Cato Challenges 10 Year Old GSE Support

Stiglitz & Fannie Mae, continued…

Posted by Mark A. Calabria

Last week I expressed some disappointment that while Nobel prize winner Joseph Stiglitz now raises the issue of “privatized gains and socialized losses” in our financial system, he made very different claims about Fannie Mae some years ago. In a NPR piece back in July, Professor Stiglitz offers his response to this charge. You should read it and decide for yourself. To the Professor’s credit, he does admit that we have a problem with Fannie (and Freddie). Such an admission would have been more helpful a few years ago. But better late than never.

For the sake of brevity I will address one of the many claims now, and address the others later this week. Stiglitz argues that “our big banks get finance at lower rates of interest than do others, because of the belief, in part, that should they have a problem, they will be bailed out.” His implication is that had Fannie not existed the risk would have just flowed to the big banks, which had to be bailed out too. Now I’ve questioned elsewhere just how much of a problem “too big to fail” banks were before the crisis, but one critical point bears remembering, even the most higher leveraged and reckless of the big banks still had to hold multiples of the capital that Fannie and Freddie held. In the extreme the GSEs only were required to hold .45 percentage points of capital against their MBS guarantees. Had a bank held that same risk on portfolio, it would have been required to hold 4.0 percentage points. That’s correct, a bank would have held almost 9 times the capital for the same risk as did Fannie. Even if Fannie held that risk on balance sheet, banks would still be required to hold 160% more capital. The simple fact is that had Fannie/Freddie not existed and banks had instead held that risk, there would have been over a $100 billion more capital in our financial system.

Professor Stiglitz was far from alone, and far from the worst, in terms of academics writing work to provide cover for Fannie Mae. Current economic advisor to Mitt Romney and former Bush official Glenn Hubbard also produced work defending Fannie Mae. Fannie and Freddie were also some of the largest supporters of the various real estate finance academic organizations, like the American Real Estate and Urban Economics Association. This is less about picking on Stiglitz (or Hubbard) than exposing Fannie’s ability to corrupt academia for its own purposes.

Mark A. Calabria • October 17, 2011 @ 1:49 pm
Filed under: Finance, Banking & Monetary Policy

Stiglitz and Hubbard are Innocent

By the time you read this, Cato Institute’s Mark Calabria, likely, will have turned to stone for his prevarications, just in the above article alone. He also might have a Pinocchio moment and find his nose several inches longer.

My teasing Calabria is based on something he wrote a week ago—which I’ve posted above--criticizing Fannie Mae, Nobel Prize in economics winner (2001) Joseph Stiglitz, and Glenn Hubbard, a Mitt Romney economic advisor.

About 10 years ago, both Stiglitz and Hubbard penned papers saying positive things about Fannie Mae, Freddie Mac, and the secondary mortgage market. The papers appeared in a Fannie compendium titled “Housing Matters.”

In attacking the two academics, now, Mr. Calabria uses standard right wing anti-GSE arguments to go after Stiglitz (and to a lesser extent Hubbard).

But what he really does—in using these tired themes—is to expose his own ignorance of how Fannie Mae truly operated and why “the pre-2004 Fannie Mae wasn’t the post-2004 Fannie Mae.”

(BTW, before writing this piece, I called Mr. Calabria—whom I didn’t know--to give him a heads up re my disagreements.)

This Mae Ain’t That Mae

The Right refuses to look at pre-2004 Fannie Mae in its pre-subprime role and compare/contrast it with the post-2004 company which made foolish purchases of Alt-A mortgages and subprime securities originated, marketed, and sold by Wall Street firms (a huge Fannie mistake, but one also committed by financial service firms all over the globe).

The pre-2004 Fannie Mae, before Dan Mudd was named Chairman and CEO in 2005, never engaged in that risky type of mortgage investing, as has been attested to in recent months by the SEC, Federal Reserve, Fannie’s regulator—the Federal Housing Finance Agency (FHFA), the President’s Financial Inquiry Commission and any number of economists and financial writers.

The original paper that Mr. Calabria uses to assail Mr. Stiglitz (ditto Hubbard)—where JS offered his opinions of Fannie Mae’s operations and capital—was produced in late 2001, when Fannie Mae was quite successful meeting its charter and producing solid earnings. It was written long before a future Fannie heavily buy private label subprime loans, chasing lost market share and profits.

There was no way, 10 years ago, for Messrs. Stiglitz and Hubbard to see subprime coming or understand how it would rock most of the world’s major financial serice companies and systems.

Privatized Gains and Socialized Losses

I also challenge Mr. Calabria to put some meat (and proof) on the phony—but cute sounding--allegation he parrots that Fannie “privatized its losses and socialized its losses.”

This is an attack line that some congressional know-nothings employ to disparage Fannie and Freddie, because it makes good sound bites but few of them can define or defend.

I worked at Fannie from 1983 through 2004 and every year the company had losses of one type or another, but fortunately, had far greater gains. The losses were deducted from profits and the net number was reported to the company’s investors and later the SEC. Nobody tried to stick the federal government with the company's losses.

It wasn’t until 2008—following the Hank Paulson/GOP takeover of Fannie and Freddie-- that the federal government put its first dime into Fannie Mae (and Freddie), which is another fact that the Right likes to forget.

The Pre-2004 Fannie Wasn’t a Major Risk Taker

The traditional and, indeed, conventional way Fannie operated before Mr. Mudd took control is evidence that huge risk taking wasn’t the GSE leadership MO of previous chairmen David Maxwell, Jim Johnson, and Frank Raines, who preceded Mudd.

During those eras, the “franchise” and “housing mission” were Fannie’s most valuable corporate possessions. None of my colleagues was willing to risk them. I remember telling any variety of outside groups and Congress that as long as the company responsibly met its congressionally mandated housing mission (goals), Fannie should enjoy congressional support.

I believe history proved me right.

Starting in 2004-2005, as soon as acquiring subprime securities--and aggressively seeking market share temporarily lost to the private-label security issuers--became the corporate priority, Fannie’s wheels fell off.

By 2008, Fannie (and Freddie) became wards of the Treasury; their shareholders got wiped out, most of their senior officers left voluntarily or were asked to leave, and their surviving workers lost years of savings they had in company stock.

(Let me note at this point, Fannie Mae’s dalliance with subprime investing should have been caught and stopped by its regulator. Instead the aberrant purchase activity was virtually regulator-blessed.)

GSE Versus Bank Capital

Calabria makes some generic comments about the GSEs smaller capital vis-à-vis commercial bank capital.

The Cato official conveniently forgets to mention two things about commercial bank capital requirements.

Banks had higher capital requirement than the GSEs because the banks could invest in any asset their management chose, including domestic loans of all kinds, foreign commercial and sovereign debt securities (think Greek bonds), while Fannie and Freddie were lower risk mono-line companies, with only mortgage loans and securities as permissible investments.

The GSE’s statutory “minimum” 45 basis points capital (.45%) against credit business was more than enough to protect that entire book of business in all of the years the risk based capital standard was in place--from 1992 on--before the failed subprime acquisitions produced the Paulson/Bush takeover.

Federal Regulators “Turtled” for the Big Banks

In offering the banks his protective journalistic shield, Calabria ignores the favored regulatory treatment big banks enjoyed.

Unlike the mortgage giants, bank executives and shareholders were protected from the consequences of their excessive risk-taking. The Fed lowered interest rates to "reliquify" them and then “lent” to them to prevent deposit runs, while the Treasury gave them capital (TARP funds).

First the Bush White House and then the Obama Administration did this—as I’ve noted ruefully—without demanding from the banks any sort of reciprocal lending (for small and large business or for mortgage borrowers), which could have ameliorated some of the nation’s unemployment problems.

How the Cato (and AEI) crowds can continue to use the "private gain public loss" label with Fannie/Freddie, but not, at a minimum, to apply the same to the banks—for which they toady--is beyond me.

I’d also ask Mr. Calabria to detail his charge that Fannie and Freddie borrowed at lower costs than the commercial banks.

FDIC Deposits Are Cheaper than GSE Debt Costs

The primary source of bank working capital (money they lend to customers, back in the day when banks did lend and not just arbitrage) is federally insured deposits.

There are about $3 Trillion of insured deposits in America’s depository institutions.

The cost of that is simple for the reader to figure, because it is what the banks pay you on your checking and savings accounts, roughly 1% give or take 25 basis points.

I can almost guarantee you that Fannie pays two or three times that amount for its working capital, slightly more than the US Treasury but slightly less than other large investors, when the latter borrow in the international debt markets.

I think Mr. Calabria perpetuates a myth when he continues to claim that Fannie pays/paid less for working capital than the banks and that banks are rugged private institutions.

Da Dum De Dum

(And finally, Congrats to DG and FDR, you two irrepressible and crazy kids!!)

Maloni, 10-23-2011

Cats and Dogs

The GSEs, also Wishes and Hopes

Other issues with higher political priorities have bumped Fannie and Freddie to the back burner, making those of us who predicted no legislation on these companies until 2013 look prescient.

Still there were two GSE items this week worth highlighting.

First the American Enterprise Institute’s (AEI) Peter Wallison was back on the Wall Street Journal perch, beating up Fannie and Freddie, using Ed Pinto’s ragged research (EP also is with AEI and once toiled at Fannie) which wrongly suggests that Fannie and Freddie bought subprime loans in the 1990’s bringing about the 2008 international financial meltdown.

Give it a break, Peter. You lost this one…overwhelmingly.

Fannie’s regulator, the Federal Housing Finance Agency, the Federal Reserve Board, the Securities and Exchange Commission, and the President’s Financial Crisis Inquiry Commission, plus any number of columnists and prominent economists have shown how wrong Wallison’s and Pinto’s meanderings are. That view is heavily weighted by the fact that Ed conjured a unique and exclusive definition of “subprime,” which nobody else recognizes or employs.

Wallison and more recently Pinto have run with this bogus claim for years but their numbers still lack integrity, unless you are the WSJ.

Moving on, but not too far…

The recent book by Josh Rosner and the New York Times Gretchen Morgenson employed the AEI fables and added their own negatives about former Fannie Mae Chairman Jim Johnson. But their business attacks were rebutted too, by many of the same folks who threw cold water on the Wallison-Pinto work.

Jeff Madrick and Frank Partnoy, writing in the New York Review of Books, penned the most recent Rosner-Morgenson smack down. (Link below.)

http://www.nybooks.com/articles/archives/2011/oct/27/did-fannie-cause-disaster/

One more article which deserves sharing came from an old line GOP economist of some renown, Martin Feldstein, Chairman of President Reagan’s Council of Economic Advisers, from 1982 to 1984, who last week wrote in the New York Times about making existing mortgages more affordable and holding down future defaults.

Feldstein’s proposed creative use of Fannie Mae and Freddie Mac, to reduce the outstanding principal on their mortgages, could meet bank opposition. This, despite how quickly the banks could make it work, how many consumer/customers could benefit, and how alternatives might be less efficient and more bank costly.

The Treasury and Fed should meet with bank reps and offer Feldstein’s plan for implementation. If the banks reject it, federal financial regulators should propose that banks “mark to market” their mortgage portfolios. That won’t immediately help consumers, but it will bring greater reality to bank accounting. (Link to Feldstein’s article follows.)

http://www.nytimes.com/2011/10/13/opinion/how-to-stop-the-drop-in-home-values.html?_r=1

My Bucket List

One of the beauties of writing a blog is that you don’t have to check with anybody before spilling your thoughts on the issue of your choosing.

Here are a few things—some serious, some silly, some fanciful, others doable--which I would like to see happen before I kick or succumb to Alzheimer’s.

--A ton of “country club” Republicans run and win congressional seats, displacing some of the Tea Party cranks who won in 2010, and bring some sanity to the GOP.

--“Solyndra” notwithstanding, for the Congress to foster and stimulate green business development because the world payoff is so grand.

--To be alive when the Congress and whoever is in the White House realize that Fannie and Freddie really did work, except for the subprime crap, an aberration unlikely ever to happen again.

--The return of bipartisan friendships/relationships. When I worked on the Hill in the 1970’s, most D’s and R’s did like and respect one another, got along, compromised and displayed comity.

--For colleges and universities to share some of the revenue with “student athletes” and end the amateur status charade.

--For the National Basketball Association (NBA) to stay “struck and locked out” through next year and maybe 2013.” (Fat chance; too much money involved on both sides.)

--For Roger Goodell to resign or be forced out as head of the National Football League.

---I want the Congress to pass and the President to sign legislation capping malpractice health care awards and then track to see if the “docs” pass onto their patients some of their medical insurance savings.

--For the GOP to admit—even to itself--that lower taxes for corporations, the wealthy, and smaller companies have been around since “W’s” first term and haven’t dramatically increased industrial production or new hiring. The R’s want the poor to get by with less federal help. They would earn greater credibility if they apply the same principle to the well off.

--For a future Supreme Court—this one won’t reconsider--to establish spending limits on all federal elections, low enough so incumbents face plenty of competition, meaning the most appealing candidate--not the richest--has a chance to win.

--For some bright young American kid to figure how to run internal combustion vehicles on salt water or something equally far-fetched and improbable.

--For newspapers to make a comeback.

--Never having to pay more than $1 for a two liter bottle of diet soda, no matter the brand.

--John Boehner to tell the House Tea Party contingent (and their back stabbing leader from Virginia, who covets Boehner’s job) to “stuff themselves,” which hopefully will allow Boehner to resume his previous decent guy persona.

--For the American people to wake up to the reality of the giant financial services companies. They exist to make money; they are not charities; they squeeze you for every dollar they can; they covet their competitor’s revenue; and most couldn’t exist without the federal government’s largesse, which –for me—puts the stake in the heart of the bank claim of being “the private sector.”

--For Maryland and Virginia to truly clean up the Chesapeake Bay and also significantly curtail crabbing and fishing—both commercial and private--for a year or two to let the species thrive and multiply. (Too radical?)

--To spend quality time with Angelina Jolie, when she isn’t wearing make up, to see if I love her as much as I think I do.

--To have fresh recordings of all of the 1950’s R&B hits by groups whose first name always started with “The……” (as in, Platters, Arabians, Drifters, Del Vikings, Aladdins, Five Satins, Crows, Dominos, Limelights, Passions, Angels, Imperials, Bel-Aires, Argyles, etc. etc.)

--To have a local store with all the penny candy and five cent candy bars I used to buy when I was a kid (and pay today what I paid for them 60 years ago).

--For the state of Maryland (or DC) to approve a full service casino nearer my house, so I don’t have to drive 63 miles (one way) to Charles Town, West Virginia to gamble.

--To be able to play touch football, basketball, and soft ball as well as I did when I was 20.

--To learn how to mechanically repair and refurbish old cars and then to buy two 1970 GM “Muscle Cars” (Pontiac GTO and Olds Cutlass convertibles) and restore them.

--Force the UN move its headquarters to Europe.

--The Russian armed forces to mutiny, revolt against Putin, the Russian mob and the oligarchs who control that country and lead the Russian people in demanding a true representative government.

--Sidney Crosby and Evgeny Malkin stay health for the entire 2011-2012 hockey season, almost guaranteeing that the Pittsburgh Penguins will be Stanley Cup contenders.

--Ben Roethlisberger, James Harrison, and Troy Polamalu to stay healthy for the balance of the 2011 National Football League season, allowing the Pittsburgh Steelers to be Super Bowl contenders.

--To have Bob Nutting, the Pittsburgh Pirates’ owner—whose team now has produced 19 consecutive losing seasons--sell the Pirates to a person/corporation willing to spend the money necessary to compete in major league baseball.

--To have The Angel of Death visit every nation and annihilate all their citizens who practice violence and repression of others or who foster those vile acts. (Gawler’s funeral home in the District of Columbia would do a land office business, just from Capitol Hill alone!)

--For President Obama to approve dropping several nukes on parts of Iran to show the Ayatollah not to screw with the US.

--Ditto the nukes in about 20 valleys between Afghanistan and Pakistan (and maybe just a few in each country) to see if we can add to the US drone successes.

--Have the world turn Africa into a continent where every country is bountiful and produces enough food for their citizens and to export, so that there are no more famines and no more pictures of sickly and dying children.

--The Congress to approve an automatic death penalty for all child molesters, with this current Supreme Court rejecting the inevitable challenge.

--For every country to legalize marijuana and release from prison anyone jailed for trafficking solely in that drug.

—To see every American second grader get instruction in foreign language and computer classes, with the most able taught Asian and Middle Eastern tongues.

Maloni, 8-16-2011

Merkel and "Occupy"

Exceeding Hitler’s Grasp!!

It appears that Germany’s President Angela Merkel, with a little help from France’s President Nicolas Sarkozy, may be poised to exceed Adolph Hitler goal of occupying most of Europe and subjecting it to his whims and plans.

Of course Hitler used his armed forces, blitzkrieg bombings, Panzer tank divisions and looked as if he would pummel every major European nation, from 1939 until 1945, when the Allies finally defeated Nazi Germany.

Ms. Merkel “merely” has the German banking system and its history of high quality economic and financial policies fronting for her, so who needs Panzers?

Merkel's Germany—and Sarkozy's France—seem to be leading an effort to boost and support the European Union’s “Euro” currency and to force feed Portugal, Ireland, Italy, Greece and Spain (PIIGS) a thinning diet of reduced spending, federal cost cutting, greater savings and self sufficiency, all using the carrot of German financial support and backing of the PIIGS sovereign debt.

Germany and Merkel are the real players here, with a chance to turn most of that continent around, if the Germans can summon the requisite courage and fancy. And, unlike Hitler, she and her country are being invited in and asked for this core financial support, which also will help many US banks, too, which were pigs themselves in buying Greek government IOUs.

Merkel may need Sarkoxy for some sort of political cover, but—next to the Russians—the French are the most feckless and unreliable of the European nations.

If the Russians are “courve and gonif” (“thieves and whores”), then the French, whose armies “went on strike" in World War I, surrendered to Hitler and fought with the Axis in WWII, and whose military vehicles have five reverse gears—to rapidly leave the field—and one forward gear, in case the enemy gets behind them, are barely more

Look Out, Here Come the American People!

My advice to Democrats and Republicans alike, ignore the nationwide “'Occupy” protests and protestors at your own political peril.

Cast them as reprobates and losers and you’ll find yourself sitting at home after the 2012 doing self flagellation “shoulda, coulda, wouldas.”

I think these demonstrations will grow and, like the conservative Tea Party advocates and sympathizers, today’s angry Americans are frustrated and disappointed, too, at a system which won’t provide them gainful employment.

Many are college graduates (recent and older), who desperately want and need jobs where few exist when businesses are not hiring.

We’ll soon find out whether their numbers grow to the level of the Vietnam War protests, 50 or so years ago. Those were the last large public demonstrations which forced major American policy changes.

But, with millions out of work or wanting more than mere minimum wage jobs, it's possible that the current protests could mushroom, especially if local and state officials don’t panic and start “busting heads” or arresting those who peacefully picket.

Like minded sympathizers and their families could add to the marcher numbers. At the end of the day--despite the GOP rhetoric--the broad complaint is not opposition to “the wealthy” as much as it opposition to federal economic policies which either don’t exist or fail to secure political consensus because of opposition.

Great Safety Valve

To me, these early rallies represent a cathartic and healthy demonstration of the First Amendment rights. That’s why I hope more and more people join the effort--as long as they stay peaceful and non-destructive.

Speaking up and demonstrating is Democracy’s perfectly acceptable outlets for policy unhappiness and could be just the activity to make Americans feel better about their lot in life, especially if their efforts produce the desired change.

At times, we’ve all complained about people failing to register to vote or being too uninvolved after they’ve registered. We just may be seeing a large group of Americans shrug off their complacency and begin to enter the political process in a loud and unmistakable manner.

It also can be seen as a message to the GOP congressional obstructionists. “Work on something which addressees our broad economic/employment concerns, not just the 2012 defeat of Barack Obama or more for those who already have gotten financially fat from federal benefits.”

It’s ironic for Republicans to suggest today’s demonstrators are left wing kooks, rather than individuals desperate for regular jobs and employment income.

The initial GOP criticism and dismissal of protestor’ issues sounds to me like false bravado and “whistling past the graveyard.”

The putdowns makes it’s easy for the Right to dehumanize and distort the protests rather than seeing them as a natural expression of angst over America’s economic dislocation and the GOP’s responsibility for much of that. (Anyone remember President George W. Bush and his phony Iraq War, eight years of deficit spending and tilted-to-the-well-off tax cuts?).

Before rushing to judgment, the GOP should remember its chosen “opening day of Congress exercise,” when House Republicans read aloud the United States Constitution (conveniently skipping the sections which could be tied to racial equality), especially the First Amendment.

The American people, now participating in “Occupy” demonstrations, merely are exercising their First Amendment rights, which Speaker John Boehner (R-Ohio) and Majority Leader Eric Cantor (R-Va) and their allies chose to venerate on their first day controlling he chamber.

I am sure that with some labor unions adding their strength and numbers to the protests, Republicans will engage in new forms of name calling and denigration.

Get Micro

But, far more important—I hope--will be the American public’s reaction when the protesters get more debate and attention on issues that should resonate with the public, like GE earning almost $15 Billion in 2010 and paying no federal taxes because of the variety of tax breaks available to corporations, which the congressional GOP refuses to close.

Or when “Occupy” participants discuss bank profits versus bank lending activity. The former—given unconditional help by the federal government—last year were up over 100% and the latter down by 9%.

Eventually, protestors will develop a common agenda and demand that Congress—and the Obama Administration—address their concerns.

“Class warfare” –the current GOP epithet used against the “Occupy” crowds, is such a catchy and ugly term, but when the protesters expand their economic brief, I believe that policy makers will see that a pretty broad range of Americans have suffered major financial setbacks, including total family unemployment, access only to sub-minimum wage positions, loss of their homes, diminished shelter, food stamp use, and entry to public welfare rolls.

The political protests are in their incubation stage. I believe that more and more people will march and protest the deaf ear that many in Washington (not just the congressional R’s) show toward the problems facing the poor, middle class, and a ton of recent college graduates who wish only to work and make their own mark in our society.

When the Tea Party types, two years ago, were “hating on Obama,” claiming that was a socialist and wasn’t born in America, few Republicans or Democrats questioned their patriotism or their right to picket and protest.

Why do those TP supporters and their congressional friends now accuse the current protestors as anti-American or engaging in class warfare?

The answer is because the protest message is antithetical to the GOP’s political objectives, might attract millions of voters to the same cause, and stimulate a large--heretofore moribund—Democrat leaning contingent toward political action which likely will see lots of Republicans lose their seats in 2012 elections.

Maloni, 10-11-2011

Take to the Streets….Please!

Here’s one guy who welcomes the protests on Wall Street and a half dozen other cities around the nation. I hope they get louder, stronger, more popular, and attract more and more Americans to them, adding their voices to the many angry and unemployed citizens already voicing their unhappiness.

While protesters have their pet targets, Wall Street, large financial institutions, obliging public officials, corporate greed, financial bailouts, etc., the root issue appears to be an economy which cannot—because of political lethargy and willful indifference---provide work for millions of American who need and want jobs.

I hope thousands, hundreds of thousands more citizens join—peacefully—screaming and shouting their demands for the chance to work.

I want the GOP-controlled Congress, which has been most indifferent, to hear these Americans and begin doing more legislatively than trying to plan President Obama’s 2012 defeat.

In my lifetime, I’ve seen public policy change because Americans were “fed up and wouldn’t take it anymore,” In this case, more than 40 years ago, it was massive opposition to the Vietnam War.

Those protests--which started in society’s fringe elements--gestated over a period of years, beseeched the Congress and the White House, drew Americans of all colors and backgrounds, and became violent.

Millions of American, opposing the conduct of this war, finally got to the Nixon White House. Changes were made which led to the United State’s participation ending after 50,000 US casualties and thousands more wounded and disillusioned and an enduring economic inflation which took years to squelch.

The arrogant current Congress--again with Republicans tolling the bell--seems to think that more tax cuts for the wealthy and big business is the answer to jobs. But something beyond polite discourse needs to challenge their arrogant certitude.

I tried pointing out in my last blog how short sighted this reliance is, but Tom Toles, the cartoonist in the Washington Post did a better job--when he asked in a recent drawing showing unemployment rising while Uncle Sam heaped cash at the foot of an idol labeled “tax cuts for the rich=job creation”--“How is that working for you?”

If the American people get angry enough and begin to take their frustrations into the streets, John Boehner (R-Ohio), Eric Cantor (R-Va), Mitch McConnell (R-Ky) and the Tea Party better listen or they could suffer political setbacks, leading to a broad realization by the voters that the GOP has no real ideas about their plight, save giving more taxpayer dollars to the wealthy and comfortable. (“That Republican Emperor isn’t wearing any clothes.”)

Of course, Tea Party members may want to go “Kent State” on the protestors, which is an additional story from the Vietnam War era. (The Congressman for whom I worked represented the family of Allison Krause, one of the Kent State students shot to death by the Ohio National Guard. Anyone want to guess how responsive Attorney General John Mitchell was to a congressional request for a grand jury investigation of the killings?)

R.I.P.P. (Rest in Political Peace) Chris Christie

I wrote the following before Governor Christie (R-NJ) announced that he wasn’t going to run for the GOP presidential nod.

While I believe all of his early explanations about his young family and his love of New Jersey, I also think his row would not have been as easy to hoe as some Republicans felt.

Nonetheless, here was my wish when Christie’s candidacy was alive.

If the New Jersey Governor is convinced that his party and his country needs him and he joins the GOP presidential nomination chase, we will have tons (no pun) of stories about his weight and girth. I hope not.

Christie has described himself as a poor eater (choice or foods) and someone who

doesn’t exercise enough (he’s “everyman”).

So what?

If CC is a capable public servant, displays awareness, intelligence, sensitivity, and global smarts, let’s welcome him and forget about his waistline.

If Christie enters the race, I hope we won’t be deluged with a bunch of William Howard Taft stories, our 27^th President who weighed north of 300 pounds.

One Out Another in, Sarah Palin?

Doesn’t former Governor Palin owe the Right or somebody an announcement of her 2012 presidential aspirations? She once said that she would make her plans clear at the end of September.

It couldn’t be any of those suggestions appearing in the Joe McGinniss’ book (“Jungle Fever”) or Levi Johnson’s tome (SP as a “cougar”).

I may be taunting, but I really hope that she toughs it out and announces that she is seeking the GOP nod.

Perry’s Most Recent Problem

Rick Perry’s recent poll numbers suggest some bumps in his road, as does his “problem du jour,” his family’s leasehold.

Why should anyone be surprised that Governor Rick Perry, the anti-science, mediocre college student, secessionist flirting Governor of Texas--with record high number of executions of African American inmates--might have hunted and recreated on a property that was named with a racial slur?

This is a man who condemns all non-Christians to Hell. Do you think he is going to be sensitive to words he heard about a million times when he was growing up?

That language and attitude jibes with Perry’s rural background, the less than “big-tent” views of current party (he once was a Gore-supporting Democrat), and the historic Texas attitude toward all minorities not just Black people.

Possible proof of the latter is the rumor that before getting it’s ”N” name, Perry’s hunting reserve was called “Kikes’ Beak,” because of the unique outcropping and curve of high rocks by the old corral.

I am certain that this won’t be the last example of some bizarre “Rick behavior” which the media will uncover. And, frankly, I am sure we’ll hear this kind of thing about any frontrunner.

It’s the intensity with which the national media go after candidates, especially when their general behavior offers themselves up, as Perry’s has.

No Good Deed Goes Unpunished!!

Speaking of Rick Perry, I received my first fundraising request from the “Gov,” ironically in the same mail that brought a campaign ask from Harry Reid (D-Nev.).

I’ve told the Senate Majority Leader’s PAC not to call or send me any requests, since I think he’s done a weak job leading the Senate Democrats.

Since I never had any contact with him or his team, the Perry letter must be my past catching up with me. Before I retired from Fannie Mae (2004) and the corporate PAC never stretched as far as I hoped it would, I adopted a, “If you helped Fannie, I’ll help you” rule when approached for campaign contributions.

While most of my checks went to Democrats and their institutional campaign committees, I must have given to enough Republicans for me to forever be “remembered” by them.

You know what they say about elephants?

Please forget me. already!!

So it’s shredder time for that letter and continued inaction when my Verizon “talking” home telephone reports a call from “Unavailable!”

Maloni, 10-3-2011

Take to the Streets….Please!

Here’s one guy who welcomes the protests on Wall Street and a half dozen other cities around the nation. I hope they get louder, stronger, more popular, and attract more and more Americans to them, adding their voices to the many angry and unemployed citizens already voicing their unhappiness.

While protesters have their pet target, Wall Street, large financial institutions, obliging public officials, corporate greed, financial bailouts, etc., the root issue is an economy which cannot—because of political lethargy and indifference---provide work for millions of American who need and want jobs.

I hope thousands, hundreds of thousands more citizens join—peacefully—screaming and shouting their demands for the chance to work.

I want the GOP-controlled Congress, which has been most indifferent, to hear these Americans and begin doing more legislatively than trying to plan President Obama’s 2012 defeat.

In my lifetime, I’ve seen public policy change because Americans were “fed up and wouldn’t take it anymore,” In this case, more than 40 years ago, it was massive opposition to the Vietnam War.

Those protests--which started in society’s fringe elements--gestated over a period of years, beseeched the Congress and the White House, drew in Americans of all colors and backgrounds, and became violent.

Millions of American, opposing the conduct of this war, finally reached policy makers. Changes were made which led to the United State’s participation ending after 50,000 US casualties and thousands more wounded and disillusioned and an enduring economic inflation which took years to squelch.

This arrogant current Congress--again with Republicans tolling the bell--seems to think that more tax cuts for the wealthy and big business is the answer to jobs. But something beyond polite discourse needs to challenge their arrogant certitude.

I tried pointing out in my last blog how short sighted this reliance is, but Tom Toles, the cartoonist in the Washington Post did a better job--when he asked in a recent drawing showing unemployment rising while Uncle Sam heaped cash at the foot of an idol labeled “tax cuts for the rich=job creation”--“How is that working for you?”

If the American people get angry enough and begin to take their frustrations into the streets, John Boehner (R-Ohio), Eric Cantor (R-Va), Mitch McConnell (R-Ky) and the Tea Party better listen or they could suffer political setbacks, leading to a broad realization by the voters that the GOP has no real ideas about their plight, save giving more taxpayer dollars to the wealthy and comfortable. (“That Republican Emperor isn’t wearing any clothes.”)

Of course, Tea Party members may want to go “Kent State” on the protestors, which is an additional story from the Vietnam War era. (The Congressman for whom I worked represented the family of Allison Krause, one of the Kent State students shot to death by the Ohio National Guard. Anyone want to guess how responsive Attorney General John Mitchell was to a congressional request for a grand jury investigation of the killings?)


R.I.P.P. (Rest in Political Peace) Chris Christie


I wrote the following before Governor Christie (R-NJ) announced that he wasn’t going to run for the GOP presidential nomination.

While I believe all of his early explanations about his young family and his love of New Jersey, I also think his row would not have been as easy to hoe as some Republicans felt.

Nonetheless, here was my wish when Christie’s candidacy was alive.

If the New Jersey Governor is convinced that his party and his country needs him and he joins the GOP presidential nomination chase, we will have tons (no pun) of stories about his weight and girth. I hope not.

Christie has described himself as a poor eater (choice or foods) and someone who
doesn’t exercise enough (he’s “everyman”).

So what?

If CC is a capable public servant, displays awareness, intelligence, sensitivity, and global smarts, let’s welcome him and forget about his waistline.

If Christie enters the race, I hope we won’t be deluged with a bunch of William Howard Taft stories, our 27th President who weighed north of 300 pounds.

One Out Another in, Sarah Palin?


Doesn’t former Governor Palin owe the Right or somebody an announcement of her 2012 presidential aspirations? She once said that she would make her plans clear at the end of September.

It couldn’t be any of those suggestions appearing in the Joe McGinniss’ book (“Jungle Fever”) or Levi Johnson’s tome (SP as a “cougar”).

I may be taunting, but I really hope that she toughs it out and announces that she is seeking the GOP nod.

Perry’s Most Recent Problem

Rick Perry’s recent poll numbers suggest some bumps in his road, as does his “problem du jour,” his family’s leasehold.

Why should anyone be surprised that Governor Rick Perry, the anti-science, mediocre college student, secessionist flirting Governor of Texas--with record high number of executions of African American inmates--might have hunted and recreated on a property that was named with a racial slur?

This is a man who condemns all non-Christians to Hell. Do you think he is going to be sensitive to words he heard about a million times when he was growing up?

That language and attitude jibes with Perry’s rural background, the less than “big-tent” views of his current party (he once was a Gore-supporting Democrat), and the historic Texas attitude toward all minorities not just Black people.

Possible proof of the latter is the rumor that before getting its ”N word” name, Perry’s hunting reserve was nicknamed was “Kikes’ Beak,” because of the unique outcropping and curve of high rocks by the old corral.

I am certain that this won’t be the last example of some bizarre “Rick behavior” which the media will uncover. And, frankly, I am sure we’ll hear this kind of thing about any frontrunner.

It’s the intensity with which the national media goes after candidates, especially when their general behavior offers themselves up, as Governor Perry has.


No Good Deed Goes Unpunished!

Speaking of Rick Perry, I received my first fundraising request from the Gov, ironically in the same mail that brought a campaign ask from Harry Reid (D-Nev.).

I’ve told the Senate Majority Leader’s PAC not to call or send me any requests, since I think he’s done a weak job leading the Senate Democrats.

Since I never had any contact with him or his team, the Perry letter must be my past catching up with me. Before I retired from Fannie Mae (2004) and the corporate PAC never stretched as far as I hoped it would, I adopted a, “If you helped Fannie, I’ll help you” rule when approached for campaign contributions.

While most of my checks went to Democrats and their institutional campaign committees, I must have given to enough Republicans for me to forever be “remembered” by them.

You know what they say about elephants?

Please forget me. already!!

So it’s shredder time for that letter and continued inaction when my Verizon “talking” home telephone reports a call from “Unavailable!”


Maloni, 10-4-2011