E!!

…because I will now praise Nevada Congresswoman Dina Titus for statements she made today in a Budget Committee meeting on The Hill:

“…I remain concerned about President Obama’s proposal to reduce the itemized deduction rate for families with incomes over $250,000.  I am particularly concerned with the impact this provision could have on housing and charitable giving.
 
“The Mortgage Interest Deduction (MID) is an important incentive that encourages Americans all over the country to buy homes.  Many consider the MID to be the single most important tax incentive facilitating home ownership in the United States.  I am concerned that reducing the value of this incentive would lead to the further deterioration of the housing market.  It has become evident over the past few years that the housing market is tied closely to the national economy as a whole.  With the economy in its current state, we simply cannot afford to make changes to the tax code that could lead to a further decline in home prices.  The housing market in Congressional District Three in Nevada – previously one of the fastest growing markets in the nation – is currently in shambles.  Today, nearly 58.2 percent of Las Vegas homes have negative equity.  We can’t afford to let prices drop any further by making it less attractive to buy a home.
 
“I am similarly concerned about the impact the proposal to reduce the itemized deduction rate could have on charitable giving.  The tax deduction for charitable giving encourages Americans to make contributions to philanthropic organizations, many of which have been hard hit by the economic crisis.  With so many people in need, the services many charities provide are in high demand.  I believe that it is the wrong time to make changes to the tax code that could make charitable contributions less attractive.”

Forthwith, let it not be said that I am unwilling to acknowledge sanity when it occasionally visits itself upon Congresswoman Titus.

I was recently encouraged, by the executives of an organization that shall go unnamed so I can keep my day job, to write a letter to my Congressman touting the benefits of the Fix Housing First Proposal.

Here’s my letter.

Dear Congressman (or woman)(or Dina Titus):

Rumor has it that you are considering additional action in re: to the housing market. As I understand it, the Fix Housing First proposal consists of the following:

1. The federal government will offer a gi-normous and historically unprecedented supercalifrajalistic tax credit to anyone buying a house in 2009, and anyone who took last year’s lesser tax credit or bought their house prior that can bite the proverbial Big One because they aren’t getting doodleley squat. In essence, those retards who had the poor sense to purchase a domicile before you and your Wall Street pals f***cked the economy into a coma are SOL: too bad, so sad, cry me a Hudson River, etc.

2. In addition – and again, this is only for those bless’d and priveleged few who choose to buy homes in 2009 – the federal government will guarantee a super-sweet taxpayer-subsidized loan at a low, Low market rate of 2.99 or 3.99. Those who were short-sighted enough to finance their homes at 5, 6, or 7% – what a bunch of losers!! – will just have to continue at those rates and hope that sometime in this millenium, they or their unfortunate descendants can break even…or at least not have to file bankruptcy and sell special personal favors out behind the local WalMart.

Naturally, as someone who enjoys being regularly screwed over by my elected officials, I support the Fix Housing First proposal. In addition to priveleging a few citizens over the vast majority and attempting to artificially stimulate an entire industry with the taxpayer dollars OF that majority, it will effectively grind into dust my last vestiges of faith in fairness, equity, and the American Way.

I now realize that virtues such as these are for fools and idealists, and I thank you for freeing me from the naïve weltanschauung that has enslaved me for the better part of my life. Now instead of wasting my time aspiring to liberty and justice for all – what crack-smoking maniac thought up THAT ridiculous concept? – I can now embark on a life filled with bitterness, vitriol and rage and go to my grave cursing both man and God, as is only befitting of an enlightened person of the twenty-first century.

Congratulations on your confirmation into Congress.

Sincerely,

Citizen Sue

With the takeover of AIG, the federal government has wangled its fourth major bailout and taken control of its very first insurance company.  

Both McCain and Obama have called the bailouts of AIG, Fannie Mae, Freddie Mac, and Bear Stearns “necessary measures.” McCain blames greedy Wall Street tycoons while Obama blames failed GOP policies.
 
Most sensible folks agree that the government’s implicit guarantee to Fannie Mae and Freddie Mac were a license to lenders to run rampant.  Fannie and Freddie were able to buy bundles of home mortgages and/or mortgage-backed securities in massive quantities without contemplation of the financial risks.

  
Some economists blame the regulators/regulations.  I disagree.  The financial industry is heavily regulated.  It was the government’s guarantee of Fannie and Freddie that emboldened lenders to put together dicey loans and encouraged undisciplined financial endeavors.

Government policy laid the foundation of the mortgage crisis more than three decades ago when Congress passed the Community Reinvestment Act of 1977. The law forced banks to loan money to low-income borrowers in order to meet the “needs” of the local community.

No worries, though.  The banks knew they could sell off those loans to Fannie or Freddie, and F & F knew they could buy those loans with little regard for the risk.

I’m reminded of the past weekend here in Las Vegas when a few enthusiastic friends (first time visitors) went out and hit the blackjack tables. 

A young man playing two hands was dealt four sevens.  A friend advised him to split and play four hands.  Pondering the risks, he hesitated – but the helpful friend offered to cover his losses and let him keep all the chips if he won. 

What do you suppose that young man did?

He behaved as anyone would:  he played all four sevens.  And, unfortunately, lost on all.

So it goes on the tables of Sin City.  So too, in Congressional corridors and bank board rooms. 

The Hill is reporting that the Senate just passed the 2008 Fannie & Freddie Prop Up bill (72-13).  The monster housing bill will now go to the White House for W’s Johnny Hancock.  For what it’s worth, all 13 ’no’ votes were GOP-ers.  Senator DeMint (R-SC) had delayed the bill over objections to F & F lobby rights, but in the end the R’s struck a deal with the Dems and passed it.  

The bill will allow re-fi’s of up to $300 billion in distressed mortgages, give tax breaks galore in order to help the market, tighten future oversight of F & F – and (this is the real kicker) give the Treasury temporary authority to approve an unlimited line of credit for F & F.  Now isn’t that sweet?!  We, the taxpayers, are going to foot the bill for a bottomless pile of cash for two government-sponsored enterprises being run by people of questionable judgment.

If you wish to see this in a positive light, just read the first paragraph of today’s Washington Post story which says, “In a rare weekend session, the Senate today ended months of legislative wrangling and gave final approval to a sprawling housing bill that seeks to halt the steepest slide in home prices in a generation, rescue hundreds of thousands of families from foreclosure and restore confidence in the nation’s largest mortgage finance firms.”

(GAG!!)

Why-oh-why is it the job of Congress to interfere with the natural forces of the market, rescue people from foreclosure because they financed over-priced houses with adjusable-rate mortgages they now cannot afford, and restore confidence in two companies that probably deserve to fail due to poor management?  Where in the Constitution does it say that the State is responsible for protecting its citizens from the natural consequences of their own poor judgment?!!

The Nanny State gets fatter while our dependence upon her grows…

In an unexpected move this week, Nevada Republican Senator John Ensign single-handedly delayed a vote on the Housing Stimulus Bill.  His motive?  Many are saying Ensign’s demand that a renewable-energy tax credit amendment be piggybacked onto the housing bill is sheer stubbornness over a pet project. But at least one housing industry insider has a different take, and his answer may surprise you.

As reported by Reuters, Democratic Illinois Senator Richard Durbin said the Housing bill was being hindered because of Senator Ensign’s “insistence on an unrelated amendment.”  The bill’s chief architect, Connecticut Democratic Sen. Chris Dodd of the recent Doddy-wide VIP Mortgage Scandal, said, “one United States senator has decided we shouldn’t do anything but HIS bill.”  Senate Majority Leader Reid was displeased with the delay and applied pressure by threatening to extend the Senate session into the weekend. 

Lobbyists for the Housing Bill chimed in as well.  Yesterday afternoon, I spoke to Ken Gear, Vice President of Government Affairs for Pulte Homes, Inc., one of the nation’s largest home builders.  Mr. Gear said, “This bill is too important for the country to be playing politics with.  The market continues to deteriorate and the Senate needs to work in a bipartisan fashion to get it done immediately.”

When asked whether he was accusing Senator Ensign of delaying the housing bill for political reasons and what those reasons might be, Mr. Gear declined to elaborate.  I spoke to another high-level industry insider who was willing to say more if I would agree to withhold his name:

“This isn’t about housing.  Ensign’s play to attach an energy efficiency tax credit amendment to the bill is purely political because the tax credit is going to cost $8 billion to implement but is not “paid for.”  The House has said it won’t pass any bill that doesn’t specify where the money will come from, and Ensign’s amendment doesn’t include this, so the Democratic leadership knows the bill won’t pass.  

Ensign knows this, too, but he’s trying to score political points by forcing the Democrats to vote against an energy efficiency bill in an election year in which energy policy is going to be a huge issue.”

Stand by for Part Two of Our Series: “Method or Madness: John Ensign Stalls Housing Bill Over Energy Amendment”