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Bank of America Settles with US Justice Department for $17 Billion

Posted by Steve Markowitz on August 21, 2014

The Wall Street Journal reported that mega-bank, Bank of America, has agreed to pay a $17 billion fine for its role in the mortgage crisis that led to the 2008 financial meltdown. This is only a piece of the nearly $60 billion the bank paid during the last five years to settle legal problems.

Those who cheer the huge Bank of America fine are missing the larger picture. Certainly many banks used dubious tactics and business practices that help lead to the 2008 economic meltdown. However, willing partners included the US government that pressured banks into giving mortgages to individuals who could not afford them, and the Federal Reserve whose easy money policies were major factors in creating the housing bubble. These issues, along with banker greed and borrowers, were significant factors in creating the bubble and subsequent meltdown.

How did the government respond to those largely responsible for creating economic calamity? First they bailed out large banks and other companies. Then they bailed out some individuals who borrowed too much money.

Perhaps the biggest problem relating to the huge monetary settlements between large banks and the Department of Justice is that the penalties are not placed on the perpetrators of wrongdoing. No executive or bank employee has been charged criminally by the DOJ. This is not by accident. Further, the current fines will be paid by shareholders including pension funds who had nothing to do with creating the problem.

The Department of Justice understands the misplaced logic behind the large penalties imposed on banks today. However, this populist action not only protects those in the private sector responsible for the bad behavior, but deflects attention from the government’s own role in creating the economic problems.

Posted in Bailouts, Banks | Tagged: , , , , , | Leave a Comment »

Comedian Bill Maher Calls Islam on Violence in Tweet

Posted by Steve Markowitz on August 21, 2014

Comedian Bill Maher is an unapologetic Leftist and atheist.  He now has one thing in common with Pope Francis; both have called Islam on the violence emanating from too many followers of that religion.  Maher’s recent tweet follows:

Bill Maher

Posted in Islam | Tagged: , , , | Leave a Comment »

Rick Perry Indicted for Refusing to Fund Drunk DA

Posted by Steve Markowitz on August 17, 2014


Texas Gov. Rick Perry was indicted on Friday for refusing to fund the State’s Public Integrity Unit.  The implication is that the Governor either overstepped his authority or has attempted to block some related investigation.  While this may be the case, there is at least antidotal evidence that the Unit is run by an incompetent District Attorney.

The Texas Public Integrity Unit is headed by Dist. Atty. Rosemary Lehmberg. In 2013, DA Lehmberg was arrested for driving while under the influence of alcohol. A video below shows her booking at a Texas police station. She is not only an incoherent, but also threatens the arresting officer.

Irrespective of Perry’s motive in not funding the Public Integrity Unit, DA Lehmberg has proven to be an inappropriate public servant to have the power to make decisions on criminal matters. However, like too many “servants” of the People, she is not held accountable for inappropriate behavior. It is another example of the growing tyranny by the governing class.

Posted in Politics | Tagged: , , , , , , , | Leave a Comment »

What is Money?

Posted by Steve Markowitz on August 14, 2014

For some years conservative economists have voiced opinions that the easy money policies of the Federal Reserve and the increasing deficit spending by the United States will damage the economy. As the years pass and without clear connection between these policies and their costs or consequences, these calls have begun to sound more like the girl that cried wolf. However, unless one believes in perpetual motion or alchemy, there must be costs to policies that in essence print money.

Forbes Editor-in-Chief Steve Forbes has said of money:

Money is simply a tool that measures value, like a ruler measures length and a clock measures time. Just as changing the number of inches in a foot will not increase the building of houses or anything else, lowering the value of money will not create more wealth. The only way we will ever get a real recovery is through a return to trustworthy, sound money. And the best way to achieve that is with a gold standard: a dollar linked to gold.

While reasonable people can argue as to the merits of again linking the dollar to gold, it is hard to argue with Forbes’ common –sense definition of money being a measuring tool. Fiat currencies, those not tied to a commodity other than the printing press, are a promise that the currency will be worth something of value in the future for trade or commerce. It does not take a PhD in economics to realize that if the total amount of goods, services and demand remain constant while the money supply increases, that the value of money will decrease.

As a simplistic example, in an economy for which the only goods and services offered and that there is demand for is corn. In this example there are 100 bushels of corn produced each year and demand remains constant at 100 bushels annually. Finally, the total currency available to this society is $100. Under this scenario, the price of corn will be $100 divided by 100 bushels or one dollar bushel. If these assumptions remain unchanged, except the aggregate money supply increasing to $150, the price will increase to $1.50 per bushel, $150 divided by 100 bushels. This is an inflation rate of 50% for the year caused by the natural bid up of prices that will occur, the result of excess currency chasing limited supply.

So far the federal deficit and Fed’s easy money policies have not resulted in significant inflation. This is due to extraordinary economic events including: 1) outsourcing that has lowered the cost of labor to the developed world, 2) excessive production capacity due to significant increases, mainly in China, and 3) historically low cost of financing that has offset spending increases by the government and lowered various costs to private industry. However, none of these items are sustainable, which when the tide turns, has the potential to lead to significant inflation with little warning.

Few economists are currently predicting significant inflation in the near-term. However, significant economic changes are rarely predicted in advance by mainstream economists. We need look no further than their track record of not predicting the 2008 economic meltdown or the problems that the subprime mortgage market would cause the economy.

Bubbles and other non-sustainable economic events generally continue much longer than reasonable logic predicts. This reality leads to a hockey stick type trajectory towards the end of bubbles. Therefore, the best economists can do is to predict a low rate of inflation until inflation kicks in. Yikes and hold on!

Posted in economics, Inflation | Tagged: , , , , , | 6 Comments »

Candidate Obama Derides Presidential Vacations

Posted by Steve Markowitz on August 12, 2014

While politicians tend to take liberties with truth and sincerity, Barack Obama has taken this to new levels. On nearly a weekly basis, decisions he makes are in opposite of what he promised the People when seeking office.

Recently some have criticized the President for going on vacation while the Middle East is in turmoil and Russia is on the verge of invading Ukraine. He is also been criticized for his many golf outings and fund-raising tours, some of which have also occurred when significant international turmoil was occurring.

Supporters of the President point out that the job is a difficult one and deserving vacations. It is hard to disagree with this logic. However, sometimes vacations need to be put off given unforeseen urgencies. In addition, it is difficult to justify the many outings that this President takes. Finally, when running for his first term, Senator Obama said (emphasis added):

You have to understand that if you seek that office, then you have to be prepared to give your life to it. Essentially, the bargain that I think every President strikes with the American people is, ‘you give me this office, then in turn my fears, doubts, insecurities, foibles, need for sleep, family life, vacations, leisure, is gone. I am giving myself to you.’

While the Barack Obama once correctly said that “words matter”, he does not hold himself to this reasonable standard. If indeed words matter, then promises made should be held to an even higher standard.

Posted in President Obama | Tagged: , | 1 Comment »

Former NFL Player Blames Anti-Poverty Programs for Damaging African-American Community

Posted by Steve Markowitz on August 9, 2014

Former NFL linebacker, Garry Cobb, played college football at USC and then went on to an 11 year pro football career. He is now running for Congress in New Jersey as a Republican in an area that typically votes Democratic.

In a television interview (video below), Cobb discusses why he switched parties and became a Republican years ago. He explains that as a child in the 60s his parents instilled in their large family a strong work ethic. At the same time he watched some of his cousins’ families break up as a result of Lyndon Johnson’s antipoverty programs, which that offered financial incentives for fathers to leave their households. As a result, Cobb also watched some of his cousins take the wrong path, ending up in jail. He contrasts this to the success that he and his siblings have, a result of his parents not getting sucked into the Progressive’s vortex.

Cobb’s explanation of the damage done to the African-American community by governmental programs is compelling. It should be the centerpiece of the Republican Party’s domestic agenda. However, Republicans often cower from the fear of being called racist. As an African-American, Cobb has no such fear. He is joining a still small, but growing list of African-Americans who are becoming a more vocal part of the Republican Party including Col. Allen West and Dr. Ben Carson.

Republicans would do well to elect leaders like Cobb who have the ability to articulate a cohesive domestic policy. Their current leadership is lacking in these important skills.

Posted in Government Ineptness, Racism | Tagged: , , , , , , , , , , , | Leave a Comment »

Prager Middle East YouTube Goes Viral

Posted by Steve Markowitz on August 7, 2014

Conservative radio talk show commentator, Dennis Prager, posted a YouTube video titled “The Middle East Problem” that has received significant press.  It proffers a very pro- Israeli leaning.  Those that support Israel against Hamas will affirmatively shake their heads after viewing the video.  Those who lean towards the Palestinian position will scoff at it.

Irrespective of one’s position on the current Israeli–Hamas conflict, it is hard to disagree with Prager’s conclusion when he rhetorically asks:  “If tomorrow, Israel laid down its arms and announced, ‘We will fight no more,’ what would happen?  And if the Arab countries around Israel laid down their arms and announced, ‘We will fight no more,’ what would happen?  In the first case, there would be an immediate destruction of the state of Israel and mass murder of its Jewish population.  In the second case, there would be peace the next day.”

Posted in Middle East | Tagged: , , , | 1 Comment »

Peter Schiff versus Conventional Wisdom

Posted by Steve Markowitz on August 6, 2014

Peter Schiff is the CEO of Euro Pacific Capital.  He has significant financial expertise that has helped make him a wealthy, the result of being a successful investor.

Schiff is conservative and a proponent of the Austrian School of Economics.  He is looked at as somewhat of a rogue by Wall Street due to his bearish outlook of the long-term view of the US economy and the US dollar, which Schiff contends have been weakened by Federal Reserve policies.

While Schiff‘s views are often controversial, his willingness to go against conventional wisdom and being right makes his ideas worthy of consideration.  For example prior to the 2008 Great Recession caused by the economic meltdown, Schiff went on TV and railed against the Fed’s cheap money policies that he contended created the housing bubble and would ultimately lead its popping.  As seen in the video below, it is remarkable on just how many respected economist and Wall Streeters scoffed at Schiff’s ideas.

Let’s see, Greenspan and his pals at the Fed first did not see the housing bubble being created.  When the downturn started they then predicted that the damage to the economy would be contained.  Greenspan’s successors have since implemented the same easy money policies, but on steroids, that created this economic mess in the first place.

Schiff is once again predicting significant economic turmoil in the near future resulting from the Fed’s ongoing easy money policies.  Most economists disagree.  History, as demonstrated in the video below, has not been kind to conventional wisdom.

Posted in economics, Federal Reserve | Tagged: , , , , , | Leave a Comment »

Obama Says Paying Taxes is Patriotic

Posted by Steve Markowitz on August 5, 2014

Included on www.Whitehouse.gov is President Obama’s radio address of July 26, 2014.  It is quintessential Obama, not only pitting one group of Americans against another, but also demonstrates hypocrisy.

Obama begins by enlightening listeners on the success of his economic policies stating that “Our businesses have added nearly 10,000,000 new jobs in the past 52 months” and “the unemployment rate is at its lowest point since September 2008.  While these figures may be correct, they paint a distorted picture.  The figures tell nothing of the quality or pay scale of the new jobs or the fact that the unemployment is rate is down mainly because so many Americans stopped looking for jobs and are no longer counted as unemployed.

Real Medium IncomeThe New York Times published a graph showing that Americans’ median income significantly decrease since Obama took office, offering a more realistic picture of the state of the American economy.  It certainly does not paint a picture of successful economic policies.

In the second part of the radio address Obama expressed outrage at some large corporations fleeing the United States “just to avoid paying their fair share” of US taxes.   He goes on to state that these “loophole in our tax laws makes this totally legal” and further says that “you don’t get to pick which rules you play by or what tax rate you pay.”

This is cynical indignation for President Obama to profess.  For example, let’s start with his pals in Hollywood who moved a significant amount of movie production over the years to either states or countries merely to lower their taxes due.  Then there is Jeffrey Immelt, CEO of General Electric, who was appointed Obama’s Job Czar.  General Electric earned over $20 billion in profits during 2010, but paid no taxes that year.

The President is disconnected with how most Americans view taxes.  Most make significant efforts and take any legal deduction to lower their tax bills.  For this president it seems that the difference between a tax benefit and a “loopholes” depends on who is the recipient.

Rather amazingly, President Obama then invokes a theme often used in the past by the Right to promote their agenda; i.e. patriotism, saying: “In my budget earlier this year, I proposed closing I proposed closing this unpatriotic loophole for good”, and “rather than double down on the top-down economics that let a fortunate few play by their own rules, let’s embrace economic patriotism that says we rise or fall together.”

If the President’s contention that paying taxes is patriotic is a reasonable one, does that mean that the nearly 43% of Americans who pay no income taxes are unpatriotic?



Posted in President Obama, Taxes | Tagged: , , , , | Leave a Comment »

Leftist Actors Accused of Anti-Semitism

Posted by Steve Markowitz on August 3, 2014

In previous postings this Blog has proffered the view that the dangers of racism and anti-Semitism emanating from Progressives and Leftists are increasing.  This view is in opposite of the narrative the Left promotes of its views.  However, their actions demonstrate a dark side of their philosophies.

Relating to racism, or for that matter sexism, the Left often promotes the view that people of color, as well as women, are somehow unable to complete on a level playing field in the business and academic world.  The numbers of African Americans and women in high places of government and all sectors of the world proves this to be fallacious.  That raises questions as to the nations behind the Left’s continued use of this narrative.  At best it is to support industries that profit from the narrative.  The alternative is darker.

Jon VoightConcerning anti-Semitism, many on the Left now have a strong anti-Israeli bias.  In an effort to cover up the building anti-Semitism within the movement, criticism is typically couched with claims such as they are not anti-Semitic, but merely anti-Israeli policy.  While Israel, as with any country, should be open to criticism, the vitriol behind the Left’s attacks, as well as the disproportionate use of these attacks against Israel, indicate a motivation that goes beyond policy disagreements.  The open anti-Semitism openly promoted by Hamas, other Muslim radicals, and in the protests currently ongoing in various countries, also supports this conclusion.

Hollywood is not only one of the most vocal proponents of Leftist philosophies in the United States, but also a significant monetary contributor to politicians who promote Leftist causes, including President Obama.  That is not to say that all in Hollywood share the leftist dogma.

One actor who has been an outspoken critic of the Left is Jon Voight.  This week Voight attacked fellow actors including Javier Bardem and Penelope Cruz for signing an open letter that was highly critical of Israel’s war against Hamas.  Voigt did not pull any punches accusing his fellow actors of fanning the flames of worldwide anti-Semitism.  Excerpts supplied by The Hollywood Reporter are included below, a refreshing view that is to avoid of political correctness or double-talk.

Jon Voight:

I am heartsick that people like Penelope Cruz and Javier Bardem could incite anti-Semitism all over the world and are oblivious to the damage they have caused.

They are obviously ignorant of the whole story of Israel’s birth, when in 1948 the Jewish people were offered by the UN a portion of the land originally set aside for them in 1921 – and the Arab Palestinians were offered the other half.

The Arabs rejected the offer, and the Jews accepted – only to be attacked by five surrounding Arab countries committed to driving them into the sea.  The Arabs tried again in 1967 and again in 1973.

Each time, the Jews prevailed, but not without great loss of life.  And yet, Israel has always labored for a peaceful relation with its Arab neighbors.  It voluntarily returned the Sinai Peninsula to Egypt in return for peace, and gave the Palestinians all of Gaza as a peace gesture.

What was the response?  The Palestinians elected Hamas, a terrorist organization, and they immediately began firing thousands of rockets into Israel.

I am asking all my peers who signed that poison letter against Israel to examine their motives.  Can you take back the fire of anti-Semitism that is raging all over the world now?

You should hang your heads in shame.  You should come forth with deep regrets for what you did – and ask for forgiveness from the suffering people in Israel.

Posted in Hollywood, Racism, Radical Islam | Tagged: , , , , , , | 3 Comments »


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