Economic Crisis | NutHouse.net

Copy HTML:

If you like this then please subscribe to the RSS Feed or Email Feed.

Could The Mortgage Meltdown Have Been Avoided?

Posted November 11, 2008

Comments(0)

Back to the root of the economic crisis. A friend pointed me to this 2004 CSPAN coverage of the oversight committee looking into Fanny Mae and Freddie Mac’s loans and compensation packages. It was posted by backitupwithfacts on youtube. The video doesn’t lie but the Democrats and Franklin Raienes sure do. Expect more from our ever more powerful Democrat controlled Congress. What will Harry Reid and Nancy Pelosi along with BHO have in store for us?

Close Bookmark and Share This Page

Copy HTML:

If you like this then please subscribe to the RSS Feed or Email Feed.

We’re Mad As Hell And We’re Not Going To Take It Anymore

Posted November 10, 2008

Comments(17)

I received this “Open Letter” to Obama by email today and felt I should post it on the blog because it hits home to me and millions of fellow Americans. I have started seven different companies over the past 25 years and can relate, first hand, to what Cory has written. Prior to founding my first company, I worked in the oil fields of East Texas as a roughneck. While Cory’s business is water well drilling, there is no more basic entrepreneurial spirit than drilling. Every company I knew at the time in Texas was a family-owned venture built out of hard work, sweat and sacrifice. Every entrepreneur understands this. Too bad the rest of our society has never learned what true freedom means…

Given the furor about ‘Joe the plumber’ I’ve written an open letter to Mr. Obama myself. I think it is worth the read. Maybe if Americans could take a closer look at what a small businessman is, they wouldn’t want politicians penalizing their success. Feel free to forward it if you want…

Cory
* * * * * * * * *

Mr. Obama,

Given the uproar about the simple question asked you by Joe the plumber, and the persecution that has been heaped on him because he dared to question you, I find myself motivated to say a few things to you myself. While Joe aspires to start a business someday, I already have started not one, but 4 businesses. But first, let me introduce myself. You can call me ‘Cory the well driller’. I am a 54 year old high school graduate. I didn’t go to college like you, I was too ready to go conquer the world’ when I finished high school. 25 years ago at age 29, I started my own water well drilling business at a time when the economy here in East Texas was in a tailspin from the crash of the early 80′s oil boom. I didn’t get any help from the government, nor did I look for any. I borrowed what I could from mysister, my uncle, and even the pawn shop and managed to scrape together a homemade drill rig and a few tools to do my first job. My businesses did not start as a result of privilege. They are the result of my personal drive, personal ambition, self discipline, self reliance, and a determination to treat my customers fairly. From the very start my business provided one other (than myself) East Texan a full time job. I couldn’t afford a backhoe the first few years (something every well drilling business had), so I and my helper had to dig the mud pits that are necessary for each and every job with hand shovels. I had to use my 10 year old, 1/2 ton pickup truck for my water tank truck (normally a job for at least a 2 ton truck).

A year and a half after I started the business, I scraped together a 20% down payment to get a modest bank loan and bought a (28 year) old, worn out, slightly bigger drilling rig to allow me to drill the deeper water wells in my area. I spent the next few years drilling wells with the rig while simultaneously rebuilding it between jobs. Through these years I never knew from one month to the next if I would have any work or be able to pay the bills. I got behind on my income taxes one year, and spent the next two years paying that back (with penalty and interest) while keeping up with ongoing taxes. I got behind on my water well supply bill 2 different years (way behind the second time… $80,000.00), and spent over a year paying it back (each time) while continuing to pay for ongoing supplies C.O.D.. Of course, the personal stress endured through these experiences and years is hard to measure. I do have a stent in my heart now to memorialize it all.

I spent the next 10 years developing the reputation for being the most competent and most honest water well driller in East Texas. 2 years along the way, I hired another full time employee for the drilling business so that we could provide full time water well pump service as well as the well drilling. Also, 3 years along the path, I bought a water well screen service machine from a friend, starting business # 2. 5 years later I made a business loan for $100,000.00 to build a new, higher production, computer controlled screen service machine. I had designed the machine myself, and it didn’t work out for 3 years so I had to make the loan payments without the benefit of any added income from the new machine. No government program was there to help me with the payments, or to help me sleep at night as I lay awake wondering how I would solve my machine problems or pay my bills. Finally, after 3 years, I got the screen machine working properly, and that provided another full time job for an East Texan in the screen service business.

2 years after that, I made another business loan, this time for $250,000.00, to buy another used drilling rig and all the support equipment needed to run another, larger, drill rig. This provided another 2 full time jobs for East Texans. Again, I spent a couple of years not knowing if I had made a smart move, or a move that would bankrupt me. For the third time in 13 years, I had placed everything I owned on the line, risking everything, in order to build a business.

A couple of years into this, I came up with a bright idea for a new kind of mud pump, a fundamentally necessary pump used on water well drill rigs. I spent my entire life savings to date (just $30,000.00), building a prototype of the pump and took it to the national water well convention to show it off. Customers immediately started coming out of the woodworks to buy the pumps, but there was a problem. I had depleted my assets making the prototype, and nobody would make me a business loan to start production of the new pumps. With several deposits for pump orders in hand, and nowhere to go, I finally started applying for as many credit card as I could find and took cash withdrawals on these cards to the tune of over $150,000.00 (including modest loans from my dear sister and brother), to get this 3rd business going.

Yes, once again, I had everything hanging over the line in an effort to start another business. I had never manufactured anything, and I had to design and bring into production a complex hydraulic machine from an untested prototype to a reliable production model (in six months). How many nights I lay awake wondering if I had just made the paramount mistake of my life I cannot tell you, but there were plenty. I managed to get the pumps into production, which immediately created another 2 full time jobs in East Texas. Some of the models in the first year suffered from quality issues due to the poor workmanship of one of my key suppliers, so I and an employee (another East Texan employed) had to drive across the country to repair customers’ pumps, practically from coast to coast. I stood behind the product, and made payments to all the credit cards that had financed me (and my brother and sister). I spent the next 5 years improving and refining the product, building a reputation for the pump and the company, working to get the pump into drill rig manufacturers’ product lines, and paying back credit cards. During all this time I continued to manage a growing water well business that was now operating 3 drill rig crews, and 2 well service crews. Also, the screen service business continued to grow. No government programs were there to help me, Mr. Obama, but that’s ok, I didn’t expect any, nor did I want any. I was too busy fighting to make success happen to sit around waiting for the government to help me.

Now, we have been manufacturing the mud pumps for 7 years, my combined businesses employ 32 full time employees, and distribute $5,000,000.00 annually through the local economy. Now, just 4 months ago I borrowed $1,254,000.00, purchasing computer controlled machining equipment to start my 4th business, a production machine shop. The machine shop will serve the mud pump company so that we can better manufacture our pumps that are being shipped worldwide. Of course, the machine shop will also do work for outside companies as well. This has already produced 2 more full time jobs, and 2 more should develop out of it in the next few months. This should work out, but if it doesn’t it will be because you, and the other professional politicians like yourself, will have destroyed our country’s’ (and the world) economy with your meddling with mortgage loan programs through your liberal manipulation and intimidation of loaning institutions to make sure that unqualified borrowers could get mortgages. You see, at the very time when I couldn’t get a business loan to get my mud pumps into production, you were working with Acorn and the Community Reinvestment Act programs to make sure that unqualified borrowers could buy homes with no down payment, and even no credit or worse yet, bad credit. Even the infamous, liberal, Ninja loans (No Income, No Job or Assets). While these unqualified borrowers were enjoying unrealistically low interest rates, I was paying 22% to 24% interest on the credit cards that I had used to provide me the funds for the mud pump business that has created jobs for more East Texans. It’s funny, because after 25 years of turning almost every dime of extra money back into my businesses to grow them, it has been only in the last two years that I have finally made enough money to be able to put a little away for retirement, and now the value of that has dropped 40% because of the policies you and your ilk have perpetrated on our country.

You see, Mr. Obama, I’m the guy you intend to raise taxes on. I’m the guy who has spent 25 years toiling and sweating, fretting and fighting, stressing and risking, to build a business and get ahead. I’m the guy who has been on the very edge of bankruptcy more than a dozen times over the last 25 years, and all the while creating more and more jobs for East Texans who didn’t want to take a risk, and would not demand from themselves what I have demanded from myself. I’m the guy you characterize as ‘the Americans who can afford it the most’ that you believe should be taxed more to provide income redistribution ‘to spread the wealth’ to those who have never toiled, sweated, fretted, fought, stressed, or risked anything. You want to characterize me as someone who has enjoyed a life of privilege and who needs to pay a higher percentage of my income than those who have bought into your entitlement culture. I resent you, Mr. Obama, as I resent all who want to use class warfare as a tool to advance their political career. What’s worse, each year more Americans buy into your liberal entitlement culture, and turn to the government for their hope of a better life instead of themselves. Liberals are succeeding through more than 40 years of collaborative effort between the predominant liberal media, and liberal indoctrination programs in the public school systems across our land.

What is so terribly sad about this is this. America was made great by people who embraced the one-time American culture of self reliance, self motivation, self determination, self discipline, personal betterment, hard work, risk taking. A culture built around the concept that success was in reach of every able bodied American who would strive for it. Each year that less Americans embrace that culture, we all descend together. We descend down the socialist path that has brought country after country ultimately to bitter and unremarkable states. If you and your liberal comrades in the media and school systems would spend half as much effort cultivating a culture of can-do across America as you do cultivating your entitlement culture, we could see Americans at large embracing the conviction that they can elevate themselves through personal betterment, personal achievement, and self reliance. You see, when people embrace such ideals, they act on them. When people act on such ideals, they succeed. All of America could find herself elevating instead of deteriorating. But that would eliminate the need for liberal politicians, wouldn’t it, Mr. Obama? The country would not need you if the country was convinced that problem solving was best left with individuals instead of the government. You and all your liberal comrades have got a vested interested in creating a dependent class in our country. It is the very business of liberals to create an ever expanding dependence on government. What’s remarkable is that you, who have never produced a job in your life, are going to tax me to take more of my money and give it to people who wouldn’t need my money if they would get off their entitlement mentality asses and apply themselves at work, demand more from themselves, and quit looking to liberal politicians to raise their station in life.

You see, I know because I’ve had them work for me before. Hundreds of them over these 25 years. People who simply will not show up to work on time. People who just will not work 5 days in a week, much less, 6 days. People always looking for a way to put less effort out. People who actually tell me that they would do more if I just would first pay them more. People who take off work to sit in government offices to apply to get free government handouts (gee, I wonder how things would have turned out for them if they had spent that time earning money and pleasing their employer?). You see, all of this comes from your entitlement mentality culture.

Oh, I know you will say I am uncompassionate. Sorry, Mr. Obama, wrong again. You see, I’ve seen what the average percentage of your income has been given to charities over the years of 2000 to 2004 (ignoring the years you started running for office – can you pronounce ‘politically motivated’), you averaged less than 1% annually. And your running mate, Joe Biden, averaged less than ¼% of his annual income in charitable contributions over the last 10 years. Like so many liberals, the two of you want to give to the needy, just as long as it is someone else’s money you are giving to them. I won’t say what I have given to charities over the last 25 years, but the percentage is several times more than you and Joe Biden… combined (don’t you just hate goggle?). Tell me again how you feel my pain.

In short, Mr. Obama, your political philosophies represent everything that is wrong with our country. You represent the culture of government dependence instead of self reliance; Entitlement mentality instead of personal achievement; Penalization of the successful to reward the unmotivated; Political correctness instead of open mindedness and open debate. If you are successful, you may preside over the final transformation of America from being the greatest and most self-reliant culture on earth, to just another country of whiners and wimps, who sit around looking to the government to solve their problems. Like all of western Europe. All countries on the decline. All countries that, because of liberal socialistic mentalities, have a little less to offer mankind every year.

God help us…

Cory Miller

Just a ordinary, extraordinary American, the way a lot of Americans used to be.

P.S. Yes, Mr. Obama, I am a real American… www.cmillerdrilling.com

Close Bookmark and Share This Page

Copy HTML:

If you like this then please subscribe to the RSS Feed or Email Feed.

Fed Embracing Islamic Finance & Shariah Law

Posted November 10, 2008

Comments(1)

Well folks, it looks as though my biggest fear is about to be realized. The following article from WorldNetDaily is pretty revealing. European countries like France, Germany, Netherlands, Belgium and Britain have all been caving in to Shariah Law. This is absolutely the last thing we want to do here in America, yet this is the basis of Barack Obama’s belief. He just said he wasn’t a Muslim. Unfortunately, 63 million people believed him.

Above all, we must adhere to our Constitution and especially the separation of church and state. We cannot give in to Muslim/Shariah ideology that god is a part of government. Our Constitution is about to be attacked as never before. Our newly elected government will not be the ones to protect it. Only We the People can protect our Constitutional Rights even if it takes us to civil war.

YOUR GOVERNMENT AT WORK
U.S. Treasury teaches ‘Islamic Finance 101′
Advisers, scholars to promote controversial Shariah funding

Posted: November 05, 2008
10:45 pm Eastern

By Chelsea Schilling
© 2008 WorldNetDaily

U.S. Department of the Treasury

The Treasury Department has announced it will teach “Islamic finance” to U.S. banking regulatory agencies, Congress and other parts of the executive branch today in Washington, D.C. – but critics say it is opening a door to American funding of Islamic extremism.

‘Islamic Finance 101′

According to its announcement, the “Islamic Finance 101″ forum is “designed to help inform the policy community about Islamic financial services, which are an increasingly important part of the global financial industry.”

The Treasury Department has collaborated with Harvard University’s Islamic Finance Project to coordinate the event. The department says it expects about 100 people will attend the seminar.

Some speakers include Assistant Secretary of the Treasury Neel Kashkari, senior adviser to Treasury Secretary Henry Paulson, Jr.; Harvard Business School professor Samuel Hayes; Mahmoud El-Gamal, chair of Islamic economics, finance and management at Rice University and Islamic finance adviser to the Treasury Department; Sarah Bell of the Federal Reserve Bank of New York; Yusuf Talal DeLorenzo, Shariah adviser and Islamic scholar; Michael McMillan, chair of the Islamic Legal Forum at the American Bar Association and professor of Islamic finance; and Rushdi Siddiqui, global director for the Dow Jones Islamic Market Indexes and vigorous advocate for Islamic finance.

Islamic finance is a system of banking consistent with the principles of Shariah, or Islamic law. It is becoming increasingly popular, having reached $800 billion by mid-2007 and growing at more than 15 percent each year. Wall Street now features an Islamic mutual fund and an Islamic index. However, critics claim anti-American terrorists are often financially supported through U.S. investments – creating a system by which the nation funds its own enemy.

Aiding the enemy

In his essay, “Financial Jihad: What Americans Need to Know,” Vice President Christopher Holton of the Center for Security Policy writes, “America is losing the financial war on terror because Wall Street is embracing a subversive enemy ideology on one hand and providing corporate life support to state sponsors of terrorism on the other hand.”

Holton refers to Islamic finance, or “Shariah-Compliant Finance” as a “modern-day Trojan horse” infiltrating the U.S. He said it poses a threat to the U.S. because it seeks to legitimize Shariah – a man-made medieval doctrine that regulates every aspect of life for Muslims – and could ultimately change American life and laws.

Shariah-compliant finance is becoming a major movement, because American banks and investors are seeking wealth from oil profits in the Middle East. Some advocates claim Islamic finance is socially responsible because it bans investors from funding companies that sell or promote products such as alcohol, tobacco, pornography, gambling and even pork.

However, Islamic financial institutions also require all industry participants to adhere to tenets of Shariah law. According to Nasser Suleiman’s “Corporate Governance in Islamic Banking, “First and foremost, an Islamic organization must serve God. It must develop a distinctive corporate culture, the main purpose of which is to create a collective morality and spirituality which, when combined with the production of goods and services, sustains growth and the advancement of the Islamic way of life.”

Three nations that rule 100 percent by Shariah law – Iran, Saudi Arabia and Sudan – hold some of the most horrific human rights records in the world, Holton said.

“This strongly suggests that Americans should strenuously resist anything associated with Shariah.”

Tenets of Shariah

In his essay, “Islamic Finance or Financing Islamism,” Alex Alexiev outlined the following tenets of Shariah taken from “The Reliance of the Traveler: The Classic Manual of Sacred Law”:

A woman is eligible for only half of the inheritance of a man
A virgin may be married against her will by her father or grandfather
A woman may not leave the house without her husband’s permission
A Muslim man may marry four women, including Christians and Jews; a Muslim woman can only marry a Muslim
Beating an insubordinate wife is permissible
Female sexual mutilation is obligatory
Adultery [or the perception of adultery] is punished by death by stoning
Offensive, military jihad against non-Muslims is a religious obligation
Apostasy from Islam is punishable by death without trial
Lying to infidels in time of jihad is permissible

‘Useful idiots’

Alexiev writes that many Islamic financial institutions claim Shariah-Compliant Finance “derives its Islamic character from the strict observance of the ostensible Quranic prohibition of lending at interest, the imperative of almsgiving (zakat), avoidance of excessive uncertainty (gharar) and certain practices and products considered unlawful (haram) to Muslims …” However, he said, “[E]ven a casual examination of the reality of Islamic finance today reveals it to be a bogus concept practiced by deceptive ploys and disingenuous means by practitioners that are or should be aware of that, but remain predictably silent.”

Shariah finance institutions that have funded militant Islamism for more than 30 years. Alexiev cites Islamic Development Bank’s hundreds of millions of dollars in contributions to Hamas in support of suicide bombing. Bank Al-Taqwa and other banks and charities run by Saudi billionaires have funded al-Qaida activities.

Additionally, Shariah law mandates that Muslims donate 2.5 percent of their annual incomes to charities – including jihadists. When 400 banks regularly contribute to such charities, potential financial sums can be virtually limitless.

If Western banks endorse Shariah, they will “end up becoming what Lenin called useful idiots or worse to the Islamists,” Alexiev writes. “And it is a very thin line between that and outright complicity in the Islamist agenda.”

Editor’s note: Concerned individuals may contact U.S. representatives, U.S. senators and the Treasury Department.

Close Bookmark and Share This Page

Copy HTML:

If you like this then please subscribe to the RSS Feed or Email Feed.

Bar Stool Economics

Posted October 28, 2008

Comments(0)

Suppose that every day, ten men go out for beer and the bill for all ten comes to $100. If they paid their bill the way we pay our taxes, it would go something like this:

The first four men (the poorest) would pay nothing.
The fifth would pay $1.
The sixth would pay $3.
The seventh would pay $7.
The eighth would pay $12.
The ninth would pay $18.
The tenth man (the richest) would pay $59.

So, that’s what they decided to do. The ten men drank in the bar every day and seemed quite happy with the arrangement, until one day, the owner threw them a curve. ‘Since you are all such good customers, he said, ‘I’m going to reduce the cost of your daily beer by $20. Drinks for r the ten now cost just $80.

The group still wanted to pay their bill the way we pay our taxes, so the first four men were unaffected. They would still drink for free. But what about the other six men – the paying customers? How could they divide the $20 windfall so that everyone would get his ‘fair share?’ They realized that $20 divided by six is $3.33. But if they subtracted that from everybody’s share, then the fifth man and the sixth man would each end up being paid to drink his beer. So, the bar owner suggested that it would be fair to reduce each man’s bill by roughly the same amount, and he proceeded to work out the amounts each should pay.

And so: The fifth man, like the first four, now paid nothing (100% savings)

The sixth now paid $2 instead of $3 (33%savings).
The seventh now pay $5 instead of $7 (28%savings).
The eighth now paid $9 instead of $12 (25% savings).
The ninth now paid $14 instead of $18 (22% savings).
The tenth now paid $49 instead o f $59 (16% savings).

Each of the six was better off than before. And the first four continued to drink for free. But once outside the restaurant the men began to compare their savings.

‘I only got a dollar out of the $20,’declared the sixth man. He pointed to the tenth man,’ but he got $10!’

‘Yeah, that’s right,’ exclaimed the fifth man. ‘I only saved a dollar, too. It’s unfair that he got ten times more than I!’

‘That’s true!!’ shouted the seventh man. ‘Why should he get $10 back when I got only two? The wealthy get all the breaks!’

‘Wait a minute,’ yelled the first four men in unison. ‘We didn’t get anything at all. The system exploits the poor!’

The nine men surrounded the tenth and beat him up.

The next night the tenth man didn’t show up for drinks, so the nine sat down and had beers without him. But when it came time to pay the bill, they discovered something important. They didn’t have enough money between all of them for even half of the bill!

And that, boys and girls, journalists and college professors, is how our tax system works. The people who pay the highest taxes get the most benefit from a tax reduction. Tax them too much, attack them for being wealthy, and they just may not show up anymore. In fact, they might start drinking overseas where the atmosphere is somewhat friendlier.

David R. Kamerschen, Ph.D.
Professor of Economics, University of Georgia

Close Bookmark and Share This Page

Copy HTML:

If you like this then please subscribe to the RSS Feed or Email Feed.