Never mind that Obama helped create the recession when the second-largest recipient of campaign funds from Fannie Mae and Freddie Mac behind Chris Dodd helped pressure banks through his association with ACORN. The banks then made the very kind of risky loans that caused the mortgage meltdown.

On the other side, Frum places Limbaugh, with "his private plane and his cigars, his history of drug dependency and his personal bulk, not to mention his tangled marital history."

The perfect and athletic Mr. Frum forgot to blame Rush for inciting the Oklahoma City bombing, as many others on the left did.

This is what passes for public discourse these days as the mainstream media see their readers and viewers flee.
Over at MSNBC, where viewership is at microscopic Air America levels, the tingly Matthews over the weekend described Limbaugh as "a human vat of vitriol." He then ran a clip from "You Only Live Twice," where a James Bond villain pushes a victim into a piranha tank. Subtle.

"Do you know what he does?" Matthews says to the Chicago Tribune's Clarence Page. "He defends capitalism." Horrors! Hide the children. To which Page responds that "ever since Reagan we've been on a trend of taxing lower-income people and giving breaks to the upper income."

Page et al. rewrite history into a lie agreed upon. The Reagan and Bush tax cuts went to those who pay taxes, to those who pull the wagon rather than those riding it.

They were not given anything. They were allowed to keep their own money. No wealth was redistributed or spread around unlike Obama's plan. The fact is that "ever since Reagan" the rich have borne an ever-increasing share of the tax burden while the poor have been removed entirely from the tax rolls.

A study for the National Center for Policy Analysis shows that from 1986 to 2004, the total share of the income tax burden paid by the top 1% of income earners grew by nearly half, from 25.8% to 36.9%. Over that same time, wrote study author Michael Stroup, an economist and associate dean of the Nelson Rusche College of Business at Stephen F. Austin State University in Texas, the burden of the bottom 50% of earners was almost halved from 6.5% to 3.3%.

The Tax Foundation has noted that in 2000, a year before the first tax cuts under Bush, roughly 30 million tax returns had no income tax liability. Every dollar those earners made they kept.

By 2004, a year after the second round of cuts was passed, 43 million returns had no tax. It estimates that, in all, more than 25 million Americans have been wiped off the federal tax rolls just by President Bush.

Yes, Rush wants Obama's socialism to fail just as liberals and Democrats wanted Bush's defense of capitalism and freedom to fail.

A Fox News/Opinion Dynamics poll of 900 registered voters taken Aug. 8-9, 2006, asked this question: Regardless of how you voted in the presidential election, would you say you want President Bush to succeed or not?" Fifty-one percent of Democrats said no, they did not want Bush to succeed.

Another Fox poll taken Jan. 16-17, 2007, asked respondents about the surge in Iraq: "Do you personally want the Iraq plan President Bush announced last week to succeed?" An astounding 34% said they did not want the surge to succeed. Among Democratic Party leaders the percentage was probably close to 100%.

If, as White House Chief of Staff Rahm Emanuel says, Rush Limbaugh "is the voice and the intellectual force and energy behind the Republican Party," it is only fair to ask: Who is his Democratic counterpart?

Our nominee is George Soros, the Hungarian billionaire and former Nazi sympathizer who helped fund MoveOn.org, the radical group that smeared Gen. David Petraeus with its "General Betray Us" ad last fall.

Through his Open Society Initiative and personal contributions Soros has funded many liberal causes and many Democratic candidates with the intent of undermining democracy and capitalism. His ultimate goal is to create a global socialist collective where we hand over our money and/or freedom and sing "Kumbaya."

For our part, we'll take Rush over Soros.

Rush believes in the Constitution and the First Amendment. He believes in freedom of religion and the freedom of speech. He believes in the Second Amendment and the right to bear arms to protect all our freedoms.

He believes in securing our borders and taking the war on terror to the enemy and winning. He believes that traditional marriage between a man and a woman is the bedrock of any stable society.

He believes that taxes should be low and are to fund the constitutional functions of government. He believes that government should work for us and not the other way around.

Rush does not believe, as Soros and the Democrats do, in open borders, confiscatory taxation, redistribution of wealth, a gutted military, appeasing despots or being forced under penalty of imprisonment to pay through our taxes other people's mortgages.

And, unlike George Soros and the Democrats, we will defend to the death his right to say it.

By INVESTOR'S BUSINESS DAILY
March 10, 200

http://www.ibdeditorials.com/IBDArticles.aspx?id=321575363666179

Comments are welcome at redstatepatriot@hughes.net. Please include the title of the article as your subject line. Selected responses, in whole or part, may be published (appended to the article).

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As the nearby chart shows, government payrolls have been on the upswing for decades, save for a brief downward blip during Ronald Reagan's first term. This is an indication that too many resources are being directed to the wrong place. For every additional worker employed by a government at some level, there is one fewer worker who can contribute to real economic growth.

Despite claims to the contrary, governments and their employees cannot force economies to grow by growing themselves. They are unable to create wealth. Instead, they seize wealth through taxes, depriving the private sector of the capital needed for growth, and regulate commerce often to the point of obstructing progress.

French economist Frederic Bastiat cleverly explained government's dead-weight impact on the economy when he noted that "the state is a great fiction by which everybody tries to live at the expense of everybody else."

Of course, a minimum number of employees is needed perform legitimate government functions. But no government worker builds a house, car or washing machine; designs innovative technologies that make businesses run more efficiently; starts a new company that puts people to work in productive jobs; turns raw materials into fuels that give us power, mobility and warmth; or creates entire industries that both benefit consumers and boost the economy.

Maybe the best way to explain how public-sector jobs drag down the economy is to consider whose welfare is increased when a private-sector job is filled and whose is diminished at the time a government position is filled.

When a private employer offers a job and the offer is accepted, the welfare of both the employer and employee is improved. The employer has a new worker who will make the company more productive and the worker has a job to meet his needs.

But when a government job is filled, a third party is involved, and the welfare of that party — the taxpayers who pay the public employee's salary — is harmed and the economy ultimately damaged.

It's hard to make a reasonable argument that the country needs 22 million public sector employees. With a total population of 304 million, that's one government worker for every 14 Americans.

The country's manufacturing and construction base is able to provide all the goods, homes and buildings we need and make a strong contribution to the economy — in other words, do more than the government — with just one worker for every 15 people.

If government workers and bureaucracy were indeed the engine of the growth, as some in Washington argue, then the Soviet Union would still be intact, East Germany would have a model economy and China would not be moving away from communism.

The best the government can do is take care of its limited duties and leave it to free enterprise to create wealth and add value to the economy. Economic expansion has always been the province of the private sector. It can work no other way.

INVESTOR'S BUSINESS DAILY
January 21, 2009

http://www.ibdeditorials.com/IBDArticles.aspx?id=317434650497778

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In Favor Of Slavery

I'm hoping that the average American would condemn such a government mandate because it would be a form of slavery, the forcible use of one person to serve the purposes of another.

Would there be the same condemnation if instead of the government forcing your neighbor to physically mow the widow's lawn, the government forced him to give the lady $40 of his weekly earnings? That way the widow could hire someone to mow her lawn.

I'd say that there is little difference between the mandates. While the mandate's mechanism differs, it is nonetheless the forcible use of one person to serve the purposes of another.

Probably most Americans would have a clearer conscience if all the neighbors were forced to put money in a government pot and a government agency would send the widow a weekly sum of $40 to hire someone to mow her lawn.

This mechanism makes the particular victim invisible, but it still boils down to one person being forcibly used to serve the purposes of another. Putting the money into a government pot makes palatable such acts that would otherwise be deemed morally offensive.

This is why socialism is evil. It employs evil means, coercion or taking the property of one person, to accomplish good ends, helping one's fellow man.

Helping one's fellow man in need, by reaching into one's own pockets, is a laudable and praiseworthy goal. Doing the same through coercion and reaching into another's pockets has no redeeming features and is worthy of condemnation.

Some people might contend that we are a democracy where the majority agrees to the forcible use of one person for the good of another. But does a majority consensus confer morality to an act that would otherwise be deemed immoral?

In other words, if a majority of the widow's neighbors voted to force one neighbor to mow her law, would that make it moral?

I don't believe any moral case can be made for the forcible use of one person to serve the purposes of another. But that conclusion is not nearly as important as the fact that so many of my fellow Americans give wide support to using people. I would like to think it is because they haven't considered that more than $2 trillion of the over $3 trillion federal budget represents Americans using one another.

Madison Rejected

Of course, they might consider it compensatory justice. For example, one American might think:

"Farmers get Congress to use me to serve the needs of some farmers. I'm going to get Congress to use someone else to serve my needs by subsidizing my child's college education."

The bottom line is that we've become a nation of thieves, a value rejected by our founders. James Madison, the father of our Constitution, was horrified when Congress appropriated $15,000 to help French refugees. He said, "I cannot undertake to lay my finger on that article of the Constitution which granted a right to Congress of expending, on objects of benevolence, the money of their constituents."

Tragically, today's Americans would run Madison out of town on a rail.

By WALTER E. WILLIAMS
November 19, 2008

http://www.ibdeditorials.com/IBDArticles.aspx?id=311982785694595

---------------
Response by BT:

In light of the present financial crisis, it's interesting to read what Thomas Jefferson said in 1802: 'I believe that banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around the banks will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered.'

---------------
Response by Len S.:

Good Walter Williams article on Red State Patriot. But even Williams does not go far enough. In our society now, when anyone is born, that individual immediately gains the potential right to a mortgage on your earnings and assets. Your government's elected officials arbitrarily determine the percentage of your earnings that will be confiscated for others' needs. And that instantly-created right to your earnings and assets is protected by agents of your government such as the IRS, with the power to destroy you. When an entity, which controls you completely, and determines arbitrarily how much of the product of your labor you are permitted to keep, and can destroy you at will, that condition is called slavery. Such taxation was once a rallying cry for those living here under another government's thumb. Those inhabitants of America then, who stood up to overwhelming power, are of no relation whatever to the Americans who live here today.

"Ubi Est Mea" - ( " Where's Mine? " ) ~ slogan of Americans in name only

---------------
Response by Marty D.:

See also the archived article on this website entitled "Slavery has Not been Abolished" (March, 2008)

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As Steve Milloy of junkscience.com points out, SUV popularity made a company such as Ford highly profitable and accounted for a 57-fold move in its stock price from 1982 to 1999. It was SUVs that helped the auto industry meet the United Auto Workers' demands for ever higher wages and benefits.

Yet the industry failed to recognize the connection between cheap gas and auto sales. Automakers pushed, not for more domestic drilling, but for more environmental regulation and conservation. At the 2004 New York auto show, for example, Ford CEO Bill Ford urged higher gas taxes to reduce fuel consumption. Huh? Doesn't that also increase the cost of driving?

Detroit and companies such as Ford did nothing to fuel their cars, but much to fuel the environmental hysteria that blocked offshore drilling, shale oil extraction and drilling in oil-rich ANWR.

Ford issued a report stating the company "views stabilization of greenhouse gases in the atmosphere and energy security as critical and business-related issues that warrant precautionary, prudent and early action."

How one achieves energy security without domestic oil production is anybody's guess. The Kyoto Protocol has been documented as an economy- and job-killing waste of time in a world that is cooling on its own. How is that a key business goal?

Gas is cheaper now, but money still flows overseas to unfriendly and unstable places and thugs like Venezuela's Hugo Chavez. Domestic production is still stifled. Energy and auto jobs are both in jeopardy in an economy starving for cheap and abundant domestic energy. The move to put corn in our cars has not helped auto sales.

Connecting the dots between energy and economic growth is Alaska's new senator, Democrat Mark Begich. At a news conference in Anchorage, of which he was the mayor, Begich announced he was "a supporter of drilling in ANWR." This may not seem surprising for an Alaskan politician, but it is surprising for a Democrat.

An environmentalist's nightmare: the truth - winter and summer

Begich, who succeeds long-term Republican incumbent and state icon Ted Stevens, told reporters: "For the last 28 years, there hasn't been a Democrat sitting in the caucus talking about ANWR. My goal is to educate them about how big ANWR is to this state."

And hopefully how important it and other domestic sources of energy are for this country.

"I'm definitely different from a New York Democrat — you can bet on that," Begich told the New York Times. He knows caribou and other critters have thrived despite drilling in Prudhoe Bay, 60 miles west of ANWR. Oil from ANWR could meet all New York's petroleum needs for 34 years, news that should be fit to print.

By INVESTOR'S BUSINESS DAILY
November 21, 2008 4:20 PM PT

http://www.ibdeditorials.com/IBDArticles.aspx?id=312162826617129

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It's the rest of the public that remains in the dark, which is why we're launching this special educational series.

"Economic justice" simply means punishing the successful and redistributing their wealth by government fiat. It's a euphemism for socialism. In the past, such rhetoric was just that — rhetoric. But Obama's positioning himself with alarming stealth to put that rhetoric into action on a scale not seen since the birth of the welfare state.

In his latest memoir he shares that he'd like to "recast" the welfare net that FDR and LBJ cast while rolling back what he derisively calls the "winner-take-all" market economy that Ronald Reagan reignited (with record gains in living standards for all).

Obama also talks about "restoring fairness to the economy," code for soaking the "rich" — a segment of society he fails to understand that includes mom-and-pop businesses filing individual tax returns.

It's clear from a close reading of his two books that he's a firm believer in class envy. He assumes the economy is a fixed pie, whereby the successful only get rich at the expense of the poor.

Following this discredited Marxist model, he believes government must step in and redistribute pieces of the pie. That requires massive transfers of wealth through government taxing and spending, a return to the entitlement days of old.

Of course, Obama is too smart to try to smuggle such hoary collectivist garbage through the front door. He's disguising the wealth transfers as "investments" — "to make America more competitive," he says, or "that give us a fighting chance," whatever that means.

Among his proposed "investments":

• "Universal," "guaranteed" health care.
• "Free" college tuition.
• "Universal national service" (a la Havana).
• "Universal 401(k)s" (in which the government would match contributions made by "low- and moderate-income families").
• "Free" job training (even for criminals).
• "Wage insurance" (to supplement dislocated union workers' old income levels).
• "Free" child care and "universal" preschool.
• More subsidized public housing.
• A fatter earned income tax credit for "working poor."
• And even a Global Poverty Act that amounts to a Marshall Plan for the Third World, first and foremost Africa.

His new New Deal also guarantees a "living wage," with a $10 minimum wage indexed to inflation; and "fair trade" and "fair labor practices," with breaks for "patriot employers" who cow-tow to unions, and sticks for "nonpatriot" companies that don't. That's just for starters — first-term stuff.

Obama doesn't stop with socialized health care. He wants to socialize your entire human resources department — from payrolls to pensions. His social-microengineering even extends to mandating all employers provide seven paid sick days per year to salary and hourly workers alike.

You can see why Obama was ranked, hands-down, the most liberal member of the Senate by the National Journal. Some, including colleague and presidential challenger John McCain, think he's the most liberal member in Congress.
But could he really be "more left," as McCain recently remarked, than self-described socialist Sen. Bernie Sanders (for whom Obama has openly campaigned, even making a special trip to Vermont to rally voters)? Obama's voting record, going back to his days in the Illinois statehouse, says yes. His career path — and those who guided it — leads to the same unsettling conclusion.

The seeds of his far-left ideology were planted in his formative years as a teenager in Hawaii — and they were far more radical than any biography or profile in the media has portrayed. A careful reading of Obama's first memoir, "Dreams From My Father," reveals that his childhood mentor up to age 18 — a man he cryptically refers to as "Frank" — was none other than the late communist Frank Marshall Davis, who fled Chicago after the FBI and Congress opened investigations into his "subversive," "un-American activities."

As Obama was preparing to head off to college, he sat at Davis' feet in his Waikiki bungalow for nightly bull sessions. Davis plied his impressionable guest with liberal doses of whiskey and advice, including: Never trust the white establishment. "They'll train you so good," he said, "you'll start believing what they tell you about equal opportunity and the American way and all that sh**."

After college, where he palled around with Marxist professors and took in socialist conferences "for inspiration," Obama followed in Davis' footsteps, becoming a "community organizer" in Chicago. His boss there was Gerald Kellman, whose identity Obama also tries to hide in his book. Turns out Kellman's a disciple of the late Saul "The Red" Alinsky, a hard-boiled Chicago socialist who wrote the "Rules for Radicals" and agitated for social revolution in America.

The Chicago-based Woods Fund provided Kellman with his original $25,000 to hire Obama. In turn, Obama would later serve on the Woods board with terrorist Bill Ayers of the Weather Underground. Ayers was one of Obama's early political supporters.

After three years agitating with marginal success for more welfare programs in South Side Chicago, Obama decided he would need to study law to "bring about real change" — on a large scale. While at Harvard Law School, he still found time to hone his organizing skills. For example, he spent eight days in Los Angeles taking a national training course taught by Alinsky's Industrial Areas Foundation. With his newly minted law degree, he returned to Chicago to reapply — as well as teach — Alinsky's "agitation" tactics.

(A video-streamed bio on Obama's Web site includes a photo of him teaching in a University of Chicago classroom. If you freeze the frame and look closely at the blackboard Obama is writing on, you can make out the words "Power Analysis" and "Relationships Built on Self Interest" — terms right out of Alinsky's rule book.)

Amid all this, Obama reunited with his late father's communist tribe in Kenya, the Luo, during trips to Africa. As a Nairobi bureaucrat, Barack Hussein Obama Sr., a Harvard-educated economist, grew to challenge the ruling pro-Western government for not being socialist enough. In an eight-page scholarly paper published in 1965, he argued for eliminating private farming and nationalizing businesses "owned by Asians and Europeans." His ideas for communist-style expropriation didn't stop there. He also proposed massive taxes on the rich to "redistribute our economic gains to the benefit of all."

"Theoretically, there is nothing that can stop the government from taxing 100% of income so long as the people get benefits from the government commensurate with their income which is taxed," Obama Sr. wrote. "I do not see why the government cannot tax those who have more and syphon some of these revenues into savings which can be utilized in investment for future development." Taxes and "investment" . . . the fruit truly does not fall far from the vine.

(Voters might also be interested to know that Obama, the supposed straight shooter, does not once mention his father's communist leanings in an entire book dedicated to his memory.)

In Kenya's recent civil unrest, Obama privately phoned the leader of the opposition Luo tribe, Raila Odinga, to voice his support. Odinga is so committed to communism he named his oldest son after Fidel Castro.

With his African identity sewn up, Obama returned to Chicago and fell under the spell of an Afrocentric pastor. It was a natural attraction. The Rev. Jeremiah Wright preaches a Marxist version of Christianity called "black liberation theology" and has supported the communists in Cuba, Nicaragua and elsewhere. Obama joined Wright's militant church, pledging allegiance to a system of "black values" that demonizes white "middle classness" and other mainstream pursuits. (Obama in his first book, published in 1995, calls such values "sensible." There's no mention of them in his new book.)

With the large church behind him, Obama decided to run for political office, where he could organize for "change" more effectively. "As an elected official," he said, "I could bring church and community leaders together easier than I could as a community organizer or lawyer." He could also exercise real, top-down power, the kind that grass-roots activists lack. Alinsky would be proud. Throughout his career, Obama has worked closely with a network of stone-cold socialists and full-blown communists striving for "economic justice." He's been traveling in an orbit of collectivism that runs from Nairobi to Honolulu, and on through Chicago to Washington.

Yet a recent AP poll found that only 6% of Americans would describe Obama as "liberal," let alone socialist. Public opinion polls usually reflect media opinion, and the media by and large have portrayed Obama as a moderate "outsider" (the No. 1 term survey respondents associate him with) who will bring a "breath of fresh air" to Washington.

The few who have drilled down on his radical roots have tended to downplay or pooh-pooh them. Even skeptics have failed to connect the dots for fear of being called the dreaded "r" word. But too much is at stake in this election to continue mincing words.

Both a historic banking crisis and 1970s-style stagflation loom over the economy. Democrats, who already control Congress, now threaten to filibuster-proof the Senate in what could be a watershed election for them — at both ends of Pennsylvania Avenue. A perfect storm of statism is forming, and our economic freedoms are at serious risk. Those who care less about looking politically correct than preserving the free-market individualism that's made this country great have to start calling things by their proper name to avert long-term disaster.

By INVESTOR'S BUSINESS DAILY
July 28, 2008

http://www.ibdeditorials.com/IBDArticles.aspx?id=302137342405551&kw=socialism

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In a 132-word videotaped pledge (still viewable on YouTube), Obama agreed to hollow out the military by slashing conventional and nuclear weapons. The scope of his planned defense cuts, combined with his angry tone, is breathtaking. He sounds as if the military is the enemy, not the bad guys it's fighting. Here's a transcript:

"I'm the only major candidate who opposed this war from the beginning; and as president, I will end it.

"Second, I will cut tens of billions of dollars in wasteful spending. I will cut investments in unproven missile defense systems. I will not weaponize space. I will slow our development of future combat systems.

"I will institute an independent defense priorities board to ensure that the Quadrennial (Defense) Review is not used to justify unnecessary defense spending.

"Third, I will set a goal for a world without nuclear weapons. To seek that goal, I will not develop nuclear weapons; I will seek a global ban on the production of fissile material; and I will negotiate with Russia to take our ICBMs off hair-trigger alert, and to achieve deep cuts in our nuclear arsenal."

Our ICBMs have been off "hair-trigger" alert for decades. But his threat to unilaterally hollow out our nuclear forces is chilling.

You can bet that Obama won't make this sweeping indictment of our security forces again as he tries to lurch to the center before the election. But this is what he thinks and plans to do. His plan, needless to say, is frighteningly irresponsible given the world threats.

And there are no signs his attitude has changed following Russia's invasion of Georgia and flexing of its military muscle off the coast of Venezuela. Or after al-Qaida's bombings this month of the U.S. embassy in Yemen and the Marriott in Islamabad, which killed some 60 people, including U.S. Defense Department and State Department officials.

In contrast, John McCain's mantra that the transcendent challenge of the 21st century is "radical Islamic extremism" is right on target. It's a phrase he's refused to back down from even as Muslim groups have convinced President Bush to stop using it.

Obama seems oblivious to the threat from Islamic extremism. During his 4,350-word acceptance speech in Denver, he couldn't summon enough spit even to utter the phrase a single time.

The gap between the two candidates in understanding the dangerous threats America faces around the world, particularly from Islamic extremism, is yawning.

Ret. Gen. Colin Powell, former chairman of the Joint Chiefs of Staff, says he's not going to vote for Obama "just because you're black." The critical issue, he recently averred, "is who is going to keep us safe." Who does that leave other than McCain-Palin?

By INVESTOR'S BUSINESS DAILY
September 22, 2008

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Until now, Congress has been surprisingly passive. As Sen. Majority Leader Harry Reid put it, "no one knows what to do" right now. Funny, since it was a Democrat-led Congress that helped cause the problems in the first place.

When House Speaker Nancy Pelosi recently barked "no" at reporters for daring to ask if Democrats deserved any blame for the meltdown, you saw denial in action. Pelosi and her followers would have you believe this all happened because of President Bush and his loyal Senate lapdog, John McCain. Or that big, bad predatory Wall Street banks deserve all the blame.

"The American people are not protected from the risk-taking and the greed of these financial institutions," Pelosi said recently, as she vowed congressional hearings.

Only one problem: It's untrue. Yes, banks did overleverage and take risks they shouldn't have. But the fact is, President Bush in 2003 tried desperately to stop Fannie Mae and Freddie Mac from metastasizing into the problem they have since become.

Here's the lead of a New York Times story on Sept. 11, 2003: "The Bush administration today recommended the most significant regulatory overhaul in the housing finance industry since the savings and loan crisis a decade ago."

Bush tried to act. Who stopped him? Congress, especially Democrats with their deep financial and patronage ties to the two government-sponsored enterprises, Fannie and Freddie.

"These two entities — Fannie Mae and Freddie Mac — are not facing any kind of financial crisis," said Rep. Barney Frank, then ranking Democrat on the Financial Services Committee. "The more people exaggerate these problems, the more pressure there is on these companies, the less we will see in terms of affordable housing."

It's pretty clear who was on the right side of that debate. As for presidential contender John McCain, just two years after Bush's plan, McCain also called for badly needed reforms to prevent a crisis like the one we're now in.

"If Congress does not act," McCain said in 2005, "American taxpayers will continue to be exposed to the enormous risk that Fannie Mae and Freddie Mac pose to the housing market, the overall financial system and the economy as a whole."

Sounds like McCain was spot on. But his warnings, too, were ignored by Congress. To hear today's Democrats, you'd think all this started in the last couple years. But the crisis began much earlier. The Carter-era Community Reinvestment Act forced banks to lend to uncreditworthy borrowers, mostly in minority areas.

Age-old standards of banking prudence got thrown out the window. In their place came harsh new regulations requiring banks not only to lend to uncreditworthy borrowers, but to do so on the basis of race. These well-intended rules were supercharged in the early 1990s by President Clinton. Despite warnings from GOP members of Congress in 1992, Clinton pushed extensive changes to the rules requiring lenders to make questionable loans. Lenders who refused would find themselves castigated publicly as racists. As noted this week in an IBD editorial, no fewer than four federal bank regulators scrutinized financial firms' books to make sure they were in compliance. Failure to comply meant your bank might not be allowed to expand lending, add new branches or merge with other companies. Banks were given a so-called "CRA rating" that graded how diverse their lending portfolio was. It was economic hardball.

"We have to use every means at our disposal to end discrimination and to end it as quickly as possible," Clinton's comptroller of the currency, Eugene Ludwig, told the Senate Banking Committee in 1993. And they meant it. In the name of diversity, banks began making huge numbers of loans that they previously would not have. They opened branches in poor areas to lift their CRA ratings.

Meanwhile, Congress gave Fannie and Freddie the go-ahead to finance it all by buying loans from banks, then repackaging and securitizing them for resale on the open market. That's how the contagion began. With those changes, the subprime market took off. From a mere $35 billion in loans in 1994, it soared to $1 trillion by 2008.

Wall Street eagerly sold the new mortgage-backed securities. Not only were they pooled investments, mixing good and bad, but they were backed with the implicit guarantee of government.

Fannie Mae and Freddie Mac grew to become monsters, accounting for nearly half of all U.S. mortgage loans. At the time of their bailouts this month, they held $5.4 trillion in loans on their books. About $1.4 trillion of those were subprime. As they grew, Fannie and Freddie grew heavily involved in "community development," giving money to local housing rights groups and "empowering" the groups, such as ACORN, for whom Barack Obama once worked in Chicago.

Warning signals were everywhere. Yet at every turn, Democrats in Congress halted attempts to stop the madness. It happened in 1992, again in 2000, in 2003 and in 2005. It may happen this year, too.

Since 1989, Fannie and Freddie have spent an estimated $140 million on lobbying Washington. They contributed millions to politicians, mostly Democrats, including Senator Chris Dodd (No. 1 recipient) and Barack Obama (No. 3 recipient, despite only three years in office).

The Clinton White House used Fannie and Freddie as a patronage job bank. Former executives and board members read like a who's who of the Clinton-era Democratic Party, including Franklin Raines, Jamie Gorelick, Jim Johnson and current Rep. Rahm Emanuel. Collectively, they and others made well more than $100 million from Fannie and Freddie, whose books were cooked Enron-style during the late 1990s and early 2000s to ensure executives got their massive bonuses.

They got the bonuses. You get the bill.

By Terry Jones
INVESTOR'S BUSINESS DAILY
September 18, 2008

http://www.ibdeditorials.com/IBDArticles.aspx?id=306632135350949

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It's a problem driven by domestic supply restrictions imposed by the Democratic Congress in the face of growing worldwide demand. The Democrats preach energy independence while they do everything in their power to prevent it. If the American people truly want change, this would be it.

A Gallup poll released in May showed that 57% of the American people wanted the U.S. to drill in coastal and wilderness areas. The percentage of Americans who bought Pelosi's line about price gouging fell from 34% in May 2007 to 20% in May 2008. It could be a winning issue for the Republicans and John McCain.

More than 15 billion barrels of oil have been sent down the Alaskan pipeline from Prudhoe Bay, some 60 miles to the west of ANWR, over the past three decades, much more than the six months' supply expected in the beginning by those who predicted a similar environmental disaster there.

The local caribou and other critters have thrived. Yet, Pelosi and the Democrats want to to keep ANWR's estimated 10.6 billion barrels of oil off the market and out of our gas tanks.

Buried in a Department of Interior Appropriations bill passed in December 2007 was an amendment proposed by Rep. Mark Udall, D-Colo., passed by a 219-215 vote in June, that prevented the establishment of regulations for leasing lands to drill for oil shale.

The Western U.S. is estimated to have reserves of a trillion barrels (yes, that's the real number) trapped in porous shale rock, an amount three times the oil reserves of Saudi Arabia. On May 15, 2008, the Senate Appropriations Committee in a 15-14 party line vote rejected an amendment by Sen. Wayne Allard, R-Colo., to allow oil shale drilling and overturn the Udall moratorium.

The U.S. Congress has voted consistently to keep 85% of America's offshore oil and gas off-limits, while China and Cuba drill 60 miles from Key West, Fla. The U.S. Minerals Management Service says that the restricted areas contain 86 billion barrels of oil and 420 trillion cubic feet of natural gas.

There are 3,200 oil rigs off the coast of Louisiana. During Katrina, not a single drop was spilled. More than 7 billion barrels have been pumped from these wells over the past quarter-century, yet only one thousandth of one percent has been spilled.

A study by Louisiana's Sea Grant college shows that there's 50 times more marine life around oil platforms that act as artificial reefs than in the surrounding mud bottoms. Some 85% of Louisiana fishing trips involve fishing around these offshore rigs.

The Flower Garden coral reefs lie off the Louisiana-Texas border. They are surrounded by oil platforms that have been pumping for 50 years.

According to federal biologist G.P. Schmahl, "The Flower Gardens are much healthier, more pristine than anything in the Florida Keys. It was a surprise to me. And I think it's a surprise to most people."

We would suggest that John McCain revisit his reservations about ANWR and run against the drill-nothing Congress. Energy development and the environment are not mutually exclusive.

In fact, we would suggest that the first joint town hall meeting with Barack Obama proposed by McCain be held on one of those offshore Louisiana rigs.

By INVESTOR'S BUSINESS DAILY
June 09, 2008 4:20 PM PT

http://www.ibdeditorials.com/IBDArticles.aspx?id=297904745555169

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