China = Fixed Trade Not Free

Unfair trade is not free trade. We need to have laws that ensure free trade.

China Angered Over US Senate's Anti-Yuan Bill -

Unfair Trade

China Angered Over US Senate's Anti-Yuan Bill - Forbes http://onforb.es/nVjelJ

What is a free market?

What is a free market?


When 1% control 35% of wealth, how is our economy an open free market?


In the USA, wealth is highly concentrated. As of 2007, the top 1% of households owned 34.6% of all privately held wealth. 

Historical context

Numerous studies show that the wealth distribution has been extremely concentrated throughout American history, with the top 1% already owning 40-50% in large port cities like Boston, New York, and Charleston in the 19th century (Keister, 2005). It was very stable over the course of the 20th century, although there were small declines in the aftermath of the New Deal and World II, when most people were working and could save a little money. There were progressive income tax rates, too, which took some money from the rich to help with government services.

Then there was a further decline, or flattening, in the 1970s, but this time in good part due to a fall in stock prices, meaning that the rich lost some of the value in their stocks. By the late 1980s, however, the wealth distribution was almost as concentrated as it had been in 1929, when the top 1% had 44.2% of all wealth. It has continued to edge up since that time, with a slight decline from 1998 to 2001, before the economy crashed in the late 2000s and little people got pushed down again. Table 3 and Figure 4 present the details from 1922 through 2007.

(From website below)

http://sociology.ucsc.edu/whorulesamerica/power/wealth.html

The Mormon Church and The Republican Party "best friends"

Bush Awards Mormon leader Hinckley Presidential Medal of Freedom, June 23, 2004.

•  Question - Did the Mormon Church help start the Great Depression?

Senator Reed Smoot (R) was a tool of the Mormon Church. His Bill, "Smoot-Hawley Act" put the Great Depression into high gear. His goal might have been to shield church owned farming from real competition.   

The Smoot-Hawley Tariff Act of June 1930 raised U.S. tariffs to historically high levels. The original intention behind the legislation was to increase the protection afforded domestic farmers against foreign agricultural imports. Massive expansion in the agricultural production sector outside of Europe during World War I led, with the post-war recovery of European producers, to massive agricultural overproduction during the 1920s. This in turn led to declining farm prices during the second half of the decade. During the 1928 election campaign, Republican presidential candidate Herbert Hoover pledged to help the beleaguered farmer by, among other things, raising tariff levels on agricultural products. But once the tariff schedule revision process got started, it proved impossible to stop. Calls for increased protection flooded in from industrial sector special interest groups, and soon a bill meant to provide relief for farmers became a means to raise tariffs in all sectors of the economy. When the dust had settled, Congress had agreed to tariff levels that exceeded the already high rates established by the 1922 Fordney-McCumber Act and represented among the most protectionist tariffs in U.S. history.

The Smoot-Hawley Tariff was more a consequence of the onset of the Great Depression than an initial cause. But while the tariff might not have caused the Depression, it certainly did not make it any better. It provoked a storm of foreign retaliatory measures and came to stand as a symbol of the "beggar-thy-neighbor" policies (policies designed to improve one's own lot at the expense of that of others) of the 1930s. Such policies contributed to a drastic decline in international trade. For example, U.S. imports from Europe declined from a 1929 high of $1,334 million to just $390 million in 1932, while U.S. exports to Europe fell from $2,341 million in 1929 to $784 million in 1932. Overall, world trade declined by some 66% between 1929 and 1934. More generally, Smoot-Hawley did nothing to foster trust and cooperation among nations in either the political or economic realm during a perilous era in international relations.
The Smoot-Hawley tariff represents the high-water mark of U.S. protectionism in the 20th century. Thereafter, beginning with the 1934 Reciprocal Trade Agreements Act, American commercial policy generally emphasized trade liberalization over protectionism. The United States generally assumed the mantle of champion of freer international trade, as evidenced by its support for the General Agreement on Tariffs and Trade (GATT), the North American Free Trade Agreement (NAFTA), and the World Trade Organization (WTO).

http://future.state.gov/when/timeline/1921_timeline/smoot_tariff.html

Fed Funds Rate + FHA Backed Loans + ARM Loans = BAD IDEA

The Garn–St. Germain Depository Institutions Act of 1982

An Act of Congress, that deregulated the Savings and Loan industry. This Act turned out to be one of many contributing factors that led to the Savings and Loan crisis of the late 1980s.

The bill, whose full title was "An Act to revitalize the housing industry by strengthening the financial stability of home mortgage lending institutions and ensuring the availability of home mortgage loans," was a Reagan Administration

The bill is named after its sponsors, Congressman Fernand St. Germain, Democrat of Rhode Island, and Senator Jake Garn, Republican of Utah. The bill had broad support in Congress, with co-sponsors including Charles Schumer and Steny Hoyer.[3] The bill passed overwhelmingly, by a margin of 272-91 in the House.[4]

Title VIII, Alternative Mortgage Transactions, allowed Adjustable rate mortgages [5]


Bush Whitehouse Unveils Exotic Mortgage Rules
November 15, 2006

Interest-only and payment-option ARM lenders will have to qualify borrowers at the fully indexed rate with potential negative amortization added to the loan amount under final federal regulatory guidance issued last month. Banking regulators rejected industry complaints that the new underwriting guidelines on programs will be too restrictive. However, these proposed rules are still subject to a 60-day comment period and may be changed before finalization.

Under the mandate, payment-option adjustable-rate mortgage servicers must include in the monthly mortgage statement an “explanation” that if borrowers choose the minimum monthly payment — which many do — it would increase their loan balance. “The regulators stuck to their guns,” said Howard Glaser, a former Department of Housing and Urban Development attorney who runs a consulting practice—

“…. It is rare for federal regulators to step in and regulate a specific product. They are doing so here out of concern that they need to protect both the borrower and the bank.”

These products have been very popular during the recent housing boom and the tightening of these standards at a time when the market is slowing may serve to exacerbate the situation.

FHA Backs More Than Half of Loans for New Homes
By Nick Timiraos Oct 2009

Just how big a backstop is Uncle Sam providing to the housing market right now? Here’s one indication: The number of home buyers relying on low down-payment mortgages obtained via the Federal Housing Administration and other federal agencies.

Some 59% of new home buyers are using government-backed loans from the FHA and other agencies, according to a survey of home builders by John Burns Real Estate Consulting, an Irvine, Calif.-based consultancy. The FHA accounts for nearly half of all mortgages, while loans from the Department of Agriculture and the Department of Veterans’ Affairs account for another 10% of all loans for new homes.

The government’s share of the market rises even higher in certain areas. In Northern California, for example, builders said that the government accounted for 76% of all mortgages, while the government share stood at 65% in the Midwest and 62% in South Florida.

South Florida also has the highest share of all-cash new home purchases, at 22%, largely the result of investor purchases of condos and other attached homes. Southern California and the U.S. Northwest had the highest share of purchases with jumbo loans, at 15% and 13%, respectively.

Deregulation Meltdown Caused By Republicans

FDR comes into the White House around March 1933

· Economy Act of 1933 - enacted March 20, 1933 - cut the salaries of federal workers and reduced benefit payments to veterans, moves intended to reduce the federal deficit in the United States.

· Emergency Banking Act of 1933 - enacted March 9, 1933 - allowed a plan that would close down insolvent banks and reorganize and reopen those banks strong enough to survive. The act also provided for the reopening of banks after federal inspectors had declared them to be financially secure.

· Glass-Steagall Act of 1933 - enacted June 16, 1933 - introduced the separation of bank types according to their business (commercial and investment banking), and it founded the Federal Deposit Insurance Corporation for insuring bank deposits.

· Gold Reserve Act of 1934 - enacted January 30, 1934 - outlawed most private possession of gold, forcing individuals to sell it to the Treasury, after which it was stored in Fort Knox and other locations. The Act also changed the nominal price of gold from $20.67 per troy ounce to $35 per ounce.

Republicans involvement in banking

· President Richard Nixon announced in 1971 that the United States would no longer convert dollars to gold at a fixed value, thus abandoning the gold standard for foreign exchange (see Nixon Shock).

· Gramm-Leach-Bliley Act of 1999 - enacted November 12, 1999 - repealed part of the The Glass-Steagall Act. Allowed commercial and investment banks to consolidate. For example, Citibank merged with Travelers . The bill was created by Phil Gramm (Republican of Texas) and in the U.S. House of Representatives by Jim Leach (R-Iowa).

Deregulation meltdown examples –

Wachovia Merger’s that failed!!

(Golden West Financial)

Wachovia agreed to purchase Golden West Financial for a little under $25.5 billion on May 7, 2006. This acquisition gave Wachovia an additional 285-branch network spanning 10 states. Wachovia greatly raised its profile in California, where Golden West held $32 billion in deposits and operated 123 branches.
While Wachovia Chairman and CEO G. Kennedy "Ken" Thompson had described Golden West as a "crown jewel", investors did not react positively to the deal at the time. Analysts have since said that Wachovia purchased Golden West at the peak of the US housing boom. Golden West's mortage-related problems led to Wachovia suffering writedowns and losses that far exceeded the price paid in the acquisition, ending up in the fire-sale of Wachovia to Wells Fargo.

(A.G. Edwards)

In the first quarter of 2007, Wachovia reported $2.3 billion in earnings, including acquisitions and divestitures. However, in the second quarter of 2008, Wachovia reported a much larger than anticipated $8.9 billion loss.
On June 02, 2008, Wachovia Corp, chief executive officer, Ken Thompson was pushed out as head of Wachovia. The board of the Charlotte-based bank said it asked Thompson, 58, to retire and replaced him on an interim basis with Chairman Lanty Smith. Smith had already replaced Thompson as chairman last month in a move the bank said "strengthens independent leadership" at the company.

Knights of Columbus - PAY TAX NOW

The Knights of Columbus is chartered as a fraternal benefit society, and is set up as a 501(c)8 corporation. They are tax exempt. Somehow they gave $1,425,000 to fight same-sex marriage in California. The donation was to a group called "YES on PROP 8". The group is a PAC "Political Action Committee".

How is giving $1,425,000.00 to PAC fraternal?

Are they going to pay taxes for the $1,425,000.00?

The IRS bans this type of activity (see link)

www.irs.gov/pub/irs-tege/eotopicf04.pdf