Topic: Social Security
How to End Social Security in Our Lifetime -- Jack Kemp Style When the Berlin Wall fell and the engines of free enterprise became the models of prosperity, Jack Kemp urged America to look in its own back yard. After ignoring Jack Kemp, America tried other ideas. We've come full circle. Thanks to ACORN the renewal of our inner cities have been dealt the worst setback in a generation.by Paul Benedict
(libertarian)
Sunday, February 15, 2009
Recently, many have begun taking a few moments to put Jack Kemp's contributions into memory as they look forward to seeing him overcoming recent health challenges. Perhaps some of Kemp's greatest policy initiatives were those that were the most ignored. If Kemp's Enterprise Zone initiative and HOPE initiative had succeeded in congress and the inner cities, we might never have experienced the joys of ACORN's inner city activism that steered countless subprime borrowers to loan originators flush with billions upon billions in cash from Freddie and Fannie.
Kemp's housing initiatives were designed to increase home ownership in the inner city. Both were all but ignored in budget discussions in congress under George H. Bush. Instead, the tremendous energy for home ownership in the inner cities took other forms. Instead of a Bush second term in which Kemp as the Secretary of Housing and Urban Development might get another chance at allowing the citizens of the inner cities to own and renew their neighborhoods, President Bush's failed reelection led to America's "first black president", Bill Clinton.
Toni Morrison, by her own admission, didn't originate the notion of Clinton's presidency being black, and the cultural identification may not have been misplaced. During the Clinton years the little known and rarely enforced Community Reinvestment Act passed under President Carter in 1977, became a banking regulation of revolutionary power. Under Clinton, changes to the Community Reinvestment Act (CRA) allowed for the securitization of subprime loans related to CRA, and nearly a trillion dollars in subprime loans streamed into inner cities. These changes occurred, at least in part, at the behest of ACORN. ACORN and community action groups like ACORN continued to thrive as the economy grew at record rates and such groups were able to deliver more and more home ownership to the inner cities.
Conservatives may bemoan the lack of social justice in the rise of ACORN, Barack Obama, and the failure of Fannie Mae, Freddie Mac, and AIG during the watch of President George W. Bush. Certainly cries that "capitalism has failed" seem particularly egregious. However, the circle of irony is complete. If Bush H had listened to Jack Kemp, perhaps there would have been no President Clinton, no ACORN and no President Barack Obama. Conservatives may well bemoan the lies of big government and socialism, but in line with Jack Kemp's many sermons on this matter, the capitalism and free enterprise must be brought to everyone, or free enterprise will fail. Of course, where ownership of capital is impossible Marxist ideals fester. Now we are all in danger of the collectivist gangrene. Just don't blame Jack Kemp.
Barack Obama was swept to power by his roles with ACORN and, to a great extent, especially during the primaries, by the activism in voter registration provided by ACORN. However, tragically, the irony has gone full circle. ACORN has failed. The home ownership it brought to the inner cities had dried up. The homes are all foreclosed; the credit of the denizens of the inner cities has been done irreparable harm. The renewal of our inner cities has been dealt its greatest set back since Regan. Just don't blame Jack Kemp.
Without the fundamentals of home ownership as a capital base, a fully employed electorate is as attractive as Egypt's full employment under the pyramid packages of the Pharaohs. We can end Social Security by investing in our inner cities. We can end Social Security by spreading capitalism. And whoever the successor to Jack Kemp may be, when he or she demands the end of Social Security by allowing minimum wage workers to apply their confiscated payroll taxes to invest in real capital in our inner cities, that politician will grab and hold the youth vote. ACORN's appeal in the inner cities is nothing compared to what the correct notions on transforming Social Security might accomplish. We can transform Social Security, and via the engines of free enterprise, still have enough money left over to pay all twenty-two trillion dollars our government has promised we'd pay.
For a detailed description of a plan that allows the Median Family (thirty-five or under) to secure their own retirement at higher benefit rates than Social Security promises, while, at the same time, making good the baby-boomer bailout their parents committed them to, see: "Ending Social Security by Applying Payroll Taxes to Primary Residences" by Paul Benedict.
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First of all - do your homework - Less than 1% of the loans that ACORN secured for homebuyers default. ACORN helps people that were the victims of predatory lending. They come to ACORN AFTER they are in trouble. The homebuyers that ACORN helped to get homes are still in them at an alarmingly high rate.
Second - I'm not sure why I even felt the urge to comment - this blog is obviously crap if the current President's name is spelled correctly.
*CRA by itself was bad enough; Federal Reserve also encouraged bad lending standards and then when Sallie Mae and Freddie Mac bought all those loans, ever crappy ones, banks just figured it didn't matter what they did. And G.W. Bush was busy encouraging it all just as much or ever more than Clinton
*Good for you for noticing that the credit ratings of so many poor people who may have had good ratings before is now shot.
*Of course, banks STILL have to make their CRA loans - maybe that's why a lot don't want to loan. Who is left to loan to? Still the same standards? Sallie/Freddie still busy backing up bad loans. It's absurd!
Posted By: Paul Benedict
Date: 2009-02-16 13:47:09
Hi Carol,
I plan to discuss the 6.2% Heritage Plan for reforming S.S. and, hopefully, enterprise zones and HOPE in a comparison to argue in favor of a more complete approach to S.S. transformation.
Posted By: Paul Benedict
Date: 2009-02-16 14:03:59
Anon and Anon,
There are a couple of lawsuits about who is to blame for the housing disaster in our inner cities. Here is an article by folks who represent the banks: [link edited for length]
Of course ACORN says they didn’t do it. Still, we are fools if we sit still while everyone points fingers at one another and ignore the magnitude of the set back in our inner cities. Anyhow, before you storm the Bastille searching for the souls of the soul merchants that live in those accursed palaces of evil: banks, check these links out:
"oh, by the way- the crisis...the financial crisis of America today was not caused by the Community Reinvestment Act."
"Let me just make it very very clear- the Community Reinvestment Act...I’m so sick of people in my party saying that making loans to low income people was Ipso Facto the cause of this breakdown of our financial institutions- nonsense."
"Fannie and Freddie with all the mistakes, with all the mistakes- that did not cause this crisis. making loans, getting capital into the hands of low income people - did we relax our standards, our lending standards too much, were there mistakes being made ?- but that was not the cause..."
Posted By: Paul Benedict
Date: 2009-03-31 22:02:01
Hi Suslky,
I can see where you might understand my article as agreeing with the notion that the subprime mortgage market was the prime mover in this collapse.
I, actually, blame the spike in oil prices. The gains in real estate prices over almost a decade where offset by increases in oil prices that happened within a single year. While the housing market retreated to lows it hadn't seen in a decade, with oil, it was the incease in oil prices that "popped" the bubble.
Thanks for the Kemp video. Too bad it was so short. That is what I was trying to say in this article. Jack Kemp understood the need for people to have property in order to understand property rights and to have economic freedom before they can understand free enterprise. No matter who we blame, it is true that both ACORN's and Kemp's hopes for renewing the inner city by way of community's owning their own communities has been dealt a serious set back. A PRSST is an idea for transforming Social Security in a way that should "sell" in the inner city.
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