Henry Payne

“(This) is an exact description of the type of risk-taking that got us into this financial crisis and recession,” said Oregon Senator Jeff Merkley in a joint news conference with Michigan Senator Carl Levin this week jumping on a $2 billion loss by JP Morgan as evidence that banks caused the 2008 financial crisis and that they need even more federal regulation.

That’s rich.

Actually, Carl Levin and his fellow Washington meddlers caused the 2008 financial crisis with years of excessive intervention in the U.S. housing market. Their actions since then – echoed by a clueless mainstream media – have been to try and rewrite the history books even as their renewed attempts at regulation are only further deepening America’s economic crisis.

Yes, a ticking time bomb of recklessly-bundled, credit-challenged mortgage securities eventually went off, cratering the housing market and crippling the taxpayer-backed U.S. banking system. But those mortgages would not have been issued in the first place were it not for Levin’s relentless push to weaken mortgage lending standards by Freddie Mac and Fannie Mae.

The Community Reinvestment Act (CRA), a regulatory poison pill prescribed by Dr. Levin himself, is at the root of the 2008 financial collapse – and proof that less Washington, not more, is the key to a healthy American economy.

Using the CRA, say experts, Democrats and housing activists had long ago planted the seeds for the next decade’s housing debacle. “Both ACORN and the Clinton administration were working together to impose large numerical targets or ‘set asides’ (really a sort of poor and minority loan quota system) on Fannie and Freddie,”reported National Review’s Yuval Levin (no relation) in 2008. ” Eventually ACORN got what it wanted. In early 1994, the Clinton administration floated plans for committing $1 trillion in loans to low- and moderate-income home-buyers, which would amount to about half of Fannie Mae’s business by the end of the decade. Thissweeping debasement of credit standards was touted by Fannie Mae’s chairman, chief executive officer, and now prominent Obama adviser James A. Johnson. This is also the period when Fannie Mae ramped up its pilot programs and local partnerships with ACORN, all of which became precedents and models for the pattern of risky subprime mortgages at the root of today’s crisis.”

Republican critics of this reckless practice read the tea leaves of disaster and attempted to strengthen lending standards. Levin would have none of it.

“I rise to speak about the Community Reinvestment Act (that encourages) banks to serve the credit needs of the entire community including low and middle income areas.,” said Levin in 1999. “I oppose the provisions weakening the CRA.”

The rest is history as subprime lending institutions made bad loans under lax federal standards, pols like Levin basked in the warmth of increased American home ownership, the lenders quickly turned the bad loans over to Fannie and Freddie, who in turn handed them to the secondary mortgage market where they were bundled into financial instruments waiting to explode.

“ACORN used CRA and Democratic sympathizers (that’s Carl) to entangle Fannie and Freddie and the entire financial system in a disastrous disregard of the most basic financial standards,” concludes NR’s Levin.

And now Michigan’s senior senator has the gall to lecture JP Morgan on risky financial practices.

“The enormous loss J.P. Morgan announced today is just the latest evidence that what banks call ‘hedges’ are often risky bets that so-called ‘too big to fail’ banks have no business making,” asserted Levin on Thursday (“enormous” is an overstatement as $2 billion is a mere 0.1 percent of the bank’s assets). Levin is now pushing amendments to the Dodd-Frank financial regulation, regulation that Michigan businessmen tell me has dried up capital markets and is one of the key reasons the economic recovery has been so slow.

Wall Street Journal financial writer Holman Jenkins sneered at Levin’s presumption: “Uh huh. Banks that refrain from risk aren’t banks. And expecting regulators to distinguish good hedges from ‘risky bets,’ as (Levin’s new regulation) requires, is to expect regulators to be better bankers (for a lot less pay) than one of the best bankers, (JP Morgan’s) Dimon, has shown himself to be.”

Indeed, The Journal reported this weekend, the intention of JP Morgan’s (ultimately disastrous) hedging was aimed at making “bets aimed at shielding the bank from the market fallout of Europe’s deepening mess.”

And why is Europe in a mess? Because of massive debt created by excessive government spending and unsustainable public sector union pension liabilities. And who is planting the seeds for similar future debt implosion in the U.S.?

Yes, Senator Carl Levin and his fellow Democrats.

America may be startled at the intensity of coverage of President Obama’s gay marriage vows. It is an issue, after all, which has hardly been on the front burner of policy – and seems a diversion from the massive economic issues facing the nation. Indeed, the pressing family issue in this country is the lack of it in places like Detroit. The city’s 80 percent black illegitimacy rate drives every inner city pathology – from school dropouts to adult illiteracy to crime.

But the media ignores the black family crisis (a crisis of class that also wreaks havoc on my home state of West Virginia) – a crisis ignited by government welfare programs. To admit the crisis would be to admit the failure of liberal welfare. And so the MSM prefers to knock the conservative War on Gay Marriage. It is a perennial issue in America’s liberal newsrooms on par with racial preferences and abortion rights.

It is also an issue I happen to agree with. I’m not convinced government sanctioning only heterosexual marriage is important. I default to choice.

There was a collective cheer in American newsrooms Wednesday as the media ssees the president’s advocacy as the culmination of years of press advocacy. But that begs the question: Why didn’t the media cheer when former Veep Dick Cheney took the exact same position in 2009?

“People ought to be free to enter into any kind of union they wish, any kind of arrangement they wish,” said Cheney who has a lesbian daughter.

Part of the answer, obviously, is that Cheney was an ex-veep by then. And his boss, President Bush, had never touched the issue while in office (though Cheney was also outspoken while in office against the federal Defense of Marriage Act).

But the bigger reason is simple partisanship. Party always trumps principle. Just as “liberal” newsies have thrown the Catholic Church under the bus on Obama’s contraception mandate – a clear violation of the First Amendment – they hated Darth Vader too much to acknowledge his progressive views.

Better to trumpet the words of their man Barack Obama – even if it took him three years to finally catch up with Dick Cheney.

Who is Richard Mourdock?

He is the bold Indiana state treasurer who brought suit against Chrysler in 2009 to try and protect state teacher and firefighter pensioners from the Obama Auto Task Force’s illegal grab of their investments to benefit the UAW. Mourdock’s ultimately futile suit was the last line of defense against a thuggish White House that had threatened New York bondholders into taking the White House’s ruthless, 29-cents-on-the-dollar deal to benefit its labor cronies.

But you wouldn’t know that from Wednesday’s MSM coverage of tea party favorite Mourdock’s upset win over Senate fixture Richard Lugar. The New York Times, for example, only mentions Mourdock’s Chrysler fight in the 16th graph of a sidebar story – headline “Many Pursuits, but Bipartisanship Isn’t One of Them.” As that loaded headline suggests, the Times’ coverage is decidedly anti-Mourdock (the story doesn’t even mention Mourdock’s flesh-and-blood plaintiffs ” dismissing them as “state funds”).

If the establishment press lived its credo of watching out for the little guy, then Mourdock’s David-like defense of pensioners in the face of the Goliath-like armies of Big Labor, Big Auto, and Big Government should have made him a national hero. Instead, his is but a footnote in Washington’s troubling Chapter 363 bankruptcies that stripped first-in-line secured credit holders of their rights to favor politically-favored Big Labor. An accurate portrait of Mourdock would clash with the MSM’s caricature of conservative upstarts as tea party extremists.

“As fiduciaries, we can’t allow our retired police officers and teachers to be ripped off by the federal government,” said Mourdock in U.S. district court on May 26, 2009. “The Indiana state funds suffered losses when the Obama administration overturned more than 100 years of established law by redefining ‘secured creditors’ to mean something less.”

“It’s improper, because creditors are not getting the legal procedure allowed to them by Congress,” UCLA Law Professor Lynn LoPucki told CFO magazine in June, 2009.

But Mourdock’s fight was a footnote in the MSM in 2009. Its coverage of White House kneecapping of New York investors? Non-existent. They were inconvenient speed bump in Obama Washington’s rush to save the UAW.

In his campaign against Lugar, Mourdock once again played David against a six-term incumbent Goliath. But The Times sniffs at the underdog for dislodging “a collegial moderate who personified a gentler political era.” Presumably a pre-tea party era when pols collegially ignored sky-rocketing debt and the trampling of the rule of law.

Now the electoral beast has been awakened. By the UAW bailouts. By trillion-dollar deficits. By Obamacare and the fear that America is following Europe over a debt cliff.

Does he regret sanding up for Indiana pensioners in 2009, the Times demands at the end of its article? “Absolutely not, replies Mourdock. “The law matters. And the fact was out retirees and teachers had their property stolen.”

Those crazy conservatives. They care about such things.

America, meet Michigan.

Mitt Romney paid a visit to Governor Rick Snyder’s state Tuesday to — as local CBS Radio put it — defy the “popular wisdom” that Michigan is lost. In fact, Romney would do well to visit Michigan more often. Michigan is America. Failed governor Jennifer Granholm was Barack Obama. New governor Snyder is Mitt Romney. And Michigan’s resurgence under former Gateway Computer Corporation CEO Snyder and his Republican legislature is dramatic evidence of how a businessman can return fiscal sanity to a government run off the rails.

“I believe we are a role model,” said Snyder as he introduced Romney in the state capital of Lansing. “It wasn’t four or five years for us — we had a decade of tough times. It’s about ‘Relentless Positive Action.’ We are the comeback state in the U.S.A. Do what we have done — fix your tax system, fix your regulatory system.”

Indeed, a simple change in leadership has brought dramatic change to Michigan. Granholm’s assive tax breaks for politically connected corporations from Big Green to Big Hollywood have given way to a broad-based, simplified, flat tax system. Businessman Snyder often rankles movement conservatives by shying from partisan battles and adopting corporate language instead of Smithian principles to justify his fiscal policies. But in a state wrecked by eight years of Obama-esque mismanagement, his focus on the fundamentals has been refreshing.

He has brought balance to a once-chaotic budget process and has tackled the state’s long-term liabilities head on after years of neglect from Granholm — an attractive, Harvard-trained, Democratic ideologue with no management experience.

Sound familiar? Obama meet Granholm. America meet Michigan.

Romney echoed Snyder’s themes in his speech. “I am increasingly optimistic about our future,” said Romney, doing his own version of Snyder’s signature ‘Relentless Positive Action,’ miles from the divisive rhetoric that has become Obama’s trademark. “Businesses will spring up across the country by instituting pro-growth regulations, pro-growth taxes, pro-growth intellectual property protections, and pro-growth labor policies.”

From Obama to Romney. From Granholm to Snyder. It’s working in Michigan.

“This is unacceptable,” Attorney General Eric Holder said of the bloodbath that is killing two black men a week in Detroit. Obama’s top cop told the NAACP’s annual dinner in Detroit Sunday night that the statistics were “shocking” and his administration is directing “unprecedented” resources to reducing young people’s exposure to violence.

Please, Mr. Holder, stop helping us.

Federal policies from public housing projects to welfare payments paying for children out of wedlock have set the table for today’s urban violence – violence bred by 80 percent birth illegitimacy rates that leave young males growing up fatherless, uneducated, and poor.

Indeed, as Holder spoke, The Detroit News told the tale of The Martin Luther King Apartments near downtown Detroit – a sprawling, federally-subsidized, 481-unit, low-income housing compound that’s been taken over by drug dealers and other criminals.

“We’re the forgotten people of Detroit,” MLK resident Sharonda Hawkins – a gun strapped to her belt – told The News. Her husband was gunned down there last year – a nameless statistic among in the hundreds of Detroiters murdered every year even as the city’s establishment trumpets each downtown restaurant opening as evidence the city is “coming back.”

While not as violent as infamous public projects like now-defunct Cabrini Green in Chicago, MLK-like apartments have also become federally-funded breeding grounds for violence, says Bill Johnson, a Michigan View columnist and veteran Detroit writer. Such complexes, explain Johnson, house concentrations of welfare moms and their children who are preyed on by drug dealers as both clients and drug couriers. Like the giant Cabrinis of old, such compounds are easily controlled by territorial gangs.

Such single families are the result of decades of federal welfare programs – expanded under President Obama – that have displaced the father in the home. Single parenthood, the Heritage Foundation’s Robert Rector writes, is a leading cause of poverty – and fuels every young male dysfunction, from school dropouts, to adult illiteracy, to criminal behavior.

Yet, incredibly, the Obama administration has just produced an ad celebrating single parenthood in the form of Julia - a mother who is dependent on cradle-to-grave government handouts. In this Obama campaign vision of the American family, a male never enters Julia’s – or her son Zachary’s – life. In this fairy tale, Julia starts a government-funded “web business.”

In urban reality, the odds are the Julia and Zach wind up in MLK apartments, terrorized by drug lords, her son a potential victim (over 100 Detroiters have been killed this year already) or recruit (60 percent of inner city black high school dropouts will spend time in prison).

Faced with these truths, Holder seemed to be speaking from another planet Sunday. “Across the administration, we’re working in a range of other innovative ways to achieve fairness and expand opportunity ” from successfully advocating for the reduction of the unfair and unjust 100-to-1 sentencing disparity between crack and powder cocaine offenses – to launching a new, Department-wide Diversity Management Initiative,” Holder said. And this will stem the violence how?

Maybe next time AG Holder comes to Detroit, he’ll get out more.