The Texas 18th District Blog

Acting as “Majority Speaker for Congress”, Nancy Pelosi was probably single handidly responsible for the defeat of the “Emergency Economic Stabilization Act”, since she siezed the opportunity to rail Republicans before the vote.

That original bill was not only rushed to vote prematurely, but it was stuffed with generous “earmarks” supporting organizations that were at the heart of the current mortgage default crisis including ACORN.

What are you trying to do to us? What are you trying to do to America? You Californians are at the epicenter of this whole mortgage problem anyway, asking the rest of the nation’s taxpayers to bail you out of idiotic speculation that has driven housing prices there to $600+ per sq/ft.

Many investers there are on the sideline, just waiting to buy in when and if housing prices fall below a half million for a 1200sq/ft starter shack. There’s plenty of investment money setting on the sideline there waiting for “reasonable” housing prices.

There is no reason for American taxpayers to artificially prop up bad investments in California or anywhere else. There is no real mortgage crisis there that the rest of the nation needs to bail you out from. 

The only problem you have is over-speculation and second mortgaged beamers setting in your driveways.

The rest of the nation can’t pay for that!

Fire Nancy Pelosi this election year and maybe we can hear you then. 

Engineer2

Texas State Rifle Association (PAC) TSRA-PAC 2008 General Election Voter’s Guide United States House of Representatives Congressional District 18, John Faulk (R) - challenger TSRA Rating; ”AQ”,  A pro-gun federal candidate whose rating is based solely on the candidate’s pro-gun responses to the 2008 NRA-PVF Federal Candidate Questionnaire and who does not have a voting record on Second Amendment issues.

Sheila Jackson Lee (D) - incumbent  TSRA Rating “F” based on her voting record!!!

2 Changes and “The Emergency Economic Stabilization Act of 2008” Will Easily Pass Congress

One of the largest constituency issues lawmakers were faced with was there wasn’t enough offered to the taxpayer/consumer in exchange for bailing out the financial system.

1. Add bankruptcy protection back into the equation for borrowers.

I noted on September 25th in my posting; “Creditors Shot Themselves in the Foot and Congress Handed Them the Gun“, that with the tightening of bankruptcy laws under the “Bankruptcy Abuse Prevention and Consumer Protection Act of 2005”, it became more appealing to walk away from poorly contrived mortgages in down economic times.

This is a prime example where government regulatory changes caused collateral damage to our financial structure. Damage to our financial system was introduced by this law because it helped reduce free market self governance by lenders.

This move would make potential debtors more likely to borrow again and creditors less likely to make bad loans.

This action alone would probably make the bill sail through Congress as early as Thursday, October 2, 2008. A complete repeal of that law would probably be our best bet right now.

2. Raise FDIC deposit insurance to $200,000 - $250,000.

Both Obama and McCain are calling for the FDIC to raise depositor insurance protection on savings accounts to $250,000. Even though the $100,000 mark is antiquated by inflation history, it may be difficult under current FDIC liquidity and reserve standards in these financial times:

To receive this benefit, member banks must follow certain liquidity and reserve requirements. Banks are classified in five groups according to their risk-based capital ratio:

Well capitalized: 10% or higher
Adequately capitalized: 8% or higher
Undercapitalized: less than 8%
Significantly undercapitalized: less than 6%
Critically undercapitalized: less than 2%

When a bank becomes undercapitalized the FDIC issues a warning to the bank. When the number drops below 6% the FDIC can change management and force the bank to take other corrective action. When the bank becomes critically undercapitalized the FDIC declares the bank insolvent and can take over management of the bank.

Doubling FDIC Insurance guarantees for depositors will immediately double the FDIC liquidity and reserve requirements on member banks.

This action is needed to help build a more sound capital structure for our banking system, encourage savings, support small business and help prevent bank runs, but it would also immediately tie up a great deal of liquidity banks may or may not have on hand.

It may be that the best choice is to phase FDIC insurance increases in over a designated time period, instead of all at once.

Engineer2

Let’s work together to put John Faulk in office. We need to elect members of Congress with strong financial backgrounds instead of lawyers.

I have the freedom to watch the American Market news periodicly throughout the day since I work at home. Unfortunately this is one day I could have done without those privileges.

I watched the DOW plunge from around -550 points to around -700 points as Democrat leaders Nancy Pelosi, Barney Frank and others addresed the nation shortly after the “Economic Rescue Bill” failed to pass Congress. After they were through, the market started paring back on losses by a 170 points within a few minutes.

This is going to be a very difficult bill to pass in any form with as little confidence the middle class “Main Street” has in either “Wall Street” or the American Government for letting this situation get so far out of hand without proper governance.

There seems to be a significant voter revolt growing and making itself better known by day.

The American Middle Class which comprises 70% - 75% of GDP and job creation in the U.S. can no longer ride the roller coasters of “Wall Street” greed building fluff on bubbles. We have to retract to a stable and predictable economy based in sound investment principles just as we have to run our homes and small businesses.

I just don’t believe a “Wall Street Rescue Bill” of any kind or under any name or guise will satisfy the Middle Class until it addresses the core issues as opposed to just propping up bad debt in a banking community that made poor decisions overextending themselves. As small businesses and homeowners.. we can’t do that. To those that did, those that didn’t, can’t carry you. The Free Enterprise System depends on punishment for bad decisions but look how far the collateral damage by unwise government interference extends here…. to the whole world? When does the “Middle Class” step up and say “enough is enough”, we can’t bear any more? When you penalize the “productive” and reward the “unproductive” you defeat capitalism, encourage socialism and discourage innovation which we will require to bring us out of this mess.

It’s probably way past time that the frequently under-represented politically subjugated “Middle Class” who are the overwhelming mainstay to both the GDP (Gross Domestic Product) and US jobs stood up and took control of their government and Wall Street. After all, “Main Street” seems to have much better governance than either our government or “Wall Street”!

It may well be a “Bailout of Main Street” instead of a “Bailout of Wall Street” as they are trying to spin it…. but in all reality that spin doesn’t make what got us here any prettier and it just doesn’t seem that we are dealing with core issues yet. Mortgage & Banking failures are not the core issues, they are symptoms. We need a bill that addresses the core problems.

In this position we are way beyond taxing and spending ourselves out. Anyone supporting a candidate hailing from that position has to be a lunatic or just morosely ignorant of economic systems.

We have at least a week or 2 to deal with this “Emergency Economic Stabilization Act” bill. Congress will just have to defer their campaign recess to deal with their past lack of governance.

I am not promoting non-action. We are indeed in a dire financial situation, but it’s a great opportunity for the “Middle Class” to take back control of out-of-control lawmakers (our government) and an out-of-control greedy Wall Street, both of which have contributed to the real core problems here.

My opinions are my own, and they don’t necessarily reflect the opinions of John Faulk or The Faulk for Congress Organization.

Engineer2

Let’s work together to put John Faulk in office. We need to elect members of Congress with financial backgrounds.

The Crude Oil price falls below $100/bbl as Congress rejects the “Emergency Economic Stabilization Act”.

The DOW initially fell 705 points during live coverage of the Congressional vote defeating the “Wall Street Bailout Bill” as it was dubbed by many.
These are complex issues which many of us have a difficult time getting our heads around.

The American public currently has a very “bad Wall Street taste in their mouths” as we start to recover from the highest energy prices in history. We all know that Wall Street speculation was partly to blame for the $148/bbl prices that have dropped to $98/bbl in a few short months.

Many Americans are tired of big government overspending, over-taxation, a burdening national deficit, lack of government representation, trends toward socialist government policies, trends away from the free enterprise system, lobbyist influence in politics, corruption in government and just plain fed up with any more policy that will further financially squeeze the Middle American Class.

It almost seems that with the resounding negative input lawmakers reported receiving from their constituency that Americans had rather go through a long deep recession or even face a depression than face any more lack of representation.

The American economy seems fundamentally flawed, leaning toward consumerism instead of encouraging savings, becoming an “Instant Gratification Society”. Economic strength can only be built in bubbles for a short term.

We must get back to solid foundations in lending practices such as 10-20% down payments and 2.5 times gross income for home mortgages. We need to get back to the whole concept of “Starter Homes” as opposed to instant riches in real estate and second mortgages financing another “Beamer” in the driveway.

The sooner we reconcile those lending fallacies of the past 20 years, rebuild our mortgage lenders, reestablish honesty, credibility and transparency in lending practices, the sooner we will recover. There is absolutely no sense in digging a deeper hole by artificially propping up mortgage values in an economy that cannot support those values and I think the American public is coming to realize that.

Engineer2

Let’s work together to put John Faulk in office. We need to elect members of Congress with financial backgrounds.

In an historic vote Congress did not vote to pass the “Emergency Economic Stabilization Act” today. Yea votes= 207, Nay Votes=228

The bill was deemed shallow and insufficient by voters who overwhelming persuaded their representatives not to vote for the bill one month before major elections. Republican lawmakers agreed by a 132-66 vote with their constituency who felt that this bailout plan is not compatible with preserving American Capitalism or the Free Market Enterprise System. Lawmakers will have to go back to the drawing board and redraft a bill more acceptable to the taxpayers who were slated to bail out irresponsible investors.

It’s also noteworthy that a large percentage of House Democrats (94) voted against the bill.

The failure of the “Emergency Economic Stabilization Act” to pass Congress caused an immediate knee-jerk reaction in the U.S. Stock Markes railing the DOW down 705 points initially before recovering to what will be one of the largest tripple digit losses in history.

I believe Americans are serious about replacing lawmakers who are to blame for lack of governance this election year. 

Update o9/30/08: 2 Changes and the Emergency Economic Stabilization Act of 2008 Will Easily Pass Congress

Ken 

Let’s work together to put John Faulk in office. We need to elect members of Congress with financial backgrounds.

For those of you who can’t conceive why many are against the “Emergency Economic Stabilization Act” and want to let the Housing Market Crash, here are some of their views:

There is a great deal of money on the sidelines preserved by more savvy investors just waiting to jump in. Many are setting on the sidelines looking for stable and sane investments, yet find themselves setting out with as much as a 95% cash position stake.

They do not feel that the government or the taxpayer should jump in and bailout unwise investors.

Prevailing thought there is that it might be unwise for the government to help artificially prop up housing prices because that treats the symptoms and not the core issues such as $600sq/ft + housing prices in California. This side of the issue feels that every time government interferes with the free market enterprise system collateral damage happens and that was what got us here in the first place. Many would jump into the housing market including first time buyers if it’s artificial value were deflated to more reasonable market values. Many in this camp feel we should return to home lending standards of not more than 2.5 times gross yearly income with a 10-20% down payment.

Even Representative Boehner calls this legislation imperfect, labeling it a “mud sandwich”, but at the same time we have to act now.

It hasn’t been publicly disclosed in the “Emergency Economic Stabilization Act” whether individual mortgage bailouts have been limited to personal residences only or whether it will extend to investment properties (rentals), vacation homes and the likes. How many holes are there in the plan?

This bill does not treat the issue of overpriced housing, revise mortgage lending standards, prohibit or girdle lobbying or punish politicians who took from lobbyists representing those institutions, while it diminishes free market capital penalties for greedy lending institutions and promotes a more socialistic American government.

Folks on that side also believe that a big part of the government drive to sustain artificially high real estate pricing is to prop up tax revenue for State, City and Local governments.

There are many problems with this bill. It will be interesting to see if it passes at all.

Engineer2

Let’s work together to put John Faulk in office. We need to elect members of Congress with financial backgrounds.

Emergency Economic Stabilization Act

Through the weekend representatives from Congress, the Senate, the U.S. Treasury and the FDIC met and hammered out the most sweeping and expensive economic rescue bill in the history of the United States, entitled the; “Emergency Economic Stabilization Act”.

Many taxpayers of all “persuasions” have contacted their Congressional and Senatorial Representatives with dissatisfaction. American taxpayers are losing their homes, jobs, retirement savings and even their hope and belief in the “American Dream”. Acting on that input more equitable conditions were written into the bill through much debate over the weekend.

It’s hard to fathom that the original Democrat framers of the Emergency Economic Stabilization Act actually tried to include earmarks in support of ACORN and other “housing authorities” who were prime contributors to this mess in the first place, but they did! In case anyone missed the subtleties of the McCain, Obama issue of whether to have the presidential debate or not, don’t count out Obama’s ties to ACORN.

Once House Republicans reinforced their stance on a clean bill those earmarks were dropped.

After McCain returned to Capital Hill the Democrat led formers of the original bill found that Republicans were not happy and ensuing negotiations ran through the weekend resolving some more favorable taxpayer positions. To be fair both parties have played out some voter concerns.

The “Emergency Economic Stabilization Act” which will be voted on around 12:00 noon Houston time today includes:

$700B to be portioned out as required with $250B made available immediately, another $100B to be on call from the President and the remainder made available under Congressional review. Extended provisions allow the federal government to buy problem assets from banks, credit unions, pension funds and local governments

Taxpayer protection clauses include:

• Governance by a bi-partisan oversight board
• Tools to reduce mortgage foreclosures such as the Treasury Dept. having authority to restructure mortgages owned by the government
• Features such as stock warrants issued to the government making it more likely that the taxpayer can be repaid for moneys lent in this bailout
• Limits on executive compensation including golden parachutes in failed institutions

One report this morning indicated that congressional & senatorial members were receiving constituent contacts of about 95% against bailing out Wall Street, while others reported 55% in disfavor. In lieu of widespread “Main Street” disapproval, it will be difficult for many lawmakers to pass a bill contrary to their expressed constituent wishes in an election year, this close to election day.

The Dow has been down near 300 points most of the morning on other grim economic news and it probably won’t fare well if this Wall Street Rescue Bill doesn’t pass.

American’s are extremely upset with corruption in politics and the lack of governance by elected lawmakers in the Senate and Congress this year. Many voters feel that this bill may address the immediate dire economic symptoms of the problem at hand without dealing with the continuing caustic true causes of this issue, such as the 354 lawmakers who may have been influenced to “turn their heads” by Freddie Mac and Fannie Mae Lobbyists.

Reminder: Houston voters should remember that Sheila Jackson Lee took $8,000 from Freddie Mac & Fannie Mae when they go to the polls this year.

Updates:

9/29/08 - The Emergency Economic Stabilization Act - Did Not Pass Congress

9/30/08 - 2 Changes and the Emergency Economic Stabilization Act of 2008 Will Easily Pass Congress

Ken

Let’s work together to put John Faulk in office. We need to elect members of Congress with strong financial backgrounds.

For the last several days, Citigroup and Wells Fargo had been engaged in a bidding war for Wachovia’s Banking Assets. It looks like Citigroup won out in a deal orchestrated by the FDIC.

Wachovia didn’t fail.

FDIC will share Wachovia loan losses with Citi. Citi will absorb up to $42B with the Fed absorbing any amount over.

Wachovia will keep A.G. Edwards and Evergreen Operations.

Citi will absorb Wachovia’s Senior Subordinated Debt.

The banking crisis is spreading globally, with news of large bailouts announced in England and Iceland this morning.

A Congressional vote on the ”Emergency Economic Stabilization Act” is scheduled for today around noon.

The Dow is set to open sharply down, within the triple digit range and Congress is set to vote on the rescue plan. No one knows yet whether the bill will pass or whether it will be effective in the short or long term.

Ken 

PATTERICO sees a pattern of intimidation

Hey Congressman Frank, what happened in five years?

Barney Frank said Friday he expects a resolution to the rescue plan by Sunday.  He wants it out of the news before he gets beat up even more.

Purple Not Just Red or Blue

Both parties share responsibility.  As I have said before it is a natural occurrence when government is involved. 

A Good Summary of the Debate 

The Wall St Journal sums it up in a brief read able fashion.

 A Comment on Sending Troops To Get Osama Bin laden

You can bet that his cave in Pakistan is heavily defended.  When you send troops to invade a heavily defended enemy position you need to have 3 times as many troops as the enemy because in the assault you are going to lose a lot of troops and you need some left to take control if you succeed.  I was a Marine in my youth and I knew it was for real when they announced on the loudspeaker of the ship I was on “all marines make up a field marching pack and prepare to go ashore” and by the way if you need to make a will “go to the mess hall, we have people that can help you with that”.

I was 21 years old when Vietnam became a U.S. war.  When you send in highly experienced and trained special operations people in complete secrecy you don’t lose thousands of troops.  You may lose one or two highly trained special operations people.  If they direct a “predator” or use a laser to guide a bomb you can accomplish the same objective. 

McCain said last night he advocated sending troops into a village, take control of it and stay there so that the villagers gain confidence that we will support and protect them as we are doing successfully in Iraq.  The villagers then no longer support the Taliban and want them out.  The Taliban is not kind to villages.  This approach in Vietnam was used successfully and lableled “Pacification”.  When the Viet Cong returned to the villages in the evening they were met by a unit of Marines.  The Viet Cong were pacified rapidly and so was the village.  I read this week that there is a petition being circulated around Iraq  requesting their government to ask the U.S.  to keep Marines there when the other troops leave.

We are winning in Afghanistan and we will probably get Bin laden soon if he hasn’t died already.  Read Michael Yon’s “Death in the Corn” here

Michael Yon An Embedded Freelance Writer

When people say we don’t have enough troops in Afghanistan or that the Taliban are coming in from Paksitan to fight us,  I ask myself “so what’s the problem”.  We have NATO forces helping us in Afghanistan so there are more troops there than implied by only referring to the number of American troops.  As for the fighting that is what we want.  We want them to engage us because we have superior training and fire power.  We annihilate them.  Read Michael Yon and see for yourself.

Michael Yon was a green beret who became a free lance writer after getting out of the army.  He reports extensively on Iraq,  Afghanistan and other middle east areas based on his own daily observances.

The First Presidential Debate Is On Schedule - John McCain will attend.

My best guess is that he felt he had sufficiently interjected his influence to demand adequate taxpayer protection in the outcome.

I would expect a “Bailout” package agreement before Monday morning, maybe as early as midnight tonight. John McCain is a man of his word and I do not believe he would have left Washington to attend the 1st Presidential Debate unless he had insight for an impending “Bailout Agreement”.

Looking past the political rhetoric in recent days, there is really no reason any potential presidental candidate ready to take office should need 3 days of preparation for this debate.

I expect ”The Old Man” to lay the “Youngster” across his lap and “spank” him pretty hard tonight.

We will see what happens at 8:00pm CST - Houston time.

Engineer2

The NRCC is working very hard to get SOME chosen Republicans elected.

I received an email from Tom Cole, RNCC Chair, dated 9/25/08 titled 2008 Republican Fresh Faces. http://www.nrcc.org/ourteam/default.asp?ID=253#Faulk

I realize that the NRCC is only looking at the 2000 census and can’t be bothered with the current fact of the 2007 American Community Survey, so they realize that no one could defeat Sheila Jackson Lee in the TX 18 CD back in 2000.

Therefore I have never expected any help from NRCC.

But at least they could have a live link to my website on their team page.

http://www.nrcc.org/ourteam/default.asp?ID=253#Faulk

I talked to someone this morning at NRCC and was told that they will try to have the live link up BEFORE November 5, 2008.

How much would it cost the NRCC to add a link to all of the challengers trying to increase the number of Republican seats in the House? $0.00!!!

I’m glad the NRCC is not defending our country we would have been defeated years ago!

I do not think the NRCC has victory in their hearts. They do not know how to be winners!

Please go to my website to find out how vulnerable Sheila Jackson Lee is in 2008!

How much is it worth to you to not see Sheila Jackson Lee on TV?

Send me $2,300 or $23.

——– Original Message ——–

Subject: Republican Fresh Faces–Meet Some of our Candidates

From: “Chairman Tom Cole” nrcc.org>

Date: Thu, September 25, 2008 6:53 pm

To: John Faulk <john@faulkforcongress.org>

Dear John:

November 4, 2008 is going to be a very unusual election - and not just for the obvious reasons.

Yes, Americans will choose between the first woman on the GOP ticket and the first African American on the Democrat ticket. However - and this is unprecedented - 30 Republican incumbents retired this year, leaving more than two dozen “open” seats.

What does this mean to the Republican Party?

Well, it means a combined 412 years of incumbency within the GOP is stepping down, to be replaced by a set of fresh faces.

This is very exciting for the future of our party. These are men and women who, much like Sarah Palin, are parents of young children and understand what it’s like to balance family, career and public service.

The youngest Republican likely to join our ranks in November is Aaron Schock from Illinois. Aaron is 27-years old, and the youngest member to serve on his school board. Darren White from New Mexico was a Katrina rescue volunteer and served in the Army’s 82nd Airborne. Jennifer Horn has five children, is an award-winning radio show host and active in her community.

Today, we want to introduce you to some of the fresh faces campaigning to represent us in Congress. They are independent voices who want to change business as usual. They are the men and women who will go to Washington and fight alongside John McCain and Sarah Palin.

We’re proud of our candidates and what they stand for, so get to know them today. We urge you to learn more about them, and after you’ve read about their background and campaign, please consider making a donation to their campaign. You can learn more these candidates and donate to any of their races, by clicking here now.

Thank you for supporting our Republican candidates!

Sincerely,

Tom Cole, M.C.

Chairman

P.S. Please also click here now to make a special donation to the NRCC so we can support other fresh faces of the Republican Party. Your donation will be used immediately to educate voters about our Republican candidates and the issues we all care so deeply about.