United Liberty

Rep. Mel Watt (D-NC) , who was recently nominated by President Barack to run the Federal Housing Finance Agency (FHFA), may run into some problems during his Senate confirmation due to racially insensitive comments he made in 2005:

During an Oct. 14, 2005 hearing held by the National Commission on the Voting Rights Act, Watt reportedly said that a “substantial majority of white voters” would not vote for a black candidate under any circumstances.
[…]
He acknowledged “some” white people would support a black candidate, but said voters who refuse should be “factored out.”

“I’ve got no use for them in the democratic process,” he reportedly said.

Watt also claimed that black voters — unlike white voters — don’t have “an absolute commitment” to voting for a candidate based on race.

Three years later, Barack Obama would become the first black president, capturing 43 percent of the vote among white voters. That does not constitute a majority, but by comparison, 4 percent of black voters supported Sen. John McCain.

This isn’t the first instance prejudice from Watt. During a 2004 meeting with the Congressional Black Caucus, the 20-year Congressman called Ralph Nader, who is about a Leftist as they come, an “arrogant white man.”

“You’re just another arrogant white man – telling us what we can do,” Watt told Nader, who was running for president as an Independent at the time. “it’s all about your ego – another [expletive] arrogant white man.”

Since the 2008 financial crisis, many analysts and policy wonks have been trying to come up with their best guesses as to what led to what we now call the “Great Recession.” Most lay blame on Wall Street, the beneficiary of taxpayer-funded bailouts, and never think of discussing the affects of policies pursued by the government in the years leading up to the recession.

Wall Street is, of course, an easy target, especially at a time when populism and class warfare are so common. But in his new book, The Financial Crisis and the Free Market Cure: How Destructive Banking Reform is Killing the Economy (McGraw-Hill, 320 pages), John Allison, retired Chairman and CEO of BB&T, explains that government policies, cronyism, and politics led to the worst economic troubles in decades and presents a compelling case for the free market.

Allison, who at the beginning of this month became CEO and President of the Cato Institute, has long been an advocate of free market economic policies. Allison explains that his principles helped guide BB&T to weather the economic storm before the financial crisis.

In his book, Allison outlines what he sees as the six factors that led the recession and this very tumultuous economic “recovery” in which we currently find ourselves:

The Federal Reserve announced a third-round of quantitative easing (QE3), during which the central bank will purchase $600 billion bonds in hopes that the debt monetization will stimulate the economy and thus bring down the unemployment rate by one-percentage point.

The move has already been met with derision by GOP vice presidential nominee Paul Ryan (R-WI), who called the Fed’s actions “insidious” during a speech in Florida on Saturday. Before the Federal Reserve announced its decision last week, the Wall Street Journal reported that many economists expressed doubt that another round of quantitative easing would do anything to stimulate the economy. And if they do manage to do anything, it could be as, Neil Cavuto explains, “substituting bubbles”:

The risk with forcibly keeping interest rates low is you create another bubble, which is odd because we’re in the fix we’re in because we burst out of a real bad financial bubble.

My fear is that we’re substituting bubbles.

We’re encouraging the very reckless hedging and leveraging that brought on the last financial meltdown.

I’m not saying that happens again. But you don’t have to be Nostradamus to see where this kind of stuff goes. It’s inflationary, for one thing, and likely prompts a continued run-up in commodity prices that had stalled for a while.

Yesterday, Federal Reserve Chairman Ben Bernanke held a press conference for financial reporters:

Could more stimulus be on the way?

Federal Reserve Chairman Ben Bernanke certainly left the option on the table Wednesday, making perfectly clear that he stands ready to do more should the U.S. economy take a turn for the worse.

“In case things get worse, we are prepared to protect the U.S. economy and financial system,” Bernanke told reporters at a press conference.

It was a point he reiterated several times and a sign that many outsiders took to mean the Fed has left the door open on a third round of asset purchases known as quantitative easing, or QE.

“Mr. Bernanke’s press conference surely left few doubts that the Fed will take more aggressive action and renew QE if the economy fails to perform as they expect,” Ian Shepherdson, chief U.S. economist for High Frequency Economics, said in a note to clients.

Meanwhile, University of Pennsylvania Economist Justin Wolfers tweeted: “I read the Fed as saying: One more bad jobs report, and we’ll do more.”

So Ben’s going to go back to the printing press if we have one more disappointing jobs report. He’s going to initiate another round of quantitative easing (QE), which is basically creating money out of thin air. It will be yet another round of quasi-stimulus spending which is basically trying to throw more money at the economy, hoping and praying that it does something. The best name for this kind of economic thinking is “print and pray” economics.

We hear a lot from our friends on the Left about the cause of the 2008 financial crisis. The often claim that capitalism and “predatory lending” deserve a large share of the blame. But in a new video from Reason, Peter Wallison, a scholar at the American Enterprise Institute and a member of the Financial Crisis Inquiry Commission (FCIC), explains how federal housing policy was the main cause of the turmoil that led to the Great Recession.

While the official report from the FCIC blamed deregulation of the financial sector, Wallison wrote a lengthy dissent noting, according to Reason, that “there were about 28 million high-risk mortgages in the U.S. in 2008; roughly 70 percent of those mortgages were owned by government-sponosored enterprises such as Fannie Mae and Freddie Mac.”

Watch the video with Wallison below. It’s well worth your time:

Despite his rise in the polls, not all conservatives are sold on Newt Gingrich. In recent days, Gingrich’s shortcomings as Speaker, his inconsistencies, and support for a bigger, more intrusive government have been the focal point of many in the right-leaning blogosphere.

In recent days, Gingrich has been rightfully criticized by Fred Barnes and George Will for comments about Mitt Romney’s time in the private sector. While Gingrich passes these off as a “joke,” it’s clear that he doesn’t understand the difference between capitalism (the concept of profit and loss) and corporatism, which he engaged in during his time as a lobbyist for Freddie Mac.

To make his growing problem worse, the editors of the conservative National Review came out strongly against Gingrich’s candidacy yesterday:

After ripping off taxpayers during his 16 terms in the House, Rep. Barney Frank (D-MA) announced yesterday that he will not seek re-election next year:

Rep. Barney Frank (D-Mass.) announced Monday that he will not seek reelection in 2012, ending a three-decade career in the House.

Frank, 71, is the top Democrat on the Financial Services Committee and the architect, with former Sen. Chris Dodd (D-Conn.), of the sweeping Wall Street regulatory reform law enacted in 2010.

He announced his decision at an afternoon press conference in his hometown of Newton, Mass., where he said redistricting played a major role in his retirement.

“I was planning to run again, and then congressional redistricting came,” Frank said.

Over at Real Clear Politics, Sean Trende writes that Frank’s district may be more competitive for Republicans in 2012, noting that it “barely went for Democrat Deval Patrick (who won statewide by six points) in 2010 and that gave Republican Brown a 10-point win.” Frank finished with 54% of the vote last year against Sean Bielat, in a seat he had overwhelmingly carried in previous elections. Frank acknowledged that it would be a “tough race.”