Sunday, May 23, 2010


Voted YES on regulating the sub-prime mortgage industry.
(Nov 2007)

"H.R. 3915 is a bill that, in an attempt to improve conditions in the housing market, will end up making it more difficult and more expensive for hard-working Americans to obtain a mortgage."
-Ron Paul

When Rep. Lowey looks at the disaster that is the housing market, she quickly blames its failures on the free market and private banks. But what Nita fails to understand is that the entire housing bubble and its collapse is the cause of government manipulation of the housing market. It is not the free market that needs to be regulated but the actions of the government and the Federal Reserve.

After the tech bubble burst and the attack on September 11th, the Fed Chairman Allan Greenspan set interest rates at an all time low of 1% to artificially stimulate a weakened economy. In order to do this the Federal Reserve printed money out of thin air so that banks could have a large reserve of cash to lend out at a low interest rate.

When banks loan money out at an extremely low interest rate, this encourages people to take out loans for a longer period of time and invest in things that are extremely expensive and/or take time to houses. On the other hand, if interest rates were high it would encourage the borrower to pay back the loan quickly and not invest in long term projects.

As a result of the interest rates being artificially lowered and all of this new money in the economy, the demand for housing increased which in turn caused housing prices to increase. Between 1998 and 2006 home prices appreciated dramatically. But the amount of new money was so great that banks, who were in charge of it, started to look for new and innovative ways to lend that money out. As a result they came up with sub-prime mortgages, which is pretty much just a fancy term for a loan to a borrower with a bad credit score. Before interest rates were set to an historical low, it was actual extremely difficult to obtain a sub-prime mortgage.

The banks started cautiously by charging a higher interest rate to sub-prime borrowers, but as the economy continued to artificially expand these sub-prime loans were defaulting at an extremely low rate. With the extra profits, as a result of these higher interest rate mortgages, reckless investors were encouraged to enter the market to offer more of these sub-prime loans. Lenders began to make even riskier loans, now offering adjustable rate mortgages and no money down loans, which the government and now Fed Chairman Ben Bernanke fully endorsed as a safe investment. In fact, the government passed legislation that made it possible for people who could not afford down payments on houses to receive assistance from the federal government, or even to pay no down payment at all, courtesy of the taxpayers. People began buying homes that they could not afford and also began to use their house as if it were a credit card confident that the price of houses would continue to rise and that they could easily refinance their home if they faced economic trouble down the road. This reckless attitude eventually caught up with us, because the money was created out of thin air and was not a result of actual personal savings, people began to default on payments, sending the housing market into a tailspin.

But the question you should ask is: If the risk was on private banks, how did the housing collapse infect the world economy?

The true "risk" was not on the banks but on the Government Sponsored Enterprises (GSEs), like Fannie Mae and Freddie Mac who bought these loans from the banks. When a homeowner takes out a loan from a bank, that bank turns around and sells that mortgage on a secondary mortgage market to companies like Fannie and Freddie. By 2008 they had a hand in about half of the country's mortgages and nearly 3/4 of all new mortgages. Fannie and Freddie, in turn, would bundle these mortgages together and sell them as mortgage securities to investors. As a result, banks had money to make new loans and Fannie and Freddie became responsible for bearing the risk and reward of the current loans.

Some people will argue that Fannie and Freddie are private companies because their stock is traded publicly but they actually enjoy tax and regulatory privileges that their competitors do not. They have billions of dollars worth of credit with the US Treasury which guaranteed them a bailout in 2008 when the housing market collapsed. Since the US Treasury gets its money from the taxpayer, it is the taxpayer who actually bore the risk of these sub-prime mortgages, and Fannie and Freddie who reaped the rewards. Why be cautious when there is a guaranteed government bailout right around the corner?

But government manipulation does not stop there. When Freddie and Fannie sold these mortgage securities to investors, the investors looked to rating agencies who gave most of these toxic assets a triple A score. Moody's, Fitch, and Standard and Poor are examples of bond rating agencies, who are suppose to tell us when something is a bad investment and there is a smell of fraud in the air...but they didn't. The free market was unable to weed out these bad rating agencies because they are wholly owned subsidiaries of the US government. If you try to start a ratings agency you can't because there are government imposed restrictions on entry, thus making these rating agencies part of the government apparatus and not part of the free market. Not only does the government limit entry, but when people see that the agency is backed by government approval, they are manipulated into thinking that the corporation is safe, which leads the investor to let their guard down and unknowingly partake in bad investments.

The root of the crisis, as with other financial and economic crises, is a direct result from government intervention into the monetary policy and housing market. HR 3915 will only lead our country into further economic turmoil.

H.R. 3915
This bill restricts entrance into the mortgage market through a licensing system, and makes it mandatory for loan originators to be fingerprinted and have a background check. Not only is this an affront to a free and open labor market, but just by introducing a mortgage licensing system, like they did with the rating agencies, mortgage fraud can not and will not be eliminated. All it will do is restrict the number of people able to work in the mortgage industry. And according to the laws of economics, when the supply of mortgage providers decreases, the cost of retaining those services increases. This will be detrimental to the poor community.

H.R. 3915 also makes restrictions on the types of mortgages which can be offered, utilizing language which is vague enough that its definition will likely be finally determined in time-consuming expensive federal court cases. By restricting the number of people licensed to work in the mortgage industry and the types of mortgages that can be offered, the availability of mortgages would decrease and the cost would increase. H.R. 3915, which has as its purported aim the protection of American home-buyers, would have the perverse effect of keeping more Americans from being able to purchase homes.

If we really want to improve the conditions of the American economy, we should only promote investment when there is actually money to be lent out. This comes only from the savings of the American people and not by money created by the Federal Reserve. New money only destroys the value of the dollar and manipulates the free market. No matter how many laws and regulations the government will pass, there will always be people getting around those laws. The best possible way we can protect people from fraud is with harsh penalties and jail time for anyone that commits it, not constant government bailouts to those who are guilty of it. We need to get the government and the Federal Reserve out of the business of manipulating the market, and that has to start with getting Nita Lowey out of Congress.

Thursday, April 8, 2010


Voted YES for Stronger enforcement against gender-based pay discrimination in the Paycheck Fairness Act
(Jan 2009)

Females earn roughly 30% less then males earn in the work place.

When Nita Lowey looks at this general statistic she wrongfully assumes that the free market has failed and that this wage gap is due to sexism in the work place and that male employers have some kind of natural animosity towards women. This, of course, is completely untrue. Although I do not deny that there is sexism, the free market is actually a deterrent of it and creates more equality in the work place...not less.

Profit, above all else, is what drives entrance into the free market. If there is no profit to be made there is little motivation to start your own business. Why then would an employer knowingly hire a male employee, when he knows that if he hired an equally capable female, he could pay her 30% less, keep the difference, and increase his profits? The answer is...he wouldn't. The female would certainly be hired. But let's say the employer was sexist and foolish and didn't hire the female. In a free market with open competition, there is always market forces grinding away at its competitors that hire higher priced workers when they could have hired lower priced workers. These sexist employers would either be weeded out of the market by losing business to cheaper competition or forced to adopted non-sexist policies.

The argument that the market is inherently sexist doesn't make much sense. But nevertheless, the fact remains that females earn roughly 30% less then males. So why is this?

This actually can be explained by the:

Marital Asymmetry Hypothesis:
This says that marriage/relationships have asymmetrical effects on male and female incomes and is the leading cause for men to earn more than women.

If we compare the pay between women that have never been married and never have had children to a man's salary it has a difference of 1%. But once a woman has married or has had children, the gap becomes enormous. If there was actually sexism in the free market the large gap in income would always be there.

So now we have to ask: Why does this huge gap appear when a woman is married and/or has children?

This is because there is an unequal sharing of chores and child raising in the household, which happens to predominantly fall on the woman's shoulders. In a society, where two groups are more or less equal, and you give a burden to one of the groups, something has to suffer. This is called opportunity costs...whenever you do one thing it always comes at the cost of something else. For example, Michael Phelps would not be a world class swimmer if he had to sacrifice his time in the pool for any number of different things. Such is the case with women's salaries. By taking more time away from their profession then their spouse they are in turn causing their skilll level to atrophy thus stagnating their salary. This holds true for men that stay at home or for single parents who can not afford to work late and put in extra hours or take classes to help them advance in their field.

But what Nita should ask herself is: Why do women predominantly choose to take on the responsibilities of household chores and child care?

Students of socio-biology say that this is human nature and that we are somehow hardwired this way because of what it took millions of years ago to survive. Like all living beings our main purpose is to procreate to ensure our society's longevity. Beings that do not live by this code eventually become extinct. We have evolved into a patriarchal society because we have descended from civilizations where the men were more expendable to the society and as a result would risk their lives to hunt and protect the village. Women, on the other hand, stayed in the village and took care of the children because they were a precious commodity. For the same reason, farmers only need to keep one bull on the farm to procreate with fifty cows to have a healthy number of livestock, men would risk their lives knowing that it would take fewer men to populate the society then women. Women are nature's insurance policy.

For more sociobiological information I suggest listening to Walter Block's lecture:

The pay gap is not due to sexism in the free market but because of the individual's choice on how to balance the responsibilities of a relationship, a family and a career. And unless Nita wants to do something as ridiculous as begin to attack a family's right to choose how to most effectively provide for themselves, she will not be able to lower the pay gap without destroying the economy. This bill may seem as if it promotes equality in the work place but what it actually does is open businesses up to frivolous lawsuits and a lot of extra expenses that will either result in a loss of jobs or the destruction of the business.


Saturday, March 27, 2010


Voted YES on regulating tobacco as a drug.
(Apr 2009)

This law calls for new FDA testing requirements, advertisement restrictions like a ban on words such as light, mild and low and also places a ban on all flavored cigarettes, (except of course menthol.)

This is a perfect example of how the government creates laws that hurt the consumer financially while at the same time bringing in more revenue for the government and protecting big business from competition. Now putting aside the fact that this is a total attack on consumer sovereignty and a person's individual liberties and freedoms, one has to wonder why Nita Lowey and Altria Group aka Philip Morris, one of the world's largest tobacco corporations, would favor this legislation.

It's simple really...regulation actually benefits big business and corporate greed, while simultaneously killing small businesses that are the backbone of our now faltering economy. Philip Morris can easily abide by these new regulations because they have the finances to do it, but a new smaller competitor does not. The result is a so-called consumer protection that only protects big business and cripples its competition. And as a result, by the time the bill was introduced and passed, Philip Morris' stock rose more than 35 percent.

But besides the billions of dollars of wasted capital spent in Washington DC by lobbyists on politicians every year, there is another reason why taxing cigarettes is so brings in more revenue for the government. Let's face it, the government is broke and the only way to generate new revenue is either by printing new money or by taxing. And one of the first rules in economics is that if you are going to tax, tax items that have an inelastic demand curve. This is pretty much just a fancy way of saying that no matter what you charge for a particular product, people are still going to pay the higher price. This is why the government continues to tax highly addictive substances like tobacco and sugar. People are far more likely to pay a higher price for these products than for celery and carrots. So, do not fool yourself for a second that even the new proposed soda tax is for the "greater good" of society. New regulations and taxes are just another way for Nita Lowey to bring in revenue for a highly incompetent government while destroying the savings of lower-class Americans.

I'll leave you now with a pop quiz:

What does this vote tell you about Nita Lowey?
a) She is completely not compassionate to the struggles of the lower-class
b) She thinks that she knows how to run your life better than you do
c) She is a crony capitalist that takes the first chance she can get to help out big business.
d) All of the above

No matter how you look at it, it is time to vote her out of office.

Further Reading:
The Future of America: Rat Burgers

Sunday, February 28, 2010


"President Obama’s comprehensive strategy to dismantle Al Qaeda and its allies in Afghanistan and Pakistan will renew our focus on defeating the terrorists responsible for the September 11th attacks and others who threaten our national security. The President’s proposal to modestly boost American combat forces with a greater reliance on training Afghan security forces will help improve the security of the region while the economic and agricultural aid will help provide alternatives to poppy cultivation for rural Afghan farmers."
-Nita Lowey, House Representative for the 18th District of New York

Cost: over $1 trillion dollars per year to maintain a world army with 700 bases around the world in 130 countries.

After voting for an unconstitutional war in Iraq, it is no surprise that Nita Lowey wants to continue to trample on the Constitution and escalate the war in Afghanistan. If you look at her record, Nita has consistently pushed for the United States to police the world, nation-build, and waste trillions of dollars on an over-extended military in the name of national security.

The United States government has had a long history of using fear tactics to promote its foreign wars, whether it was to stop the spread of communism in Vietnam (which never happened) or to prevent WMDs from being used by Saddam Hussein (which he never had). But right now, I want to focus on the fallacy that by occupying Afghanistan we are somehow making the United States safer.

We are constantly told that we have to "win" in Afghanistan so that al-Qaeda cannot use that territory to plan further attacks against the US. But we need to remember that the attack on September 11th, was, according to the 9/11 Commission Report, largely planned in the United States and Germany by terrorists who were in our country legally. This shows that just by invading Afghanistan does not stop terrorists from gathering in other locations. By endorsing military action in Afghanistan because of al-Qaeda presence, implies we should favor US air-strikes against our own states and even Germany. This is absurd. We need to understand that the Taliban allowed al-Qaeda to remain in Afghanistan because both had been engaged, with US assistance, in the insurgency against the Soviet occupation in the 1980s.

The main problem stems from a fundamental misunderstanding of the situation. It is our presence as occupiers that feeds the insurgency. With every civilian death, we unify diverse groups in a common goal against our occupation. Bin Laden has repeatedly stated this, but for some reason, we believe his threats, but we refuse to listen to the reasoning he gives for them. The fact remains that al-Qaeda members are 10 times more likely to come from a US occupied territory. By adding more US troops we will only assist those who recruit fighters to attack our soldiers and who use the US occupation to convince villages to side with the Taliban.

Nita also argues that we must train and build an Afghan national army to take over and strengthen the rule and authority of Kabul. But what we actually have done is entrench ourselves in the middle of a 35-year old civil war, while setting up a government, that encourages an ideology and system of rule unknown and unwanted by the Afghan people. This will only lead to greater tragedy and greater civil unrest down the road.

What concerns me further is that not only is Nita in favor of an escalation in Afghanistan but she also wants to escalate the fighting in Pakistan as well. Already CIA drone attacks on Pakistan soil have destabilized that country and have killed scores of innocents, displacing thousands of people, and producing strong anti-American feelings. I do not see how that contributes to our national security.

If we continue to follow down this path and invade country after country, when will it end? At what point do we say enough is enough. Right now, the only end in sight will be a destruction of our dollar. Most great nations faced economic ruin because they have stretched themselves too far beyond their borders. We must ask ourselves: What if the Chinese invaded us and told us how to live, and how to run elections? How quickly would we unite to defend our land?

If we truly want to make America safe we can use the powers of marque and reprisal within our Constitution to target specific terrorist suspects, instead of invoking war against an entire foreign state. Safety will only come when we stop this policy of preemptive war. Instead we need to promote diplomacy, free trade and personal liberties, and at the same time bring our troops home to secure our borders.

Most importantly, we need to find out how and why our government bureaucracy failed to stop the 9/11 attack from happening. We need to discover why the FBI did not act on 70 internal field tips, and why the various intelligence agencies could not collaborate on information to prevent the attacks while spending 40 billion of our dollars per year. This is where our focus should be and not overseas. If we follow Nita Lowey's approach and continue to invade and nation-build, we face a future as an isolated nation with few allies, a weakened military, and a destroyed currency.

Further Reading:
...And What Have The Romans Ever Done For Us?

Saturday, February 20, 2010


Voted YES on $2 billion more for Cash for Clunkers program.
(Jul 2009)

Total cost: $3 billion, the premier resource for online automotive information, has determined that Cash for Clunkers cost taxpayers $24,000 per vehicle sold.

There is a clever anecdote called the Broken Window Fallacy that gives insight into the evils behind the Cash for Clunkers Program. The parable describes a shopkeeper whose window is broken by his young son, and who then has to pay for a glass maker to fix it. To the casual onlooker this is perceived to stimulate the economy because there is a boom to the glazier's business. However, the onlooker ignores the cost to the shopkeeper.

Since the shopkeeper was forced to spend his money on a new window, he could no longer spend it on something else, such as bread or shoes. The boy's actions may have benefited the glazier, but at the expense not only of the shopkeeper, but the baker and the cobbler. As a result, the child, in fact, made the town poorer by at least the value of one window, if not more.

But now suppose it was discovered that the little boy was actually hired by the glazier, and paid for every window he broke. Here in lies the truth behind the Cash for Clunkers Program.

By voting for this bill, Nita Lowey is wreaking havoc on the free market system, all in the name of stimulating the auto industry and combating global warming. When in fact it does nothing but weaken the American economy and take away the personal liberties of its citizens.

Here are the actual effects of this stimulus plan:

  • More Debt. Americans who cannot afford to buy a new car are heavily persuaded by the large rebates to stretch their budget even further and go into even more debt to take advantage of this deal. This is the housing bubble all over again, but now with automobiles.

  • Destruction of Charity. Charitable donations of "clunkers" fall dramatically since the dealers were required to disable the cars, leaving the poor and the truly impoverished without any means of transportation.

  • Increased prices of used cars. Prices are decided by supply and demand, and as the supply of available used autos shrinks, low-priced vehicles become more costly to purchase. Auto parts face the same price increase making it more costly for the poor to keep their cars running.

  • Increased Driving. By subsidizing fuel-efficient vehicles more driving is encouraged which causes total fuel consumption to decrease less than expected.

  • MPG. New federal data analyzed by The Associated Press finds that the single most common swap, at an occurrence rate of more than 8,200 times, involved Ford F-150 pickup owners. The fuel economy for the new trucks ranges from 15 to 17 miles per gallon, which equates to a mere 1 to 3 mpg improvement over the clunkers.

  • Loss of Freedom. The government directed the allocation of funds upfront by selecting the industry that would receive the subsidies, and the administration in power set the rules for allowable purchases under strict guidelines that induced the consumer to purchase smaller, more “green friendly” automobiles that conform to its long-term, environmental ambitions.
  • Waste of Capital and Resources. Used cars are destroyed depleting valuable resources and capital that could have been reused or repurposed.
  • Redistribution of Wealth. Money that would have been spent elsewhere is now reallocated to the well-connected unionized auto industry causing many other businesses to lose profits.

We have to understand that by tampering with the free market system with incentives like this we are only creating an artificial boom period. In the long run, this is not helping the auto industry but only setting them up for a bigger fall. Let us not forget that this $3 billion dollars is only the tip of the iceberg. We have been continually bailing out the auto industry for the last 30 years at the consumer's expense.

In all, this program was little more than a political redistribution of wealth from the people of America to the Nita Lowey’s power base which includes unions, environmentalists, and social justice bulldogs. But we really shouldn't expect anything else from her.

Further Reading:
Nita Lowey Loves John Maynard Keynes

Friday, January 29, 2010


Voted YES on the Economic Stimulus Act of 2008
(Jan 2008)

Total cost: $152 billion

This law provides for tax rebates to low- and middle-income U.S. taxpayers, tax incentives to stimulate business investment, and an increase in the limits imposed on mortgages eligible for purchase by government-sponsored enterprises (e.g., Fannie Mae and Freddie Mac). For this article, I will be focusing on the effect of the tax rebate on the economy.

The justification for this bill and in fact, all government spending, relies on the principles of the Keynesian Economic Theory. It states that government stimulation and control of the economy is necessary for its general health. In this bill's case, by increasing the money supply and sending everybody a check, people will be encouraged to buy things and, as a result, stimulate the economy. Sounds good, right? But it is this injection of new money into the market system, even when directly sent to lower income individuals, that creates artificial bubbles of prosperity resulting in a greater depression.

When people decide to spend a stimulus check in the market, they create a demand for items that they would not have usually purchased. As a result of this increase in sales and profits, entrepreneurs begin to reinvest the new money into their own store in an expectation to meet future demand. By this time, however, all of the stimulus money has been spent and the store owners are left with an overstock of items that people are no longer willing to buy. Entrepreneurs have now wasted precious capital and resources, and must sell their products at a loss only to eventually go bankrupt. That is, unless another stimulus bill is passed, which inevitably happens.

Nita Lowey's unwavering support of stimulus packages, like this one, leads to a constant injection of new money into the market. This not only destroys businesses, but also destroys the value of the dollar. She does not understand that real growth in an economy comes from savings. An increase in savings, increases the supply of lending capital and lowers interest rates naturally. It is at this time that businesses should be investing in new technology and products.

It is time that Nita Lowey is replaced by someone that understands the importance of a free market system and that will allow our economy to actually grow.

Wednesday, January 27, 2010


Voted YES on Congressional pay raise.
(Jun 2009)

Nita Lowey's salary: $174,000
The average United States citizen's income: $46,000

Want a raise? Don't beg your boss, just vote yourself one. That's what Nita Lowey did. While our government was in the process of increasing our debt by one trillion dollars in one of the worst economic crises, Nita Lowey thought it would be a good time to vote for a 2.8 percent pay raise for herself and her fellow Congressmen on Capitol Hill. This, of course, is just above the 2.7% inflation rate that the country faced in 2009 and cost the taxpayers $2.5 million. But isn't leadership like this worth it? Not at all.

The reason for this $4,700 increase was to compensate for the increase in the cost of living(COLA), which as we all know as the inflation rate. But it is important to know what causes inflation.

Inflation, in short, is an increase in the amount of money in circulation. Money is printed, some might say counterfeited, by the Federal Reserve and sold to the US government, who then distributes it to the most well-connected businesses. In the last year, this was Wall Street and the Auto Industry. With the increase of money in the system, people spend more, increasing the demand for goods. And since prices are determined by supply and demand, as demand goes up so do prices.

The people who receive the money first before the prices rise benefit. But the money takes time to trickle down to the working class and the poor, and their salaries do not adjust until after the price increases have taken effect. This indirect tax, is referred to as an inflation tax and is a major cause of the redistribution of wealth from the poor and the middle class to the politically well-connected.

The worst thing about this system is that as citizens, we can not do anything directly about inflation. It is caused by an injection of money into the economy by the Federal Reserve and the government. The only thing we can do is vote for a Congressman that has some economic sense about them. Sadly, Nita falls way short in this category having voted to spend:

  • $825 billion for the economic recovery package
  • $192 billion in additional anti-recession stimulus spending
  • $15 billion for the bailout of GM and Chrysler
Does anybody else find it ironic that her poor economic judgment led to the inflation that led to the justification for her increase in pay?

Further Reading:
A Letter to Your Representative
The Life and Death of the US Dollar