The Road to Perdition

As Shakespeare wrote in King Lear, “the road to perdition (hell, destruction) is paved with good intentions.”  While this is universally accepted for its obvious wisdom, its point is continually ignored.  One of the latest violations of this message may be the federal government’s attempt to increase home ownership in the US.  What could be wrong with that?  Who doesn’t want every American to own their own home?  This desire certainly qualifies as a good intention.

The hard way to accomplish this goal is to slowly improve the financial circumstances of millions of Americans so that they can actually afford to buy new homes.  The easy way is for the government to mandate banks to make home loans to people who can’t afford to pay those loans back.  As you might expect, the government took the easy way out in 1977 when they first passed the Community Reinvestment Act, which pushed banks to make loans in low to moderate income neighborhoods.  This led to a mini housing bubble in 1977 and 1978 when over 800,000 new homes were sold in America.

For perspective, from 1963 through 1995 the country produced a steady supply of new homes that averaged 603,000 new homes each year.  Over that 33-year history, new home production only exceeded that average by 20% three times, and two of those years were in ’77 and ’78. This artificial stimulation felt great, of course, because every new home employs three people for a year and brings in $90,000 in taxes to the treasury.  However, with every manufactured bubble comes the inevitable bust, and this mini bubble burst in 1981 and ’82 when the country’s new home production slumped to just over 400,000 per year.  This lost production resulted in over a million lost jobs from the bubble’s peak and certainly contributed to the recession of 1981-82.  But, did the government learn its lesson?  Of course not!

In fact, in 1994 and 1995 the government doubled down.  In 1994 Congress set out to rewrite and strengthen the Community Reinvestment Act, which was eventually passed in ’95 and was fortified by the Housing and Urban Development’s (HUD) national homeowner strategy.  These two moves lead to an explosion of new home sales and for the next 12 years we would surpass the 603,000 home average by more than 20% every year. In fact, between 2003 and 2006 we built over a million homes each year and actually doubled that average in 2004 and 2005 as we built over 1.2 million homes each year.  Remember, we only exceeded that level of production three times in the 32 years between 1963 and 1995. 

And, after 12 years of overheating, no amount of governmental rationalization could have prevented the unavoidable correction.  Franklin Raines (Fannie Mae CEO) guaranteed us that, “home prices are only going to go up.”  Barney Frank assured us to the bitter end that nothing was wrong with this policy or with Fannie Mae or Freddie Mac, the main vehicles of the policy, but the housing bust came.  It came just the same.

For the last four years, including 2011, we have averaged only 375,000 new homes per year and in the last two years we will average an anemic 320,000 homes.  That is 960,000 fewer homes from our peak in 2005.  Remember, each of these homes used to employ three people for a year and deliver $90,000 in taxes to the treasury.  That’s is a loss of almost three million jobs from the peak and over $86 billion in lost revenue to the federal government each year.  THAT is why many people, including me, believe that this manipulated housing bubble and bust is at the epicenter of our overall economic problems.  The road to destruction is paved with good intentions.

The moral of the story is - the federal government needs to get out of the fairy godmother business.  Beware of politicians who promise to eliminate suffering and poverty for all.  While their intentions may even be good, the unintended consequences of their programs will cause more pain than they relieve.  We need to think hard before we try to change our unalienable rights to Life, Liberty, the pursuit of Happiness, Health Care, a house to live in, a free College education, a guaranteed income, two cars in every garage and a chicken in every pot.  The country can’t afford these kinds of good intentions.  We need to go back to the original intent for the role of our government; to enable freedom of choice and demand our citizens take personal responsibility for those choices.

Size of Government & Abuse of Catholics

I’ve often discussed (OK, argued) about what the government does well.  Some people would suggest that defense is what government does best, and I would have to give some support to that argument.  Our military is the best in the world.  Some would contend that delivering justice through our judicial system is what government does best.  You will get a little more push back from me on that assertion, but we’re better than most in that area.  Some would suggest that government does nothing well, and you would get strong support for that idea these days, but I would propose that there is undoubtedly one thing government does very well, and that is – Grow.

It’s always done to provide something free to some Americans somewhere, but with that growth comes intrusion and with that encroachment comes loss of liberty.  The best way to measure this intrusion is to measure government spending as a percent of gross domestic product or GDP.  GDP is the total dollar value of all goods and services produced over a specific time period - you can think of it as the size of our economy.  When you compare our spending to our GDP you are including all inflation and population growth, so that you get a real sense of the size or involvement of government (intrusion) into our lives. 

In 1903 the federal government spent just over 2% of the country’s GDP.  For the last two years, that figure has been very close to 25%, and there has been very little shrinking of government during that 108-year period.  Under the Clinton administration government shrank from 22% to 18% of GDP and balanced the budget.  This is a hint for those who wonder what the right size of government should be.  Most growth has come from explosive increases.  Under FDR, the government grew from around 6% of GDP to about 11% just before World War II.  Under Harry Truman government went from a post war size of just over 13% to 21% by the end of his term.  It stayed close to that level for the next 55 years, but now, under the Obama administration it has made another surge.

What is driving this surge is involvement.  Whether that involvement is for bailouts or subsidies for wind and solar energy, it is still involvement, and the next big intrusion is about to come in the form of ObamaCare.  As Nancy Pelosi famously said, “We need to pass the bill so that we can find out what is in it.”  Well, we are beginning to find out what is in it, and many Americans are not very happy about it.  Ask the Catholics right now.

The government is now telling the Catholic Church that they must provide contraceptives, morning after abortion pills and sterilization procedures whether their conscience will allow it or not.  Whether 98% of Catholic women use contraceptives or not is irrelevant.  The government cannot tell any religion what their beliefs should be.  And don’t give me the argument that it is about access.  There is no problem with women accessing birth control pills.  How do you think all those Catholic women get them?  That is also irrelevant.  The Catholic Church has been providing a tremendous service to our country for hundreds of years.  They have been able to supply that service within the dictates of their conscience, but now our secular government demands that the church must think like it or be eliminated.  Doesn’t this violate our country’s most fundament beliefs of freedom of religion?

The bigger point here is that we all need to be very careful about how big and intrusive the government gets.  Not only is big government expensive, which either means higher taxes or more debt, but it can force you to spend your hard earned money on things that you would never, ever support on your own.  And it doesn’t matter if you are conservative or liberal.  The government subsidizes everything from big oil to Solyndra.  It gives money to everything from Planned Parenthood to the arts.  The point is, if you think you didn’t pay for opera tickets last year.  Think again.  If you think you would never give money to any organization that provides abortions.  Think again.

The United States was built on the concept of individual liberty and personal responsibility, and the concept of limited government.  So if you don’t want the government to tell you what your children can eat in their school cafeterias or what light bulb you can use in your own homes then we need to limit its size.  Oh wait, they already do that.  

Komen Kafuffle

What could be less political than the fight against breast cancer?  Cancer is apolitical and indiscriminant in its impact on our society.  No one would dare suggest that Cancer affects conservatives more than liberals or vice versa, yet the Susan G. Komen Foundation just got caught in the cross hairs of the political right and left and may have been severely damaged in the process.  Welcome to the new definition of freedom of choice.  You can only have it as long as you agree with Nancy Pelosi.

Before we even get into the decision, which led to a reversal, let’s talk about what the Susan G. Komen Foundation does.  First, it is the largest source of non-profit funding in the world compiled to stop the spread of cancer, particularly in women.  They have donated over $1.9 billion dollars to the prevention of cancer since their inception in 1982.  They have been a big part of increasing the 5-year survival rate driven by early detection from 74% in 1982 to 98% today, and there are 2.5 million cancer survivors in the US to attest to those facts.  Who could find fault with an organization like this?

Nancy Brinker, the founder and CEO of the Foundation, works at this cause with a pure heart driven by a personal connection to the ravages of cancer.  The Foundation is named after Brinker’s sister who died from cancer at age 36 in 1982.  Since that time she has been working to do “everything possible to end the shame, pain, fear and hopelessness caused by this disease” as a fulfillment of a promise she made to her dying sister.  Who does not admire this woman who has dedicated her life to help others in the name of her sister?

As part of that effort Nancy Brinker has raised the $1.9 billion dollars mentioned above and then must decide how to best invest that money to achieve her goal.  If you go to their site, you will find hundreds of organizations and doctors that they partner with especially in the area of research and early detection.  Since they do have a finite amount of money, I’m sure there are grant requests that they have to turn down so I’m confident that they are continually reviewing their partnerships to insure that they are investing dollars appropriately and for the best results, which is the elimination of cancer.  Along comes Planned Parenthood. 

As you might guess, Planned Parenthood has been an often-questioned partner by Komen supporters as is indicated by their site.  They do terminate over 300,000 pregnancies a year and at least half of those are on female babies.  Planned Parenthood delivers breast examinations but does not actually provide mammograms, which Komen believes is the most effective early detection treatment.  Many people who support the women’s health services supplied by Planned Parenthood still resist giving funding because it is difficult to see how those funds don’t also enable them to provide abortions, which they may not favor.  Finally, there is some question as to whether abortion actually increases the risk of breast cancer in women.  While experts will disagree, Dr. Rachel Wellner, Director of Breast Services NYEE, probably puts in most fairly when she says that, “the possibility of a link may exist.”

The Komen Foundation might decide to move away from a partnership with Planned Parenthood for any of these reasons.  That money would not be thrown away or spent on extravagant parties, but would just be reinvested with another partner who shares the goal of eliminating cancer.  Who they partner with is their business and I personally think that they have earned the right to make that choice on their own over the last 30 years.

But when that relationship was threatened to be severed last week, the liberal left accused them of yielding to political pressure from the right and proceeded to apply an orchestrated political pressure of their own.  Is that not the height of hypocrisy?  Unfortunately, Nancy Brinker and the Komen Foundation gave in to the pressure, even after receiving pledges of support by people who favored the decision.

The bottom line is that Nancy Pelosi and her underlings perpetrated a huge injustice on women everywhere last week.  She attacked an organization primarily run by women and that fights for women’s health because it didn’t march to her specific tune.  She put her concerns above those of all women around the world and, unfortunately, the real loser could be the Komen foundation and women everywhere.

Where have all the great leaders gone?

Where have all the great leaders gone?  You know, the ones who brought America together, united us behind a vision and personally sacrificed to make America better for the future than it was in their day.  George Washington paid his troops from his personal resources when the country needed it during the Revolutionary War.  Adams, Jefferson, Franklin and all the founders literally put their lives on the line to establish this great nation.  Abraham Lincoln was physically drained by a war that was fought to keep us together.  FDR, like his policies or not, united us with his fireside chats and kept the post depression America unified.  John Kennedy rallied us with the race into space and with words like, “Ask not what your country can do for you…” and Ronald Reagan captured us with his belief in American exceptionalism.  We desperately need these kinds of leaders today, because when America is united we can do almost anything!

In 1776 a unanimous Continental Congress signed the Declaration of Independence and established this country, pulling us away from the control of the most powerful empire on earth at the time.  In World War II a United USA joined the Allied forces in Europe and changed the outcome of the war and the history of this planet.  After 9/11/2001, this country came together as I have never witnessed before or since and rebuilt the city of New York and kept this country safe for the next ten years.

Unfortunately, according to the most recent Rasmussen polling, 86% of Americans say that members of Congress are more interested in their careers than in helping others.  We have politicians that are willing to demonize large portions of the American people if they think it will help them win an election.  Maxine Waters, Congresswoman from California’s 35^th district, recently told the country that the Tea Party could, “go to hell.”   President Obama has called Republicans “the enemy”, Nancy Pelosi has implied that Republicans want people to die and the DNC suggests that Congressman Ryan wants to shove old ladies off a cliff.  To be fair, Mitch McConnell, Senate Minority Leader, said that his most important goal starting in 2009 was to make sure President Obama was a one term President.  Really?  Not jobs?  Not balancing the budget?  All of this is highly divisive.  They must think that it will help them get re-elected because it is certainly not uniting the country.

What politicians forget is that America is a blend of all of these beliefs.  If the numbers are consistent, 15% of our soldiers are Tea Party supporters, roughly 30% of our firefighters have conservative views and, believe it or not, many teachers would not consider themselves to be liberal.  Even if these numbers aren’t perfect, do we want to call even one soldier the enemy?  Do we want to call even one firefighter an SOB?  Do we want to tell even one teacher to go to hell, especially when we agree on “what” to do and only differ on “how” to do it.

The good news for Americans is that there is very little difference in “what” any of our politicians want to do.  I have read both the Republican and Democratic platforms and even the Tea Party’s mission statement and found that all sides are for fiscal discipline.   Everyone is for creating opportunity for all of our people, and all want to create jobs and improve the lives of our current working class and for our children.  No group is for reckless spending, unemployment or racism, yet that is what politicians will often accuse “the other side” of in order to get elected.

The other piece of good news for America is that there is wisdom in both sides of the political argument, not in the extreme versions of either, but in the compromise ground found in the middle.  We need the fiscal discipline of the conservative side but we also need to protect our citizens from themselves, a more liberal focus.  “We the People” have the power to elect our representatives, and we must exercise our right to vote, not blindly to a party, but with thoughtful consideration of the issues.  We must also, and I believe more importantly, elect men and women with integrity and love of country.  We must elect leaders who can and will unite us into the great nation we can be.

I firmly believe that the biggest challenge for our next President, no matter who it might be, will be to bring this country together again.  To paraphrase President Obama, there is no black America or white America or Conservative or Liberal America – There is just a United States of America.  Just saying it is not enough.  We need leaders who can actually bring that vision to life.