Monday, April 30, 2012

Baseball legend ‘goes batty’ on climate

Baseball legend ‘goes batty’ on climate


Baseball legend 'goes batty' on climate

'Balls are carrying much better now than I remember'


Tim McCarver
Has Tim McCarver of Fox Sports gone batty?
Some may think so after comments the former baseball player and now broadcaster made at a Major League game on Saturday.
While on the air at Busch Stadium in St. Louis, the city where he happened to be an All-Star catcher for the Cardinals in the 1960s and ’70s, McCarver proffered his personal thoughts about atmospheric conditions on the Earth and how they’re affecting the game of baseball.
“It has not been proven, but I think ultimately it will be proven that the air is thinner now, there has been climactic changes over the last 50 years in the world and I think that’s one of the reasons that balls are carrying much better now than I remember,” McCarver said. “You know, the ball that Ramirez hit out and the ball Freese hit out, I didn’t think either one was going to be a home run, yet they made it.”
McCarver’s fellow broadcaster Joe Buck then commented, “So that’s your inconvenient truth?” referring to Al Gore’s book, “An Inconvenient Truth” about the dangers of so-called global warming.
“Well, I think they’re going to find that out one of these days, yes, I do. That’s a theory, but we’ll see,” McCarver responded.
The two hottest books on the planet exposing the absurdity of global warming and the evil agenda of leftist radicals are “The Greatest Hoax” and “Eco-Tyranny.” Get your personally autographed copies of both today!
Statistically speaking, McCarver could not be more off base.
The Associated Press reported last September that baseball scores were at a two-decade low, thanks in part to plummeting numbers of home runs.
“The home run average was down to 0.94 each team per game, also the lowest in 19 years and a sharp drop from 1.17 in 2000,” AP stated.
McCarver, 70, is now catching flak for his theory.
“I love Tim McCarver, and he’s one of the best at what he does,” noted radio giant Rush Limbaugh this afternoon. “But this is how insidious this [climate] propaganda is. The fact of the matter is in the past few years, home-run totals have been in a fairly steady decline. From 2000 to 2009, home-run totals are down. There aren’t more baseballs flying out of the park in the last 10 years or 11 years for whatever reason.”
Matt Yoder at AwfulAnnouncing.com said, “We’ll have to wait for the day when he releases his scientific papers on baseballs flying through a thinning atmosphere over the last fifty years. How could we have missed CLIMATE CHANGE as fundamentally changing the game of baseball amongst steroids, expansion, and the evolution of athletes?”

Sunday, April 29, 2012

Gore's Grades Belie Image of Studiousness (washingtonpost.com)

Gore's Grades Belie Image of Studiousness (washingtonpost.com)


Gore's Grades Belie Image of Studiousness

His School Transcripts Are a Lot Like Bush's


By David Maraniss and Ellen Nakashima
Washington Post Staff Writers
Sunday, March 19, 2000; Page A01

If Al Gore is commonly thought of as a grind, the sort of fellow who during his school days would take notes in precise Roman numeral outline, strive mightily to ingratiate himself with teachers, and bring sterling report cards home to his demanding parents, his academic transcripts go some way toward subverting that notion.
From his lower school years at St. Albans to his incomplete effort at Vanderbilt law school, Gore was often an underachiever. Though his IQ numbers and aptitude test scores were well above average, his grades were uneven, never approaching the plateau of A's and B's that might be expected of one who possesses such a pedagogical demeanor. His generally middling college grades at Harvard in fact bear a close resemblance to the corresponding Yale marks of his presidential opponent, George W. Bush, whose studiousness and brainpower have been more open to question during this campaign.
Gore arrived at Harvard with an impressive 1355 SAT score, 625 verbal and 730 math, compared with Bush's 1206 total from 566 verbal and 640 math. In his sophomore year at Harvard, Gore's grades were lower than any semester recorded on Bush's transcript from Yale. That was the year Gore's classmates remember him spending a notable amount of time in the Dunster House basement lounge shooting pool, watching television, eating hamburgers and occasionally smoking marijuana. His grades temporarily reflected his mildly experimental mood, and alarmed his parents. He received one D, one C-minus, two C's, two C-pluses and one B-minus, an effort that placed him in the lower fifth of the class for the second year in a row.
For all of Gore's later fascination with science and technology, he often struggled academically in those subjects. The political champion of the natural world received that sophomore D in Natural Sciences 6 (Man's Place in Nature) and then got a C-plus in Natural Sciences 118 his senior year. The self-proclaimed inventor of the Internet avoided all courses in mathematics and logic throughout college, despite his outstanding score on the math portion of the SAT. As was the case with many of his classmates, his high school math grades had dropped from A's to C's as he advanced from trigonometry to calculus in his senior year.
When John C. Davis, a retired teacher and assistant headmaster at St. Albans, was recently shown his illustrious former pupil's college board achievement test scores, he inspected them closely with a magnifier and shook his head, chuckling quietly at the science results.
"Four eighty-eight! Terrible" Davis declared upon inspecting the future vice president's 488 score (out of a possible 800) in physics.
"Hmmmm. Chemistry. Five-nineteen. He didn't do too well in chemistry."
As Davis moved down the page, his magnifier settled on Gore's more promising achievement scores in other scholastic realms.
"English. Seven oh-five. Right at the top!"
"U.S. History. Seven oh-one. Not so bad."
Then he came to Gore's results in IQ tests taken in 1961 and 1964, at the beginning of his freshman and senior years. "One thirty-three and 134. Absolutely superb. That means tremendous ability."
These high IQ and achievement scores did not necessarily translate into equivalent high grades for Gore in high school English and history. From ninth grade (called Form III in the Anglophilic St. Albans culture) to his senior year (Form VI), he earned an equal number of C's and B's in English, but no A's. In history during those four years, he also moved between C's and B's until his senior year, when he broke through with an A-plus in Sacred Studies, a religious history course. He pulled steady C's for all three years of high school French. The one course in which he received straight A's was art, which he took all four years of high school.
"You have here a boy who shows a lot of potential," Davis said after inspecting Gore's tests and grades. "He was as a rule a hard worker, but he wasn't really interested in certain things, and when he wasn't so interested he tried faithfully to do what he was supposed to, though not necessarily very well."
Gore's reputation for being earnest and hardworking, if sometimes pedantic, is often contrasted with the personality of his political patron and White House boss, Bill Clinton, who is considered more extemporaneous. But they shared one surprising trait from their school years, a tendency to procrastinate on subjects that did not enthrall them and then cram at the last minute. Clinton once skipped his Yale law school classes for three months before borrowing a friend's notes, then ended up scoring better on the tests than his classmate did. Gore was less daring, but many of his St. Albans classmates remembered how during his senior year he often put off studying for exams until the night before, when he would sneak down to the 24-hour Little Tavern on Connecticut Avenue and cram all night in a back booth.
Clinton ended his secondary school career ranked fifth in his class of several hundred at the public Hot Springs High in Arkansas, while Gore left St. Albans ranked 25th in a senior class of 51. But reputation was everything in high school. The prestige of the private school in Washington, its history as a feeding ground for the Ivy League, and the confidence college admissions officers had when examining a St. Albans transcript--where there was no grade inflation and a C meant a C--all served Gore well when it came to getting into Harvard, the only school to which he had applied.
The late Canon Charles Martin, headmaster at St. Albans during Gore's era, used to say that he was "preparing his boys for the kingdom of heaven, not the kingdom of Harvard," but in fact he was doing both. Earlier in the century, St. Albans had been known as a pipeline for Princeton and Haverford, but that changed in the mid-1950s when Harvard decided it wanted more Washington and Virginia boys and accepted all 16 St. Albans boys who applied. By the time Gore's class came around in 1965, a recommendation from the St. Albans administration was about all it took for one of its students to get in.
Davis wrote Gore's recommendation, and said he was never concerned about the young man's transcript full of C's and B's and his middle rank in the class. "In Al's case he was what Harvard most wanted at that time," Davis said. "What they wanted was competent academic performance plus future potential. Plus they were very impressed by the fact that he was a political son. Colleges like Harvard, Princeton and Yale are just as excited to get important sons as top academic scholars. They want our boys as much as our boys want them. And Al was captain of the football team. Any nice big boy was welcome if he played football."
Gore flirted with English at Harvard, dreaming of a life as a novelist, but decided to make government his concentration. He got off to an uncertain start in that subject, with a C and C-minus in his first two courses, before righting himself. In his junior year, he earned a B, a B-plus and an A-minus in three government courses, and he aced his senior government thesis on the impact of television on the presidency, a strong finish that made him a cum laude graduate. His devotion to the subject by then was so intense that he gave much of his time to a not-for-credit seminar with his favorite professor, Richard Neustadt, an expert on the presidency. Bush, a history major, scored mostly B's in that subject, as was first reported in the New Yorker, though the five history courses he took his senior year were all pass-fail.
After serving in the military for two years, Gore returned to graduate school late in the summer of 1971, first taking religious studies courses at Vanderbilt and then entering the university's law school. His efforts in both instances were incomplete, reflecting the uncertainty he felt during that period about what he should do with his life. He had considered everything from writing to police work.
He took the religious studies courses while also working full time as a journalist at the Nashville Tennessean, and after getting off to a strong start with an A-minus in Ethics, he failed to complete any of the three courses he took in the fall of 1971, and those incompletes eventually lapsed into F's. He returned for another semester in the spring of 1972, when two more incompletes turned into F's. Two years later, he enrolled in law school and spent three semesters there taking heavy course loads while still working at the newspaper. He performed satisfactorily, with a high grade of 81 in Legal Writing and a low grade of 69 in Civil Procedures II. Partway through the spring semester in 1976, he decided to run for an open seat in Tennessee's 3rd Congressional District. His mother, Pauline Gore, herself a lawyer, tried to persuade him to remain in school while running, but he withdrew, turning away for good from the academic life, while beginning a political career in which he increasingly took on the characteristics of a scholar.
Gore has never released his transcripts, which were obtained independently by The Washington Post. Parts of them have been cited as well by Bill Turque, a Newsweek writer who has written a biography of Gore titled "Inventing Al Gore."
The vice president chose not to comment on his grades and test scores, but his press secretary, Chris Lehane, responded with lighthearted sarcasm. "This just proves that many of the preconceived notions of Al Gore have been stiff and boring," Lehane said. "He in fact has a very rich and well-rounded background--artist, athlete and academic."

Transcript: Al Gore Got ‘D’ in ‘Natural Sciences’ at Harvard | CNSNews.com

Transcript: Al Gore Got ‘D’ in ‘Natural Sciences’ at Harvard | CNSNews.com

Transcript: Al Gore Got ‘D’ in ‘Natural Sciences’ at Harvard


(CNSNews.com) - In his commencement speech at Hamilton College on Sunday, former Vice President Al Gore told the graduates that global warming is “the most serious challenge our civilization has ever faced.” But as an undergraduate at Harvard University in the late 1960s, Gore--one of the most prominent spokesmen on climate change today--earned a “D” in Natural Sciences.
Gore’s transcript documents that during his sophomore year at Harvard he earned a "D" in Natural Sciences 6 (Man’s Place in Nature). Also, as a senior at Harvard, he earned a C-plus in Natural Sciences 118.
Gore, along with the Intergovernmental Panel on Climate Change, was awarded the Nobel Peace Prize in 2007 for his work on global warming.
For his college board achievement tests, Gore earned a 488 (out of 800) in physics, and a 519 (out of 800) in chemistry. Gore’s academic records were first obtained and reported on by reporters David Maraniss and Ellen Nakashima at The Washington Post in March 2000.
Gore did relatively well, however, on the SAT, earning 1355 (out of 1600). For comparison, George W. Bush got 1206 on the SAT.
President Barack Obama has not released his academic records. He first attended Occidental College and then transferred in 1981 to Columbia University, where he earned his B.A. He later went to Harvard Law School and earned his J.D. in 1991.

Breitbart’s coroner poisoned to death?

Breitbart’s coroner poisoned to death?


Breitbart's coroner poisoned to death?

Police probe mysterious demise of L.A. medical examiner


Andrew Breitbart
Medical examiners in Los Angeles are investigating the possible poisoning death of one of their own officials who may have worked on the case of Andrew Breitbart, the conservative firebrand who died March 1, the same day Sheriff Joe Arpaio announced probable cause for forgery in President Obama’s birth certificate.
Michael Cormier, a respected forensic technician for the Los Angeles County Coroner died under suspicious circumstances at his North Hollywood home April 20, the same day Breitbart’s cause of death was finally made public.
“There are mysterious circumstances surrounding his death,” said Elizabeth Espinosa, a news reporter for KTLA-TV. “We’re told detectives are looking into the possibility that he was poisoned by arsenic.”

Cormier, 61, had been rushed to Providence St. Joseph Medical Center in Burbank after complaining of pain and vomiting.
“He was transported there early in the morning, and passed away late at night,” Ed Winter, assistant chief of operations and Cormier’s colleague at the Los Angeles County Department of Coroner, told KTLA. “It affects everybody when you lose a co-worker, but we’ll proceed and do our job and try to figure out why Michael died.”
The hospital then notified Los Angeles Police about Cormier’s death.
“At this point we haven’t ruled out foul play,” police Lt. Alan Hamilton told the Los Angeles Times. “It is one of the things being considered. We are waiting for the coroner’s results.”
Toxicology results are not expected for five to six weeks.
Sources told the Times several hazardous materials experts and officers searched Cormier’s home in search of what may have caused his sudden demise.
Michael Cormier
“The sources, who spoke on the condition of anonymity, said that finding the presence of poison does not necessarily mean the death was a homicide, because the substance could have accidentally entered his system,” the Times reported.
Hamilton also noted investigations are standard procedure when there’s a suggestion of anything other than natural causes in someone’s death.
It’s still unclear if Cormier personally worked on the probe into Breitbart’s death, and WND has left messages with the coroner’s office seeking comment.
On April 20, the same day Cormier died, the coroner’s office released its findings into the death of Breitbart, stating the 43-year-old conservative media powerhouse died of natural causes, listing cause of death as heart failure.
“No prescription of illicit drugs were detected.The blood alcohol was .04%,” the official report said. “No significant trauma was present and foul play is not suspected.”
Breitbart was founder of BigGovernment.com among other websites.
The night before Breitbart died, WND senior staff reporter Jerome Corsi arranged for Breitbart to interview Arizona Sheriff Joe Arpaio, who the very next day held a news conference to announce there was probable cause to believe President Obama’s birth certificate released on April 27, 2011, was a forgery, as well as Obama’s Selective Service Card.
“I have known Andrew for nearly 15 years and considered him a friend. His passion and energy for seeking the truth will be greatly missed by the nation. It’s almost incomprehensible that he left us so soon,” said Joseph Farah, founder and editor of WND.
In a column, Farah recalled meeting Breitbart years ago when he worked as a backup editor for the Drudge Report.
Matt Drudge paid tribute to his colleague and friend with a posting on the Drudge Report: “In the first decade of the DRUDGEREPORT Andrew Breitbart was a constant source of energy, passion and commitment. We shared a love of headlines, a love of the news, an excitement about what’s happening. I don’t think there was a single day during that time when we did not flash each other or laugh with each other, or challenge each other. I still see him in my mind’s eye in Venice Beach, the sunny day I met him. He was in his mid 20′s. It was all there. He had a wonderful, loving family and we all feel great sadness for them today.”
Rush Limbaugh called Breitbart an “indefatigable bulldog for the conservative cause.”
Sean Hannity told WND: “Andrew was a warrior, though a happy warrior, who relished political combat. He cared deeply for his friends, his family and his country. The movement has lost a passionate advocate. And I have lost a good friend. Andrew and his family are in our prayers.

Friday, April 27, 2012

Mission Accomplished Mr. President, Operation Sideshow is a Success! Part Nine

Mission Accomplished Mr. President, Operation Sideshow is a Success! Part Nine


Today Is The One Year Anniversary Of The Release Of Obama’s Forged Long-Form Birth Certificate!


Obama birth certificate SC Today is the One Year Anniversary of the Release of Obamas Forged Long Form Birth Certificate!
(Part 9 of an exclusive Western Journalism investigative report)
Today is the One Year Anniversary of the Placement of Obama’s Forged Long-Form Birth Certificate on the White House Website, a Red-Letter Day to be Sure
Forensic Hurdles and the Obvious Choice, a Digital Forgery
Just this past month, Alabama State Supreme Court Justice Tom Parker filed a concurrence in denial of a mandamus petition over a request for an original copy of Obama’s long-form birth certificate be filed with the State in the Courts Order:
Mclnnish has attached certain documentation to his mandamus petition, which, if presented to the appropriate forum as part of a proper evidentiary presentation, would raise serious questions about the authenticity of both the ‘short form’ and the ‘long form’ birth certificates of President Barack Hussein Obama that have been made public.
His statement resulted from a failed ballot challenge from Alabama, although Justice Parker is referring to the findings by Maricopa County Sheriff‘s office.
I believe we are at a point to make some reasonable conjecture.
A forgery for a “certificate of live birth” must be created to give the appearance of propriety to Obama’s claims of citizenship. Otherwise, he is simply a usurper; the cries for verification have become too loud to ignore. Donald Trump and Jerome Corsi’s best selling book “Wheres the Birth Certificate?”, which was released in May 2011, turned the tide and forced Obama to make an about face on this issue.  Obama could not release his actual and genuine “certified” copy as it would show him to be ineligible to hold the Office of President as it is most likely a birth certificate by affidavit.
Given this set of circumstances, several technical difficulties come into play that limit his choices to accomplish the goal of creating a forgery for his birth documents; these hurdles are discussed below.
1.) It cannot be easily placed into the bound volume residing in the records of the State of Hawaii; the reason for this is that it is forensically impossible to do so for the following reasons:
1a.) this would require removing the entire record from the vault for an extended period; this is practically impossible.
1b.) the entire bound volume would be nearly impossible to duplicate as it would require a volume of materials that are no longer available (age appropriate).  This would mean paper, spine,  cover, inside flap materials, adhesives, ink, and the duplication of every record in the current bound volume, a monumental task.
1c.) to replace just his record is again difficult as it actually requires taking the bound volume apart separating the page that contains his record.  A single page in a bound book is actually only one of four pages.  It is a single piece of paper that is folded in half and placed with others nested to make a booklet; these booklets are then brought together and bound then placed into the spine of a single volume.  It is printed on each side as well, further complicating matters.
(Note: if it is a 3 post binder book this matter would be easier to accomplish; however, any single page would either be two or four pages front to back.)
2d.) it would be next to impossible to cut and replace a page; this would then be two pages (front & back), and it would be grossly evident given close examination.
1e.) forensic and chemical tests on the paper and materials would again preclude the substitution or replacement scenario, as aging leaves it‘s own evidence that is difficult to duplicate and in some cases geographic dependent on how it effects a record.
1f.) a bound volume that has records added as is it made (being added through time) brings a matter of complexity to any attempt to enter a forged record of this type.  This book then would capture certain biological material (spores and pollen) and information of the seasons as flora blooms and blossoms along with fungi and humans that handled this volume.
(Note: examination of this type of evidence would be another method to ascertain that the book or records contained forgeries.)
2.)  Microfiche records may or not exist for his record; if so, a forged microfiche record may be able to be made. However, it would require remaking the entire reel or sheet, then substituting the forged record during the exposure and creation process.  This is probably a more feasible process; however, it would need materials that would pass forensic examination.  Original materials that date to the time the reel or sheet was last created is probably next to impossible to obtain to complete this type of forgery.
Any forgery for a bound volume breaks down rather quickly as being insurmountable when the technical hurdles are considered.  The only reasonable alternative is to create a digital image and substitute it for any “claimed” certificates Obama received from the Hawaii Department of Health, a bait and switch scenario.  An honorable mention needs to be made to Loretta Fuddy, Director of Health for Hawaii; Neil Abercrombie, Governor; and David Louie, Attorney General, who played their parts extremely well to aid Obama in this masquerade over his birth certificates.  One can only hope that the legal and political consequences prove disastrous for them in the future as they assisted in the deception of the American people.
The actual forger was so incompetent that whoever made this forgery did not know that all they had to do was print the document on a safety paper background, then scan that and post it on whitehouse.gov, making detection more difficult. Obama is strictly second rate as he cannot even get a world class forger to create his false and fraudulent documents; they are on par with his Cabinet and Czars, all second and third string players.  Was the actual perpetrator of this crime an unwilling participant to this cabal and left tell-tale evidence for others to find? We can only hope so.
(Note: I personally believe it was incompetence born of arrogance as the press corps would give cover to any actions Obama and his agents cared to implement so he could be careless.)
All the subterfuge of the press gaggle and Obama’s own statements of April 27, 2011 were obfuscation for the placement of a false and forged document on the web.  Officials of the State of Hawaii have facilitated this.  Operation Sideshow is looking like an actual operation and cabal conceived, planned, and executed with a host of accomplices. Some were active and others were passive as a fawning and pliant press; without their capable or incompetent services, this could never have been possible.
Obama needs to end this matter by releasing his birth certificate documents for examination from Hawaii’s vital statistics vault.  Forensic analysis of the original record(s) is necessary to clear this matter up.  This can be done by Obama waiving any confidentiality requirements as he did in his letter of April 22, 2011 per Hawaii Statute §338-18 and allow his records to be examined.
His refusal to release his documents is ominous and mystifying if in fact his records are as he claims them to be.  Ms. Corley needs to state that the “Certificate(s) of Live Birth” she received from Ms. Fuddy is the same as the one posted on whitehouse.gov.  I personally think she would decline such a claim now that it has been declared a forgery. Who knows what she will do?
She was probably only sent to fetch the certificates and instructed not to view the documents so that she could not be compelled to testify on the contents of the sealed envelope at a later date if it all blew up in their faces.  This way, she could use plausible denial as a defense; all she would have done was turn over a sealed envelope to Bob Bauer (the White House counsel) who would have a certain amount of executive privilege from congressional oversight and possibly the courts as well.  It was probably cheap insurance for them, though only a well-reasoned guess on my part.
Part Ten is a simple method to determine for yourself that Obama‘s long-form birth certificate is a forgery; this method was developed by Nick Chase, a retired expert in typewriters and type set machines for the printing of technical documents and newspapers.
Operation Sideshow is Mission Accomplished (the White House and Press Connection)
Part One
Part Two
Part Three
Part Four
How Hawaiian Officials Helped Cover Up The Obama Forgery: Operation Sideshow
Part Five
Part Six
Part Seven
Part Eight

Transcript of the Constitution of the United States - Official Text

Transcript of the Constitution of the United States - Official Text

 These are the only powers the federal government has been give by our constitution. Any others are stolen and unenforceable.

 Section. 8.
The Congress shall have Power
1 To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;
2 To borrow Money on the credit of the United States;
3 To regulate Commerce with foreign Nations, and among the several States, and with the Indian Tribes;
4 To establish an uniform Rule of Naturalization, and uniform Laws on the subject of Bankruptcies throughout the United States;
5 To coin Money, regulate the Value thereof, and of foreign Coin, and fix the Standard of Weights and Measures;
6 To provide for the Punishment of counterfeiting the Securities and current Coin of the United States;
7 To establish Post Offices and post Roads;
8 To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries;
9 To constitute Tribunals inferior to the supreme Court;
10 To define and punish Piracies and Felonies committed on the high Seas, and Offences against the Law of Nations;
11 To declare War, grant Letters of Marque and Reprisal, and make Rules concerning Captures on Land and Water;
12 To raise and support Armies, but no Appropriation of Money to that Use shall be for a longer Term than two Years;
13 To provide and maintain a Navy;
14 To make Rules for the Government and Regulation of the land and naval Forces;
15 To provide for calling forth the Militia to execute the Laws of the Union, suppress Insurrections and repel Invasions;
16To provide for organizing, arming, and disciplining, the Militia, and for governing such Part of them as may be employed in the Service of the United States, reserving to the States respectively, the Appointment of the Officers, and the Authority of training the Militia according to the discipline prescribed by Congress;
17 To exercise exclusive Legislation in all Cases whatsoever, over such District (not exceeding ten Miles square) as may, by Cession of particular States, and the Acceptance of Congress, become the Seat of the Government of the United States, and to exercise like Authority over all Places purchased by the Consent of the Legislature of the State in which the Same shall be, for the Erection of Forts, Magazines, Arsenals, dock-Yards, and other needful Buildings;--And
18 To make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers vested by this Constitution in the Government of the United States, or in any Department or Officer thereof.

Free fall: How government policies brought down the housing market - Economics - AEI

Free fall: How government policies brought down the housing market - Economics - AEI


Free fall: How government policies brought down the housing market
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Free fall: How government policies brought down the housing market

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The US housing market is in serious trouble, far worse than in almost any other developed country. Since 2006, housing prices have fallen 30 to 40 percent in most areas; millions now owe more on their mortgages than their houses are worth, and millions more have only slivers of equity. The average homeowner today has 7 percent equity in his or her home, versus 45 percent as recently as 1990. The private housing finance system has virtually disappeared, and the government system that remains is pursuing the same policies that produced the current problems. The affordable housing goals imposed on Fannie Mae and Freddie Mac in 1992 were the major contributors to both the deterioration in underwriting standards between 1992 and 2008 and the growth of an unprecedented ten-year housing bubble that suppressed delinquencies and stimulated the growth of a private securitization market for subprime loans. But other government policies are also to blame for the deterioration in the US housing market, including the thirty-year fixed-rate mortgage, the mortgage interest tax deduction, the right to refinance without penalty, and the Community Reinvestment Act. Until Fannie and Freddie’s market dominance and the government’s role in the housing finance system are substantially reduced or eliminated, the United States will continue to have an inferior and unstable housing market.
Key points in this Outlook:
  • Today, the United States has the most troubled housing market in the developed world. It’s also the only developed country with a major government role in housing policy.
  • In less than twenty-five years, “affordable housing” and other housing policies have turned a healthy market into a financial ruin. In 1989, for example, only 1 in 230 homebuyers made a down payment of 3 percent or less; by 2007, it was 1 in 3. Meanwhile, average home equity plunged from 45 percent to 7 percent. 
  • The policies that caused the financial crisis are still in force. Until they and the government’s role in housing are eliminated, the US housing market will not return to health.

Most of the discussion about the role of government housing policies in the mortgage meltdown and the subsequent financial crisis has focused on the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac and the effect of the affordable housing (AH) goals in creating demand for subprime and other risky loans. By 2008, before the US financial crisis began in earnest, 28 million such loans were outstanding in the United States—half of all US mortgages—and 74 percent of them were on the books of government agencies or government-backed or -regulated entities. Fannie and Freddie were by far the largest source of demand for these loans, but the AH goals were only one element in a series of government housing policies that were key factors in the financial crisis and the subsequent depression in the housing market. Cumulatively, these policies have had a devastating effect on the overall health of the US housing system.

The United States is the only developed country with a significant government role in housing policy. Most other countries leave housing finance largely to the private sector, have less volatility in housing starts and house prices, and do not suffer the recurring crises characteristic of the US market. Nor does the United States, for all the funds it has lavished on housing, have a particularly high homeownership rate, although US housing policies have for many generations focused on increasing homeownership. In a recent presentation that compared US government housing policies with those of fifteen developed European Union countries, Dwight Jaffee found that the United States ranked eighth in homeownership and had the third-highest mortgage rate in relation to the applicable risk-free rate. These housing markets were also more stable than the US market and had lower mortgage default rates.[1]
Without government interference, a private US market would offer homeowners interest rate reductions for substantial down payments, limits on refinancing, and more rapid amortization—features that borrowers would find desirable. The results would be more home equity, lower leverage, lower interest rates, and greater stability in downturns. These features of private markets account for the healthier and more stable housing markets in Europe.
"The United States is the only developed country with a significant government role in housing policy."Instead, the US housing market today exhibits a large number of unhealthy conditions, almost all a direct result of government housing policies. These include disastrously low levels of home equity, government policies that continue to promote low-quality loans, mortgage-backed securities that are unattractive to long-term investors, a dysfunctional appraisal system, procyclical bank capital regulation that subsidizes excessive mortgage investment, millions of defaulted but unforeclosed mortgages, a new and overly complex regulatory structure in the Dodd-Frank Act for residential mortgage lending, and a series of advantages for a continued government role in the housing market that will make reviving a private mortgage financing market highly improbable.
We have outlined many of these ills in prior Outlooks.[2] In this piece, we will look at the ways US government policies, by degrading many elements of what had once been a healthy and well-functioning system, have left the US housing market in serious trouble.
Government Policies That Reduce Home Equity and Promote High Leverage
One of the most familiar, and popular, government policies is the mortgage interest deduction, which allows homeowners to deduct from their taxable income the interest they pay on mortgages and home-equity loans. The benefit extends only to the minority of taxpayers who itemize their deductions and thus is not available to those who take the standard deductions or the 45 percent of the population who pay no income taxes at all. In 2009, one in four taxpayers itemized mortgage interest, accounting for about two-thirds of the mortgage interest paid by all borrowers.
Under this policy, in the midst of the housing bubble that developed between 1997 and 2007, homeowners could borrow against the inflated equity in their homes, deduct the interest on these loans (unlike with any other personal loans), and spend the money on vacations and other baubles. When the bubble deflated, many of these homeowners found themselves without any significant equity in their homes and deeply in debt. Since 1986, residential mortgage debt has increased from 39 percent of gross domestic product to 50 percent in 1999 and then to 75 percent in 2007.
The deductibility of mortgage interest goes hand-in-hand with the thirty-year fixed-rate mortgage. This loan, which—unaccountably—is still lauded by consumer advocates, maximizes interest deductibility in the early years of loan amortization. This might make sense if most homeowners stayed in their homes for thirty years. Because most of early mortgage payments go to interest, deducting the interest would help young families during their peak spending years, with deductions gradually decreasing as they grew older, earned more, and had fewer expenses. But, on average, families stay in their homes for only seven years, so when they move to a new home they have accumulated relatively little equity in their previous residence and thus have little to contribute to the new one.
One of the lessons we thought we learned from the mortgage meltdown and resulting financial crisis was that homeowners—like financial institutions themselves—had become too highly leveraged. Yet consumer advocates and members of Congress still seem to believe that the whole purpose of the government housing finance system is to retain the thirty-year fixed-rate mortgage. A fixed-rate fifteen- or twenty-year mortgage would be a much better loan to encourage. It would amortize more quickly, build equity for homeowners, and be less risky for lenders.
Other policies that encourage equity stripping are refinancing mortgages without penalty—another benefit treasured by consumer advocates—and cash-out refinancing. The GSEs’ promotion of thirty-year fixed-rate loans without prepayment penalties led to mass refinances when interest rates declined in the early 2000s. Although refinancing without penalty enables homeowners to reduce the interest rate on their mortgages, it also increases lenders’ risks and thus raises interest rates for all mortgages. It is also a particular benefit for the well-to-do, who have the financial sophistication and lending sources to take advantage of refinancing opportunities.
Sophisticated financial players have always preferred to acquire prime loans to low-income borrowers because these borrowers did not have the financial wherewithal to refinance as frequently. Refi- nancing without penalty is one reason why US mortgage rates are higher than those in the European Union, despite the US government’s willingness to take mortgage credit risks through the GSEs, the Federal Housing Administration (FHA), and others. In addition, refinancing without penalty enables borrowers to restart another thirty-year fixed-rate mortgage term, with low amortization of principal in the early years—another contributor to high leverage and low equity in US homes.
"The most significant effect of the government's direct role in housing policy was its contribution to the massive housing bubble that developed between 1997 and 2007."Cash-out refinancing permits homeowners to take equity out of homes when they refinance, often leaving them without equity when housing prices decline. During 2003, equity extraction totaled $400 billion, with over $700 billion extracted in each of 2004 and 2005. Although housing prices rose sharply during the ten-year housing bubble between 1997 and 2007, the increased value of homes was largely illusory; when the bubble collapsed and housing prices returned to normal trend levels, millions of homeowners who had engaged in cash-out refinancing found themselves “underwater,” their homes worth less than their mortgage debt, while millions of others had only a small amount of equity. According to a recent article in American Banker, the average loan-to-value (LTV) ratio of all mortgages in the United States today is 93.3 percent, which means that the average US homeowner has less than 7 percent equity in his or her home. As recently as 1990, US home equity was 45 percent.[3]
Government Housing Policies That Weakened Underwriting Standards
Other government policies were designed to increase homeownership, primarily by reducing mortgage underwriting standards. The most important of these policies were the AH goals enacted in Title XIII of the Housing and Community Development Act of 1992 (the “GSE Act”).[4] The GSE Act, and its subsequent enforcement by the US Department of Housing and Urban Development (HUD), set in motion a series of adverse changes in the structure of the US mortgage market and more particularly the gradual degrading of traditional mortgage underwriting standards.
The AH goals required Fannie and Freddie to meet certain quotas when acquiring mortgages. The GSE Act had initially specified a quota of 30 percent; that is, 30 percent of the GSEs’ mortgage purchases had to be loans that were made to low- and moderate-income (LMI) borrowers, defined as borrowers at or below the median income in their communities. During the Clinton administration, HUD increased this quota to 42 percent in 1995 and 50 percent in 2000. HUD’s tightening continued in the George W. Bush administration so that by 2008 the main LMI goal was 56 percent, and a special affordable (SA) subgoal had been added requiring that 27 percent of the loans GSEs acquired be made to borrowers who were at or below 80 percent (and, in some cases, 60 percent) of the median income in their communities.
The initial 30 percent quota was not burdensome for the GSEs. In 1993, for example, Freddie Mac was able to meet the 30 percent quota by acquiring the prime loans that it traditionally purchased from originators. In the same year, 7 percent of its purchases met the SA subgoal. But the GSE Act required HUD to promulgate a new set of goals beginning in 1996, and HUD’s tightening of the AH requirements beginning in that year and continuing through 2008 forced the GSEs to seek loans of less than prime quality. For example, when HUD’s new AH goals for 1996 were released in late 1994, Fannie and Freddie reduced their down payment requirements to 3 percent, and by 2000—after HUD announced plans in 1999 to raise the AH goals to 50 percent—they were acquiring loans with no down payments at all.
HUD made no secret of its intentions, then or since, to reduce underwriting standards and elide the differences between prime and nonprime mortgages.[5] As HUD observed when raising the AH goals to 50 percent in 2000:
Because the GSEs have a funding advantage over other market participants, they have the ability to under price their competitors and increase their market share. This advantage, as has been the case in the prime market, could allow the GSEs to eventually play a significant role in the subprime market. As the GSEs become more comfortable with subprime lending, the line between what today is considered a subprime loan versus a prime loan will likely deteriorate, making expansion by the GSEs look more like an increase in the prime market.[6]
In terms of their later effects, the AH goals were clearly the most consequential of the government’s housing policies. HUD succeeded in moving the GSEs away from their policy of acquiring only prime loans. As the agency well knew, it was difficult to find prime loans when at least half of all loans the GSEs acquired had to be made to borrowers at or below the median income in their communities. Borrowers in this category seldom had significant down payments; they also had low credit scores, high debt, and uncertain employment prospects. Large numbers of nonprime loans would increase homeownership but risk major losses in the future.
Nevertheless, by 2008, before the financial crisis, Fannie and Freddie—in complying with the AH goals—either held or had guaranteed 13.4 million subprime or other nonprime mortgages; the government as a whole—including the FHA and other institutions controlled or regulated by the government—held or had insured over 20 million similar nonprime mortgages. This amounted to 74 percent of the 28 million nonprime mortgages present in the US financial system before the financial crisis.[7] When these loans began to default in unprecedented numbers in 2007 and 2008—an effect later called the “mortgage meltdown”—they weakened the financial institutions that held them as investments and brought on the financial crisis.
But HUD did not stop with the GSEs. It also harnessed the FHA and various private firms in an effort to reduce underwriting standards. In 1994, for example, HUD began a program to enlist other members of the mortgage financing community in an effort to increase low-income mortgage lending. In that year, the Mortgage Bankers Association—a group of mortgage financing firms not otherwise regulated by the federal government and not subject to HUD’s legal authority—agreed to join a HUD program called the Best Practices Initiative.
This program involved “Fair Lending Best Practices” agreements that HUD described as follows: “The Agreements not only offer an opportunity to increase low-income and minority lending but they incorporate fair housing and equal opportunity principles into mortgage lending standards. These banks and mortgage lenders . . . serve as industry leaders in their communities by demonstrating a commitment to affirmatively further fair lending.”[8] HUD used the terms “equal opportunity principles” and “fair lending” as euphemisms for reduced underwriting standards or low-income borrowers.
In 1995, expanding the idea in the Best Practices Initiative, HUD issued a policy statement titled “The National Homeownership Strategy: Partners in the American Dream.” The first paragraph of chapter 1 leaves no doubt about what HUD had set out to do: “The purpose of the National Homeownership Strategy is to achieve an all-time high level of homeownership in America within the next 6 years through an unprecedented collaboration of public and private housing industry organizations.” The paper then made clear that reducing down payments would increase homeownership: “Lending institutions, secondary market investors, mortgage insurers, and other members of the partnership should work collaboratively to reduce homebuyer downpayment requirements. Mortgage financing with high loan-to-value ratios should generally be associated with enhanced homebuyer counseling and, where available, supplemental sources of downpayment assistance.”[9]
HUD’s policy was successful. In 1989, only 1 in 230 homebuyers bought a home with a down payment of 3 percent or less, but by 2003, 1 in 7 buyers was providing a down payment at that level and by 2007, the number was less than 1 in 3.[10] The program’s contribution to the reduction in home equity and the subsequent increase in leverage is obvious.
"The GSEs' government-enabled dominance in the housing finance market allowed them to become the de facto standard setters."HUD also used the FHA, a government mortgage insurance agency it controlled, to lead the way in reducing underwriting standards. Established in 1934 to assist the housing market during the Great Depression, the FHA was originally a prime-quality lender but found its niche in later years as the government’s principal agency for assisting low-income housing. As such, HUD was a natural competitor for the GSEs as they began to implement HUD’s enhanced AH goals, and it appears that HUD used the FHA to lead the GSEs toward reduced down payments.
In 1993, for example, shortly after the goals were adopted, the FHA began to increase the percentage of its loans that involved down payments of less than 3 percent; these went from 13 percent in 1992 to 28 percent in 1996. From there, they rose sharply to more than 50 percent in 2000, coinciding with another increase in the AH goals. After that, the FHA’s percentage of these risky loans began to decrease as the GSEs—which were off-budget enterprises—took on more of the risky loans necessary to meet the increasing AH goals.
For a time, as the GSEs expanded their loan purchases, the FHA became less important for assisting growth in homeownership. Recently, however, as their conservator has tightened the GSEs’ lending standards and reduced the effect of the AH goals, the FHA has increased its market share of home purchase loans, from 8 percent in 2007 to 43 percent in 2010.[11] In other words, the current administration is no different from the last two, which were willing to reduce the underlying equity in housing to spur home sales—an adverse trade-off between short-term objectives and long-term market health.
Another government policy that weakened the housing market before the financial crisis was the Community Reinvestment Act (CRA), which required banks to make mortgage credit available in “underserved communities” in the bank’s area of operations. Originally enacted in 1977, the act initially required banks only to reach out to these communities. The results did not satisfy the act’s supporters, and in 1995 new regulations went into effect that required banks to make loans in underserved communities even if the loans did not meet their normal lending standards. These were not quotas in a formal sense, but examiners were supposed to assess whether individual banks were making the required effort, as shown by actual loans on their books.
The CRA is enforced through regulators’ refusals to grant bank applications of various kinds. A bank that receives an unfavorable CRA rating, for example, could be denied regulatory approvals for merger and other expansions. This could be very troubling for larger banks bent on expanding through acquisitions, as well as smaller ones hoping to be acquired at some point. Despite many bankers’ complaints about the losses they were suffering in making these loans, very few of them disclosed these losses—perhaps for fear of retaliation from community activists. Thus, although there were strong incentives for making CRA-type loans, the actual numbers and their delinquency rates are hard to find. However, in its 10-K annual report to the Securities and Exchange Commission for 2009, Bank of America made one of the few bank references to CRA loan quality: “At December 31, 2009, our CRA portfolio comprised six percent of the total residential mortgage balances, but comprised 17 percent of nonperforming residential mortgage loans. This portfolio also comprised 20 percent of residential net charge-offs during 2009.”[12]
Nevertheless, there are plentiful data on commitments by large banks to make CRA-type loans in connection with applications to the Fed for permission to merge with small and medium-sized institutions between 1997 and 2007. In a 2007 report, for example, the National Community Reinvestment Coalition (NCRC) reported that in this ten-year period its member organizations had induced banks that were seeking merger approvals from the Fed and other agencies to commit almost $4.5 trillion in CRA-type lending. Press releases at the time these mergers were approved (available online) backed up this claim. After this report received publicity, it was pulled from NCRC’s website, though it is now available elsewhere on the web.[13] These report loans totaling $1.3 trillion made to fulfill prior commitments,[14] but determining the delinquency rates on these loans is impossible; banks have generally refused to make these data available, and the Financial Crisis Inquiry Commission (FCIC)—established by Congress to investigate the causes of the 2008 financial crisis—did not seriously attempt to investigate this issue.
We can estimate the number of low-quality mortgages made at the behest of the government’s housing policies under the CRA, but the exact number is difficult to quantify. Congress should conduct a thorough investigation to determine why banks felt the need to make CRA-like commitments in connection with their merger applications at the Fed.
Government Policies That Distorted the Private Mortgage Market
Without question, the most significant effect of the government’s direct role in housing policy—especially its attempt to increase homeownership through the AH goals—was its contribution to the growth of the massive housing bubble that developed between 1997 and 2007. This was by far the largest and longest-lasting house price bubble in US history and increased real housing prices (adjusted for inflation) almost 90 percent, about nine times larger than any previous bubble.
Figure 1, developed by the New York Times from data on real home prices by Robert Shiller of Yale University, shows the differences in stark terms. There has been very little serious study of why this bubble was so much larger than any of its predecessors. One factor may have been an income tax law change in 1997, which made speculating in homes a vocation for many homeowners. A married couple could live in a home for two years and pay zero tax on the first $500,000 of capital gain.[15] But the most important element of this bubble—different from any previous one—was the government’s role.

HUD’s loosened underwriting standards succeeded in increasing homeownership: between 1995 and 2004, the US homeownership rate rose from 64 percent—where it had been for thirty years—to more than 69 percent. That added substantial demand to the market, which gave the bubble a bigger boost than simple speculation might have accomplished on its own. In a normal speculative or bubble market, financial sources add funds as the bubble grows but eventually sell out and withdraw as they perceive the risks to have increased.
This is probably the mechanism that naturally limits the size of housing and other asset bubbles in markets not substantially affected by government objectives. But the 1997 to 2007 bubble was different because it was ultimately fed by a government social policy, not the normal profit-making goals of investors and speculators. Unlike private speculators, the government does not fear losses when it is pursuing an objective like increasing homeownership, and it persisted in feeding money into the market long after the risks would have driven private sources out.
By 2002, the bubble had been growing for an unprecedented five years, and speculators, investors, and other funding sources that would otherwise have left the market began to believe that it would be different this time and the normal rules no longer applied. In that year, subprime PMBS passed the $100 billion mark for the first time, yet this still amounted to only about 4 percent of the market. Two years later, subprime PMBS were 12 percent of the market and kept growing from there. In 2006, 20 percent of all originations were subprime mortgages, and about three-quarters of these were securitized.[16]
In a market where prices are rising quickly, homeowners who cannot meet their mortgage obligations can often refinance or sell their homes without a loss. In the midst of a housing bubble, therefore, subprime loans can look like excellent risk-adjusted investments. For this reason, by 2004, private investors had become interested in PMBS backed by subprime loans; these securities were offering high yields but not showing losses commensurate with their risk. This phenomenon was helped along by the fact that the low interest rates in the early 2000s had produced a vast number of refinanced and unseasoned mortgages, which in their early years characteristically have low rates of delinquency and default. Finally, the rating agencies seemed to see things the same way and were putting triple-A ratings on pools of subprime loans. Thus, in early 2007, for example, Austan Goolsbee—later head of President Obama’s Council of Economic Advisers—noted: “the vast majority of even subprime borrowers have been making their payments. Indeed, fewer than 15 percent of borrowers in this most risky group have even been delinquent on a payment, much less defaulted.”[17]
Between 2002 and 2006, the private market for PMBS backed by subprime loans grew substantially. One myth about the this period—accepted and repeated by the FCIC and many others—is that private mortgage securitizations took a larger share of the market between 2004 and 2006 than Fannie and Freddie. However, this is true only if one ignores the purchases of private-label securities by Fannie and Freddie to meet their AH goals. Between 2004 and 2006, Fannie and Freddie bought about 20 percent, or $613 billion, of the private mortgage securitizations tracked by the FCIC. These securities should be attributed to Fannie and Freddie rather than the private sector because they were created to meet the GSEs’ demand. In that case, the GSEs’ own issuances, plus the PMBS they acquired, totaled $3.2 trillion, compared to $2.6 trillion in private issuances over the same period. Thus, the private-sector market share of securitizations never exceeded GSEs issuances between 2004 and 2006.[18]
Eventually it became impossible to ease credit standards sufficiently to maintain a continued flow of mortgages to feed this market. The bubble flattened, delinquencies and defaults began to rise, and by 2007 the PMBS market—at that point, collateralized by about 7.8 million subprime and other risky loans—had collapsed, with devastating consequences for the financial institutions holding these securities. It does not excuse the behavior of the private institutions that put themselves in jeopardy to point out that their activities accounted for only a small proportion of the subprime and other risky loans that caused the mortgage meltdown and the financial crisis.
Underlying the giant housing bubble that drew them in was a government investment that in 2008 consisted of 20.4 million subprime and other risky loans—about three times the size of the PMBS market. If the government had not created a ten-year bubble by making massive investments in subprime and other low-quality mortgages, the private sector would never have been drawn into the subprime market in such a significant way. The weakening of financial institutions in the mortgage meltdown—and the resulting financial crisis—would never have occurred.
Government Policies That Reduced Private Demand
Government policies have also distorted the private mortgage market by narrowing the range of institutions that are likely to support the market. Mortgages are relatively long-term investments, naturally attractive to firms like insurance companies and pension funds that could match mortgage investments with their relatively long-term liabilities. However, the Fed’s flow of funds data make clear that this is not occurring. Insurance companies and pension funds are shunning investment in GSE or FHA/Ginnie Mae securities.[19] The reasons for this are not hard to find. With the government—really, the taxpayers—taking the credit risk on these mortgages, their yields are too low to attract long-term private investors, who earn higher yields by taking the credit risk on debt securities. If the government has already absorbed that risk, the yields on government-backed instruments are too low to meet the investment needs of these major institutional buyers.
In 2006, at the height of the housing bubble, only 6.3 percent of the assets of these institutional investors consisted of mortgage-backed securities issued by the GSEs; in 2011, even that small proportion had declined to 5.4 percent. Considering that insurance companies and pension funds have over $12 trillion to invest in long-term assets, this is a source of housing finance funds that the government’s role has forfeited. The buyers of government-backed mortgages have been foreign central banks; insured US banks induced to buy these instruments by favorable capital regulation; and federal, state, and local governments and their pension funds, which are required by law to invest in only the safest instruments.
The Effects of the GSEs
The GSEs’ government-enabled dominance in the housing finance market allowed them to become the de facto standard setters. The result was a significant deterioration in two areas—appraisals and automated underwriting—that contributed both to procyclicality in the housing market and the growth of the immense 1997–2007 housing bubble.
In the 1970s, the GSEs developed standard form residential appraisal reports, known as the Uniform Residential Appraisal Report, which became the industry standard. Until the mid-1980s, an acceptable appraisal for a residential mortgage involved at least three approaches—replacement (or construction) cost, rental value (or income), and comparable value. Replacement cost and rental value changed slowly as housing prices rose and fell, acting as countercyclical brakes on large increases or decreases in housing prices. In the mid-1980s, the GSEs concluded that the rental value approach was no longer required on the owner-occupied mortgages they bought. In the mid-1990s, they made a similar decision regarding the replacement cost approach.
Because of the GSEs’ dominance in the market, these changes became market practices. If an originator was likely to sell mortgages to Fannie or Freddie, it no longer made sense to require a more costly appraisal that included replacement cost and rental value. That kind of appraisal also tended to hold down the value of the home, impeding sales by reducing the size of loans financing sources would approve. Reliance solely on comparable prices, moreover, was highly procyclical. As home prices rose, higher comparables begat higher-priced sales. When the bust came in 2007, this procyclical process began to work in reverse; now, it is difficult to sell a home because comparable-properties appraisals are so low that buyers frequently cannot get the financing to meet a price they would be willing to pay.
Another area where the GSEs’ dominance had similar effects was automated underwriting; in a kind of Gresham’s law in operation, the system with the lowest standards drove out others. Because of the nature of automated underwriting, which accounts for experience in the market, this not only reduced underwriting standards but also had procyclical effects that drove the development of the housing bubble.
As with appraisal practices, if a mortgage originator wanted the option to sell mortgages to Fannie or Freddie, it was a waste of money to establish different or more stringent standards than those in the GSEs’ own automated underwriting systems or to use any other automated underwriting system. Gradually, then, the GSEs’ systems became the dominant automated underwriting systems in the market, used by originators as well as mortgage insurers to determine acceptable mortgage quality.[20] By the mid-2000s, Freddie was purchasing more loans approved by Fannie’s system than its own, because Fannie’s system approved more mortgages overall.
The dominance of the GSEs and their automated underwriting systems also had two other adverse effects. First, because of the GSEs’ need for subprime and other risky mortgages to meet AH goals, they adjusted their systems to accept mortgages that were goals-rich. Automated underwriting allowed originators to test in real time whether a subprime or other low-quality mortgage would be acquired by the GSEs before it was approved. Without real-time testing, many subprime mortgages would never have been made; it would have been too risky to fund the loan and later find that neither of the GSEs would buy it.
Second, the systems also contained feedback mechanisms that tested for the performance of loans with certain qualities. If a particular subprime loan had a low delinquency rate in the recent past, the automated system would accept it, even though a human underwriter—with longer experience in the market—might have considered it too risky. As weaker and weaker subprime mortgages were accepted and showed few delinquencies, more and more of these mortgages were approved, again in an upward spiral with the prices of homes.
Conclusion
Government housing policies did more than increase the numbers of subprime and other weak mortgages in the US financial system; they also encouraged Americans to reduce the equity in their homes, built a massive ten-year bubble that obscured growing risks in the mortgage market, forfeited the support of insurance companies and private pension funds—both natural sources of mortgage funding—and tended to degrade the quality of the peripheral elements, such as appraisals, necessary for a well-functioning housing finance system.
Despite all the government’s “help,” the United States has higher mortgage rates in relation to the risk-free rate than other developed countries and a homeownership rate that falls in the middle among these same countries. These policies have left the American housing market in a shambles, requiring many repairs and years of recovery. But no recovery can begin until Congress and the American people recognize that the problems of the housing market are the result of government intervention to a degree experienced nowhere else in the developed world.
Peter J. Wallison (pwallison@aei.org) is the Arthur F. Burns Fellow in Financial Policy Studies at AEI, and Edward J. Pinto (edward.pinto@aei.org) is a resident fellow at AEI.

Notes
1. Dwight M. Jaffee, “A Privatized U.S. Mortgage Market” (presentation, Conference on the GSEs, Housing, and the Economy, Washington, DC, January 24, 2011), www.rhsmith.umd.edu/cfp/events/2011/GSE2011/presentations/Jaffee.pdf (accessed April 18, 2012).
2. See, for example, Peter J. Wallison, “Dodd-Frank and Housing Finance Reform: A Cure That’s Worse Than the Disease,” AEI Financial Services Outlook (April/May 2011), www.aei.org/outlook/economics/financial-services/housing-finance/dodd-frank-and-housing-finance-reform/; and Peter J. Wallison, “Empty Promise: The Holes in the Administration’s Housing Reform Plan,” AEI Financial Services Outlook (February 2012), www.aei.org/outlook/economics/financial-services/housing-finance/empty-promise-the-holes-in-the-administrations-housing-finance-reform-plan/.
3. Barbara A. Rehm, “Programs from Hamp to Harp More Crutch Than Cure,” American Banker 177, no. 33 (March 1, 2012): 1.
4. Public Law 102-550, 106 St. 3672, H.R. 5334, enacted October 28, 1992.
5. See Peter J. Wallison, Dissent from the Majority Report of the Financial Crisis Inquiry Commission (Washington, DC: AEI Press, 2011), 45–85; and Edward J. Pinto, Government Housing Policies in the Lead-Up to the Financial Crisis: A Forensic Study (Washington, DC: American Enterprise Institute, February 5, 2011), 104–08, www.aei.org/paper/economics/financial-services/housing-finance/government-housing-policies-in-the-lead-up-to-the-financial-crisis-a-forensic-study.
6. Department of Housing and Urban Development, “HUD’s Regulation of the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac),” Federal Register 65, no. 211 (October 31, 2000): 65106, www.gpo.gov/fdsys/pkg/FR-2000-10-31/pdf/00-27367.pdf (accessed April 23, 2012). Emphasis added.
7. Peter J. Wallison and Edward J. Pinto, “Why the Left Is Losing the Argument over the Financial Crisis,” The American, December 27, 2011, www.american.com/archive/2011/december /why-the-left-is-losing-the-argument-over-the-financial-crisis.
8. US Department of Housing and Urban Development, Hawaii Newsletter (Fall 2001), www.hud.gov/local/hi/working/nlwfal2001.cfm (accessed April 18, 2012).
9. US Department of Housing and Urban Development, “The National Homeownership Strategy: Partners in the American Dream” (chapter 4, action 35), 1995, http://web.archive.org/web/20010106203500/www.huduser.org/publications/affhsg/homeown/chap1.html (accessed April 18, 2012). Emphasis added.
10. Wallison, Dissent from the Majority Report, 55 (figure 4).
11. Mortgage Bankers Association, “2004-2010 HMDA Home Purchase Owner-Occupied by Borrower Race,” January 13, 2012 (draft).
12. Bank of America, 2009 Annual Report (Charlotte, NC: Author, 2010), 69, http://media.corporate-ir.net/media_files/irol /71/71595/reports/2009_AR.pdf (accessed April 20, 2012).
13. National Community Reinvestment Coalition, CRA Commitments (September 2007), www.community-wealth.org/_pdfs/articles-publications/cdfis/report-silver-brown.pdf (accessed April 18, 2012).
14. Wallison, Dissent from the Majority Report, 85–92.
15. Vikas Bajaj and David Leonhardt, “The Reckoning: Tax Break May Have Helped Cause Housing Bubble,” New York Times, December 18, 2008.
16. Inside Mortgage Finance, Mortgage Market Statistical Annual, vol. 1 (2012): 17. 
17. Austan Goolsbee, “‘Irresponsible’ Mortgages Have Opened Doors to Many of the Excluded,” New York Times, March 29, 2007.
18. Pinto, Government Housing Policies, 144.
19. This point is discussed in greater detail in Wallison, “Empty Promise.”
20. The one notable exception was Countrywide, which after being helped to market dominance by the GSEs, negotiated the right to use its own underwriting system called the Countrywide Loan-Underwriting Expert System (CLUES). CLUES was kept updated with the latest variances agreed to by one or both GSEs.

Thursday, April 26, 2012

Nebraska assistant Ron Brown says faith demands anti-gay stance - NCAA Football - SI.com

Nebraska assistant Ron Brown says faith demands anti-gay stance - NCAA Football - SI.com


Nebraska assistant says faith demands anti-gay stance

OMAHA, Neb. (AP) -- Nebraska assistant football coach Ron Brown has been called, among other things, a homophobe and a hater.
He turns the other cheek.
The 55-year-old Brown knows he walks a fine line as a high-profile employee of a taxpayer-funded university. His detractors say he crossed it last month when he attended an Omaha City Council hearing and testified against an anti-discrimination ordinance that extended protections to gay and transgender people.
In Brown's three-minute appearance, he challenged ordinance sponsor Ben Gray and other members to remember that the Bible does not condone homosexuality. He told council members they would be held to "great accountability for the decision you are making."
"The question I have for you all is, like Pontius Pilate, what are you going to do with Jesus?" Brown asked. "Ultimately, if you don't have a relationship with him, and you don't really have a Bible-believing mentality, really, anything goes... At the end of the day it matters what God thinks most."
Barbara Baier, a member of the Lincoln Board of Education, wrote to university administrators to request Brown's firing in the wake of his testimony. She noted the university-wide policy not to discriminate based on, among other things, sexual orientation.
Brown - in a decision he said he now regrets - gave Memorial Stadium in Lincoln as his address of record. Baier said some people could have inferred he was representing the university, not just himself, when he appeared before the council. She said Brown's continued employment creates an atmosphere hostile to gay student-athletes.
"He says terrible things about members of my community - citizens of this country, people who have not committed any crimes," Baier said. "He compares gays and lesbians to people who have committed crimes, people who are desiring to go and cause the destruction of the American family, and nothing could be further from the truth."
Chancellor Harvey Perlman admonished Brown for giving the stadium address, but said Brown's personal views do not reflect those of the university.
It was not the first time Brown has spoken out against homosexuality, and not the first time people have called for his dismissal for doing so.
"To be fired for my faith would be a greater honor than to be fired because we didn't win enough games," Brown said in an interview with The Associated Press. "I haven't lost any sleep over it. I realize at some point, we live in a politically correct enough culture where that very well could happen."
It was just six months ago that Brown earned national acclaim for leading a prayer for healing at midfield before the Cornhuskers' game at scandal-torn Penn State.
"Hero to goat," Brown said.
Brown is adamant he won't change his Bible-inspired message or quit delivering it. As a Christian, he said, he's called to evangelize.
At a time when Tim Tebow's faith has been the subject of admiration and ridicule, there are those who like the fearlessness Brown shows going against the grain of what they say is a culture out to marginalize religion and unwilling to define right and wrong.
A Lincoln city councilman has said he plans to propose a similar anti-discrimination ordinance next week and that a public hearing could be held May 7. Brown said he is "praying about" speaking in opposition if his schedule allows.
In a state where the Cornhuskers are assigned celebrity status, separating Brown from the program would be a stretch.
Brown acknowledges that he uses his position as a platform for his ministry. He sprinkles in football metaphors during his many speaking engagements and sometimes references the players he's coached.
He said the risk of losing his job pales in comparison to the price others have paid for standing up for their beliefs. Christians throughout the world, he pointed out, have been murdered because of their faith.
"The same thing that was a sin 2,000 years ago is a sin today," Brown said. "The thing that was right 2,000 years ago is right today."
Brown was born in New York in 1956 to an unwed mother who placed him in an orphanage. His adoptive parents brought him up as a Catholic, and he said he had a mostly trouble-free childhood even as his mom and dad struggled to make ends meet. With their encouragement, he said, he earned an academic scholarship to Brown University and starred there as a defensive back.
He said he felt a spiritual emptiness during his college years but came to be influenced by the devout lifestyle of one of his teammates, Harry Walls. Brown said he was born again in 1979 and began evangelizing.
He now heads a Christian ministry called FreedMen Nebraska, hosts a show on a statewide Christian radio network, appears on a cable-access channel in Lincoln and writes a column for the Fellowship of Christian Athletes' magazine. Brown also has written books on Christian character and growth.
Brown has been an assistant at Nebraska under three head coaches, starting with Tom Osborne in 1987. He was let go when Bill Callahan replaced Frank Solich in 2004. Bo Pelini, who took over for Callahan in 2008, rehired Brown.
Advocacy groups called for Brown's firing after he condemned homosexuality on a Christian radio show in 1999, and the American Civil Liberties Union has threatened legal action against Nebraska public schools that require students to attend Brown's Bible-fueled motivational talks.
The attention Brown has received for his non-football activities has worn on Pelini.
"Why don't you ask me why I hired him?" Pelini said. "I hired him because he's a good football coach. He's trustworthy. He has a lot of integrity. I hired him because I believe in him as a football coach and a guy who has positive impact on kids."
Pelini said he knows Brown injects religion into his relationships with his players and none has complained.
Osborne, now the athletic director, said Brown is within his rights to express his personal views.
"I think it's important that there be clarity with what you do in your capacity at the university and what you do as a private citizen," Osborne said.
Brown stepped to the pulpit at Dundee Presbyterian Church in Omaha on Sunday night and began preaching with the same passion he brings to coaching. He gave a pep talk about the role of missionaries. Football was the backdrop, with Brown mentioning star running back Rex Burkhead as he spoke figuratively about "pushing the ball over the goal line."
Brown offered a disclaimer after his 50-minute talk, saying his views did not necessarily reflect those of the university. Pamphlets in the pews referred to Brown as an "accomplished football coach" but made no mention of his ties to the Huskers.
Brown said he isn't "picking on" gays and lesbians. He said a gay agenda has cropped up in American culture and that he is merely responding to it.
He said gays and lesbians do not deserve the same protections as groups that historically have been discriminated against, such as blacks and women.
"I have simply said that based on the Bible, homosexuality, the lifestyle of homosexuality, is a sin," he said. "That has created a flame within itself. But I've decided I'm not going to be afraid of people calling me a bigot or a homophobic or narrow-minded out of a simple, gentle, compassionate expression of the truth of God's word. I'm not going to be bought off by that."