran! I am a very fortunate person. You may have surmised by now that my life has been, at best, very unsettled. Don’t get me wrong, I’m not complaining. I have nothing to complain about. Life has been very kind to me. Through all of this there was a single thread that was the only consistent thing in my life, my tears! I remember the exact moment they started. I had just come home from the war. I was in a roadside café in Oneonta,

New York, it was 8:30 PM, I had to leave because I started crying for no apparent reason. I sobbed profusely for what seemed to be an eternity before I could come to grips with the situation. I don’t remember the second time but I do remember there was a second time. I would be alright for short and sometimes long periods of time. One instance that stands out in my mind is when an American solider was chained to a flag pole in a hostile middle eastern nation. I saw the fleeting image on a grainy black and white television screen. I closed the door to my room and was not compatible with the rest of the world for several days. I am, as you may surmise, much older now and am a bit more suited to analyzing situations. The one that gets me is why I cry at Football games. I think when that ball is delivered into the end zone I realize that there are countless numbers of young soldiers who were denied the opportunity to carry that pigskin across the goal line because of their patriotism. They made the ultimate sacrifice in defense of the freedoms we all take for granted. Today I was in the grocery store and observed an old black man wearing a well decorated Vietnam Veteran’s cap. He was struggling to get a box of grape soda from the top shelf when he noticed my attention. He was bent and broken and not quite the man he once was. I think that embarrassed him a little. As I pulled the case of soda from the top shelf I asked, "What’s that hat all about, is that yours?" Not knowing the extent of my prejudice at that point, he looked me square in the eye and said "Yes!" As I placed the hefty load in his basket I simply said "Me too" he hugged me and said, "Thank you for your kindness" and I chocked back yet another tear. Why do I cry? Any clinical psychiatrist might tell you that it stems from a genetic abnormality caused by a latent complex as a result of being dropped on my head as a baby. Hogwash! I am starting to understand why I cry. I cry because I am one of the more fortunate ones. Why do I cry? Was it the death, was it the loss of fellow soldiers, was it the atrocities leveled on the civilian population of old men, women and children or was it "D" all of the above. In my little community and in my time I was one of three young boys that went off to war. Flags waving, bands playing and mothers proclaiming their grief. I was the only one to return! After all these years I can still feel the anguish of the mother that wondered why her son wanted to "Join up", as she prayed every moment for his safe return and as she accepted his remains just three months later. What a price she has paid on our behalf. In deep contrast to our bad days coming few and far between, some 40 years later, her good days are still nonexistent. Her life sentence can not be pardoned, commuted or abolished by Presidential decree. It can only be soothed by our actions. We must carry on and survive to bring this and countless other Mothers the realization that their gift was not in vein. Our gift to them is our survival, to let them know that another Mother will not suffer the life long loneliness and daily grief of a child they can not hold in their arms. I understand that a disproportionate number of modern day veterans returning from the wars of today are successfully suicidal. This old Seabee will be the first to tell today’s vets that the burden is heavy and enduring. Every soldier in every war since the beginning of time has sustained unique wounds. Some emotional some physical and some both. Nurses will tend, doctors will diagnose, family and friends will pity and you will cry. As thousands of old vets die off every day we need you to take our places in support of the veterans of tomorrow. You are part of the strongest brotherhood ever to plague mankind. No color, no creed, no race, no religion, just a veteran. If you feel you cant go on, if you don’t yet understand your tears, if you are dismayed, disillusioned and disconnected, find one of the only people that truly understand, an old war veteran, tell him your story and listen very carefully as he says, "Me too!" I am, Allen, W.J 685-64-13, BUR3, United States Navy Seabees, 1962-1968. I am a Veteran.

God Can’t Live in America Separation of church and state is a political and legal doctrine that government and religious institutions are to be kept separate and independent from each other. The key word there is doctrine, a doctrine refers to a belief held or taught by any given establishment. In the united states the government has adopted a stance that the word God should be stricken from all public lands and government buildings. It is also launching a movement to have the phrase "In God We Trust" removed from the coin and legal notes provided as currency or money to the general citizenship. This perplexes me because in reading the constitution I find no passage or amendment that prohibits either the word or concept from appearing in public or on any building or currency owned by the people.

Who's watching the Devil while we fight over GOD?

So, what could the underlying goal be? What happens when God, the word, is removed and separated from government? Remember, we are dealing with the "word" God, not the spiritual God that is usually associated with Christianity or a religious science that believes in a supreme being, "God". We will inevitably tie the two together but for now we will address God the legal term. To understand why God can’t live in America we’ll have to take a step back and look at the constitution and the so called framers of that document. Were they God-fearing men? Given the times and the accounts of their general conduct, I believe they were. Were they perfect? Given the times and the accounts of their general conduct, I believe they were far from perfect. They were simply good men and great thinkers. Then why would they lay the future of their children, and their children, in the hands of an unseen and somewhat doubtful "God". The constructors of this profound blueprint of freedom named the citizens of America as the highest authority in the land, "We the People". The people were in authority over all things, great and small. As authoritarians they bestowed privileges on a group of people that would become known as "The Government". They were privileged to carry on the business of running the country as outlined in the constitution and at the will of the people. The founding fathers understood the perils of their proposal and warned us repeatedly to be vigilant of the men we placed in the permissive role of governing. Things went well for about four years and then government started to usurp the constitution and assume rights they had not been given by the higher authority. Fortunately our third president, Thomas Jefferson, corrected the usurious acts of his predecessor and put America back on the right road of government, the constitution. The framers were also mindful of a future oppressive government questioning the people’s authority. Who gave this highest authority to "We the People", Thomas Jefferson, George Washington, Benjamin Franklin, James Madison? These men although pioneers in their own right, had no sustainable authority to give. The question was. How would the poor and ambiguous citizens retain their rights when faced with a government that would become richer, more powerful and insatiably corrupt with each new administration? We’ve already discussed that the founding fathers were dedicated and great thinkers. I can’t imagine it being too long before one of them declared with an undeniable amount of wisdom that, the people derive their unalienable rights from a higher source. God, himself, has bestowed this authority upon us and there is no higher power to rebut this authority. "God given rights" genius, pure genius. Were they referring to an angelic entity that had created heaven and earth and held mankind in the balance? I don’t really know but I don’t think so. I’m sure that they revered their god as the creator and looked to him in a spiritual and biblical sense, but, given what they had already achieved I can’t help but imagine they were after a legal big brother. We derived our rights from God, trump that! Someone has been trying to "trump that" every day since the constitution was signed. The fact that they have yet to succeed lends testimony to what a powerful idea that was. Let us not grow too confident in the efforts of our forefathers. There are new players and new strategies in the game and they may be holding the trump card. The emerging strategy is to ban God from America. Not the supreme being of all religions, not the God depicted in the bible and all of the scriptures and certainly not the God worshiped by the many sects living in the country today. Instead the trump card being played deals with the legal or highest authority God. If God can be erased from our legal system, washed from the face of our money, scratched from the walls of our buildings and buried beneath our hallowed fields then there will be no legal God. With no legal God there is no higher authority. With no higher authority there is no constitution. With no constitution there is no republic, no freedom and ultimately no America. Are you starting to get the message? The key is a higher authority. If you’re an atheist should you pursue removing God from our money, no! From our government, no! If you remove the authority granted by the legal God, you will no longer be free to worship, as it were, as an atheist. Government sanctioned religion is a reality in this world. If we lose God even atheists will have no basis for their beliefs. Another front in the battle to terminate God is being waged in the classrooms of America. Remember when every day started with the pledge of allegiance to the flag, followed by the Lords Prayer? Where did that fundamental practice go? Why was it abolished? Was it to separate church and state? A wild idea was introduced into the developing minds of our youth. It was proposed by an adult mind that the adolescent mind of school aged children may be offended or confused by hearing of God in the classroom. By the way, this same adult mind has introduced "Gay Day" to the educational system. A day that celebrates gay, bisexual and trans-sexual behavior in our time. No chance of being dazed and confused there! But, that’s a topic for another day and another article. Back to basics. Removing the pledge and the prayer from the classroom is not a play for immediate results. It is however a long term attack on the legal God, on yet another front. If this absence of the connection between God and country persists long enough from the minds of the country’s youth the legal God will be dismissed and only the spiritual or religious God will sustain. A generation of that and our God given rights will be gone for good. The higher authority will be removed and "We the People" will lose our greatest Allie in the fight to retain our republic, our freedom and to fight tyranny. Lets send God to school, with the constitution and a flag in hand. Let’s invite God back, to live in America.

Nationalized Health Care     For many decades, if not generations, the American worker has stood by and helplessly watched as our government brought the greatest industrialized nation in the world to it’s knees. Subsidies, tax breaks and incentive programs were used to entice American companies to move their operations off shore.     The feds post the unemployment rate at 9.4%. That’s a contrived number. I think the real nationwide number is at least 20%.     The State of California suggests 11.5% in July, a 25 year high.     Unemployment figures posted by the government in my county, San Bernardino, CA., stand at 13%. I believe that number is grossly understated. If one were to do the math, dissect the numbers, interview the people and take an actual head count, the number would be 30%, if not higher.     Remember, this is my opinion. My opinion is based on a tool repair business that is dependant on the labor force in this area.

Don't Worry! It's Standard Government Procedure........

In the best of times the Hi-Desert region of Southern California is listed as an economically depressed area. Business is off more than 50% over the last two years. Does that mean that unemployment in this neck of the woods is 50%? Could be, but if everything was taken into consideration it could be 60%. Consider the people that don’t have jobs but don’t qualify for unemployment insurance. Consider the workers who’s benefits have run out but they are still unemployed. What about workers that have been given a drastic cut in hours or sent home until the next job starts. Or the throw-away portion of the American population that has been consigned to unemployment or to jobs that don't pay a living wage. There are a great number of reasons, including legal issues, that render a person un or under employed. I know that if you gathered up all the able bodied workers in this town, 6 out of 10 of them would be looking for a job.     So, are these the people to be given nationalized health care? Am I one of those people? Are you one of those people? Do you want free care? Sure, it’s human nature. Everyone wants something for nothing. The real question is, what are you willing to pay for it and can you really afford to get something for nothing? Everyone on the dole from a government that has no shame. Is that what you want? Not me!     A tariff on all imported goods, an excise tax on all exported goods and the same incentives offered to companies to come back to America that drove them away in the first place. That’s what I want! Give me a job, I’ll take care of my own health.     Nationalized health care? Thank you for the offer but no thank you!     I’d rather die in the arms of the republic than by the hand of a Socialist government that doesn’t understand the value of my life.

The Pledged I pledge allegiance to the flag of the United States of America and to the democracy for which it stands.... Wait a minute, the United States of America are not a democracy, they are a republic! Yes, it's the United States of America are, not the United States of America is. But that's another topic for another day. At this point we need to understand the difference between a democracy and a republic. It all has to do with what rights you have and where you derive those rights from. It also has to do with what rights can be voted away from you by a majority of the voting public. In a democracy any or all of your rights including those derived through your ownership of property can and eventually will be voted away. In a republic you have certain unalienable rights along with rights you obtain from ownership of property those rights can not be voted on, questioned, amended or usurped by any branch of government or any voting body. You are the highest authority in matters concerning any or all of your property. Be it as insignificant as a pencil in your pocket or as considerable as the home you live in. You are the highest authority. The United States of America has many problems and challenges today, these challenges are being compounded by an unconstitutional government. The answers are in the constitution! We the people must read and discus the constitution and it's supporting documents as a starting point to reaffirming it's powers, it's privileges, and returning The United States of America to the republic it was born to be and for which it stands.

American Idle

He who tampers with the currency Robs labor of its bread................ Daniel Webster

"Chase"ing The Money Chase bank, the recipient of billions of tax dollars in the biggest transfer of wealth the country has ever known, the great Obama bail out! In the great bail out boondoggle Chase acquired Washington Mutual. I don’t understand why Washington Mutual rolled over, but it gave Chase the opportunity to gouge hard working tax payers with their own money. One of the first things Chase did was to raise the interest rate on WAMU credit cards to 29.99%. Why didn’t they just hit us in the head and pick our pockets while we were unconscious? The current administration may have frowned on that and it wouldn’t have given politicians the chance to spout rhetoric about stopping the banks from gouging the public, but that will take some time because water boarding is taking center stage and all of the resources. If you call Chase Bank to inquire about the new rate you will immediately be connected to a hard to understand representative somewhere in India. They will politely greet you and introduce themselves with their American name, Ralph, Jeremy, Sheila, Susan or some other name they can hardly pronounce. Next they will ask for your account number, your social security number, your date of birth and your mothers maiden name. The questions you may ask yourself at this point might be, why am I giving this stranger my critical information and is there really someone in India naming their children Ralph? Now it dawn’s on me that while we are staggering under the weight of a faulty economic recovery plan, Chase Bank is using American tax payer money to employ people in India! This suddenly brings to mind a question that Mr. Obama should be asking Chase Bank. With 14 million unemployed people in this country, you can’t find anyone to answer the phone?

Don’t get caught up in the blame game. Democrats would have you believe that they inherited these problems from the Bush administration. Republicans say this administration is at fault and they don’t know what they’re doing. Blaming the previous regime puts the current regime in the clear because they’re not at fault! Another pit fall will come in the form of a statement, "You can’t go back to the constitution!". Back being the operative word. And that is correct, we can’t go back in time. I don’t think we’re going back to the constitution, we’re going forward to the constitution! If you find yourself in a conversation with an idealistic person that wants to point out the mistakes of the other party, you will be unable to carry on a meaningful conversation. There is plenty of blame to go around and every point has a justifiable counter point and the conversation goes nowhere. Don’t waste your time trying to place blame, the problem is government. Not any particular part but every part of government is broken, corrupt, mismanaged, over funded and praying on the misfortunes of the people it was meant to protect. Having stated the problem the solution becomes very clear. The people of this nation must rise up in a peaceful revolution that will reassert the sovereignty of our nation and it’s people. We must abolish the rule of the rich and powerful and return it to the people at the most basic level. How do we do this, by joining together serious and like minded people to discus the predicament and formulate a strategy that will empower the people and embody the country. Start a group today! Become a chapter of The Constitutional Guard. Contact the Fundamental Press, we’ll help you get started. Support the Revolution, the Constitutional Revolution!

Bill Allen editor@fundamentalpress.com Yucca Valley, CA Seabees, 1962-1968 Date Posted: 02/28/2009 Topic: The Stimulus Theory Opinion: The current government claims to be shoring up the economy by giving large amounts of money to banks, corporate executives and other, already fat cats at the top. A lifetime spent in the construction industry has taught me that you never shore up anything from the top. You should always start repairs at the foundation. You always shore up anything from the bottom.  In my county alone (San Bernardino County, CA.) over 500,000 homes are in foreclosure. A helping hand may be to give homeowners the opportunity to defer 3 mortgage payments a year to the end of the contract, without penalty, for 5 years. It will work for the people that deserve it with out misuse of taxpayer monies.

Here's a very good article I came across as I was introduced to "Backwoods Home Magazine" 

The Meltdown and The Bailout

Why, How, and What they mean ....... By John Silveira

     To understand how the recent meltdown and bailout came about, you have to know what brought them on. According to some, there are PhDs who have problems grasping what happened. I don't know if that's true, but I don't think it has to be made that difficult.

     If you're unfamiliar with some of the terms and the entities that are spoken of when discussing the issue, let's start here:

     sub-prime — This refers to borrowers with income levels that are too low, or who made extremely small down payments when buying a home (or no down payments at all), or have poor credit histories, or shaky employment (or none at all). They're the kind of borrowers traditional bankers do not want. Hence, they're less than prime. 

Fannie Mae — the Federal National Mortgage Association founded in 1938 under FDR, but made a "private" corporation in 1968, under Lyndon Johnson, as a Government Sponsored Enterprise (GSE). What you have to know about Fannie is that it's a quasi-government enterprise and that it doesn't grant mortgages. It buys mortgages from banks and other lending institutions, thereby creating a fluid "mortgage market." This is thought to be important for ensuring the availability of money for mortgages.
     Freddie Mac — Federal Home Loan Mortgage Corporation, another GSE. Other institutions couldn't compete with Fannie, so the government "invented" Freddie to compete with it.
     Something else you must know about Fannie and Freddie is that they are the only two corporations in the Fortune 500 that, by government "regulation," do not have to make their accounting public to either the public or investors. This would eventually create problems.
     You should also understand that in the "old days," when you got a mortgage it was almost always through a local bank. The bank loaned out the depositors' money and charged the mortgager interest. The bank held the "paper" or deed to the property and took the risk. It then used the interest paid against the mortgage to pay the depositors interest on their savings and took a portion of it to run the bank and make a profit. It worked.
     But, nowadays, the bank is more likely to sell your mortgage and take the money it receives and loan it out, again. To whom is the mortgage sold? Often, it's Fannie or Freddie.
     Under the old arrangement the local bank was responsible and accountable and the type of meltdown we so recently witnessed could not have happened.

    

Seeds of the meltdown

     The seeds of the meltdown and bailout were planted with the Community Reinvestment Act (CRA) of 1977, passed into law under Jimmy Carter. The intent of the CRA was to ensure banks gave housing loans to low-income families. The Act wasn't just to encourage the banks, it actually created penalties with stiff fines for banks that didn't commit to making those loans, even if the bankers were convinced those loans were risky.
     On the heels of the Act's passing came activist groups, such as the Association of Community Organizers for Reform Now (ACORN) which began to ensure—and often bully—banks into making nontraditional loans. If banks didn't comply, the activists took them to court contending the loans were denied because of racist policies, not sound financial policies. The result was that banks, to avoid harassment and fines, began to lower credit standards—everywhere. They began granting mortgages to subprime borrowers.
     Then, in 1993, under Bill Clinton, Fannie and Freddie were directed to increase the number of subprime loans they were carrying. Though there was initially some resistance, legislation was passed by a Republican-controlled Congress so the loans were ultimately guaranteed by...are you ready...you and me, the taxpayers. With pressure from regulators and the guarantee the taxpayers would bail them out, Fannie and Freddie understandably gave in and bought even more of these mortgages.
     Finally, just months before Clinton left office, Fannie and Freddie were told they had to increase the number of subprime loans until they equalled half of what they carried in their portfolios. No prudent lender would have taken these risks, but Clinton felt Fannie and Freddie, both GSEs and both backed by the taxpayer, could "afford" to.
     By 2004, many lending institutions realized Fannie and Freddie would buy up these mortgages, so they too could afford to grant these risky loans and "sell" them, along with their risks, to Fannie and Freddie. Hey, it wasn't just legal, it was what the Congress and community activists wanted. In all fairness, although the problem originated with Democratic Party policies, when the Republicans had a chance to correct it...well, they weren't going to be the bad guys who turned off the mortgage spigot.
     In 2001, and now in control of both the Congress and the White House, many Republicans pretended that the CRA, Fannie, and Freddie were not problems just as the Democrats had done before them. Part of the reason seems to be that many Republicans, just as were many Democrats, were taking substantial campaign contributions from the two GSEs, and there was also the danger at that time that if you spoke out against the lending practices that today we know were unsound, you would be vilified by the press and castigated by community groups—accused of being anti-poor, racist, or both. It was better to lay low, ignore the problem, and hope it would go away. And if it didn't go away, you hoped at least you wouldn't get blamed.

Housing takes off

     The inevitable result of "easy" mortgages was that developers, conventional lending institutions, and borrowers started having a field day. Developers rushed to build, banks were eager to make loans to both the developers and home buyers, and high-risk borrowers were eager to get in on the "American Dream" of home ownership.
     Increased demand in housing made the cost of houses rise faster than ever and also created the illusion that the price of housing had nowhere to go but up and would continue no matter how fast it was rising—or how high it got.
     Remember I said banks used to hold your mortgage? It's different, today. Nowadays the institutions originating the loans don't have to keep them. Banks and other lending institutions were now more willing to grant mortgages when they could quickly get rid of them, along with their risks. This is where the CRA met Fannie and Freddie and disaster came looming.
     Buyers of the mortgages resold them. They bundled them together and each bundle is now called a mortgage backed security (MBS). Investment firms in turn bought these MBSs, pooled the mortgages from them, then "graded" and separated them into what are called "tranches." Tranche is just a French word meaning "slice." Some "slices" were the really good mortgages, owed by people you could expect to pay them off. Other slices were not so good and got a lower grade and so on down the line. The really good tranches paid very low returns because they carried the least risk. Lesser grades paid higher returns because they carried more risk. These graded tranches were called collateralized mortgage obligations, or CMOs, and they were sold as investments to pension plans, life insurance companies, investment firms, and others who bought them up because they're supposed to be safe investments and they were backed by you and me. And what did the financial institutions who sold these CMOs do with the funds they got from selling them? They used them to make loans for even more subprimes mortgages.
     This availability of more mortgage money, of course, drove housing prices even higher. It seemed like the perfect plan to make everyone rich and happy—as long as the housing market didn't tank. But now many pension plans, insurance companies, and other financial institutions that had invested heavily in the MBSs and CMOs began to depend on the worst part of the economy: the subprime borrowers—people with shaky credit and living in overpriced houses. If those people stopped paying their mortgages, the whole system was going to be in danger.

What caused the meltdown?

     And the price of housing was the proverbial fly in the ointment. From about 1980 until 2001, median housing costs had averaged between 2.9 and 3.1 times the median household income. By 2006 it had gone up to a high of 4.0 times the median household income. This meant that, in traditional markets, housing was now overpriced. Yet, people—borrowers, banks, Fannie, Freddie, and Congress—wanted to believe it still had nowhere to go but up. So, new housing starts, house refinancing, and the number of subprime loans all increased and demand made the "values" keep climbing. But like any other commodity, housing has no intrinsic value, i.e., you can only get for a product what another person is willing to pay, and new buyers began getting priced out of the market. Suddenly, buyers were in short supply. When that happens, prices drop—and they did. As a result, many homeowners suddenly discovered:

* they owed more on their mortgages than their houses were worth

* there was no equity in their houses, so they couldn't refinance

* many who had taken the mortgages or refinancing at "teaser" rates found they couldn't make their new, larger payments and, with their houses worth less than they paid for them, they couldn't refinance them to get a fixed rate, and they couldn't sell them without losing money.

     The net result was that, predictably, the housing bubble burst and people began to default on their mortgages.
     When too many people started defaulting on their mortgages—and mortgages were the very heart of these CMOs—no one any longer knew how much the CMOs were really worth. And because so many institutions, such as Lehman Brothers, Washington Mutual, and others including pension plans, insurance companies, had large investments in the CMOs, no one knew, anymore, what those institutions were worth. The result was that the stock values of the institutions began dropping. At the same time, no one wanted to give credit to those institutions because they had started looking like bad credit risks. In other words, those institutions were beginning to look like subprime borrowers themselves. It's that simple.
     Now, involved in this were also credit insurers who were supposed to cover the CMOs if they went bad. But credit insurance is like hurricane insurance. It's only viable if it's a payout here and a payout there. But, when there are too many claimants in a hurricane, the insurer can't pay off. And that's what happened in the credit industry. The number of borrowers defaulting were like a massive hurricane moving through the financial markets. The credit insurers went broke trying to cover the bad debts, and markets began to free-fall.

Could it have been prevented?

     Not everyone was blind to the dangers of subprime lending. As early as 2000 there were articles in financial publications such as the Wall Street Journal forecasting the dangers many saw on the horizon. And just a few years later the Republicans in the Senate sponsored the Federal Housing Enterprise Regulatory Reform Act of 2005 (S. 190), which would have capped the subprime holdings of Fannie and Freddie in an attempt to reduce those dangers. But it never made it to the Senate floor for a vote of the whole Senate because the Democratic minority found enough Republicans, at least some of whom were indebted to Fannie and Freddie, to block the vote. So it died and Freddie and Fannie went on with business as usual.
     Had the bill come to a vote, and had it passed, would it have saved us from this mess? Would blocking more subprime mortgages and forcing the government-controlled Fannie and Freddie to divest themselves of many of them so they weren't carrying the burden of so much bad debt have stopped the meltdown? There are many who believe it would have. Had Fannie and Freddie stopped buying up the subprime loans, the subprime market would have started drying up and fewer irresponsible loans would have been made. But we can't go back in time to find that out. However, it was one of the last best hopes.
     Then, in 2006, a similar bill to bring Fannie and Freddie under control was introduced but blocked by what was now a Democratic majority on the Committee. Perhaps their hearts were in the right place and the Democrats were not going to give up their dreams of affordable housing for the poor, no matter how unrealistic it was.
     In the meantime, from 2005 to 2007, Fannie and Freddie added over a trillion dollars in bad mortgages to their portfolios. But, come 2007, the housing bubble was beginning to pop and the entire Senate was coming around to the fact that the two GSEs were a problem. But it was too late. Come January 2008, four percent of the subprime mortgages were in default and the delinquency rate was rising every day. This meant the CMOs continued dropping in value and the institutions holding them were beginning to falter. The whole stock market began to falter. By September the Dow-Jones Industrial Average had plunged over 3,000 points and several of the largest investment firms that were holding the subprime debt in the form of securities, such as Lehman Brothers, went into bankruptcy while others, such as Washington Mutual, were gobbled up by competitors.
     This has been described as a failure of the free-market system and leaders from both parties, including John McCain and Barack Obama, made the charge that the meltdown came about because of corporate greed. Both refused to acknowledge that the seeds of the meltdown began in Washington, D.C., and, when measures could have been implemented that would have started undoing the bad government decision, members of Congress got in the way.
     Many congressmen have proclaimed the meltdown occurred because there wasn't enough oversight and that it was preventable—but they had fought against any changes for years.
     President Bush said recently, "The market is not functioning properly." Of course it wasn't; it was being regulated by people who were trying to force markets to do things no prudent man would or should do. The regulators allowed Fannie and Freddie to operate without opening up their books, twisted them for political ends, and forced them to make unsound fiscal moves. The one thing you will not see is the Democrats admit they screwed up. The one thing you won't hear the Republicans say is that they lost their courage when they had a chance to correct it.
     One of the problems, according to many market critics, is that the industry wasn't regulated enough. In truth it was regulated too much. It was manipulated by politicians. It was the push of politicians to make more risky mortgages available while allowing the two largest mortgage buyers, Fannie and Freddie, to keep their books closed to the public. The regulators were not only aware of the risky loans, they mandated them. And because Fannie and Freddie are backed by the government, they can and do take risks no private company can take and stay in business—or even escape the scrutiny of regulators. And take risks they did.

What's the bailout for?

The reason Washington said we need the bailout is to prevent the implosion of the credit markets and shore them up so there will still be a free flow of credit and stave off a full-blown depression.
     The politicians are using scare tactics and they keep harking back to the Great Depression, telling us that without the bailout we're going to see another depression that will rival that one. What they don't tell you is that starting with Hoover in 1929, and then accelerating under Roosevelt, the President who followed him, the U.S. Government tried to spend its way out of the Great Depression—and failed. We not only wound up with a depression that was the longest in American history, but in 1937 we got a depression within the Great Depression. All despite Washington's fixes.
     Many economists now feel that had Washington stayed out of it, not have tried to spend the country's way out, the markets would have self-corrected and what became an unfathomable depression would have been an economic downturn that would have lasted just a few years.
     This bailout is just another attempt to throw money at economic trouble, and the danger is that, like the Great Depression, the problem will go on, get worse and worse, and there will be more bailouts until we do have another depression.
     Quite frankly, we're hearing all this from the people who created the problem, and didn't see it coming, but who now know the "fix." Meanwhile, the free-market people had been warning us for years that what we have now was inevitable, but are members of Congress or Wall Street-types asking them for any input? No!
     The purpose of the free market is to let the consumer speak directly through his money. As a result, those who serve the free market get rewarded, while those who don't get punished.
     The bailout is not bailing out the American public; it's bailing out the people who caused this mess, including the politicians who had a hand in it. It isn't to save poor people with mortgages, but to save the investors who made bad choices and bought those mortgages. It is to save the stock holders who made bad investments. Half the actual bailout money goes to foreigners, most notably Arabs and the Chinese who made bad investments. But it will not make the bad mortgages good.
     The bailout is punishing those who have acted responsibly while rewarding those who didn't.
     We could have taken the bailout money and have paid off or paid down to manageable sizes all of the bad mortgages. But why should you and I, who pay our bills on time, have to do that? Why do we have to bail out Wall Street?
     Where's the money from the bailout coming from? Actually, there is no money. Congress and the Federal Reserve are simply "creating" the money. But that extra money dilutes the money in existence—inflation. If you don't understand that inflation is really another way of taxing us, you haven't been paying attention to how government works. You're paying for the bailout.
     So, what did the bailout accomplish? It pulled the butts of the creditors and investors out of the fire. In other words, people who had made bad loans and investments are the ones being saved, not the homeowners. It saves the money of foreign investors, mostly notably the Chinese and Arabs.
     What would have happened without the bailout? Banks would have failed. That is, they'd have gone bankrupt. The owners of the banks, the stockholders, would have had to sell off their assets. The banks would then have new owners. And those who owe on their mortgages would still have to either pay their mortgages or be foreclosed on. That is, from the borrower's point of view, nothing would have changed.
     In the meantime, housing prices would have dropped further and the irony is they would have become more affordable to the poor and to other people who previously could not afford them but had shown restraint.

Conclusion

     We don't yet know if the bailout is going to work. And it most likely won't. We don't even know if there are going to be more bailouts, though there are already stirrings in Washington that there will not only be more money needed for the subprime mess, but there's already talk abut bailing out the auto industry, student loans, credit card companies, various states, and who knows who else is asking to be "saved."
     But this bailout and and future bailouts are clear signals from Washington that it's okay to engage in risky economic behavior because you and I will pick up the tab when they fail. Those who get bailed out are always grateful, while those who pay for the bailout usually don't understand that they're the ones paying for it either directly through their taxes or by having their money eroded by inflation. And the politicians and bureaucrats are grateful for it because there are always strings attached to these bailouts and they aggrandize more power. This bailout is actually more socialization of the banking industry; future bailouts will be for the socialization of America, creating more centralized control of America from Washington.

My Upside Down Flag Made it to the KESQ 6 O’clock News, View the Pop Up Video, Then Use Your Browser’s "Back" Button to Return to This Page.